Just today a number of congressmen and women demanded additional banking regulations in the wake of Chase Bank disclosing trading losses.

Chase – a commercial bank – has in the eyes of many, and particularly Michigan-Senator, Carl Levin, acted as a hedge fund with consumer deposits and cheap federal capital.

If you’re a deposit investor with Chase Bank, you’ve undoubtedly Read more...]]> If you bank with Chase, then the answer is likely yes.

Just today a number of congressmen and women demanded additional banking regulations in the wake of Chase Bank disclosing trading losses.

Chase – a commercial bank – has in the eyes of many, and particularly Michigan-Senator, Carl Levin, acted as a hedge fund with consumer deposits and cheap federal capital.

If you’re a deposit investor with Chase Bank, you’ve undoubtedly been a witness to their horrific consumer deposit rates, many of which are barely providing just half a percent in returns. Yet Chase Bank has (surprise) been making risky hedges with these funds.

Another Senator crying afoul on Chase Bank’s latest business practices, Oregon’s Jeff Merkley, had this to say when asked if he had a message for Chase Bank’s CEO, Jamie Dimon; ““Yes. If you want to be the head of a hedge fund, be a hedge fund,” Mr. Merkley said. “Terminate your access to the Fed’s discount window, terminate your access to deposits, and then we have no quarrel.”

He went on to state that current laws provide, “a big enough loophole that a Mack truck could drive right through it,” and a “license pretty much to do anything.”

Breaking Down the Banking Loophole:

1) Lets assume BankVibe started an actual Bank.

2) We then applied for and received FDIC insurance from the federal government. Meaning that we can protect our depositors under this governmental insurance program so that they will get all of their money back (from the FED, not us) if we happen to go belly up.

3) We then start collecting consumer deposits, paying between just 0.50% and 1.00% APY (national average for 12 month CD’s sits at 0.50%, while the national average for 3 year deposits sits at just 1.00% APY).

4) With the money collected from the deposits we then make investments through our subsidiary company that we’re allowed to create thanks to the reformation of the Glass-Steagall Act in 1999.

5) BankVibe then reaps the rewards of higher risk investments while paying only a paltry 0.50 to 1.0 percent in returns to our investors (aka depositors). If we lose depositors’ money from risky maneuvers and go under, the FDIC will foot the bill!

No risk for us!

To be fair though the month of April is almost always an out-lier as a data point in month-to-month US budget data due to it being tax collecting season. However, Read more...]]> Thanks to a 10 percent increase in tax revenue last month, the Congressional Budget Office has just reported a budget surplus of $58 billion for the month of April. This is the first monthly surplus they’ve recorded since the economic collapse of 2008.

To be fair though the month of April is almost always an out-lier as a data point in month-to-month US budget data due to it being tax collecting season. However, many analysts still suggest this is a positive sign of things to come.

For all of us savers out there, the continuation of positive economic data can only speed up the time frame the FED has for raising interest rates (currently set for early 2014).

Recent (Positive) Economic Data:

Despite a variety of troubling economic data (rising inflation, shaky markets, European worries) there are still a number of positive data points to take note of. Below are two that likely pose the greatest impact in the short term.

- The number of US job openings available as of March 2012 rose to  3.7 million – also the largest number since 2008.

- Crippling gas prices may be on the decline. As of the end of April, oil has fell to it’s lowest level in four months.

If you’re on the hunt for the highest yielding bank deposits, we’ve compiled the top 5 in your state. The current savings environment is terrible throughout the country, so don’t expect much of anything in the way of interest. In fact, as of May, 2012, the national average for 12 month CD rates nationwide sits at just 0.70% APY while the national average for 5 year CD rates Read more...]]> -Wisconsin Residents Only-

If you’re on the hunt for the highest yielding bank deposits, we’ve compiled the top 5 in your state. The current savings environment is terrible throughout the country, so don’t expect much of anything in the way of interest. In fact, as of May, 2012, the national average for 12 month CD rates nationwide sits at just 0.70% APY while the national average for 5 year CD rates sits at just 1.20% APY.

Income investors typically invest in bank deposits due to their relative low risk and as a hedge against inflation. However, since the brief period of deflation we saw in 2009, bank deposits haven’t been able to keep up with the rate of inflation. In 2012 inflation the rate of inflation has hovered right around 2.80%. Compare this to our highest yielding 12 month deposit available nationwide (1.15% APY) and you’ll see that even if you’re money is stashed away in a bank CD you’re still likely losing over 1% annually on your dollar’s buying power.

That said, many investors are still wary of upcoming economic data and enjoy the peace of mind that comes with deposits – even in grim savings environments.

Below are the highest yielding deposit rates in Wisconsin so far in 2012:

1) West Point Bank of Oshkosh, Wisconsin is providing 6 month CD’s yielding 0.90% APY requiring a minimum deposit of $1,000.

2) Community First Credit Union of Waupaca, Wisconsin is providing 12 month CD’s yielding 1.10% APY requiring a minimum deposit of $5,000.

3) Co-Op Credit Union of Strum, Wisconsin is providing 2 year CD’s yielding 1.35% APY requiring a minimum deposit of $1,000.

4) Bank of Augusta of Augusta, Wisconsin is providing 3 year CD’s yielding 1.75% APY requiring a minimum deposit of $1,000.

5) Headwaters State Bank of Presque Isle, Wisconsin is providing 5 year CD’s yielding 2.31% APY requiring a minimum deposit of $1,000.

- All CD’s mentioned above are FDIC insured up to $250,000. Visit their website(s) to learn more.

Have you opened a deposit account in Wisconsin with a higher yielding interest rate than the ones we’ve listed above? If so, let us know about it by leaving a comment!

In it Richard Sylla, an NYU professor, discusses the rise and fall of entire industries throughout the relatively brief history of the US as well as the governmental involvement in one particularly dominant industry dating back to the days of our founding fathers.

What was particularly interesting for us to learn, and perhaps Read more...]]> There was a fascinating piece on NPR’s money blog the other day highlighting “the 10 largest Corporations in 1812.”

In it Richard Sylla, an NYU professor, discusses the rise and fall of entire industries throughout the relatively brief history of the US as well as the governmental involvement in one particularly dominant industry dating back to the days of our founding fathers.

What was particularly interesting for us to learn, and perhaps already obvious to some, was that when you consolidated the list of the biggest corporations in the early 1800′s into the top 20, it was nearly ALL banks (19 out of 20) besides one exceptional fur-trading company.

And if you think there is too much involvement (financially) in the banking industry today by the federal government, you’d have been outraged at the level of involvement some two-hundred-fifty years ago. In fact, Alexander Hamilton the first US Secretary of the Treasury, was the instrumental key in creating the largest US bank in history – the Bank of the United States. From the very beginning this bank was an odd hybrid of public and private ownership, with a 20 percent stake owned by the federal government, according to Sylla.

Top 20 Companies 1812:

1. Bank of the United States
2. Bank of America
3. State Bank
4. Bank of Pennsylvania
5. City Bank of New York
6. Farmers Bank of Virginia
7. Philadelphia Bank
8. Manhattan Company
9. American Fur Company – Only Non-Bank!
10. Boston Bank
11. Union Bank of the City of New York
12. State Bank of North Carolina
13. Bank of Virginia
14. City Bank of Baltimore
15. Mechanics Bank in the City of New York
16. Farmers’ and Mechanics’ Bank
17. Merchants’ Bank in the City of New York
18. Bank of Baltimore
19. Farmers Bank of Maryland
20. Union Bank

Oh how we’ve diversified! Top 10 US Companies in 2012:

1. Exxon Mobile
2. Apple Inc.
3. Microsoft Corp.
4. IBM
5. Chevron Inc.
6. Google Inc.
7. Berkshire Hathaway Inc.
8. General Electric Co.
9. Wal-Mart Stores, Inc.
10. AT&T Inc.

As of April 2012, only two banks reside in the top 20: Wells Fargo (13) and JP Morgan Chase (15).

“What’s a more logical cash investment to get involved in during a dull landscape for savers – FDIC insured savings accounts and/or deposits or US treasury bonds?”

Answer: For a lesser hassle take the crummy CD rates.

Disadvantages of US Treasuries Bonds:

- US Treasury Bonds are nothing like fixed rate deposit products. They are traded in large volumes throughout Read more...]]> Here’s an interesting question we’ve received over the weekend from BankVibe.com reader Angie:

“What’s a more logical cash investment to get involved in during a dull landscape for savers – FDIC insured savings accounts and/or deposits or US treasury bonds?”

Answer: For a lesser hassle take the crummy CD rates.

Disadvantages of US Treasuries Bonds:

- US Treasury Bonds are nothing like fixed rate deposit products. They are traded in large volumes throughout every trading day and their yields are directly effected by daily market conditions.

- For average investors, say anyone looking to stack away less than $10,000, these products are difficult to deal with (and expensive to purchase). If you’re looking to invest smaller amounts of cash, you’ll have to invest through bond funds which pool together smaller investors’ funds.

Advantages:

- Because of the fluctuation of US Treasury Bonds, their rates could rise while your holding them providing better returns on your investment.

- They can be sold by the holder at any time. If you’ve found a better cash investment, taking your money out of a US Treasury note comes without penalty. Almost all bank deposits impose strict financial penalties for any early withdrawal.

- Long term Treasury Notes (see rates below) are currently providing much higher returns than long term bank deposits. Conversely, short term Treasury Notes are providing practically nothing in returns.

Today’s Treasury Yield Curve Rates:

(For updated information visit the resource center at www.Treasury.gov)

- 3 month CMT (Constant Maturity Treasury) yielding 0.09%

- 6 month CMT (Constant Maturity Treasury) yielding 0.15%

- 12 month CMT (Constant Maturity Treasury) yielding 0.19%

- 24 month CMT (Constant Maturity Treasury) yielding 0.32%

- 5 year CMT (Constant Maturity Treasury) yielding 0.90%

- 7 year CMT (Constant Maturity Treasury) yielding 1.42%

- 10 year CMT (Constant Maturity Treasury) yielding 2.06%

- 20 year CMT (Constant Maturity Treasury) yielding 2.82%

- 30 year CMT (Constant Maturity Treasury) yielding 3.18%

While we are experiencing record low savings rates here in the United States, India continues to see their domestic savings rates rise to ridiculous heights.

As of this week, the largest bank in India – The State Bank of India, has seen it’s deposit rates rise to Read more...]]> Anyone keen on the savings environment in both India and the United States may feel like the two are each other’s bizarre-O worlds lately.

While we are experiencing record low savings rates here in the United States, India continues to see their domestic savings rates rise to ridiculous heights.

As of this week, the largest bank in India – The State Bank of India, has seen it’s deposit rates rise to a maximum of 10% APY on deposits with terms of just 7 days to 3 months. And the key rates in India have remained considerably high over the last few years as well – a time in which our rates domestically have encountered extreme lows.

This, however, is not something that is unanimously celebrated in India. In fact, according to this Business Standard article, “The State Bank of India’s decision to increase deposit rates by 25-100 basis points earlier this week has stumped its peers, who were planning to lower these rates after March.” At a time when many Indian banks and lending institutions are pushing for lower loan rates to stimulate domestic economic growth, a rate hike of this kind from the State Bank of India, has left some bank executives a tad disgruntled. One exec went on to state that, “We cannot understand why SBI had to raise deposit rates now. We have no plans to increase our rates but the move has ruled out any scope for a cut in our deposit rates.”

How to Take Advantage of India’s Deposit Rates?

Despite the mixed feelings on high savings rates in India, US savers are likely salivating over their returns. If you’re considering investing in the deposit products of foreign banks and currencies review our coverage of the risks associated with foreign currency CDs.

In January of 2011, Bank of America’s stock price was sitting at $14 plus per share and just $5.56 on the last day of trading in that same year.

Since the beginning of Read more...]]> Despite Bank of America’s (BAC) stock price plunging over 50% in 2011, we’ve just learned that CEO Brian Moynihan made just over $8 million for his work there last year – up from $1.9 million in 2010.

In January of 2011, Bank of America’s stock price was sitting at $14 plus per share and just $5.56 on the last day of trading in that same year.

Since the beginning of 2011, the company has encountered a whole host of problems and impacting factors both outside and inside of their control. In the beginning of that year investors worried about the company’s need for more capital to absorb mortgage-related losses and meet new international capital standards. Then in the Fall, consumers ran from BofA with the threat of new checking account fees that were being imposed by BofA in an attempt to open up new revenue streams. They backed off this idea after massive consumer and media backlash, however, despite rescinding the idea significant damage had already be done. In fact, many of the country’s credit unions saw record market share gain as new customers flocked from BofA and other big banks imposing these new fees.

Bank of America’s stock price has since rebounded from it’s sub $6 low in 2011 after passing the Federal Reserve’s stress test this March. Today the stock is trading at nearly $9.75 per share.

Their online savings account currently features one the highest yields on the market with an APY of 1.0%. And like most other competitive online Read more...]]> Another bank just entered the internet banking arena with a tech savvy product and and an already well established brand. The multi-national British Bank, Barclays, opened their American headquarters just recently in Delaware and now offer a number of FDIC insured bank deposits and online savings accounts.

Their online savings account currently features one the highest yields on the market with an APY of 1.0%. And like most other competitive online banks, Barclay’s savings account comes with no fees or minimum balance requirements.

Their new certificate of deposits come in 3 month to 5 year terms featuring APY’s that are less impressive than their online savings account when compared to their competitors. Their highest CD rate is offered on their 5 year CD and it features an APY of just 1.75% (national average sits at 1.50%).

Contrary to other well-known big banks here in the US, Barclays does a relatively good job at continually developing their product line and implementing customer input on ways in which they can improve their service. Last week we noted Barclays  new credit card as one of the first crowd-sourced credit cards on the market. And it seems they listened to customer needs when building their online savings product as well. Their OSA features the most desired mobile banking application of 2012 – remote deposit. Remote deposit allows Barclays savings account holders to cash checks via their smart phone from anywhere they can get service.

The online bank’s mobile applications are not yet showing up at their app stores, but your checks can still be scanned and deposited using their online banking platform.

Barclays Bank Savings Account Features:

• ACH transfer service for for electronic deposits and withdrawals
• 5-day hold for ACH deposits (CSR)
• No maximum amount for ACH transfers (CSR)
• 2-3 day external account transfers
• Remote Deposit for making deposits with your home PC scanner or iPhone, Android, or BlackBerry smartphone (not yet available through respective app stores)
• Remote Deposit maximums: $5K per check, $10K per day, $50K per 10-day period