5 Savings and CD Accounts to Take a Look at In March 2018

Savings and CD rates continued their climb towards the end of February. We expect rates to continue to go up into Jay Powell’s first meeting as Fed Chairman. Powell’s testimony in front of Congress this week has made very clear that he will be a hawk and not a dove. Interest rates are going up 3 times, maybe 4 and maybe even 5 before the end of 2018. While we cover long-term CDs, we have never been as adversely inclined towards them as we are now.

Here are 5 related products that have caught our attention as we begin March.

1. Dollar Savings Direct – 1.80% Savings Rate

Dollar Savings Direct is a subsidiary of Emigrant Direct. As we noted last month, DSD has been way ahead of the curve in raising their rates as rates have been increasing. On February 27, 2018, they raised their savings rate by 20 basis points from 1.60% to 1.80%. It continues to be a fairly solid bet and user reviews are generally good. We’ve been made aware that they cannot link for ACH transfers with Morgan Stanley (UMB Bank) and Merrill Lynch. And, given Emigrant’s troubles over the last decade, we’d be very careful to stay within FDIC insurance limits.

2. Popular Direct – 1.65% Savings Rate

Popular Direct is a subsidiary of Banco Popular North America, a bank that had real troubles in 2009 and been the subject of recent acquisition rumors involving some major Spanish banks. The online bank’s website was recently revamped, and we think it could be worth a look, although we again urge you to be very careful to stay below FDIC insurance limits.

3. Marcus – 1.50% Savings Rate

Marcus is the new name for Goldman Sachs’s online bank. While the rate isn’t so attractive at 1.50%, if you want to open a bank account at a place where you will feel comfortable occasionally exceeding FDIC insurance limits, Goldman Sachs is the one.

4. Live Oak Bank – 2.10% 1-Year CD rate

While we want to be cautious about CDs, Live Oak Bank’s 1-year CD continues to be the best nationally available online CD rate. If you must submit to your desire to pick up a couple more basis points, this is the one to go for, especially since their early withdrawal penalty is only three months’ interest (other banks have more onerous penalties) and you will be able to get out with little damage if rates really start to move dramatically higher quickly this spring or summer.

5. Capital One 260 – 2.65% 5-Year CD rate

Again, we certainly aren’t recommending a 5-year CD at this point in the cycle. But, if you feel that rates aren’t going to get much higher and want to get into a 5-year product, this is the one we would recommend at the moment, especially since Capital One’s early withdrawal penalty for their 5-year CD is only 6 months’ interest (many other banks have penalties for early withdrawal of 5-year CDs of one year’s interest or even more).

The great thing about the above rates is that they are all readily available online. However, brick-and-mortar banks and credit unions are also becoming rate competitive.

Here you can check the best savings rates for local banks and credit unions where you live. CD rates for local banks and CD rates for credit unions can also be checked here.