High interest rate savings account


Someone from my bank called recently offereing to up the interest rate
on my savings account from just over 1% to 4%. I asked him what was
the catch and he said none and that I didn't even have to maintain a
minimum balance. Claims this is the latest trend in banking.
We have a meeting set for a few days from now. Since when did high
liquidity and high interest rates go hand in hand? Too good to be true
or am I missing something?
Reply to
oparr
Definitely seems too good to be true. The highest rate on BankRate.com right now is 1.4% APY.
If it turns out it's not too good to be true, let us know where you bank! :-)
--Bill
Reply to
Bill Woessner
If they need a meeting to increase the interest rate on a savings account, something must be involved needing your signature.
Reply to
Andreas Ziegler
I have seen some high interest rate accounts advertised, but it was a tiered interest rate plan.
the first couple thousand were at the high interest rate, higher amounts fell back down to reality.
Reply to
Wallace
1) Make sure that what you are getting is really an FDIC insured account and not a note issued by the bank.
2) Look for some kind of teaser rate that is guaranteed for a relatively short time in hopes that you won't move your money when the rate drops back to or below market rates.
There is no such thing as a free lunch.
Reply to
Bill
As the yield on the 10 year T-Note is only 2.61% I don't see how your bank can afford to pay 4% on savings.
Please provide the name of your bank and more information when you have it.
Reply to
terrable
Deparment stores have sales to attract customers, hoping you will like ALL their merchandise, and do your shopping there in the future. No signature required, just attend the free lunch and listen to the sales pitch. As others have noted here, check the merchandise before you plunk down your cash.
There must be some way the bank makes money off the limited number of "high interest" accounts. Banks are tough to decipher from their financial statements, but consider that a bank avergages interest paid over all its deposits. Likewise for the interest it receives.
One thing to be sure to look up and verify is what T-Bill rates will be one year from now.
Reply to
dapperdobbs
on 8/20/10 4:14 PM terrable said the following:
Must be the selection of different products. You will get the hard-sell. Sign nothing on first day. Report back.
Reply to
Yadda
Indeed, it is the latest trend among banks... which need to capitalize quickly.
You can check your bank out at
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it doesn't fare at least 4 stars, if I were you, I'd take all mymoney to a more solid bank. Which one? Try
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Good luck.
Reply to
Augustine
I can't find any savings accounts there, and the highest MMA is far below 4%. What are you talking about?
Reply to
Wallace
What I'm talking about is that when banks are desperate for money in order to make up capital requirements, they start offering interest rates much higher than the market average. It often fails to achieve its needs and its final demise typically involves the FDIC having to pour in much more money than otherwise, spreading weakness throughout the banking system.
In fewer words: 4% is too good to be true.
Reply to
Augustine

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