Banking Deals of the Week: July 14

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A Canadian economics outfit has released new data that paints a dark picture for the U.S. housing market — and for the overall economy.

Capital Economics, a Toronto-based investment/economic analytical firm, says that a “double dip” is on the menu for the housing market. Report author Paul Dales, as quoted by HousingWire.com, says that we’re on the precipice of a “new downturn.”

"The expiration of the homebuyer tax credit at the end of April has triggered a double-dip in the housing market, with new home sales falling particularly sharply in May," he writes in the report Double Dip Begins. "The only reason why existing home sales did not fall significantly is because they are measured at the contract closing, rather than signing stage."

Dales sees a big upward spike in the number of U.S. home foreclosures, which will set off a domino effect that will result in a “shadow inventory” of unsold homes that totals 7.9 million. "That dwarfs the 3.9m homes already on the market,” Dales writes.

If Dales is correct, a double dip in housing will adversely impact bank savings rates. As more homeowners go under, they’ll have less money to spend. That hurts economic growth, and would likely force the Federal Reserve to keep interest rates low to foster economic growth.

Let’s hope Dales is wrong — but let’s also be prepared for lower bank rates if he’s right.

Checking Accounts

One way to get prepared for lower rates is to leverage a good checking account rewards deal.

Bank of the Wichitas has such a deal — a 4% interest rate on its Wichita Rewards Checking Account. It’s a free checking account that offers the 4% rate up to $10,000.

Account benefits include:

  • 4% APY
  • Free Online Banking
  • Free Checking
  • Free Bank of the Wichitas VISA CheckCard
  • Free Customer Service
  • Free Daily E-mail Notification if Overdrawn
  • Free ATM Transactions Worldwide
  • Overdraft Privilege Available

You’ll have to make 10 check card transactions and must receive all of your account statements electronically, but past that, the road to the 4% rate is wide open.

Note that if you do exceed the $10,000 threshold, you’ll only earn a 1% rate on every dollar above that figure.

Find out more at BankoftheWichitas.com.

Bank Savings

American Express Bank (Stock Quote: AXP) used to have a 1.5% interest rate on its signature Internet savings account, but even the current rate — at 1.3% — is still a good deal. Right now, the average rate on a bank savings account is only 0.208%, as measured by the BankingMyWay Weekly Savings Rate Tracker.

Amex calls the account a “high yield savings account,” and says that customers won’t be charged any fees or face any minimum balance requirements. But the bank also warns that rates could “change at any time” so it’s best to act fast to grab the good rate.

The bank also offers a 2% rate on it two-year certificate of deposit. Again, that is way better than the national average of 1.153% as calculated by the BankingMyWay Weekly CD Rate Tracker.

You can apply for either rate at AmericanExpress.com.

Business Line of Credit

Here’s an interesting deal from JPMorgan Chase (Stock Quote: JPM) for business customers — and for the U.S. economy.

It’s an interest rate deal that cuts a business line of credit rate for each employee a company hires. Says a press release from Chase, dated June 30:

“Starting today, Chase will lower its interest rate on a new Chase Business Line of Credit by 0.5 percentage point for each new hire, up to three, for the life of the loan. Counting the discount for a new business checking account, a small business owner could save about $4,000 over three years on an outstanding balance of about $65,000, Chase estimated.”

In 2009, Chase had upped the ante on its business line of credit ceiling, adding $4 billion to its business credit reserves (for a total of $10 billion).

The deal is good for any new — again, “new” — Chase Business Line of Credit customer with an account limit up to $250,000. Existing business customers can get in on the action, but will have to increase their line of credit balance by $10,000.

Chase business checking customers can also earn a half-point discount on any loans they take.

According to Chase, in the first quarter of 2010, the bank loaned $2.1 billion to small businesses — a 31% increase from a year earlier.

Get more information at the Shareholder.com website.

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

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