Capital One Offering $50 to Open Online Savings Account, Money Market, or CD

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Capital One is offering $50 to open an online savings account, money market, or CD. The account currently pays 2.01% APY on balances above $10,000. That's somewhat competitive according to the BestCashCow rate tables.

Capital One is offering $50 to open an online savings account, money market account or certificate of deposit.  The savings account currently pays 2.01% APY on balances above $10,000.  That's a somewhat competitive online savings rate according to the BestCashCow rate tables. The Certificates of Deposit are not rate competitive on their own.

To get the money, you'll need to open one of the products before April, 15, 2009 and have at least $10,000 on deposit by 05/8/2009.  Other important information includes:

  • This must be your first account with Capital One Direct Banking.  They are only looking for new money.
  • Interest credits will be deposited into your account 4-6 weeks after 5/2/2009.
  • The minimum initial deposit amount is $1.

AmericaNet Bank Offering 3.10% APY Mega Money Market Rate

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AmericaNet Bank, a division of Oklahoma based All-America Bank, is offering 3.10% APY on its Mega Money Market Account.  Key featured of the account include:

  • Includes 6 FREE withdrawals per month ($5 fee for each additional withdrawal)
  • FREE Account (No Monthly Maintenance Fee)
  • FREE Daily Email Notification if Overdrawn
  • NO MINIMUM BALANCE

The account application is all electronic.  Identify is authenticated via several questions pulled from your credit report.  Funding the account can be electronically via ACH. 

AmericaNet also offers a 5.25% APY Rewards Checking account on the first $25,000 deposited.  The subsequent funds receive a lower rate of 2.25% APY, which is still competitive.  To get the rate the sole requirement is that you must make 10 AmericaNet Bank® VISA® CheckCard sales transactions per month.

Safety and Soundness

All-America Bank, the parent company of AmericaNet Bank has a Bauer rating of 4 out of 5 stars (Excellent) for its safety and soudness.  The bank has been FDIC insured since December 22, 1969 (Certificate # 20093).

See the best savings rates here.


Brokerage Sweep Accounts Offer Safety but Awful Return

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Millions of investors have parked their cash in brokerage sweep accounts. In most cases, this is a bad idea.

As stock markets have crashed, millions of investors are holding a significant percent of their portfolio in their brokerage sweep accounts.  While this is good for financial companies, it's terrible for investors.  Sweep accounts offer rates of return as low as .01%.  For banks, the accounts are a bonanza.  They reinvest the money parked in these accounts at significantly higher rates, earning billions per year.

So, how do you make sure that you get a decent rate of return instead of funding your bank?

Move the money out of your brokerage account temporarily until you are ready to reinvest.  High yield savings and money market accounts on the BestCashCow rate table pay above 3% APY.   If you want to park significantly more than the FDIC limit of $250,000 per person per bank, then you may want to consider a CDARS program.

The disadvantage of getting these higher rates is that you'll have to move the money out of your brokerage and it can take 3-4 business days or longer to move the cash back in.  If you don't need immediate access to your money, it's not a problem.  But if you want to be able to transfer and trade, the time limit might be a drawback.

A solution to the access problem is to look  for a companion savings account with your broker.  Online stock brokers like Etrade and Charles Schwab offer relatively high savings accounts that provide ffast and easy transfer between brokerage and bank.  Etrade is currently paying 1.95% APY while Schwab is paying 2% APY.  BankDeals has a good review of the Schwab High Yield Investor Savings.  Be sure to ask your broker about higher yielding options 

Sweep accounts were never meant to be a place to park money for long periods of time.  Your broker has no incentive to suggest you move your money elsewhere but if you ask they should be able to provide a better option.  If they don't, at least you now know there are higher yielding places to invest your cash,