We are pulling through the winter, and savings and CD rates are continuing to firm, but are not moving dramatically higher as the Fed now seems intent to hold the Fed Funds rate at 2.25% to 2.50% until later in the year.

Here are 5 products that we find particularly compelling:

1. CIT Bank Savings Builder – 2.45%, Requires $25,000 Balance or $100 plus an additional deposit of $100 a month

CIT Bank’s reviews are largely favorable and their rate is very attractive. BestCashCow has named CIT as one of our best bets for 2019 so we think it will remain competitive. There are two ways to qualify for the savings builder account – either to maintain a $25,000 balance or to open the account with $100 and deposit at least $100 during each monthly measurement period (between the 4^th day of each month until the 4^th day of the following month).

2. CIBC Bank – 2.39% Savings Rate, No Minimum Balance

CIBC is one of Canada’s largest banks and launched its US online bank in late 2018. Their 2.39% savings rate is aggressive, and they have been among the first to raise their rates when the Federal Reserve raised the Fed Funds to its current level in December. To boot, the bank’s online savings account has no minimum balance.

3. My Savings Direct – 2.40% Savings Rate, $1 Minimum Balance

My Savings Direct is owned by Emigrant Bank. An account here bears certain risks and disadvantages that are well known to anyone who has followed the online savings space and Emigrant’s strategy. We highlighted these in our February newsletter. But, until and unless these risks materialize, the rate is attractive at 2.40%.

See and compare all of the best online savings rates here.

4. Purepoint – 2.60% 13-Month No Penalty CD, $10,000 Minimum

We have been hesitant to recommend CDs with rates rising, but we have also spoken very highly of the benefits of No Penalty CDs. With that in mind, Purepoint’s 2.60% No Penalty CD, introduced earlier this week, is startlingly attractive. It represents a 15 basis point premium on the best savings accounts (a 25 basis point premium on Purepoint’s savings account) and does not have the liquidity risk of CDs. We think this product is a very attractive alternative to a savings account at the moment.

5. Live Oak Bank – 2.85% 1-Year CD, $2,500 Minimum

Many are looking to short-term CDs to pick up yield and Live Oak’s 1-Year CD is one of the highest yielding and safest ways that we see to do it. The penalty for early withdrawal is only 3 months' interest and the minimum balance is only $2,500.

Check out the best 1-year CD rates here and see long-term CD rates here and special rate CDs here.

Have a great month.

BB&T and SunTrust Bank announced their merger this morning. The banks are the 12^th and 13^th largest US banks based on assets and the combined entity will become the sixth largest US bank. (A complete list of the largest banks based on asset size is here).

I spent my morning reading all of the articles across financial media that have been trying to explain the rationale for this merger, which is the largest proposed bank merger in over a decade. I then waited until 10 AM to watch the CEOs of the two institutions appear on CNBC.

I am not seeing any reason for consumers to be excited about this merger.

Bank of America and Wells Fargo have proven over the last decade that bigger is not better. Their large asset size has not enabled a better lending portfolio, nor has it enabled them to extend more meaningfully into new or more creative financing initiatives in the public interest.

In terms of consumer banking, their large size does not necessarily enable them to offer more creative mortgages products, home equity loans or auto loans. Neither these two - nor JP Morgan Chase or Citibank – have used their size to offer competitive savings rates or CD rates.

We are living in a world where small and creative institutions can offer more unique solutions. We have seen an influx of smaller banks and tremendously talented so-called Neobanks that offer technology solutions that outflank anything that the larger banks can produce. It is a sheer fact that in relation to technology, being smaller and more nimble is an advantage.

Therefore, when Kelly King, BB&T Chairman and CEO, and Bill Rogers, SunTrust Chairman and CEO, began speaking on CNBC this morning about the primary driver for their merger was technology investment, it struck me as being about as compelling as a Trump State of the Union address. The truth is that both banks, in their current position and without a merger, should be able to find the technology talent and resources in Atlanta or Charlotte to compete technologically across all consumer and the institutional spectrums.

Towards the end of the interview, Sara Eisen asked point blank whether this merger is in fact a defensive move designed to address the issue of contracting net interest margins. Kelly King, who has always been a straight shooter on CNBC, turned very candid and indicated that his view of some sort of inflection point in net interest margins is a motivating factor.

In other words, this merger is like an old-line industrial merger. It is being done to drive costs out of the system. Excessive branches in Florida, Georgia and the Carolinas will be shuttered, and people will lose their jobs. Investors in the companies may or may not make money, but few if any benefits are going to inure over the short or medium term to customers of either bank.

As someone who watches innovation in the banking space, I see nothing to celebrate here and I hope that this is the last, and not the first, of a new wave of bank mergers.

Full Disclosure: The author has been an investor in and a consumer of services of both BB&T and SunTrust in the past, and would have no interest in going near either one right now.

Savings and CD rates continued to firm into the end of 2018. However, as we predicted back in November, Fed Chairman Jay Powell has now fully equivocated as a result of presidential harassment and the Federal Reserve has now held the Fed Funds rate at 2.25% to 2.50%. It is possible that rates could be here until later in 2018. Here are 3 savings accounts that we find attractive at this point:

1. MySavingsDirect – 2.40% Savings Rate, No Minimum Balance

MySavingsDirect is a division of Emigrant Bank, a large New York-based bank. Customer reviews are mixed and Emigrant has a history of dropping rates in one division (holding customers who don’t regularly check their rates) while raising rates in other divisions. However, MySavingsDirect has been competing for depositors by raising rates for some time and, it is, at least for the moment, the highest yielding account without a minimum balance requirement. In addition to the need to stay on top of the rate to make sure it isn’t lowered, those considering MySavingsDirect should know that it does have direct ACH connections to all other banks (which is something that is pretty standard among most online banks).

2. CIBC Bank – 2.39% Savings Rate, No Minimum Balance

A couple of years ago, The Private Bank which operated out of Chicago offered competitive online savings rates. The bank was purchased by the CIBC, one of Canada’s largest banks, which in late 2018 re-launched the platform under the CIBC Agility brand in order to compete for deposit accounts in the U.S. CIBC now appears to be a very aggressive market participant. It has been among the first to raise their rates when the Federal Reserve raised the Fed Funds rate. To boot, the bank’s online savings account has no minimum balance.

3. CIT Bank Savings Builder – 2.45%, Requires $25,000 Balance or $100 plus an additional deposit of $100 a month

CIT Bank’s reviews are ordinarily favorable and their rate is very attractive. However, unlike the above two savings accounts, this rate does have a minimum balance requirement. There are two ways to qualify for the savings builder account – either to maintain a $25,000 balance or to open the account with $100 and deposit at least $100 during each monthly measurement period (between the 4^th day of each month until the 4^th day of the following month). We think CIT is likely to remain competitive and named it one of our best bets for 2019.

See and compare all of the best online savings rates here.

While we have been hesitant to recommend CDs with rates rising, the Federal Reserve’s recent decision to slow the pace of rate increases may provide reason to take a look at one-year CDs, particularly those with low early withdrawal fees. Here are two that are competitive, and will penalize you with only 3 months of interest should you need to break the CD early.

4. Live Oak Bank – 2.85% 1-Year CD, $2,500 Minimum

Live Oak Bank is a small North Carolina bank that entered the online banking arena last year. It has not been a consistent competitive player in the savings space and it can and does frequently adjust CD rates. At the time of this publication, their 1-year CD rate stands at 2.85%. Live Oak does not enable an account holder to have over $250,000 in total in their CDs, and you should not be exceeding FDIC limits with a small North Carolina bank anyway.

5. Sallie Mae Bank - 2.85% 1-Year CD, $2,500 Minimum

Sallie Mae Bank has an old interface and you will see a spinning wheel when you try to open a Certificate of Deposit there. But, its rate is 2.85% on a 1-year CD and it is likely that they will still be among the most competitive rates when it comes time to renew.

Check out the best 1-year CD rates here and see long-term CD rates here and special rate CDs here.

Have a great month.