Banking Deals of the Week: Nov. 4

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It’s a tough world out there, with Americans postponing their pursuit of the American dream to hunker down until the economic storm passes — and when that happens is anyone’s guess.

While we wait for a revival and focus on survival, let’s make the best of the situation by finding the best bank interest rate deals out there.

BANK SAVINGS ACCOUNTS

This week’s hunt starts in the savings account marketplace, where Discover Bank (Stock Quote: DFS) has a whopper of a savings rate — 1.75% as of Nov. 4.

That’s light-years ahead of the 0.22% average savings rate pegged by the BankingMyWay Weekly Savings Rate Tracker.

The Discover account is strictly an online savings account, with no minimum balance and the ability to set up automatic transfers from any bank checking or savings account.

The rate has fallen in recent weeks from 1.85% so it’s wise to act fast. For all the details, visit the bank's site.

BANK CDs

Ever hear of an “added-value” certificate of deposit?

In a word, it's a CD that add a few basis points to the interest rate, much like a baker adds an extra muffin to your “baker’s dozen” on Sunday mornings.

ING Direct (Stock Quote: ING) has a similar deal with its added-value CD, which adds 15 basis points to bring the interest rate on its 12-month CD to 2.25%.

That’s twice the amount of the average 12-month CD rate return, according to the BankingMyWay Weekly CD Rate Tracker, which clocks in at 1.02% this week.

You have to open the account online, but there is no minimum funding payment and the payout options are extremely flexible. A word of caution — if you try to take the CD proceeds out early, expect to be charged roughly three months of earnings.

Also, ING Direct is firm about using your bank checking account to fund the CD (it doesn’t have to be an ING bank account). So have your checkbook handy when you open the CD.

For the details, visit ING's site.

U.S. TREASURY BONDS

We don’t talk much about U.S. Treasury Bonds here at “Deals of the Week” but maybe we should — especially when you can get a deal like the one offered by TreasuryDirect.gov.

The object of our desire this week is the Treasury’s “I bond,” which combines a fixed rate with the current inflation rate to give you a pretty good return when compared to similarly-lengthed bank CDs.

Right now, you can get an I bond that pays a return rate of 3.36% — 0.3% based on the fixed rate and 3.06% based on the current inflation rate.

What are I bonds? The TreasuryDirect.gov Web site describes them:

“I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. Once sold and redeemed solely as a paper security, they’re now also available in electronic form. As a TreasuryDirect account holder, you can buy, manage and redeem I Bonds online.”

The 0.3% on the fixed-rate portion of the I bond is three-time higher than the 0.1% we saw last spring, but it’s also way below the 1% rate we saw in 2010 — but at least it’s moving back in the right direction.

To find out more about I bonds, and the 3.36% rate, check out TreasuryDirect.

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

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