FNBO Direct drops savings APY to 1.65%

May 19th, 2009 · 1 Comment

I got an e-mail from FNBO Direct’s customer service on Monday.  The FNBO Online Savings Account is now earning a 1.65% APY, as of 2009.05.18.  It appears I made the wrong bet last month when I decided not to renew a step in our “emergency fund” CD-ladder on the theory that savings rates were competitive with 6-month CD rates.

Around the 20th of last month, the highest rate I could find on a 6-month CD was my local credit union’s 2.07% APY.  Whereas FNBO was paying a 1.90% APY and had been doing so for a seemingly long period of time after the period of rapid (multiple times per month) drops earlier in the year.  As a result, my wife and I decided not to lock-up our money in a CD and just ignore the 0.17% APY difference.  The difference in income just didn’t seem worth having the money locked up, given that there is some concern blossoming about the security of our job income.

Well, now that the difference has grown to 0.42% and may increase even further, it is starting to seem significant given that our “emergency fund” is really an income replacement fund, and thus we’re talking a decent number of single-digit thousands of dollars.  Granted, a 0.42% APY for 6-months on $5,000 is only $10 in interest, but still that’s $10 we wouldn’t otherwise have, and who knows how bad savings rates will get over the 6-month term?  And, I also realize we felt a bit panicky about the job situation — the truth is we do have 6 months of income replacement in our ladder, so we shouldn’t be preparing to tap it all in one month anyway.

This is all super-relevant to us now because tomorrow is the day on the calendar where we’ve noted we need to start figuring out what to do for this month’s CD renewal.

Tags: Savings

1 response so far ↓

  1. 1 FNBO Direct savings down to 1.50% APY | Geographic Independence // 2009.06.25 at 4:09 am

    […] to log that FNBO Direct dropped their online savings account’s APY to 1.50% on June 22, 2009. FNBO’s previous rate change was to a 1.65% APY on May 18, 2009, so they’re continuing their downward trend which has been going on ever […]

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

 Subscribe in a reader