Banks That Want Your Savings - Brief Article

Kiplinger's Personal Finance Magazine, Jan, 1999 by Joan Goldwasser

* Money-market accounts pay pathetic rates--except these.

Banks are not known for their generosity to savers: On average, they pay a miserly 2.4% on money-market deposit accounts and even less on passbook savings. But some banks are reaching for a share of the $1.3 trillion parked in money-market mutual funds--by paying rates that rival the money funds' average 30-day yield of 4.67%. The banks with the highest rates tend to be so-called branchless banks, which do business with most customers on the Internet or by mail and telephone:

* Key Bank LISA (800-872-5553) pays a 5.34% yield on money-market account balances over $5,000.

* Bankfirst (800-328-2411, members .aol.com/mbf9/index.html) pays 5.35% on deposits of more than $15,000. Lower balances earn just 3%.

* Advanta National Bank (800-441-7306, www.advantanb.com) pays 5.13% on money-market deposits, with a minimum balance of $10,000.

* Bluebonnet Savings Bank (800-892-6151) pays 5.01% on balances from $5,000 to $25,000 and 5.12% on balances over $25,000.

* TeleBank (888-989-4422, www .telebankonline.com) pays tiered rates, starting at 4.8% on a $2,500 minimum balance.

The only bank in the bunch that is truly branchless, Net. Bank (www .netbank.com), pays a 5.25% yield and requires only a $100 minimum balance. Net. Bank (formerly Atlanta Internet Bank) does business only on the Internet, and says it passes along the cost savings of having no bricks-and-mortar branches. (The bank, which operates from Atlanta, is registered with the Office of Thrift Supervision and is FDIC-insured--as are all the banks listed above.)

With your money-market deposit, Net. Bank gives you free checks and an ATM card. The bank charges no ATM fees, but because it has no ATMs of its own, you're subject to the fees that other banks charge you to use their machines. For a list of surcharge-free ATMs, check the Web sites of the Independent Bankers Association of America (www.ibaa.org) and the Credit Union National Association (www.cuna.org).

Also remember that federal regulations permit money-market depositors to make only six withdrawals per month, of which three may be checks. An electronic funds transfer counts as a withdrawal, but you can make unlimited ATM withdrawals or transfers. If you need more flexible access to your money, stick with a money-market mutual fund with liberal check-writing privileges.

Best Deals in Credit Cards

Low-interest premium cards Best if you carry a balance

ISSUER                            RATE       INDEX/MARGIN

Pulaski Bank & Trust (G)          7.99%      discount rate(*) 3.24
Huntington National (P)           8.25       prime
USAA Savings (P)                  9          prime + 1
Huntington National (G)           9.25       prime + 1
Simmons First Natl(G)             9.75       discount rate(*) + 5

                              CASH-ADVANCE        ANNUAL
ISSUER                        RATE/FEE(c)         FEE

Pulaski Bank & Trust (G)        7.99%/none        $50
Huntington National (P)         8.25/2%            75
USAA Savings (P)                9/none             45
Huntington National (G)         9.25/2             49
Simmons First Natl(G)           9.75/none          50

                                TELEPHONE
ISSUER                            NUMBER

Pulaski Bank & Trust (G)       800-980-2265
Huntington National (P)        800-480-2265
USAA Savings (P)               800-922-9092
Huntington National (G)        800-480-2265
Simmons First Natl(G)          800-636-5151

No-fee premium cards Best if you usually pay the balance each month

                               INTRO
ISSUER                         RATE             FULL RATE

AFBA Industrial (G)            8.5%             prime + 3.4
Capital One (P)                8.25             9.9
Bank One (P)                   9                9.99
First USA (P)                  9.25             9.99
Pullman Bank & Trust (G)       9.75             prime + 3

                              INTRO RATE       CASH-ADVANCE
ISSUER                        LASTS            RATE/FEE(c)

AFBA Industrial (G)           six months       11.4%2%
Capital One (P)                  --            19.8/2.5
Bank One (P)                     --            19.99/2
First USA (P)                    --            19.99/2
Pullman Bank & Trust (G)         --               11/2

                               GRACE            TELEPHONE
ISSUER                         PERIOD            NUMBER

AFBA Industrial (G)            25 days         800-766-2265
Capital One (P)                25 days         800-822-3397
Bank One (P)                   20 days         888-221-9067
First USA (P)                  25 days         800-294-2993
Pullman Bank & Trust (G)       25 days         800-785-5626

Some card issuers have not yet adjusted to changes in the prime and discount rates.

(c) Cash advances frequently have the grace period; additional fees may be charged.

(G) gold card

(P) platinum card

(*) 4.5% as of Nov. 17

SOURCE FOR LOAN RATES AND CREDIT CARDS: Bank Rate Monitor, N. Palm Beach, Fla.