Saw this site, moneyaisle.com, where banks compete with the best rate to get your business in a high-yield savings account or a CD. Sounded interesting, so I tried it out. I said I had $5k to deposit. The best rate they had was 3.51%. In less time it took for that rate to load, I went to Bankrate.com and found a place – yes, the banks on both sites are FDIC-insured – offering 3.91%, and only requiring a $1000 deposit. FAIL.
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correct link: [www.moneyaisle.com]
Ben, I think the correct URL is Moneyaisle.com.
I don’t really buy the idea of an “auction” style competition. More like a fixed database thing LOL
Yeah seriously.
I’m not sure I’d want to go with the bank that “won” anyway. I’ll stick with my credit union thanks.
I’m suspicious of the word “auction”. I highly doubt there is some bank guy paid to sit as his desk, logged into this site, and bid on your account! All in minutes!
Wamu has an online savings account for 4.00% APY, no minimum deposit.
@dorianh49: Never mind, they dropped it to 3.00% APY.
@dorianh49: Heh. really now.
Etrade still at 3.30%
You only get 4% for savings accounts??
@Onouris: How much interest do you get for your money?
@Amelie: Savings accounts we get 6.55% easy access, up to 7.2% with no withdrawal.
I still don’t get CDs. I like saving, and I like interest, but $1000 in a 4% APY account gives you a bank-breaking $40 a year. Even if you can get $10,000, that’s only $400 a year. Not really worth it.
@zegota: 4% is better than nothing. Not really worth it? What else are you going to do with it, if you want safety?
@zegota: Yeah, you’re right.
I’d much rather lose 33% in the stock market.
@zegota: You need to become acquainted with compound interest.
Pretend that you sack away $1000 in a 1 yr. CD. Then you just buy another CD with the cash once it matures. Assuming that you keep buying 1 yr CDs at only 4%, you’ll double your money every 18 years. Save some money now, and it’ll quadruple when you retire–no extra work needed, and no risk of it disappearing. Seems pretty cool to me.
Stop looking at the dollars and instead consider the margin. It’ll make more sense that way.
Just out of curiosity, what do you do with your savings or investment money?
Not that it matters but Wachovia is still offering a 4.3% CD. Whether the bank that takes them over will honor that is up for debate, but if they don’t you get your money back plus interest.
Hi, I’m writing from MoneyAisle and wanted to respond to a couple of the comments here.
Yes, we are running actual auctions and no, there isn’t a banker sitting at a computer 24/7 punching in rates. That’s where the innovation of our technology comes in – without getting too technical, banks are able to set rates based on a number of different variables, pushing the rates higher. This is what allows the auction to take place in such a short period of time (for those interested in a more detailed explanation, I’d recommend checking out the video interview Robert Scoble conducted with our CEO recently.) Since this is an actual auction dependent on many different variables, the rates offered may differ even within an hour of running. We’re a relatively new company and we’re still growing our network of banks – as this happens we expect the rates offered to get even higher. Also, with all of the bank failures of late, we’ve added another level of consumer protection by pre-screening banks through the Veribanc rating service. Any banks rated red with no stars (in danger) by Veribanc are not allowed into the network – you may have noticed that many of the banks offering really high rates recently (IndyMac and WAMU) went under shortly after. We’re trying to avoid this situation.
Kevin Cafferty
Senior Web Producer, MoneyAisle
@WoodrowRodeo: So let me make sure I’m understanding this…there is in essence, not really an auction taking place per say. An auction implies bidding is occuring on something. In reality, it sounds like you run an affiliate marketing site that has obtained favorable terms with a variety of merchants (banks in this case) such that your database allows you to offer a range of terms to your users who sign up through your affiliate link.
Is that accurate? Please correct me if I am wrong on any of that.
@Haltingpoint – It’s definitely an auction. There are several different banks bidding against each other for the consumer’s business. Some banks are going to offer higher bids for certain products (e.g., $1,000 6-month CD). Because the bidding takes place over several rounds, the banks have a chance to match rates against each other as they battle it out for a consumer’s business. (MoneyAisle uses complex mathematical algorithms that allow banks to set dynamic bidding for a number of factors without having someone man a computer 24/7 — which would be prohibitively expensive).
The result is an auction marketplace where the sellers (the banks) are able to offer more favorable (competitive) terms to the buyer (the consumer) as a result of the low-cost system that makes banks vie for customer business. The system was designed to be a win-win for buyers and sellers.
Kevin Cafferty
Senior Web Producer, MoneyAisle