bank rates

Installment Account Pays Up To 2.79%

You can open an account for one to three years.It’s been about a year since last we wrote about the Rainbow Savings Account at Wilshire State Bank, and we’re happy to report the rates have not declined.

This installment savings account available nationwide pays as much as 2.79% APY. That’s the same yield it paid last March.

But if you enroll in the Rainbow Savings Plan, you’ll have to put up with some rules particular to installment accounts.

First, you’ll have to choose a goal to save $1,000, $5,000, $10,000 or $20,000.

Then, you’ll have to 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.

So, on a 12-month contract, you’ll deposit as little as $989.28 to earn your $1,000 goal.

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

You’ll actually deposit less overall in longer-term plans to earn your goal amount.

If you choose to have your money automatically transfered from another Wilshire State deposit account, you’ll earn about a quarter-point more than if you have it automatically deducted from an account at another bank.

But if you open a Wilshire State deposit account, you’ll need to maintain a minimum balance to avoid monthly account fees.

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.

These returns beat the best nationally available savings and money market accounts.

And while the yield on the Rainbow account is considerably better than the best nationally available CD rates with the same terms, it’s important to note that this isn’t an apples-to-apples comparison because — unlike with an installment account — with a CD you deposit your money in one lump sum.

So the 2.02% APY on the best 12-month Rainbow account yields roughly the same as the best 12-month CDs on our CD Rates Leaderboard.

Here’s a chart from Wilshire State (www.wilshirebank.com) that details how much you’d earn and how much the monthly payments would be:

Wilshire State has 24 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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3 Existing Comments
  1. Kathy at Bankaholic said:
    on February 21st at 07:11 am

    These rates are still available.

  2. Kathy at Bankaholic said:
    on February 27th at 09:07 am

    The Rainbow Savings rates are still available.

  3. Kathy at Bankaholic said:
    on March 5th at 09:55 am

    You can still get these savings rates.