Washington Post Nails It - Savers Penalized by Bailouts

Rate information contained on this page may have changed. Please find latest savings rates.

We've talked about it for some time, but the Washington Post has finally gotten with the program. The economic crisis and subsequent bailouts have severely penalized savers and those living on fixed incomes. Bankdeals has pointed out an article by Allen Sloan  that puts its finger on the dilemma created by the low rate environment engineered by the Fed.

"This is a quiz. What do the record-high Wall Street bonuses have in common with the record-low yields for savers? Answer: They show yet another way that prudent people, especially those living on fixed incomes, are being cheated by the government's bailout of the imprudent."

The article goes on to discuss how this time, the damage done to savers is greater than in the past. Usually, the Fed lowers short term rates (the Fed Funds Rate) which impacts yields on savings and CD accounts. But this time, it has purchased hundreds of billions of Treasuries to lower yields. Treasuries yields have dropped to record lows, even as the government issues more to cover it's record debt.

And the Build America Bond program allows municipalities to borrow, with 35% of the borrowing subsidized by the public. These bonds have crowded out regular municipal bonds and droppped yields to near record lows.

Those living on fixed incomes have been in a tough pickle. My advice is to ensure that all savings and cd rates are getting the best possible interest. Be sure to open a high yield savings account or a cd via a site like BestCashCow.

And hold on. Yields will not stay this low forever and if anything, will rise dramatically as the dollar continues its decline/collapse and as the economy shows some small signs of life.

 

 


SFGI Direct Offers 2.25% APY on High Interest Savings Account

Rate information contained on this page may have changed. Please find latest savings rates.

SFGI Direct, a division of Summit Community Bank is offering a high interest savings accoung paying 2.5% APY. That's currently the best savings rate on the BestCashCow rate tables.

SFGI Direct, a division of Summit Community Bank is offering a high interest savings account paying 2.25% APY. That's currently one of the best savings rates on the BestCashCow rate tables.

Summit Financial Group, Inc., the owner of Summit Community Bank, is a financial holding company which provides community banking and insurance services. Summit’s community banking operations consist of 15 banking offices located in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley and Northern regions of Virginia.  As of June 30, 2009, Summit Community Bank had $1.5 billion in assets.

High Yield Savings Account

SFGI Direct's only offering at the moment is their high yield savings account. Key features include:

  • Minimum initial deposit of $500
  • Initial deposit limit of $25,000. You can deposit more using additional deposits.
  • Funding only via electronic ACH.
  • Interest accrues daily and credited monthly.
  • No beneficiaries or IRA accounts.
  • Joint accounts are available.

Account Opening and Funding

When opening an account, you will be asked for your U.S. Social Security number and a valid form of identification including: Driver’s license, State ID, Military ID or Passport. You will also need to provide personal information, including your name, social security number, date of birth, physical address, telephone number, former mailing address(es), and employment information.  If you are not a U.S. Citizen or U.S. Resident Alien and do not have this information, you will be unable to open an account.

Once your account is opened, the only way to fund it is via an electronic ACH transfer from another bank account. SFGI Direct will validate the sending account via to small micro deposits. 

 SFGI Direct Safety and Soundness

SFGI Direct's parent Summit Community Bank is an FDIC insured institution. Bauer Financial gives it 2 out of 5 stars (Problematic)  for its safety and soundness which is actually rather low for a community bank. As always, be sure to stay below FDIC insurance limits of $250,000 per person per bank.

Please share your experience with SFGI Direct below. 


Capital One Direct Offers $50 Money Market and Savings Bonus

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Capital One Direct Banking is offering another $50 bonus to open a savings account or money market account online. To get the bonus you need to open an account and fund it with at least $10,000 by 11/25/2009.

Capital One Direct Banking is offering another $50 bonus to open a savings account or money market account online. To get the bonus you need to open an account and fund it with at least $10,000 by 11/25/2009. 

Details of the offer include:

  • Online available to accounts opened online
  • Must have opened account with offer code SAVER50DF and funded it with $10,000 by 11/25/2009
  • This account must remain open 4-8 weeks after 11/25/2009 during which time the bonus will be deposited into your account.

The savings and money market accounts are currently paying 1.60% APY which is currently the 20th amongst the best savings account rates on the BestCashCow rate tables. That's competitive.

Let's do a little math. If you deposit $10,000 and get a $50 bonus, that's a .5% return. Add that to the 1.6% APY and you get an 2.1% APY, which would put it third on the rate table for return. If you deposit more money then that return will go down.

Capital One also has a Costco account. Costco members can open a savings account that currently yields 1.75% APY instead of 1.6% APY. With that bonus, the Capital One account would have the top 1 year APY for deposits of $10,000.

ACH Transfers Improved

As reported by BankDeals, Capital One Direct has also improved the speed of its incoming ACH transfers. Incoming transfers now post the next day as long as the transfer is made for 7:00 PM. Outgoing transfers though still take 2-4 business days. To me, the outgoing transfer speed is the bigger issue. If I need the cash, I want it quick. I'm less concerned about losing a day or two of  interest on the way in.

Please share any questions or experiences you've had with this account and bonus.