Interest rates at credit card banks a mixed bag
I have an unusual hobby. I collect banks.
I do this by going to bank websites, opening an account or two online and depositing money.
(Being in my dotage, I find collecting banks to be fun, like playing Scrabble down at the senior center.)
I’ve divided my collection into categories, based upon some shared characteristic of the banks involved.
One category, of which I’ve already written, is the mega bank. Citibank, Chase, Bank of America and Wells Fargo are included. I’ve said all I’m going to about them.
A second category is the credit card bank. This includes any bank that is, or is affiliated with, a well-known purveyor of plastic.
The credit card banks in my collection are the two Capital One banks, Discover Bank and American Express Bank.
All offer savings accounts that consistently post rates among the highest nationwide.
The Capital One InterestPlus savings account has a 1.10% APY (with a 10% quarterly bonus on interest earned if you maintain at least a $10,000 balance or an active Capital One credit card).
The online savings accounts at Discover and American Express have a 1.15% APY.
A while back, Discover upgraded me to a "premium" savings account. It offers a higher rate than the regular savings account (it currently pays 1.25% APY).
I don’t know why Discover did this. But I’m not asking any questions.
Credit card bank CDs are another matter. Discover has generally been near the top of online banks, though recently its rates have slumped more than I like.
American Express’ CD rates are anemic. The two Capital Ones' CD rates are awful.
The Capital One banks, however, occasionally advertise CD promotions, so I keep an eye out.
Only Discover offers IRA accounts -- and just CDs, not savings or money market accounts.
Customer service at both Capital Ones and Discover is excellent. American Express’ is something else: good people, bad execution.
All these banks are highly rated by Bankrate's Safe & Sound ratings system -- four stars for the Capital One duo, five stars for Discover and American Express.
This is better than another credit card bank I once had in my collection -- Advanta -- which went belly-up in 2010. At least the FDIC paid off my CD promptly.
Overall, I like my collection of credit card banks. I’m proud to show it off.
I only wish these banks would raise their CD and savings account rates -- a lot -- and very soon.
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