Find Best Bank CD Rates with Money Aisle

by Kevin on June 24, 2009

Yesterday I confided that our CD ladder had fallen completely apart leaving our emergency fund stranded in an ING savings account earning “just” 1.50%. While 1.50% is a stark contrast to the years of 4-5% savings rates at ING it isn’t all that bad in today’s economic environment.

That having been said 1.50% will lose out to inflation eventually. I really need to find a better place to store our money just to avoid losing out to inflation over time.

Money Aisle Finds CDs and Savings Accounts

I recently came across MoneyAisle, a new website designed to help you find the best CD and savings account rates available. If you are familiar with the Lending Tree model (“banks compete, you win”) then Money Aisle will be easy to understand — it’s the same concept. Banks compete for your CD or high-yield savings account deposits. You end up with the highest interest rate, they end up with your money at their bank.

The best part? You can use it to search for rates for free without having to register.

Today I’m going to walk you through using the site in hopes of finding a good deal myself.

My Bank CD Criteria

Our CD ladder housed a chunk of our emergency fund — a few thousand dollars. I wish I could search for CDs that would hold $50,000 or something like that, but we’re not to that financial point just yet.

Here is what I would be looking for ideally:

  • $1,000 deposit
  • 6 to 12 month term
  • Obviously, good rate

So let’s see what we can find.

A Money Aisle Walkthrough

1. Once you hit the main page you click on the type of product you want to test drive: Bank CDs or High Yield Savings. Naturally I’m looking for CDs, so click that. Input the amount, length, state, and zip code information in the form. (It should look like the following image, click to enlarge):

2. Fill in the captcha text and click start auction. You will be sent to the next page that shows the different rounds of bidding, and how many banks are left. It should look something like this:

Things don’t look so good here. Only 3 banks left and a small rate of 0.63%. But let’s be patient…

3. Get result of highest bid and compare to other publicly available CDs that you are aware of.

This is what my result looked like. 1.90% for 6 months which trumps ING’s 1.25%. But I know there are other potential offers out there that might be better. Note the chart to the right shows my result (orange), my state’s average APY (dark green), the national APY average (lighter green), and the US treasury yield (lightest green on the end).

Notes on Using Money Aisle

Here is what I noticed in no particular order:

  • Limited real banks? While 94 banks were “competing” to win my business, by the second round there were only three left. And those three were currently competing at a sad rate of 0.63%. This leads me to believe that there either aren’t that many real banks involved, or the ones that are involved are really just hoping to snag your money at a ridiculous low rate.
  • You can run as many tests as you want without having to register. This is a definite plus in my eyes. If I get a result I like, I can register immediately to take advantage of it.
  • Deposit amount appears to have little affect on interest rate. This is contrary to what I thought would happen — I figured the higher the deposit amount, the better the interest rate even if by just a few tenths of a percent. I ran other tests with the exact same criteria and only changed the deposit amount. These were my results:
    • $5,000 – 1.90%
    • $10,000 – 1.90%
    • $50,000 – 1.90%
  • However, increasing the length of deposit leads to higher interest rates. Going back to my original $1,000 deposit, and a comparison of a $5,000 deposit:
    • 6 months – 1.90% / 1.90%
    • 12 months – 2.30% / 2.50%
    • 24 months – 2.50% / 2.65%
    • 36 months – 3.00% / 3.10%
    • 48 months – 3.50% / 3.50%
    • 60 months – 3.75% / 3.75%
  • Every bidding is bank is FDIC insured — no shady banks here. Your deposits are guaranteed up to $250,000 per year.
  • Your experience may be completely different — different state, different zip code, different potential banks.

Overall I see MoneyAisle as just another tool in your search for the highest paying bank CDs. You need to check other sources like Bankrate.com and reputable internet banks like ING Direct as well. Tomorrow I plan to do a quick roundup of some online banks and their CD options to see if there are any major discrepancies in rate.

I haven’t decided on what to do with our emergency fund just yet. 1.90% at 6 months is only 0.40% higher than our current savings rate with ING. (That’s a whopping $4 extra on every $1,000 saved.)

Nonetheless if you are looking for a place to park a significant amount of cash safely I would recommend using MoneyAisle to search for FDIC insured bank CDs.

Anyone else out there use the service and find a CD that you ended up putting your money into?

{ 4 comments }

Adam June 24, 2009 at 5:36 am

I just gave it a try, it went 10 whole bidding rounds and there were 3 banks in it from rounds 3-10… Curiously round 1 started at 0.9% and by round two it had dropped to 0.6%.

After all that silliness I ended up right at 1.9% for a 6 month CD.

Seems like a load of theatrics to me. Why can’t the whole system be nearly instant? Its not like there is an individual at these 94 banks pushing buttons to send bids out.

Anyone want to register on the MoneyAisle site and see if it really is the reorganized GMAC bank “Ally Bank”? I just checked Bankrate.com and that is what they come up with for a 6month CD. Took much less time to get too.

As far as FDIC insured banks go, I don’t know if I would rate Ally as a equal competitor. FDIC told them to drop rates because they were out of line and they offer their 9month “no penalty” CD which strikes me as a too-good-to-be-true product. Imagine a savings account where the rate can’t go down for 9 months, and as long as you call every week and “renew” (take the no-penalty option withdrawal and open a new account), well I think you see where I’m going with this.

Kip Nickell June 24, 2009 at 12:01 pm

Though it may be too much a hassle, you could always go the way of Rewards checking. Some offer up to about 5% interest. The only catch is that you have to have to sign up for wireless bills, make one deposit, and make 10 withdrawals. I have setup two accounts at two banks and send the deposits and withdrawals to each other. This fulfills the requirements and I am able to enjoy the relatively high rates of return. Disclaimer: I did have one account closed because of all the small withdrawals.

Jake June 24, 2009 at 9:01 pm

3 month CD @ $30,000 – 1.41%
High Yield Savings @ $20,000 – 2.30%

Shouldn’t the CD, which locks in my money, be higher than the savings?

Kevin June 26, 2009 at 8:03 pm

@Adam: I don’t think Money Aisle is Ally/GMAC. Not in the least. Separate companies.

I think it is garbage that the FDIC told them to drop their rates. It is a business that is trying to rebuild a customer base. Let them do what they want!

I do agree that Money Aisle seemed to be a bit of theatrics and they limit how many searches you can do to 10 per day. Odd.

@Kip: Yea I’ve heard of those, but I’m still to skeptical to try them out myself. 🙂

@Jake: Theoretically yes, but the CD locks in your rate of return. If Ally drops their high yield rate below the CD rate, then the CD would be a better option. I agree though, it would have to drop quite a bit.

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