Savings Accounts Update: Warning, Falling Interest Rates Ahead!

Interest rates on savings accounts are dropping left and right. With the Fed Funds rate at near 0%, I don’t see any hikes soon. The question is… how low can they go? Capital One 360 hit a new low since it started in 2000!

Liquid Savings Accounts

  • If you’re a rate chaser, Broadway Federal is offering a pretty amazing 4.08% APY with a minimum opening deposit of $1,000. However, there is no guarantee this rate will last very long at all, and reports indicate a hard credit check. To see if it’s worth it, don’t forget my handy Rate Chaser Calculator.
  • The Everbank Yield Pledge Money Market Account is offering 3.51% for 3 months guaranteed for new accounts, and after that it goes down to the regular rate of 2.43% APY. (Balances up to $50,000.) See my review of the application process here.3.51% APY for 3 months remains better than any other banks’ top 3-month CD rate, while still allowing withdrawals.
  • DollarSavingsDirect has made a few drops, currently down to 2.65% APY now. If you are moving money out, remember that you need to maintain a minimum average daily balance of $1,000.00 during the entire month to keep the high rate for that period. For those with lower balances, it may be better to withdraw after you see your last month’s interest credited. See my quickie review here.
  • FNBO Direct is now at 0.85% APY. See my account review here. Their CD rates have dropped significantly.
  • If you have money committed to the (now expired) WT Direct $250 bonus promo like I do, just a note that they are at 2.16% APY for $10,000+ balances. We have to hold until end of February, and they promised the bonus the 2nd week of March.
  • The “Original” Capital One 360 is now down to 0.75% APY, but new savers can still get their $50 opening bonus. According to my data, this is the first time ING has ever dropped below 2%.
  • E-Trade Savings (useful if you trade stocks there) is at 2.15% APY. HSBC Direct is at 2.25% APY.

Certificates of Deposit
It may not be worth locking in these low rates for a long time, but if you have a CD ladder going you might be interested:

  • Pentagon Federal Credit Union is offering 3-year CD at 3.89%, 4-year CD at 4.15%, and 5-year CDs at 4.39% APY. If you aren’t a member and don’t otherwise qualify, you can join the NMFA for a one-time fee of $20.


  1. Presidential Bank is still offering 2.6% for their premier savings account

  2. Saw it coming but disappointing nonetheless :/

  3. I’m adding to my Vanguard funds, VBIIX and VFIIX ,both are up over the past year average 5.38% for both. Current yield paid monthly about 4.60%,low yearly expenses,average .20%.
    When I get the monthly interest payment from DSD I’ll be moving that money to Vanguard. Watch these funds and buy on 10 day low.
    Pimco also has excellent bond funds but expenses are about 3 times more,.68%.
    Stay out of all equality markets, gold is still a buy but wait for pullback,(new money).

  4. Bernie Bildman says:

    Broadway Federal Bank

    Looks to me you cannot transfer cash in and out via online routes, only between Broadway’s accounts::

    How can I make deposits?
    We offer several convenient and safe ways to make deposits. Deposits can be made at:
    • Any Broadway Federal branch location
    • Broadway Federal ATMs
    • Direct deposit (ACH credits or debits)
    • Mail
    • Phone transfers through Goldphone (1.323.935.2288)
    • Transfers between Broadway Federal accounts through online banking

    How can I make a withdrawal?
    All Checking and Savings accounts (excluding Certificates of Deposit) will have an ATM card. Withdrawals can be easily
    and conveniently made at:
    • Any Broadway Federal branch location
    • Broadway Federal ATMs
    • ATMs with a MoneyPass symbol (locate a “surcharge free” ATM on our home web page)
    • ATMs with a VISA, CIRRUS, or STAR symbol. (May not be “surcharge free”)
    • Mail
    • Phone transfers through Goldphone at (1.323.935.2288)

  5. Bernie Bildman says:

    The problem I have at this time is if I decide to move my DollarSavings Direct cash to, let’s say, Broadway Federal, by the time I open the account (you have to mail in DL ID etc etc), and get my money transferred there, the very real possibility exists that Broadway Federal will have the rate already adjusted downward, just like a loss leader sale.

    Right now, I’ll bet they’re trolling for new investors in light of the downturn this month in interest rates. Can’t win for losing, and I’m hesitant to start the process, only to have my cash stuck in yet another bank whose interest rate is now the same as all the others.

    Whew, I hate this.

    (By the way, here’s the disclaimer in the Broadway Online Savings Agreement::

    “Note: Accounts are not opened until the Bank receives the funds. The Bank must receive funds within thirty days or your application for an account will be cancelled. Accounts are opened Monday through Friday only. Your account will receive the rate and annual percentage yield in effect on the date the account is opened. Certificate of Deposits will receive the rate and annual percentage yield in effect on the date the application is submitted.”

    So it’s possible by the time it’s open the rate may have already dropped.)

  6. I’m adding to my Vanguard funds, VBIIX and VFIIX ,both are up over the past year average 5.38% for both. Current yield paid monthly about 4.60%,low yearly expenses,average .20%.

    Just so everyone understands, these are bonds and the income is not guaranteed and should not, in my opinion, be used for short term savings or an emergency fund.

  7. Anyone else hear about the TCF High Yield Savings? Not an online account, but they’re offering 3% APY right now. I wonder how long that rate will last, but I already had a checking account there so I’m giving it a shot. $500 minimum balance.

  8. Terry, you may have a good idea about buying bond mutual funds instead of regular savings depending what kind of access you need for the money.

    However the statement “both are up over the last year” is something to be careful of. Granted, they are bond funds but beware of chasing prior returns.

    also, how can I “buy on a 10 day low”? what if the fund just keeps going up?

    anyway I also use Vanguard so I am strongly contemplating moving my longer term money from DSD. I will be looking for ideas about what is coming wrt bond funds this year.

  9. Mark,
    These Vanguard bond funds are up ever year going back years.
    Check daily prices at Vanguard,going back 24 months.

  10. Bernie Bildman says:

    Mark, when you come up with your plan about moving your DSD long term money, PLEASE post here, thanks.


  11. Mike Zoril says:

    The truth is that the market is not setting the interest rates this low, command economy planners are doing it, communist style. But the market always wins. The government doesn’t have the funds to keep this stuff up, so they will print up some more money and destroy the dollar.

    Buy gold. This will get you better than a 5% return and at this point, it appears to be guaranteed.

  12. Bernie Bildman says:

    If you’re looking for on demand withdrawal of cash savings, gold will not do. I use my interest to pay my rent monthly, and the KEY word in your statement is “appears.”

  13. ING Direct —Say it isn’t so!

    I know everyone has their own experiences but I’ve had my ING account since 2004 and never once had an issue with any of the accounts or their service. I’m not a rate chaser. I got what I expected from the account. A fairly good rate with decent security and an easy interface.

    So now I’ve lost the fairly good rate part (in comparison to competitors) of the equation…..

    Should I stay or should I go and if I go where??

    Of the sites reviewed above do any of the fellow blog readers have any personal experiences?

    Thank you!

  14. I would also like to give a vote of “no confidence” on gold!!

    There are a couple of things I don’t like……..

    #1.) Gold is ridiculously expensive right now. I won’t get into the details and you don’t have to trust me, but I don’t like where gold’s at right now. This is not market value, it’s a sign of the times…….no bueno!!!

    #2.) I don’t like where ANY of the metals are at right now. Copper is ridiculously low, Platinum is trading at significantly disproportionate value to gold and I predict something weird is about to happen and the worst part is not knowing when.

    I just don’t like gold right now.

    As for online savings???……..I dunno! I remember the mid 90′s going down to about 1%. If you’re shopping safety, that may be the only thing available for a good while here soon!!!

  15. Gold has no liabilities,or debt.
    US Dollar has 10′s Trillions of debt,and growing very very fast.
    Gold cannot be made with a few strokes on the Treasure / Fed Reserve
    Everyone should read some history of paper money going back to China.
    One word of caution: World central banks can and do have take downs of gold prices when it reaches high levels.

  16. Matt,

    I’ve been with FNBO for over a year and have been very satisfied. Fairly basic interface. Strong bank rating with long history and they remain competitive to keep rate chasers. Their rates are not usually the highest, but they attracted me with their high rate last year (6%) and usually lower their rates only when corresponding Fed rates drop.

  17. Bernie Bildman says:

    I see FNBO is at 2.60% now, guess I’ll stick with the 2.65% at DSD, and hope for better weather.

  18. I know Jonathan’s post is specific to savings accounts but the Everbank Checking account offers the same 3-month bonus APY of 3.51% on balances up to $100,000 (as opposed to just $50,000 on the Everbank MMA balance that can earn the 3.51%). I’ve read most of the fine print on the Everbank site and there doesn’t seem to be any restriction from opening both the checking and the mma accounts for a potential $150,000 total that will earn the bonus yield for the first three months. Does anybody know for sure one way or the other if you can open both accounts and get the 3.51% on both up to the separate bonus caps simultaneously? These both say they are for first time Everbank customers so you probably can’t do these sequentially … besides, in three months the bonus rates could be closer to 2% anyway.

  19. I just did a review of ShoreBank Direct. I am not sure why it is never covered in any reviews so I hope I am not missing something here but my review can be found here. The bank offers 3.15% APY so it stacks up pretty good to some of the popular choices out there and its FDIC insured

  20. Just called Everbank and they said you CAN open both accounts (checking and mma) simultaneously to get the bonus rate on up to 150K.

  21. Banks are all over the place with their rates, I’ve kept mine with GeInterest Plus for many years now. They’ve average well, sometimes they’re high and sometimes they’re a little low. But you don’t have to move you money all over the place. Check it out:

    Investment Amount & Rate
    Less than $15k 2.70 2.73
    $15k – $49,999 2.85 2.89
    $50k and more 3.00 3.04

  22. I’m going to hold out at Dollar Savings Direct.. They seem to be on the high side when the rates are up… and I’m happy with their interface and such.

  23. Has anyone noticed and/or worried about DSD’s lowest-rated “Safe&Sound” rating found on’s website. Here is a link to high-yielding savings accounts:,416&prodtype=chksav&market=416&product=33&state=US&sort=2

  24. Be careful with VFIIX, it’s almost at its all time high. I have been putting some money into VFSTX for dividend yield.

  25. Terry, I assumed you were talking about the share price being UP, but I can see from later comments you meant that they had a positive return. Of course, being bonds they are supposed to have a positive return via the dividend but sometimes the share price eats that gain.

    Bernie, nobody should listen to me or follow my actions because everyones situation is different and I am just a mechanical engineer with about 4 years of studying how to fund my retirement in my free time. I know about 20% of what I need to know and half the time I am just wingin it.

  26. GE Interest Plus is not FDIC-Insured. Yes, it’s GE, but the incremental risk isn’t worth it to me when you have other FDIC-insured banks with higher yields.

  27. Bernie Bildman says:

    ShoreBank’s interest rate history::

    Rate History:

    01/22/09: 3.15% APY
    06/04/08: 3.50% APY
    03/29/08: 3.30% APY
    12/12/07: Had been offering a $25 new-account bonus. Offer ended on 3/29/08.
    11/12/07: 5.00% APY

  28. Capital One Online Savings: 2.5%

  29. Capital One 2.55% with $10k min and Costco Membership. Plus $60 bonus for Executive and $20 bonus for Gold Membership. Qualify for bonus with $5k min. 2.20% for balances less than 10k. Capital One is also one of the few banks with a 5 star “Safe and Sound” rating on

  30. I am sticking with my online rewards checking account at Community Bank of Pleasant Hill. The rate dropped from 6.10% APY to 5.01 APY, but it is still higher than online savings accounts.

    Plus, I am making a few extra days of interest on money that normally would be in a low interest checking account waiting to be used for electronic bill pay, or money that is normally in transition from an online savings account to my checking account to be used for bill pay.

  31. FNBO dropped to 2.40% APY today.

  32. Rate drops continue at Capital One!

    Online Savings 10K+ 2.50 > 2.27% APY
    Costco OSA 10K+ 2.55 > 2.33% APY

    Money Market 2.00 > 1.60% APY
    Costco MM 2.20 > 1.80% APY

  33. Good Bye ING (maybe not all the way but a substantial portion)…..

    My FNBO Direct Account Setup Experience

    Joint account completed Sunday at 8pm Pacific.
    Test deposits arrived in linked account Monday somewhere before 8am.
    Confirmed account with test deposits by 9am Monday.
    Initial deposit was established during account setup.
    Withdrawal occurred from ING Direct sometime on Wednesday.
    Waiting for arrival at FNBO.

    We shall see…

  34. Bernie Bildman says:

    Etrade silently just dropped Complete Savings interest rate to 1.95%

    I expect DollarSavings to follow suit soon, they’re at 2.65% but my gut says we’re going down lower.

  35. Bernie Bildman says:

    I applied at ShoreDirect Savings, 3.15%, application is totally electronic, $1 opening deposit, I’ll watch the rates, but this will probably be my last effort at moving cash around.

  36. Bernie Bildman says:

    Sure enuf, DollarSavings in now down to 2.50%

  37. Kevin Says: February 24th, 2009 at 1:20 pm
    I am sticking with my online rewards checking account at Community Bank of Pleasant Hill. The rate dropped from 6.10% APY to 5.01 APY, but it is still higher than online savings accounts.

    5.01 is still the best rate I’ve seen, why wouldn’t everyone want to jump at this? Is this taxable? I am looking to find a better money market, CD, or savings account than what Morgan Stanley offers. So far, a Vanguard 5 yr. CD at 3.16 or Kevin’s Pleasant Hill Bank at 5.01 sound best. Any other ideas would be appreciated. Also, any ideas on whether to invest in Citigroup at this point? I have some, maybe might as well get more at this point to lower its cost of average? Any other ideas on stocks, etc.?? Thanks -

  38. Bernie Bildman says:

    For me, the problem with Community Bank of Pleasant Hill is it’s limited to $25K and::

    “To Earn the Bonus Rate, Perform the Following Each Cycle:
    Make at least 10 debit card transactions (Point of Sale) per statement cycle
    Have at least one monthly ACH direct deposit or ACH auto debit
    Receive your statements electronically

    5.01% Annual Percentage Yield (APY) paid on balances each cycle when the minimum qualifications are met. If you do not meet the qualifications per cycle, your account will still function as a free checking account earning 0.10% APY.”

    “Earn 5.01% APY on balances up to $25,000*
    0.50% on balances over $25,000.00″

  39. Thank you for the info re: Community Bank.. I think I’ll stick with Vanguard…

    Any ideas on whether to go with Citigroup, JPMorgan, or even ExxonMobile – or ??

    Thanks again! – Leah

  40. did anyone get the money from wt direct for having the money there
    during jan 1- feb 28?

  41. i mean, did wt direct pay yet, what they promised ($50 for $10,000 deposit, $100 for $20,000 deposit etc during jan 1 – feb 28)?

  42. “Bonus will be credited to client’s WTDirect account on or about the second week of March.”

  43. Wow……..falling like lead zeppelins………

    DSD now at 2.25%
    Emigrant 2.00%
    ING 1.65% (YIKES!!!!)

    FNBO still holding at 2.40% (Maybe taking over DSD’s thesis, “America’s Highest Rate”??)


  44. Bernie Bildman says:

    Yes, I noted that 2.25% this am, and is it possible they simply WANT us to pull our funds out??

    ShoreBank Direct is still holding at 3.15% and I’m moving it all there. Let’s see how THEY manage to hold the interest line. Shore is a communtiy bank in Chicago,Cleveland and Detroit — seems to be focused on the minority community.

    They’ve got my cash if they stay high interest-wise. Opening the account was totally painless, all done from my computer.

    578 total employees in the U.S. and in international offices
    56% are African American.
    43% of officers and 28% of senior managers are minorities.
    54% of officers and 30% of senior managers are women.
    Shareholders include financial institutions, foundations, insurance companies, major corporations, and individuals”

  45. Bernie Bildman says:

    ShoreBank dropped theirs this evening to 2.80%

  46. Julien Zeitouni says:

    March 10th:
    HSBC down to 1.85%
    FNBO down to 2.15%…
    DSD still at 2.25%

  47. SanDance says:

    WTdirect to apply bonus on or before March 13.
    APY fell to 2.01% $10k min.

  48. Bernie Bildman says:

    Etrade now down to 1.45%, from 1.70% –amazing that rates have fallen so far so fast.

    And DSD is at 2.05%

    My Shorebank Direct is at 2.80%, I’ve got my fingers crossed on this one.

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