Banking Deals of the Week: Aug. 4

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In the beginning of April, the 10-year U.S. Treasury note was brushing up against the 4% level. Since then, the 10-year note has fallen more than 100 basis points, to 2.92% in Wednesday trading.

The 10-year bond is an important bellwether for bank investors. By and large, the direction of bank rates mirrors the direction of the 10-year note, but lately, that direction’s pointing south.

The 2.92% rate tells you all you need to know about the relative health of bank interest rates. They’re low and there are still no concrete economic trends that would fuel an upward push for interest rates.

Sure, the fact that U.S private employers gained 42,000 jobs in July is better than analysts expected, but this is still well short of the 100,000 to 200,000 new jobs needed each month to really jump-start the U.S. economy.

If you’re considering jumping into the bank rate market, keep a sharp eye on the 10-year U.S. Treasury note. It has trended downward the past three months, but given some better economic news (stronger numbers from the U.S. Labor Department would help), it should bounce up again, taking bank rates with it.

Free Checking

For now, let’s forget the big picture and focus instead on good deals for bank interest rate investors.

First up is Chicago-based South Division Credit Union. They’re offering a sweet deal: 4.01% interest rates on its Free Green Checking Account. It’s also easy to get — just check out the application on its website.

Here’s what you’ll need to qualify for the 4.01% rate:

  • Use E-Statements as opposed to a printed and mail paper statement.
  • Use your VISA Checkcard for 12 or more “credit” (non-PIN) transactions.
  • Use online Bill Pay to pay a minimum of one bill.
  • Use direct deposit and/or ACH to fund your checking account with a monthly deposit of $250.

High-Yield Savings

American Express (Stock Quote: AXP) Bank is out with a new deal — a 1.3% APY if you open an Amex High Yield Savings Account. There’s no minimum balance and Amex doesn’t charge any fees on its high yield savings account .

Open the account whenever you want — 24 hours a day, 7 days a week. Applications and transactions can be completed online or over the phone by calling 1-800-446-6307.

The address for snail-mailing checks and account info is as follows:

American Express Bank

P.O. Box 30384

Salt Lake City, Utah 84130-0384

Incidentally, the average rate for bank savings accounts, according to this week’s BankingMyWay Weekly Savings Account Rate tracker, is 0.205%.

Learn more at AmericanExpress.com.

Certificates of Deposit

We don’t talk about seven-year certificates of deposit much — not many are around, and you shouldn’t tie up your cash that long unless you’re getting a really good interest rate.

But Pentagon Federal Credit Union has a good rate — 3.75% on its 7-year IRA Certificates. Most five-year CDs pay out less than 2% these days, so if you don’t mind the extra two years, you’ll get a decent deal at 3.75% (The credit union also has a two-year certificate that pays out at 1.75% - far ahead of the 1.116% national average as measured by the BankingMyWay Weekly CD Rate Tracker.

Watch out for early withdrawal penalties - redeeming your cash within 365 days of the certificate issue date makes you forfeit all dividends – a year’s worth of interest after only the first year. If you close your account within the first year, you’ll also lose interest earned.

The credit union provides a “7 Top Ways To Join” web page and anyone can sign up easily earning the big rate deals.

Download an application at PenFed.org.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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