Banking Deals of the Week: Sept. 30

ADVERTISEMENT

It’s been an interesting week so far in the bank marketplace, particularly as the FDIC finally announced the framework to shore up its cash reserves – by turning to banks, and not U.S. Treasuries, for funding.

Primarily, the FDIC will pump up its bank insurance fund by requiring financial institutions to “prepay” their FDIC insurance fees. Here’s what the agency said in a press release issued Tuesday.

“The Board of Directors of the Federal Deposit Insurance Corporation today adopted a Notice of Proposed Rulemaking (NPR) that would require insured institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The FDIC estimates that the total prepaid assessments collected would be approximately $45 billion. The FDIC Board also voted to adopt a uniform three-basis point increase in assessment rates effective on Jan. 1, 2011, and extend the restoration period from seven to eight years.”

FDIC Chairwoman Sheila C. Bair said, "First and foremost, bank customers should know that their insured deposits have and always will be 100% safe, no matter what. This commitment to depositors is absolute. The decision today is really about how and when the industry fulfills its obligation to the insurance fund. It's clear that the American people would prefer to see an end to policies that look to the federal balance sheet as a remedy for every problem. In choosing this path, it should be clear to the public that the industry will not simply tap the shoulder of the increasingly weary taxpayer. This proposal is a vote of confidence for the banking industry's resilience, and it will continue to recover its strength as we work through the significant challenges ahead."

Stability is critical in the banking and finance markets, so the FDIC announcement should be welcome news for both banks and their customers. Whether that has any impact on good rate deals (and it sure can’t hurt) remains to be seen. But we can say that, week-by-week, bank deposit deals seem to be getting better and better.

Online Savings Accounts

First up this week are online bank savings accounts, which have been an oasis for bank consumers throughout the country’s two-year-long economic troubles.

But Discover Bank (Stock Quote: DFS) has been strong on the savings rate front all along – and the streak continues with a 2% APY for the first 90 days in its signature online savings account.

Discover says the rate is about five times higher than the national average.

At 0.29%, according to the BankingMyWay Savings Rate Tracker this week, Discover is doing significantly better than that.

Check it out for yourself here.

CD Rates

Here’s a unique deal, one where you certainly have to give Citibank (Stock Quote: C) points for creativity.

The bank has crafted a secured credit card deal that’s tied to an 18-month certificate of deposit that pays a - wait for it – 4.07% interest rate.

So, if you’ve been down on your luck financially, or are just starting out and are looking for stronger credit, the deal gives you both a high-profile, secured credit card, plus an 18-month CD that’s paying way more than the national average (two-year bank CDs are paying an average interest rate of 1.52% this week, according to BankingMyWay’s weekly CD Rate Tracker.)

Straight from the Citibank Web site, here’s how the deal goes down:

Build Your Credit Score and Earn a Competitive Interest Rate
Deposit an amount, from $200 to $25,000 into a CD. Your credit card limit then becomes equal to the amount of money in your CD. We (Citibank) report your account performance to major credit bureaus, and after 18 months, you could become eligible for an unsecured Citi Platinum Select credit card. Meanwhile, you'll earn a competitive annual interest rate on your CD.

Build Your Credit History
With no minimum income or co-signer required, it's simple to qualify for this credit card, so you can start building a record of account performance for future borrowing purposes.

Retail Purchase Protection2
Most items purchased with your card are eligible for protection against accidental damage or theft for up to 90 days from the date of purchase.

$0 Liability on Unauthorized Charges
Shop anywhere and never lose a penny on unauthorized charges. With $0 Liability you won't pay for any unauthorized charges made on your Citi credit card.

Auto Rental Insurance2
You're automatically covered when you reserve and rent a vehicle with your Citi card and decline the car rental company's collision loss/damage waiver insurance.

Citi MasterCard® Payment Tag with PayPass
Enjoy the tap-and-go convenience of a Citi MasterCard Payment Tag with PayPassTM. This new technology allows you to pay by tapping your payment tag on a PayPass reader at checkout. No fumbling for cash and no signature required on most purchases up to $25.

Citi Credit Card Benefits & Services
Your card includes a wide range of benefits and services to help protect your credit, provide simple online account management, offer cash or rewards and much more.

Rewards Checking Accounts
To wrap up the week, check out KANZABank, a Kansas-based bank – and its 4.01% APY bank checking rewards account.

The rate seems good in all 50 states, according to the Web site.

According to KANZA, to qualify, just make 12 monthly debit card purchases on your account; set up at least one direct deposit or automatic payment and enroll and receive electronic statements. The minimum opening deposit is $100.

Account features include:

  • 4% APY earned on balances up to $25,000 when qualifications are met
  • Free Online Banking
  • Free Online Bill Pay
  • No minimum balance
  • No monthly service charge
  • Unlimited ATM fee refunds per cycle when qualifications are met
  • Overdraft Protection

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

Show Comments

Back to Top