bank rates

Earn Up To 2.79% With Rainbow Savings


If you’re looking to start your first savings account or need the feeling of a deadline to force yourself to set money aside, a Rainbow Savings Plan from Wilshire State Bank might be an option for you.

Wilshire State Bank offers this installment savings planBut there are some rules to follow.

This installment savings plan requires you to choose a goal of $1,000, $5,000, $10,000 or $20,000 and decide how much time you want to reach that goal, from 12 to 36 months.

You then deposit a fixed amount into the plan each month and collect your goal after the final payment has been made. The amount you receive includes your deposits and the interest you’ve earned on that savings.

The interest rate depends on the length of the plan — longer plans earn higher rates — and how the payments are made.

If the money is taken from a Wilshire State checking account, you’ll earn about a quarter-point more than if you have it automatically deducted from an account at another bank (although Wilshire will do so at no extra charge).

You can earn anywhere from 1.77% APY for a 12-month plan with the payments taken from another bank to 2.79% APY for a 36-month plan with payments taken from a Wilshire account.

That’s about a half point less than these plans were offering last summer. But the returns beat the best nationally available conventional savings accounts as well as the installment savings plan offered by SmartyPig.

While the APY on the Rainbow account is better than the best nationally available CD rates with the same terms, it’s important to note you’ll earn more with the CDs because — unlike with an installment account — you deposit the money in a lump sum. Installment accounts typically are not the best investment options for people with cash on hand.

Here’s a chart from Wilshire State that details how much you’d earn and how much the monthly payments would be:

Wilshire State has 23 branches in California, Texas, New Jersey and New York. But Rainbow plans can be opened online and are available to savers nationwide.

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Comments (3)
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  1. Kathy at Bankaholic said:
    on March 27th at 08:17 am

    These rates are still offered as of March 27, 2011.

  2. Josh Nash said:
    on March 28th at 07:22 pm

    Just did this on Sat 3/26… if u want highest rate gotta have a free checking account with the bank minimum deposit $100. Also from what I was told, and it’s a bummer, but you CANNOT put more than agreed monthly amount in the account. No fees to close if you keep it open for 3 months (you will lose accrued interest) but if you open and then close before 3 months $10 fee…..

  3. Kathy at Bankaholic said:
    on May 26th at 05:47 am

    You can still get these rates as of May 26, 2011.