Predicts Feds Drain of Banking System to Result in Many Changing Savings Accounts

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If even temporarily, the Feds draining of $2.18 billion in reserves (as reported in Bloomberg, March 29, 2011) combined with the slide in interest rates, may cause some account holders to end up switching accounts, according to Which can prove potentially disastrous for some.

The reverse repurchases, by the Federal Reserve, will likely have an effect that results in money tightening to some degree by the banks. Together, with interest rates paid on savings accounts now going further downward, account holders will seek banks that offer higher interest payouts. Currently the rates have sunk so low, a 1.5% yield is considered high (for accounts with low minimum deposits – as well as accounts, to a lesser extent, having higher minimums, set time limits and other restrictions). With pressure to find higher rates coming from the ridiculous payouts, while even accounts that hover around the 1% mark become an exception rather than a fallback.

Many banks, in fact, are not making interest payouts at all, or even offering such percentage amounts to customers. Percentages have become so tight and economic circumstances so stringent, the customer specifically now has to ask for such rates, with the customer often left wondering why. Heading further into 2011, customers who seek the better rates will be actively questioning figures, no doubt, along with other pertinent facts.

Driven by the disappointing yields, savers often develop a tendency to neglect critical factors, going from one advertised bank to the next. When rates tumble low, and the economy is in the state it is currently found, the financial stability of banks and savings institutions (ratings and other financials) become thrown in question. Checking multiple sources, for both financials offered and not, is simply disregarded by many savers, according to, during a time when many leading experts have begun to question whether FDIC insurance will even be around to back deposits, when the time comes, if in fact it does. With claims of the FDIC residing in the red (since 2009) and the latest bank failure tallying 26 (as reported in The Street, March 25, 2011) .

Due heavily to the economy, as added pressure for a source of income – susceptible account holders will likely put their hard earned savings out to simply maximize returns. That is, without completing a full swing when it comes to investigating new accounts. Although looking at the hard side, when it comes right down to it, there may be no recourse for recapturing funds if and after they become lost.

When banks look for the new customers, in times of stress, and money becomes tight, such as in the current situation, funny things can happen. A case in point, is the teaser rates put out by certain banks. These entice the account holder and disappear sooner than expected. Visit for a take on one example of the teaser.

Visit, for a few ideas that are known for online options

For a more extensive, though not comprehensive list of points, visit

Some current offerings by online banks, along with commonly sought features like minimum deposit amounts and check writing abilities, are listed for convenience only at


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