This comes from my home-state paper, The Daily Oklahoman.
This is the lede:
If you’d like to earn 5.25 percent interest on your checkin’ account, you might be a redneck.
The Redneck Bank — “where bankin’s funner!” — is payin’ some of the most mouth-waterin’ interest rates on checkin’ accounts in the whole U.S. of A. You can even git yer Redneck Bank debit card with or without the brayin’ horse on it (“We want to be your ‘mane’ bank!”)
Yes, there’s a real, FDIC-insured Redneck Bank based in Snyder, Oklahoma.
I’m a proud Okie and Sooner, but come on, Oklahoma, sometimes you make it hard.
But seriously, Redneck’s internet checking account pays 5.25 percent interest, which seems awfully high. I’d like to see a good story about these high-interest accounts and how their numbers add up. There are several banks paying 6.01 percent on online checking accounts. How?
The Oklahoman doesn’t address this except to let the bank say others do it, too. It should have.
c'mon, Ryan, do you really not know what over-market interest rates on deposits means? It means the bank is screwed. It means it is desperately trying to attract deposits before its next regulatory examination. It means, usually, that the bank is insolvent, but that FDIC insurance will bail out depositors when the thing goes belly up, so why not swing for the fences while we still have an (outside) shot? It means "moral hazard," man. Does anyone not know that?
#1 Posted by ed ericson, CJR on Wed 11 Mar 2009 at 10:20 PM
You're right, Ed, and that's why I raised the question.
I know that some of the banks that have gone belly-up raised their interest rates significantly in a frantic bid to get deposits to shore up their capital bases.
But surely there has to be some way for them to justify to regulators paying out 6 percent interest rates on checking accounts, right (hoping, hoping)?
Has this been explored anywhere?
#2 Posted by Ryan Chittum, CJR on Thu 12 Mar 2009 at 12:33 AM
What about the banks who have been offering high interest rates for a while without decreasing a lot. For example, Coulee Bank ( http://www.CouleeBank.net ) offers 5.01% and has been in the 5-6% range for a long time while others have dropped 2-3%. Coulee Bank also has a 5-star Bauer Financial rating. Coulee Seems like a great bank to me. I personally just think that you have to find a bank that you can trust.
#3 Posted by KCBank, CJR on Wed 18 Mar 2009 at 02:29 PM