Dedicated to Deposits: Deals, Data, and Discussion

5.50% No-Minimum Online Savings Account at a New York CU (RateEdge)

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Update 7/01/09: Yield is now 0.20% APY. See bottom of post for the rate history.

RateEdge just increased the rate on its online savings account from 5.35% to 5.50% APY. This account only requires $5 to open and has no minimum requirement to earn interest. The only problem with RateEdge is that it's a division of Sunmark Federal Credit Union which has a limitied field of membership. For those eligible to join, it's a great deal.

RateEdge was launched around September of 2005 and it has always maintained very competitive with rates that are often higher than any other no-minimum bank savings accounts. In January it increased the rate from 5.25% to 5.35% APY, and in the fourth quater of 2006 it was offering a $50 sign-up bonus (see post).

A reader reported that the online account at RateEdge uses the same interface as Presidential Bank. It allows for multiple links to your other bank or credit union accounts, and the transfers are fast.

Field of membership is primarily limited to those who live in parts of New York State. To open an account at RateEdge.com, you have to live, work, worship, own a business, volunteer or attend school in one of the following New York counties: Albany, Montgomery, Rensselaer, Saratoga, Schenectady and Schoharie. You can also be eligible if you have an immediate family member who meets the above criteria (even if they're not already a member).

RateEdge is a division of Sunmark FCU which is federally insured by the NCUA (Charter # 1884). It has $441.4 million in assets and 47,379 members.

Thanks to the reader who mentioned this update at RateEdge.

Push for Online Savings Accounts from Your Own Credit Union

As I mentioned in my previous post, there's no reason why other credit unions can't offer similar online savings accounts. They may not all be as competitive as this, but by applying the same online business model, credit unions should be able to give the online banks a run for their money. Another example of a credit union doing this is Beehive Credit Union of Utah. It's currently offering an online money market account with a rate of 5% APY.

I've contacted my credit unions about offering this type of online savings account. The president of one of my credit unions told me that they don't see the demand for this type of account. I guess they think most members prefer 1% savings with branch accessibility rather than a 5%+ online savings accounts. So be sure to send your opinions to your credit union's management and board members. Remember, with credit unions, you elect the board members.

Rate History:
Update 07/01/09: Yield is now 0.20% APY
Update 01/29/09: Yield has fallen to 2.60% APY.
Update 01/15/09: Yield is back down to 2.80% APY.
Update 11/08/08: Yield has increased to 3.00% APY.
Update 7/04/08: Yield has fallen to 2.80% APY.
Update 4/19/08: Yield has fallen to 3.05% APY.
Update 3/22/08: Yield has fallen to 3.40% APY.
Update 3/15/08: Yield has fallen to 3.95% APY.
Update 2/23/08: Yield has fallen to 4.20% APY.
Update 01/25/08: Yield has fallen to 4.45% APY.
Update 11/18/07: Yield has fallen to 4.85% APY.
Update 10/27/07: Yield has fallen to 5.00% APY.
Update 9/23/07: Yield has fallen to 5.25% APY.

  Tags: New York, savings account

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