Banking Deals of the Week: Feb. 17

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The U.S. economy once again seems to be set on a shaky foundation, as the public debt rises just as foreign investors seem to be selling out of U.S. government and corporate bonds.

The U.S. Treasury reports that foreign investment in U.S. Treasury bills fell by $53 billion in December 2009. China gave up its perch as the number one foreign investor in U.S. bonds, selling $34 billion worth of Treasury Bills (now Japan is the number one holder of U.S. public debt).

Sure, you can’t make too much out of one month’s worth of Treasury bills statistics, but it’s worth watching. Why? Because if foreign investors continue to get the yips from Uncle Sam’s rising debt levels, it will put further pressure on the economy and, in the process, keep bank deposit rates down with it. Way down.

The Congressional Budget office estimates that the U.S. government debt will grow to $13 trillion by 2020. To pay for that debt, the government will have to issue Treasury bills to foreign investors at higher interest rates, especially if foreign investors show reduced demand for U.S. investment.

Consequently, we’re starting to see some effects from the exploding debt picture, and they aren’t positive ones for bank interest rate investors.

Bank Checking Accounts

One decent bank deal comes from M&T Bank, which is offering a “Build Your Own Bonus” plan that offers up to $150 for new customers.

Here’s the deal. All you need to do is open a new M&T checking account, then you can earn the bonus on a piece-by-piece basis.

  • Open a direct deposit account and earn $100 right off the bat.
  • Add overdraft protection to the checking account and earn another $25.
  • Add M&T’s Web Bill Pay service and earn another $25.

You can apply online here or call (866)878-0329.

Bonuses will be made to the account via direct deposit and those bonuses will be reported to the Internal Revenue Services for tax purposes.

Credit Cards

TD Bank (Stock Quote: TD) has an interesting deal in these recession-wracked times — a $10 TD Bank Visa (Stock Quote: V) Gift Card for every $100 you spend on groceries using that specific credit card.

The deal, which began Jan. 17, expires on March 6, but banks have a way of extending these programs if consumer response is good, and this deal should certainly qualify.

Here are some particulars on the TD Bank card deal. You can only earn up to $50 (for at least $500 worth of groceries) and you must sign up for the deal on the TD Bank Web site.

The bank only counts “signature-based transactions” as being eligible for the $10 gift card. Also, you can’t cut any corners by using warehouse stores, supersaver clubs or discount stores like Wal-Mart (Stock Quote: WMT) that sell groceries.

The bank says to allow up to six weeks for delivery of each $10 gift card. Find out more here.

Online Savings Accounts

Here’s an interesting deal, and sorry, North Carolina residents, because you’re not invited to this particular party.

It’s from Southern Community Bank — specifically the bank’s “Ready Saver” high-yield savings account that pays a 2% APY on your bank deposits.

There are no minimum deposit requirements, no monthly service fees and there aren’t any interest rate tiers that minimize or disqualify customers from getting the 2% return on their money. In a word, everyone gets the same deal.

Southern Community isn’t clear why North Carolina residents are shut out of the promotion — most likely the Winston-Salem-based bank is trying to avoid a stampede of in-state residents taking advantage of the deal. To that end, you can’t open an account and qualify for the deal at a bank branch — you only apply online at the bank’s Web site.

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

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