The Federal Open Market Committee meets today and the focus will be squarely on the statement they issue afterward. With Fed Chairman Ben Bernanke stating the recession is likely over, the Fed’s task now shifts from monitoring a contracting economy to one that is now in the process of recovery. Just when will the Fed need to begin raising interest rates? And how will the Fed go about unwinding their mortgage purchase programs without causing a spike in mortgage rates?
The sustainability of the economic recovery must be unquestioned before the Fed can entertain thoughts of raising interest rates. We’re not there yet, as the recovery is widely seen as tentative or easily derailed if an unexpected shock arises. B
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Meets Today, Today
Hudson City Savings Bank is now offering two of the best CD rates in the country.
The bank, which has dozens of branches in New Jersey, New York and Connecticut, is paying 2.50% APY on 24-month certificates of deposit and a 3.00% APY on 36-month CDs.
That beats the best deals in our most recent rankings of the top-paying, nationally-available 2-year CD rates and 3-year CD rates.
It even matches the 3.00% APY Flagstar Bank is offering most savers on 36-month CDs — just not those that live near its branches in Michigan, Georgia and Indiana. (
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Cd Rate, Hudson City, Rate
Hot Deals, Quick Link for Rates, Recap of this week’s posts
The total number of bank failures for the year is now 98. Three banks failed on Friday. For all three, the FDIC was able to find buyers who agreed to assume all deposits including those above the FDIC limit (see post). The main concern will be for CD holders at the failed banks since the acquiring banks have the right to cut rates. One thing that we’ve learned this year is that the acquiring banks often don’t communicate this change well (see MB Financial post). However, one of the acquiring banks from Friday’s failure didn’t waste any time informing customers of their decision.
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Deals, Deals Weekly
Three banks failed today. It has been three weeks since there has been 3 or more bank failures on a Friday. All 3 banks were relatively small. One had around $500 million in assets. The other two were tiny with well under $100 million in assets. Total cost to the Deposit Insurance Fund was just under $300 million which is fairly small compared to the losses in previous weeks. Some had speculated that the FDIC may have slowed the closures until the assessment money from the banks start coming in to replenish the DIF.
All of the three closures today were typical. The FDIC was able to find buyers for all three, and the buyers agreed to assume all deposits, even those above the FDIC limit.
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Three Banks, Week
If you have not already, make sure to read the great articles from Money-Rates.com contributors Adam Jusko and Richard Barrington that mutually show how saving money is much better than going into unneccessary debt.
Indeed, saving money has become as wise today as refinancing the house was (or seemed?) when you had 75 percent equity and could take out $500,000 at 5 percent, if in fact that seemed wise then.
This recession has certainly emphasized the importance of frugality, which then enables you to save. Because it really is self-discipline, in the end, that separates those who have some money from those who are dead broke.
This recession has surely created a class of broke people that are not to be envied. U
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North Cascades National Bank has some competitive short-term CD rates. The most competitive include a 2.02% APY for 3- and 6-month terms and a 2.07% APY for a 9-month term. Minimum deposit is $50,000. Slightly lower rates are available for a $10,000 and $500 minimums. They also have IRA CDs with slightly lower rates, but they only list terms of 12 months, 18 months and 36 months. The full list of rates are shown below.
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Bank, Cascades National, Cascades National Bank, National Bank
If you want the highest CD rates around, you’ll have to join a credit union like Wings Financial Federal Credit Union.
Every one of its CDs pays more than the highest-yielding certificates of deposit in our rankings of the best, nationally-available bank CDs:
1.97% APY on a 3-month CD when the best national rate is 1.50% APY.
2.38% APY on a 6-month CD when the best national rate is 1.76%.
2.78% APY on a 12-month CD when the best nation rate is 2.25%.
2.99% APY on a 24-month CD when the best national rate is 2.40%.
3.14% APY on a 36-month CD when the best national rate is 2.90%.
The minimum deposit is only $500 for all of those CDs.
Wings Financial has 123,000 members and is open to the employees, retirees and families of 130 air transportation companies, including 54 airlines.
You can apply online or call the credit union at 1-800-692-2274 for further information. W
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Cd Rates, Rates, Wings Financial