Update 5/03/08: Rate has fallen to 3.05% APY.
Update 4/12/08: Rate has fallen to 3.20% APY.
Update 3/08/08: Rate has fallen to 3.40% APY.
Update 2/09/08: Rate has fallen to 3.50% APY.
Update 1/5/08: Rate has fallen to 4.25% APY.
Update 11/24/07: Rate has fallen to 4.45% APY.
Beehive Credit Union is offering a 5.25% APY online money market account. A minimum $100 opening deposit is required and a $1,000 minimum balance is required to earn interest. The account has check writing privileges. Business accounts are not eligible. The rate is based on an internal overnight funds index. The rate has been competitive over the last several months ranging from 4.65% in early June to 4.90% in early August.
This money market account can only be opened online. Withdrawals at branches are charged $3. There is no fee for deposits to the account. According to the website, online funding is available. I assume this means they have an ACH transfer system.
The field of membership includes residents of Salt Lake or Utah County. Members/employees of a long list of companies are also included. A $25 deposit in a savings account is required for membership.
Beehive is NCUA insured. It has $161.5 million in assets and 21.5K members.
High Yield Online Savings Accounts from Credit Unions
Beehive is one of the few credit unions offering online-only accounts. The online-only nature of these accounts reduces cost making it possible for a low-minimum, high-yield account. This is no different than the savings and money market accounts at EmigrantDirect, HSBC Direct or Capital One to name a few.
The only other credit union that I'm aware of that has a similar online savings account is Sunmark FCU in New York which has been offering a low-minimum high-yield online-only savings account via the website RateEdge.com. RateEdge's savings account currently pays 5.25% APY on balances of over $5. Before the last Fed rate hike, it had remained 0.25% above the fed funds rate since last September. It first reached 5.25% back in May.
There's no reason why other credit unions can't offer the same type of high-yield online savings account. I've written to my credit unions requesting this, and have received some feedback from the top management. The more people who request this, the more credit unions will follow Beehive and Sunmark and we'll get more competition which should lead to better online savings accounts.