Dedicated to Deposits: Deals, Data, and Discussion

New 5.25% No-Minimum Online Savings Account - FNBO Direct

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FNBO Direct
Update 11/16/09: The current yield is 1.40% APY. Refer to this post for the rate history.

First National Bank of Omaha has started a new online savings account at FNBO Direct with a rate of 5.25% APY. It's another no-minimum online savings account. According the service rep, FNBO Direct was launched about a month ago and has maintained a 5.25% APY.

Here are some features of this savings account based on the website and my conversation with the customer service rep. Account and bank information is available at FAQs, account disclosure and terms & conditions.
  • $1 minimum deposit with no monthly fees
  • No minimum balance to earn full interest
  • Entire application can be done online with nothing to mail in (CSR)
  • Trial deposit method is done to verify linked account (CSR)
  • Link to either a checking or savings account (CSR)
  • Allows 3 external account links (FAQ)
  • No hard credit inquiry (just a soft pull which doesn't affect credit score) (CSR)
  • Typical limit of 6 withdrawals per month (FAQ)
  • No small transfer limits on the amount that can be withdrawn or deposited (withdrawal limits are $100K/day and $250K/month, deposit limits are $250K/day and $1M/month) (T&C)
  • Deposits start accruing interest when transfer is complete (FAQ)
  • Interest is calculated daily and is compounded and credited monthly. (FAQ)
  • No interest is forfeited if the account is close
  • No sign-up bonus (CSR)
  • $2.50 ATM charge for using other banks' ATM (Disclosure)

I was able to quickly reach customer service with their toll-free number. According to the contact page, customer service is available 24/7. The rep was fairly knowledgeable, but there were a few discrepancies between his answers and the website. One was in the allowed number of withdrawals. He said 3 a month were allowed. The website specifies that 6 are allowed. Typically, savings accounts only allow 3 by check, so I asked if this were the case. He said it's 3 total and that check withdrawals don't apply since it doesn't offer checks.

The 5.25% APY is competitive, but it's not something to get excited about when there are several online banks offering 5.30% and above. Plus, we can't say how long it'll remain competitive. It seems prudent to wait and see if the high rate can last. Perhaps, they'll realize that with so much competition, a high rate isn't good enough. They need to do what E-LOAN did and offer a rate substantially higher than anyone else or offer some kind of sign-up bonus.

First National Bank of Omaha is FDIC insured. I couldn't find any proof of the link between First National Bank and FNBODirect.com. The FDIC page only lists the URL firstnational.com. I did call the contact number at First National and they did verify that FNBODirect.com is part of First National Bank of Omaha. I didn't see any signs that this wouldn't be the case, but I just wanted confirmation. First National seems like a healthy bank. It has a 4 out of 5 safe-and-sound rating (sound) at Bankrate.com.

Thanks to Brent who mentioned this new online savings account in the finding deals post.

Links to new FNBO Direct posts:

[Edited 5/13/07: added new post links. Edited 5/2/07: added new post links. Edited 5/1/07: Updated the number of external ACH links from 1 to 3. Added 6% promo note.]
  Tags: FNBO Direct, savings account

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Comments
10 comments.
Comment #1 by ShraZZy (anonymous) posted on
ShraZZy
woah banks are fighting all over the online savings. Beating most of the CD's APY.

1
Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
A reader left the following comment on FNBO in another post. Comments about your experiences with banks are much appreciated.


With regards to the FNBO savings acct - I am a long time FNB customer but am very dissatisfied with the experience of trying to open a FNBO savings acct. First, they cannot/willnot link their FNBO savings accts to their FNB online service. Second, they will not allow any Trust accts to be established for the FNBO savings acct - although they do allow it for FNB accts. They provide no customer service for FNBO savings at their local branches - all transactions must be done online or via phone. This would be acceptable if their online support process were efficient. The enrollment process is cumbersome and inefficient compared to other savings accts such as ING (I know their rates aren't as competitive) and Emigrant. In fact, once I finally got enrolled (took over two weeks) they could not explain why my acct was not linked to my checking acct used to fund the savings acct. They said they could fix it in about a week. I'm closing all my accts at FNB as a result of this experience and suggest anyone opening an FNBO acct be careful in their expectations of service. I believe this to be a financially sound bank - but their customer service has been deteriorating over the past 6 months or so.

1
Comment #3 by Omaha user (anonymous) posted on
Omaha user
I too am a FNB of Omaha customer and have found their local banks to be OUTSTANDING for service. When I saw the FNBO Direct savings account online I rushed into my local branch to see if I could sign up there and ask them why they haven't advertised this new high yield savings account more. The CSR first told me that it hasn't been advertised locally because they are trying to get "national" money outside of the immediate surroundings. OK, I don't have a problem with that, but I still don't believe that was efficient on their part. Then I asked the CSR if I could view this account with all of my other FNB accounts and they said no. They said that FNBO Direct was out of their scope and it's strictly an online account only, that is how they are able to offer the higher rates. This is something I already knew, but I thought I'd try.

As for the opening of the account process, I started the process around 2:00 on Thursday and by noon on Saturday my account was setup and I could access my account online. My initial deposit still hasn't shown up but I am able to at least see my account. The whole process is nothing to write home about, but it was MUCH easier than opening my Etrade account but not as efficient as opening up my ING account.

Not having any money in the account I can't speak to the speed of the ACH transfers but I will find out in the next week or so how long those take. The website is nothing to get excited about but if you're just looking for a good place to get 5.25% then this might be the place.

So far my customer service experience with them has been great. I've only placed one call but there was no hold time and the rep was very friendly and knowledgeable. The only thing I can't figure out is why you have to "relink" your initial funding account?

1
Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. Please keep us updated as your experience with them continues.

I think B&M banks are trying to walk the line of profiting from new online banking but being careful not to disrupt the deposits in their low-interest B&M branches. They want to keep those customers who are content with their low-interest B&M accounts to remain in those accounts. That's why there's no link at FNBO's main site to this new FNBO Direct's site.

Having to relink does seems like a bad design. They stated its for security reasons, but I don't buy it. You can have the customer verify the trial deposits on the opening deposit and then just keep that link.

1
Comment #5 by Anonymous posted on
Anonymous
Does anyone know when they pay the interest. I opened an account in February with only $10 and did not get any interest at month end. Maybe the interest was so small it rounded to zero? Some banks pay at month end and some pay at the aniversary date of account opening. Thanks.

1
Comment #6 by CreditUnionFan (anonymous) posted on
CreditUnionFan
The problem, as noted by BankingGuy above, is that most of these online banks dont offer easy access to actually getting your money Out when you need it (Checks not offered).

Many have significant fees for WireTransfers etc, dont offer checks, and will charge you more for closing the account or for maintenance fees if you fall short for any duration (ala ETRADE). Im getting 4.75% at my credit union MoneyMarket account, but am completely liquid, and tied to checking etc via online or B&M...

One would need a considerable amount of $$ to justify needing the extra .5% interest and be able to pay the costs of actually Getting to use your money someday...

1
Comment #7 by Anonymous posted on
Anonymous
I've opened several FNBODirect accounts over the last couple months. The rate is high and my expectations for service were low from the start...I understand that the mone that is going towards the interest rate comes from no supporting service personnel, tellers, buildings, etc. If you need a place to park money and get a good rate with a straightforward (simple) website, this is a great account to have.

1
Comment #8 by Anonymous posted on
Anonymous
"First National Bank of Omaha is FDIC insured. I couldn't find any proof of the link between First National Bank and FNBODirect.com. The FDIC page only lists the URL firstnational.com. I did call the contact number at First National and they did verify that FNBODirect.com is part of First National Bank of Omaha."

I called the FDIC and spoke to a representative. She told me that FNBO direct is federally insured. Just a little peace of mind.

1
Comment #9 by bluntmoney (anonymous) posted on
bluntmoney
I noticed on the Disclosures page for FNBO direct that it says "FNBO Direct is a division of First National Bank of Omaha".

1
Comment #10 by Sree (anonymous) posted on
Sree
I am amazed to find that the FNBO is asking my OTHER(funding) bank's account details and online account access user name and password in order to fund the FNBO account. I have never seen some one is asking the online account user name and password to verify the other account.. too fishy..

1