MrNovember said:Is it okay to pull out of Charter before the interest posts, or do you have to wait for it to post, or else risk losing the interest?If you close the account, any accrued interest will be lost. So if you want to close it, leave a minimal balance for another statement cycle, get the remaining interest, then withdraw the remaining balance at the beginning of next month.

bogalusa said:Pakman0209 said:ThursdaysChild said:BankDeals has just posted about a newly nationwide rewards checking account at Farmers & Merchants bank (of Virginia, home office Timberville, 3 stars BankRate, 3 CAEL).

5.02% on balances up to $50,000 and 2.05% for balances over $50K:

Make 10 Check Card Transactions
Set Up One Direct Deposit or ACH auto debit
Enroll and receive electronic statements
Access NetTeller online banking

Opening deposit minimum $10.00

looks good to me!
And it looks good to me, too.

(Edit 1: The quotes above are from August 2008.)

(Edit 2: FW thread on this in Deal - not sure why it wasn't moved to FWF. Thx again, jenna)

After considering First Ark B&T, Newport FSB, West Bank Iowa and others, I think I'll go with Farmers & Merchants. Given my predicted account balances, the potential for earning interest seems best at F&M. And I am so risk-averse that the difference in requirements of 10 debit-card txns vs. 12 (at West Bank, for example) is significant.

But perhaps more important, I'm placing my "bet" with F&M as I think they are least likely—among the banks I considered—to lower their rate any time soon (no science here, of course). F&M's rate came down to 4.51 in December, while FAB&T hasn't moved from 4.44% in a year now. NFSB apparently dropped its rate twice in December (tip of the hat to jennatx), but offers less interest-earning potential for me.

Here's hoping that F&M stands pat for a while with 4.51% / 1.54%.

As BankingGuy on BankDeals noted, the digits of interest rate above $50k are the reverse of the digits of the interest rate capped at $50k. I hope this is the only way F&M is cute.

Effective May 2009, their rates 4.01% / 1.04%. Good thing they are so stable at least in reversing the digits .

I am biting.

Data point: they (Farmers & Merchants, that is) pull hard credit for each of the joint applicants. Require notarized driver license via snail mail.

One year, as I understand it.

cyberkost said:mikesay98 said:One year, as I understand it.
2 years is the correct answer.

And this means your credit score is negatively affected for 2 years?

MrNovember said:
And this means your credit score is negatively affected for 2 years?
The negative effect on the score is usually small (1-3 points) and it wears off in 6 months to a year. The inquiry does stay for 2 years though, so it may be an influencing factor if your credit report is reviewed (and not just credit score looked at) even after the first year.

I know this has been covered before, but because of the changing market, I thought it would be good to ask now too: Does anyone have a sense which of these accounts are more likely to keep their interest rates and not get slashed like so many others have? I am debating whether to get the 1.75% savings at capital one/costco, or try one of these accounts. Right now I'm leaning toward the capital one/costco account just to prevent the headaches it looks like many of you have experienced with these reward checking accounts. For reference, I am a CA customer and would put roughly 25k into the account.

Additionally, does anyone have any information about which of these accounts have the fastest transfer out time? I like to use a separate checking account for everyday things to help me manage money, so I would probably keep a regular checking account, but sometimes I need to move funds fairly quickly between accounts.

Thanks

uutxs said:blackacre said:I know this has been covered before, but because of the changing market, I thought it would be good to ask now too: Does anyone have a sense which of these accounts are more likely to keep their interest rates and not get slashed like so many others have? I am debating whether to get the 1.75% savings at capital one/costco, or try one of these accounts. Right now I'm leaning toward the capital one/costco account just to prevent the headaches it looks like many of you have experienced with these reward checking accounts. For reference, I am a CA customer and would put roughly 25k into the account.

Additionally, does anyone have any information about which of these accounts have the fastest transfer out time? I like to use a separate checking account for everyday things to help me manage money, so I would probably keep a regular checking account, but sometimes I need to move funds fairly quickly between accounts.

Thanks
My guess is as good as yours regarding "which of these accounts are more likely to keep their interest rates?" That said, in most cases, when the rates drop for a RCA, the reduced rates are still competitive wrt a savings a/c (Charter turbochecking being a recent exception). With 25k to invest, you can nominally manage it with a single RCA and I would go with one instead of a savings a/c.
IMO, the best chance of preserving a good RCA rate is to find a local-only RCA that not too many people know about. RCAs available to all (or that were available to all for a while before becoming more localized) tend to have the most severe rate drops. It seems once quite a few people have taken advantage of an RCA opportunity, this makes the rate more subject to downwards pressure.

Another possibility: Perhaps the FI has reached a point where they can no longer sustain an interest rate for all those RCAs when the disparity between the Federal Funds Rate and the RCA rate is so great. The FI might also have tried to increase deposits and overshot their goal, thus also making it less desirable to maintain a high interest rate. Probably multiple factors are in play here, with the low Federal Funds Rate providing a common limiting factor that trumps everything else eventually.

Without a rate guarantee or some other immediate benefit or incentive, I'd feel uncomfortable in taking advantage of any nationally available RCA at a decent rate, unless I was prepared for the likelihood that the rate would shortly decline significantly. It's sad to say that discussing any such nationally available RCA deals here (especially if a dedicated thread is started for them) or at the Bank Deals blog probably contributes to shortening their lifespan. Although local-only RCAs might eventually suffer rate drops, it might take longer for that to happen.

IMO, the days of nationally available 6% or even 5% RCAs are over (unless the Federal Funds Rate increases significantly -- an unlikely event in the short-term, whatever "short-term" means), and even 4% nationally available RCAs are becoming harder to find.

Well, we all kinda know which nationally-available RCA will be going down (either in interest rate, limit, or national availability) next

The problem with opening many RCAs is that one reduces the likelihood of success (i.e., getting hit by Chex, et. al.) when one applies for "more promising" RCAs in the near future.

DavidScubadiver said:I ran out of stamina and cannot open up any more reward accounts. I will keep 50k in with Bank2 and probably keep one other RCA active. I am just worn out with the new accounts and how fast they drop. Instead I am loading up on the janus short term bond fund and hoping for the best with my cash not otherwise invested in stocks.

Oh boy, I feel exactly what you are saying!

I for once, am only keeping one; this is the aftermath of managing five RCA at once, honestly; I've giving up. As you, I'm moving the money to MF for now, wish me luck as I wish it to those that fearless are still willing to keep RCA battle going. Keep it up boys, I hereby surrender and raise the defeat flag....for now.

I also agree that managing these reward accts can be an irritant and a nuisance at times! What keeps me going is a similar calculation; in my case, the fact that 200K of HELOC $ on which I currently pay 2.24% (101 under prime) nets me $3500-4000 annually at prevailing rates. Making multiple $1.01 Comcast payments takes maybe an hour a month. With the Fed saying they'll keep rates low for an "extended period," it's tough to give it back