E Loan is offering a $25 bonus for opening their Savings Plus online account. To get the $25 you must use the promotion code "plus25" on the application and submitted before to December 18th, 2008. You must also deposit a minimum of $100 into the account and keep at least that balance for at least 60 days. That's a pretty low requirement.

Savings Plus accounts come with an interesting condition though. You must contribute a regular minimum amount each month in order to receive their highest rates. The minimum contribution is $100.

The rates on the Savings Plus account are pretty competitive. For balances between 10,000 and 24,999, the APY is 3.35%. The more money you deposit, the more you'll earn.

These rates compare to a top rate on the BestCashCow savings and money market rate table of 4% APY and a balance requirement of $1.

E-Loan is owned by Banco Popular North America and has a Bauer rating of 3 out of 5 stars. As with any bank, we advise you keep your deposit amount under FDIC limits.

• Check the best savings and money market rates

We have all heard stories about how applying for many savings or cd accounts can have an adverse impact on your credit score. According to conventional wisdom, some banks do a hard pull on your credit and these pulls can cause your score to go down, impacting your ability to get a loan or the rate on any loan you open.

So is this really true? What do banks do when you open a savings account, checking account, certificate of deposit, or other FDIC insured account? And how do the credit agencies track what the banks do and apply it to your credit score?

To find out what really happens when you open an account, I spoke to representatives from Experian, Transunion, and Equifax (the big three credit rating agencies), as well as from Fair Isaac, the company whose algorithms are used to calculate your FICO score. Most banks use FICO scores as an important component in determining a potential borrower’s credit worthiness for a loan.

Maxine Sweet, the Vice President of Public Education at Experian explained how Experian records account openings:

• Checking Accounts (DDAs) - Banks have the option of doing a hard pull or a soft pull. Banks need to use a code in their account opening system if they want the pull to be soft. Once overdraft protection or a debit/check card is added it will automatically be a hard pull.
• Saving and Money Market Accounts and Certificates of Deposit. These always result in hard pulls.

Steve Katz from Transunion wrote that whether or not they do a credit check “…really depends on a financial institution’s specific credit policies. Some may pull credit reports for CD’s and savings accounts which would then show as a hard inquiry. Most do not engage in that practice at this time.

Some financial institutions may seek to offer the consumer a credit card or other pre-approved offer of credit in conjunction with the new account. Inquiries for such a permissible purpose would result in only a soft inquiry that has no impact on a consumer’s credit score.”

According to Ms. Sweet, the impact of even a hard pull from this type of inquiry is minimal and short lasting, unless the consumer is already having credit problems. In that case, it becomes another flag that there is something going on and can have a more significant impact on your report. These types of inquiries last about 3 months and then disappear entirely from your credit report.

Ms. Sweet recommended that if you are thinking of applying for a mortgage or a car loan, you not go on an account opening binge in the 3 months prior to applying for the loan.

Craig Watts, Public Affairs Manager for Fair Isaac said that if the savings or CD account is a “hard pull” then the inquiry would be listed on the FICO report and it could have a impact on your FICO score. He said the impact might be a 5 point decrease in your credit score. The impact to a young credit file, that is someone who has just started to build their credit history, might be more significant. Regardless, he stated a string of late payments on credit cards would have far more impact than a string of inquiries from opening savings accounts.

His advice to consumers is to check your credit report, be diligent in managing credit, and mind your Ps and Qs so you don’t have to worry about minor impacts from things like opening a savings account or a certificate of deposit.

Conclusion

• Opening a checking account may or may not have an impact on your credit score, depending on the bank and the credit agency they use. If the account comes with overdraft protection or a check card, assume it will result in a hard pull.
• You can ask the customer service rep or the branch customer service personnel but they may not even understand their bank’s policies. Many do not.
• If a hard pull is done the impact on your credit score varies depending on your other credit history, and your credit age.
• If you have other bad marks on your credit score and are thinking of applying for a major loan (home, car, etc.) you might not want to open a slew of new accounts.
• Any impact on your credit score from opening a savings account, certificate of deposit, or money market account is minimal if you have good credit.

Updated: November 7, 2008

The chart below shows a very interesting trend that we\\'ve seen over the last six months with savings account rates and certificate of deposit rates. Even though the Fed Funds Fund rate (the rates banks charge each other for overnight lending) has fallen since early April, savings and cd rates have actually risen. Note that the divergence started with the near-failure of Bear Stearns, which marked the beginning of an intense period of financial turmoil. Even as the Fed cut rates to 2%, savings account rates, 1 year CD rates, and 3 year cd rates rose. The increase in rates seems to have reached its peak in mid-October with the Fed takeover of Fannie Mae and Freddie Mac, the failure of Lehman Bros, and the government takeover of AIG. The passage of the bank bailout, officially known as the Treasury Asset Relief Program (TARP) as well as a swift cut in the Federal Funds rate from 2% to 1% has slightly thawed savings and cd rates and we are now starting to see a gradual decline in bank rates.

So, why did banks buck the interest rate trend and increase rates? The answer is that the banks were desperate to keep your cash and get more of it. Banks were deathly afraid of the kind of runs that brought down IndyMac, WaMu, Wachovia, and National City.

(Graph shows the average of the top 10 savings account rates, 1 year cd rates, and 3 year cd rates according to the BestCashCow rate tables)

Will the decrease in deposit rates continue? Yes for two reasons:

• If you look at the Fed Funds Futures (instruments that are based on future expectations of what the Fed will do with rates) they are giving high probabilities to a rate cut to either 0.75% or as low as 0.5% by January. Lower Fed Funds Rates will put pressure on bank deposit rates.
• Government efforts to support and recapitalize banks will take some of the pressure off banks to raise money from deposit holders. The Fed has pumped in over $1 trillion dollars into the financial system. Raising the FDIC limit to $250,000 also makes it less likely depositors will withdraw money if they sense trouble and will make it easier for banks to begin cutting rates.

So, what does all of this mean? For a timeframe of between 1-2 years, opening a CD now may get you a higher return than waiting. Based on economic conditions, it looks like banks will be reducing rates. If you want to keep your money liquid in a savings account , you will see a drop in rates, but the drop will not be precipitous. Banks are still hungry for your money and are willing to pay a premium for it. They just aren't as hungry as before.

Check back for further updates and analysis of how economic conditions will impact savings and money market accounts, cds, and more.