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Tuesday, January 06, 2009
Finding FDIC-insured banks offering high-yield savings accounts and CDs
Recently, came across an article from the Wall Street Journal regarding an auction site, called, which allows you to find FDIC-insured banks that are offering CDs and savings accounts with high interest rates. Basically, this free site is similar to various mortgage/insurance type sites where you provide some basic information (in this case, the initial deposit and the state of residence when finding high-yield savings account), and the sites come back with their recommendations. Similarly, after inputing the required information, the site provides the highest yield that its member banks are willing to offer for your money. The site is free and does not require you to accept the bank's offer.

Here's the quote from the Wall Street Journal's article:
Problem: You're too nervous to invest in the stock market, but your bank is offering paltry yields on CDs.
Solution: Auction your cash to the highest bidder. At, more than 100 small and midsize banks compete for consumer deposits through live auctions. When a customer comes to the site and asks for the terms of a CD or high-yield savings account, the banks bid against one another -- through automated auction software that runs on the Web site -- to win the deposit. The cost is free to consumers, and you don't have to commit to investing anything before you see the results of an auction. Participating banks, which are all FDIC-insured, are screened by an independent bank-rating agency to filter out the riskiest banks.

Savers can also find high-yield CDs with brokered CDs, which are offered by banks and brokerage firms around the country, and typically sold through brokerage firms and financial intermediaries. As the big brokerage firms expand their deposit business, many -- including Morgan Stanley and Merrill Lynch -- are offering attractive yields to lure buyers. Keep in mind that brokered CDs have different rules. If you cash out before they mature, you may lose some of your principal.
After reading the article, decided to give a try for finding a high-yield savings account. The process was very simple. I simply had to indicate the amount of my initial deposit and the state of residence. The site then displayed the results of its auction process, with the yield increasing until the process is complete. The site then shows the highest yield you can get for your deposit. To find the name of the winning bank, you do need to register.

I played with three different amounts of initial deposits. With the deposit of $2,500 and $5,000, the site showed a yield of 2.96%, which increased to 3% if I entered $10,000. Similarly, for the 5-year CDs, the site came back with the APY of 3.32% and 4.14% for deposits of $2,500 and $10,000, respectively. So with higher deposits, it's possible to get higher interest rates. I found the site to be a good tool in getting an idea of how much yield you can get for your deposit.

For the complete article and MoneyAisle site details, see:

Wall How to Fix Your Life in 2009


posted by Ruby @ 5:46 AM  
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