Banking Deals of the Week: Oct. 20


Good banking deals are getting harder and harder to come by – and that won’t change for the better after the Federal Reserve kicks off its government bond buying spree.

Yesterday, Fed officials floated a plan to spend $100 billion per month in monetary stimulus, primarily via the purchase of U.S. Treasury debt.

With the U.S. economy expected to grow at a tepid 1.9% for the third quarter of 2010, Fed officials obviously believe that more aggressive stimulus measures are needed, and cutting long-term interest rates through government debt purchases is the way they have chosen to go.

As Atlanta Fed President Dennis Lockhart said in an interview on CNBC yesterday, the bond buying program isn’t a matter of “if” but “when” and “how much”.

"If we're going to pursue another round of quantitative easing, it has to be a large enough number to make a difference," Lockhart said. "As a monthly number [$100 billion] is fairly consistent with what we did before, and so I think it would certainly be in the range of numbers one might consider ... but if you were talking about $100 billion as simply the overall program, I think that's too small," he said.

Nothing is guaranteed though, and the Federal Reserve doesn’t meet for another two weeks, on Nov. 2 and 3. But if the Fed opts for the bond-buying gambit, expect bank rates to remain low for the duration of the Fed’s shopping spree.

Now, onto this week’s deals.

Money Market Accounts

The national average for interest rates on money market accounts, as calculated by the BankingMyWay MMA Rate tracker, is a paltry 0.273%.

But Discover Bank (Stock Quote: DFS) seems determined to blow that number up off the map.

Discover is offering a money market account rate of 1.00% and higher for deep-pocketed savers. There aren’t any fees attached to the deal, and you can get free transfers, automatic bill pay, a debit card option, and mobile banking money transfers.

For bank customers who want to treat their money market account like a checking account, the Discover deal seems like the right stuff. You get the FDIC insurance with a money market account, but still get to treat it very much like a bank checking account.

Here’s a breakdown of the money market deposit categories at Discover Bank as of Oct. 20:

Term                           Rate

$2,500-$4,999             1.00%
$5,000-$9,999             1.00%
$10,000-$24,999         1.20%
$25,000-$49,999         1.20%
$50,000-$99,999         1.20%
$100,000 Plus             1.30%

Discover claims the average rate attached to its money market accounts are five times the national average. If you’ve got some money to park for the short term, you could do a lot worse than this deal.

Discover is also offering a nice 1.35% APY for all of its savings accounts, too. Get the whole story on Discover's website.

Savings Accounts

Wilmington Trust has a good reputation for treating consumer depositors fairly. Now, it’s looking to extend that good will in a big marketing effort to get more “high depositors” inside the bank’s doors.

The bank’s WTDirect Cash Bonus program offers up to $300 for big depositors – and only for the month of October.

The breakdown looks like this, according to the bank website:

  • A balance of $10,000 will earn you a cash bonus of $100.
  • A balance of $25,000 will earn you a cash bonus of $150.
  • A balance of $50,000 will earn you a cash bonus of $300.

To earn the bonus, you have to deposit the cash by Oct. 31, then keep that balance active for three months. Right now, WTDirect is offering a pretty good deal on its savings account rate: 1.21% for deposits of $10,000 or more. That’s a good number, when compared to the national savings account average rate of 0.188%, as measured by the BankingMyWay Savings Rate tracker.

The 1.21% APY for deposits of $10,000 or more is a level that places the bank (by its own estimates) among the top 5% in bank savings account rates in the U.S.

Find out more at WTDirect's website.

Bank CDs

Presidential Bank is celebrating its 25th birthday in style – with some great deals on certificates of deposit.

The bank, which bills itself as the first-ever “Internet Bank,” has an interesting lineup of CD deals. Here’s a list:

Duration         Rate                BankingMyWay Average Rate

30-Day           0.50%              N/A
60-Day           0.50%              N/A
90 Day            0.50%              0.245%
182 Day          0.75%              0.386%
1 year             1.00%              0.585%
2 Year             1.75%              0.887%
5 Year             2.50%              1.665%

The minimum deposit for each CD category is $1,000. There is a minimum balance charge involved, so make sure to keep your CD account above $1,000.

For more information, check out Presidential Bank's website.

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