Dedicated to Deposits: Deals, Data, and Discussion

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


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, 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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Comment #1 by Anonymous posted on
Just note, it seems you only get 2 free ACH transfers out and then there's a fee attached after that, all ACH transfers going in are free though

Comment #2 by SVG (anonymous) posted on
Banking Guy,

>>I've contacted my credit unions about offering this type of online savings account.<<

Which ones ? If I am member at some of the ones you've contacted already, perhaps I'll give them a call as well.

>>The president of one of my credit unions told me that they don't see the demand for this type of account.<<

Hmm ... I wonder how did they arrive at this conclusion ? Did s/he mention any studies / polls that may be out there about this ?


Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
Anonymous, thanks for the info on the ACH transfers.

SVG, Actually, I need to contact Agriculture FCU and Pentagon FCU which I became a member of last year. I've only contacted my local Texas CUs.

The CU president did look into Sunmark and determined that "their success in growing online has been very limited at best.". He finished by saying "Overall, we find our members value the service our branches and their staff provide. While we plan to continue monitoring this issue, we do not plan to proceed in the near future with a high yield online savings account."

I have to admit, that Sunmark's growth has been disappointing considering they've had this incredible savings account for the last 18 months. From the data at the NCUA, Sunmark had 46,295 members in June 2005 (before it launched RateEdge). In December 2006, the number of members had only climbed to 47,379 (an increase of only 2.34%). It states that the potential number of members in their FOM is 880,000. I guess most people don't get so excited about very high yield savings accounts.

Comment #4 by Anonymous posted on
I really like this account.

I get my deposits a few days earlier than other banks. I get an excellent rate.

And when I decided that I needed more than 6 payments pulled from the account each month, they let me open another account for that purpose.

It appears these guys are serious about maintaining top rates...

I only had a very distant relative that lived in that county to get into RateEdge.

Comment #5 by Eric (anonymous) posted on
I am a member and a big fan of Rate Edge. First, they're local to me second they have very good rates (5.5%APY), but the best thing is that they let you fund the account for your initial deposit with a CREDIT CARD. Since I'm in the 0% Balance Transfer game I was able to fund this account with $24,000 under a 0% APY purchase for 12months at 0%. The best thing is that I got 24000 reward points for this purchase and already cashed 20000 of them out for a $200 check!

I suggest anytime someone can fund an account via credit card they do it for the reward points associated with the PURCHASE.

Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. I didn't know they allowed credit card funding for the initial deposit. I guess the only thing to watch out for is possible credit card transaction fees if the credit card company considers it a cash advance.