Skittish consumers are finally saving more money -- and now the banks are trying all sorts of gimmicks to get their hands on it, including offering some pretty nice upfront perks.
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Americans socked away 5% of their disposable income in January, pushing the personal savings rate to a 14-year high, according to the Commerce Department. (To put that in perspective: from 2005 to early 2008, the quarterly personal-savings rate only once topped 1% -- and, at one point, even fell into negative 1% territory.)
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"Everyone is running scared right now," says Sam Gott, a San Antonio-based certified financial planner.
That fear could pay off. Hoping to lure newfound savers into their branches -- and bolster their own balance sheets -- some banks are offering sign-up bonuses of up to $100 and attractive rates that far surpass the current record-low fed funds rate of 0% to 0.25%.
Here's how (and where) to dig up these bank deals:
Open a Reward Account
If you're willing to jump through a few hoops, you could earn as much as 6% by opening a so-called reward account. To get that enticing rate, you'll need to meet (and stick to) some strict requirements, including a set number of debit purchases each month, signing up for direct deposit and opting out of paper statements. Fail to stick to the plan and your rate will drop to less than 0.50%. Here are some of reward account deals currently being offered:
|Southern Missouri Bank (Missouri and Arkansas)||6.01||Make at least 12 debit-card transactions a month, and set up at least one direct deposit or automatic payment. Good on balances of up to $25,000.|
|Kansas State Bank (Kansas)||6.01||Make at least 10 debit-card transactions a month, receive statements electronically, and set up at least one direct deposit or automatic payment. You must also access your online account at least once a month. Good on balances of up to $25,000.|
|Rocky Mountain Bank (Montana)||6.01||Use your debit card, receive statements electronically, and set up at least one direct deposit or automatic payment. Good on balances of up to $25,000.|
|First Robinson Savings Bank (Indiana and Illinois.)||6.01||Make at least 10 debit-card transactions a month, receive statements electronically, and set up at least one direct deposit or automatic payment. Good on balances of up to $25,000.|
|Bank of Blue Valley (Kansas)||5.51||Make at least 12 debit-card transactions a month and set up at least one direct deposit or automatic payment. Good on balances of up to $25,000.|
* Data from Money-rates.com
To woo new customers, many banks are offering sign-on bonuses when you open a new checking or savings account. While big-name banks such as Citibank and HSBC offer widely-promoted deals, local community banks and credit unions may also extend such bonuses, says Gott. Wainwright Bank & Trust in Boston, for example, currently offers a $200 savings bond for new customers who open a Value Checking account and fund it with at least $10. (You'll need $500 in the account, however, to avoid a monthly maintenance fee.) Here are some more offers you can find:
|Citibank||$25||Open and fund an Ultimate Savings Account with $1,000 by April 30. (The account carries a 2.10% APY). You must maintain the balance for three months to receive the bonus.|
|Compass Bank||$100||Open a new Build-to-Order Free Checking account with a minimum deposit of $100 before March 21. You must also set up direct deposit and opt out of paper statements.|
|HSBC||$25 to $75||Open either of two eligible checking accounts by March 31. Get $75 for opening an HSBC Plus Checking account with a minimum $1,500 deposit. (You must maintain a combined $15,000 in HSBC accounts to avoid a $15 monthly fee.) Or get $25 for opening an HSBC Choice Checking account with a debit MasterCard and a minimum $500 deposit. (You must maintain $1,500 to avoid the maintenance fee.)|
|M&T Bank||$25 to $100||Open and fund a new checking account by April 4. Bonus earned varies by account type. M&T Totally Free Checking earns $25, for example, while M&T Direct Checking (free when you sign up for direct deposit) yields $100.|
|Wachovia||$25||Current customers: Entice a friend to open a Free Checking Account with a minimum deposit of $100, and you'll each get $25. Offer expires December 31.|
* Data from individual banks.
Online-Only Savings Accounts
Don't want to jump through all the hoops of a reward account to get a better rate? Try going online where you can still snag an inflation-beating annual percentage yield of more than 2.5%, says Greg McBride, senior financial analyst for Bankrate.com. Here are some of the best yields currently being offered:
|GMAC Bank (Midvale, Utah)||2.65||$1 minimum deposit to open, no minimum balance, no monthly service fees.|
|Beverly National Bank Online (Beverly, Mass.)||2.60||$5,000 minimum deposit to open. Must maintain a balance of at least $5,000 to avoid a $15 monthly maintenance fee.|
|Heartland Bank Direct (St. Louis, Mo.)||2.55||$500 minimum deposit to open, no minimum balance, no monthly service fees.|
|Goldwater Bank (Scottsdale, Ariz.)||2.49||$1,500 minimum deposit to open. Must maintain a balance of at least $1,500 to avoid a $5 monthly maintenance fee.|
|FNBO Direct (Omaha, Neb.)||2.40||$1 minimum deposit to open, no minimum balance, no monthly service fees.|
* Data from Bankrate.com