4.40% UmbrellaBank Money Market Account?

UmbrellaBank.com is apparently raising its money market account from 4.15% to 4.40% APY. This new rate isn't showing up yet at Umbrella's website. However, Bankrate.com is now showing 4.38% APY. Also, an Umbrella customer reported on fatwallet that he received an email from the bank informing him about the new rate of 4.40%. As in the case with HSBC this morning, the process of updating the rate on the website doesn't seem to be an easy process for these banks. Maybe the webmasters have already started their holiday vacations. Perhaps by tomorrow the new rate will be posted, and we'll know for sure if it's 4.40% or 4.38%.

This rate increase by UmbrellaBank seems reasonable. Their last increase was from 4% to 4.15% on November 10th.

HSBC Direct or UmbrellaBank?

Besides a little higher interest rate, UmbrellaBank has some advantages over HSBC Direct. First UmbrellaBank's money market has check writing privileges. Also, UmbrellaBank offers high-rate CDs. HSBC offers CDs but the rates are not competitive (highest CD currently only pays 4.25%). The big downside with UmbrellaBank is its lack of an ACH bank-to-bank transfer system. Your initial deposit can only be done with a wire transfer or by mailing a check. Future deposits can be done by ACH transfer initiated from another bank. So if you want the best rates along with an easy ACH transfer system, you may want to open accounts at both banks. The other alternative is GMAC Bank which comes close to the rates at UmbrellaBank but supposedly has an easy bank-to-bank transfer system like that of HSBC.

The other disadvantage of UmbrellaBanks is the lack of a signup bonus. However, UmbrellaBank does have a $20 promo for trying online bill pay. However, you need to open a checking account and pay 10 bills over two months to qualify for the full $20 bonus.

Refer to my previous post for more UmbrellaBank info.