E*Trade Raise Rates on Complete Savings Account: Interest Rates Bottomed?

In a sign that interest rates may stop falling and start rising, E*Trade Financial sent me an email this afternoon with a surprising update: Start May 8, they will increase the interest rate of their Complete Savings Account from the current 3.01% APY to 3.15% APY, though the Fed has cut interest rates by another 0.25% point last week.

Another interesting observation is that, in the past every time after the Fed cut rates, banks followed almost immediately to slash interest rates on their savings accounts and my Inbox was flooded with rate update emails. Not this time, though. Actually, I didn’t get any such email from banks since last Wednesday. I guess the banks must have enough cushion after dramatically lowering their rates since last September so they can afford to stay where they are now :)

I haven’t updated my checking and savings rates table since last December. Since it looks like the Feb will idle when they meet next time in June, maybe it’s time to revise my table.

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8 Responses to “E*Trade Raise Rates on Complete Savings Account: Interest Rates Bottomed?”

  1. Investment Tool |  May 07, 2008 at 1:39 am

    it is a surprise they increase instead of decrease the interest rate, but it’s a good surprise, right ?

  2. Jim |  May 07, 2008 at 9:15 pm

    They might have some cash flow problems. A higher rate might attract more customers and provide more cash for E-Trade to meet their obligations.