Because interest rates are now so closely packed now, the banks are resorting to contests and incentives to differentiate themselves. Some are temporarily boosting yields to attract new customers. Here’s a rundown of current deals.
ING Direct’s Automatic Saver Sweepstakes
Since January, ING Direct has been holding an Automatic Saver Sweepstakes. For each month between January and June 2008 that you deposit at least $100 into an ING Direct account via an automatic savings plan, you’re entered to win one of five $1,000 monthly prizes. There’s only one prize left (for June), but that’s okay — the $30,000 grand prize is available to anyone who has an automatic savings plan active at the end of this month.
Though the odds are slim, this is still incentive enough for me to finally set up my plan. I’ve been funneling my money into my ING savings account manually. The automatic savings plan is more in line with my quest for paperless personal finance, anyhow.
Create a one-minute video about what you’re saving for. Maybe you’re a savings superstar — or a little savings challenged. Be compelling, original and creative — and you may be selected as a challenger in the FNBO Direct Pay Yourself First Challenge!
We’ll give you the tips and advice to start saving more. The challenge is to make it work for you and conquer the everyday problems that come between you and your money. As a challenger, you’ll share your progress and spread the word of your savings success. FNBO Direct will match each contestant’s savings amount and send the grand prize winner on a once-in-a-lifetime getaway.
Upload your video by July 31. Start shooting today!
For more information, see the official contest rules. The prize list is impressive. The first five hundred entrants on YouTube will receive a $10 gift card. The top 20 contestants will each receive $500. The top five contestants will receive up to $5,000 each. And the grand prize winner will receive a luxury vacation.
HSBC bumps rates
HSBC Direct has bumped the APY on its online savings account
to 3.50%, at least through September 15th. HSBC offers 2.25% as of February 2009. This may or may not be a good deal, depending on your circumstances. As Jim at Blueprint for Financial Prosperity notes, it doesn’t make sense to move from one high-yield account to another when their rates are this similar. But if you haven’t yet opened an account online, HSBC could be a good choice. Kiplinger’s Personal Finance named it “the best online savings account”.
Provident Direct offers 3.50%
Provident Direct, which I’d never heard of until recently, is also offering a 3.50% APY with no fees and no minimum balance. The account requires $1 to open. A reader named Ben wrote to say that he likes his Provident Direct account so far, but I don’t know anything else about this company. Can any of you offer feedback?
Credit unions offer up to 6.01%
Finally, several readers have written to say that their local bank or credit union is offering 6.01% on special checking accounts. These are invariably similar to the local checking account I highlighted in January: they offer high interest rates if certain requirements are met, the most stringent of which is usually to perform 10 or 12 point-of-purchase transactions each month. (For example, use the account’s debit card to buy groceries.)
I’ve had an account like this at a local credit union since March, but it turns out my spending patterns don’t lend themselves well to this — I get something like 0.50% interest instead. Still, with a 5.50% APY, it might be worth my while to make my habits conform to the requirements.