There’s a new player in the online banking space, ableBanking.com. Launched in June 2012, ableBanking offers high yield online money market accounts and certificates of deposit, with a twist. It operates an interesting business model that limits the amount spent on traditional marketing and gives the savings to depositors to donate to any cause or charity. When a consumer opens an account with ableBanking, he/she receives $25 to give to any charity. After that, the bank will donate 0.25% of your average balance every year on your ableAnniversary.

According to Heather Campion, a co-Founder and the Chief Administrative Officer at ableBanking, the average bank spends 15X more on marketing than it gives to charity and donates 1% of pre-tax earnings. By cutting back on traditional forms of advertising and providing that savings to consumers in the form of money that can be donated, ableBanking expects that it will give the equivalent of 2.5% of its assets to charity. She calculates this is over 10x what a regular bank will donate.

The bet here is that consumers, given money by ableBanking to donate to their favorite charities and causes, will create buzz about the bank on social networks and become a more effective means of getting the word out about the bank than traditional forms of advertising.

Rates and Fees

Heather told me that because ableBanking is online and doesn’t have the cost of a branch network to maintain, it can offer consumers high rates on money market accounts and CDs. The bank is currently offering a 0.85% APY money market account which is one of the best rates in the country. Its CD rates are also competitive with the top rates of other online banks. These are not teaser rates either. According to Heather, ableBanking plans to stay competitive as part of their business model.

The money market account and the CDs have a $1,000 minimum balance to open with no fees.

Details on Donating to Causes

ableBanking has some nice features for those who like to contribute to charity or would like to contribute more often. ableBanking provides the $25 to donate and also the .25% every year and an individual can give the funds to any 501c organization. That could include a religious institution, a homeless shelter, a school, or more. Their online banking interface makes giving easy, and also keeps track of all donations made, handy for tax-time. Within their online banking interface, a user can search for a 501c, specify how much money should be sent, and then send the cash much like sending a bill-payment. ableBanking has done the work of loading the names and addresses of every 501c organization in the country. The interface also allows a user to search for causes and charities in his or her neighborhood.

A benefit of using the interface to make donations is that, unlike paying via a credit card, which takes 2-3% of the funds sent, the funds a transfer through ableBanking is free.

Account Opening Process

Opening accounts is done online via an online application. Like most of the more sophisticated online banks, it confirms a users identity by pulling a series of questions from credit reports. So, for instance, a user might be asked the amount of his car payment or some other credit related question. The application takes about 10 minutes. Once the account has been setup, it can be attached to a primary checking account elsewhere so that can funds can be transferred in and out. The account can also be funded via check.

About the Bank

ableBanking is a division of Northeast Banking, an FDIC-insured community bank based in Maine and founded in 1892. Northeast Bank’s FDIC insurance covers deposits at ableBanking. The bank has over 200 employees and operates 10 branches in Maine as well as a call center, which is also utilized by ableBanking. Financially, Northeast Bank has a Texas Ratio of 9.6% versus the national average of 19.96% (lower is better). The bank has approximately $890 million in assets.

If you’re looking for a competitive online savings account or online CD, and also want to make giving easier, then ableBanking seems to worth checking out. We’ll continue to follow the new online bank as it develops and will post information regarding any new changes or announcements.

This week Moody’s downgraded 28 Spanish banks, but last week was all about the hype surrounding Moody’s bank downgrade of some of the world’s biggest banks. In accordance to the story, Moody’s downgraded 15 global bank’s credit ratings last Thursday. Three of the nation’s largest financial institutions, JPMorgan Chase, Bank of America, and Citigroup, were included in the bunch.

According to Moody’s global banking managing director, Greg Bauer, “All of the banks affected by today’s actions have significant exposure to the volatility and risk outsized losses inherent to capital markets activities.” Despite this, the stock prices of five downgraded banks jumped Friday morning, speaking to investor confidence in the financial system. Truth is, banks are much stronger financially today than say three years ago.

Citigroup “strongly disagrees with Moody’s analysis of the banking industry and firmly believes its downgrade of Citi was arbitrary and completely unwarranted.”

Morgan Stanley believes “the ratings still do not fully reflect the key strategic actions” it has taken in recent years.

Royal bank of Scotland, states it has made “significant progress in strengthening its credit profile since 2008.”

Nonetheless, the downgrades did cite concerns about the welfare of the global financial system in terms of “more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions”, but in a more direct way, how do they affect banks and consumers like us?

Ratings by Moody’s and Standard & Poor’s help set rates at which banks can borrow money and ultimately the rate at which they can extend loans to businesses and consumers. Banks sell commercial papers to money market funds, a form of borrowing used to meet short-term cash needs. Truth is, the downgrades may make it difficult for banks to sell these commercial papers.

In the long run, banks with lower ratings will have to pay more to borrow money and finance lending activities. The higher cost of capital may equate to higher costs to consumers in terms of mortgages and small business loans. In theory, banks with higher ratings will not be affected and therefore be able to provide better rates says Jodie Lurie, corporate credit analyst at Janney Capital Markets.

However, the flip side of the story is that at least in the short run, the downgrades may in fact have little effect on consumers. In fact, some analysts do not see financing cost for banks as an issue. Joseph Morford, a bank analyst at RBC Capital Markets said, “The commercial banks are flush with deposits and liquidity, so if anything, many of them are retiring debt and are relying less on issuing debt to fund their operations.”

Experts do see any direct impacts on rates or fees offered by the downgraded banks to consumers. When revenues were pressed in the past banks have tried to raise and impose fees on things like debit cards. However, consumer complaints forced banks to roll back these fees and impose them in more discrete places. What this means is that for consumers, there will be, if any, few changes to bank rates. Bank customers will continue to see low yields on their CDs and savings accounts, in addition to low rates on mortgages based on qualifications.

According to Keith Gumbinger, vice president of HSH.com, a mortgage information website people won’t find any “appreciable effect” on mortgage lending. He also does not expect the downgrade to affect banks’ willingness to make huge loans to people buying costly homes.

Overall, as Lurie says, “the downgrades are likely to trigger some near – term volatility.” However, with regards to its implications, bank financials are strong, so we should not expect to see much change in bank savings rates and mortgage rates.

Looking for some competitive CD rates in New Jersey? First Choice Bank is offering some of the highest rates in the state. Top rates include:

• 36 month CD paying 1.64% APY
• 48 month CD paying 1.83% APY
• 60 month CD paying 2.10% APY

The CDs have a $1,000 minimum deposit.

The bank is headquartered in Lawrenceville, NJ and has five branches around the Trenton area. The bank was founded in 2007 and has seen strong growth since then, increasing assets from $55 million to $669 million in 2011. That makes it one of the fastest growing banks in the state and the country for that time-period. Banks that are in high growth mode usually offer higher deposit rates since they need the cash for lending.

The growth hasn't hurt the bank's safety and soundness. Its Texas ratio is a low 6.94% versus the national average of 19.96% (a lower Texas ratio generally means a safer bank). In general, I've found that banks opened after 2006 tend to have lower Texas ratios as they avoided much of the lending excesses of the decade and started off with clean balance sheets.

Visit First Choice Bank

If you don't live near Trenton, NJ don't despair. In our database, I found 36 banks and credit unions nationally offering over 2% on a 3-year CD and over 200 banks offering at least 1.50% APY. The average national 3 year CD rate is 1% APY. There is not reason to settle for this average rate. With five minutes of research you can find a much better rate in your neighborhood or online.

Find the best CD rates in your local area. Remember, don't settle for average rates on your money.

Previous Weekly Rate Spotlights

• March 13, 2012 - The City National Bank of Metropolis Offering 1.26% APY Money Market Account
• March 6, 2012 - North Country FCU Offering 2.80% APY 60-Month CD - Northern Vermont
• February 27, 2012- El Paso Area Teachers FCU Offering 2.98% APY Five Year CD
• February 21, 2012 - Cardinal Bank Offering 2.01% APY First Choice Checking
• February 13, 2012 - Citizens State Bank Offering 4.00% APY Variable IRA
• February 6, 2012 - Liberty Bank & Trust Offering 1.31% APY Savings Account Rate
• January 30, 2012 - WYMAR Federal Credit Union Offering 2.27% APY 24-Month CD
• January 23- 2012 - Frederica Credit Union Offering 1.65% APY 12-Month CD - Open to All
• January 17, 2012 - Western Heritage Bank Offering 2-Year CD Paying 1.75% APY
• January 9, 2012 - Navy Federal Credit Union Offering 3.00% APY 20-Month IRA CD
• January 5, 2012 - Consumers Credit Union Offers 4.09% APY Rewards Checking Account - Nationally Available

Check back next Monday for a new bank deal. Email any deals you know about to ratedeal (at) bestcashcow.com. Feel free to also share them below. If you're a bank and have a great deal not listed on BestCashCow, register for access and add the deal to the site.

Email Rate Updates for BestCashCow Readers

Users can now register to receive the best bank rates via email every Monday. You can choose to either receive the best rates for banks across the country, or you can receive the best rates for your state. You can cancel delivery at any time and also login to change which product rates you receive for which state. This email service is free. You can register for the service here.