A few months ago Darby Direct stepped on the online banking scene with a lucrative high yield savings account providing a 3.0% interest rate. Unfortunately that account carried a variable interest rate and has since lowered substantially. Today’s Darby Direct offer, however, comes with a series of fixed rates on a 36 month term.
Here is how the account works:
Upon opening your account you will receive a 3.0% APY. This account will then be “stepped up” on August 15 of 2010 to a whopping 4.0% APY, then again on August 15 of 2011 to an even more impressive 5.0% APY.
To put this unique offer in perspective the average 12 month CD is yielding only 1.60% APY and the average 36 month CD yields 2.20% APY.
Terms and Conditions:
(as seen on their promo page)
- $500 minimum deposit requirement
- Annual percentage rates will change ONLY on the dates specified
- Substantial penalty will be imposed for early withdrawal
- Fees will reduce earnings
- Offer effective as of August 1, 2009
- FDIC insured
About Darby Direct:
Darby Direct is an online bank but also operates 8 brick and mortar branches in Georgia. Despite being opening their online division in just 2009, they now control roughly $650 million in deposits and have almost $750 million in total assets with over 700 full time employees.
Why we like this account:
According to the FED, interest rates in general are going to fall sharply until they have reached a near zero level. The reason the FED is doing this is an attempt to stimulate borrowing amongst individuals and small businesses. Once rates do bottom out – likely within a year or two – they will remain extremely flat until we have climbed out of our current recession. With the FED printing money and loaning it to the banks at a near zero interest rate, this gives banks little incentive to raise capital from depositors – so locking in a long term deposit now with a favorable rate may turn out to be a very smart move to hedge against future falling savings rates.