Update 11/28/08: The yield is now 3.60% APY. See bottom of the post for the rate history.
Another online savings account at SavingsSquare.com was started in February by Kirkpatrick Bank. The rate is competitive at 5.10% APY, but it's far from the top. As we learned from FNBO Direct (see post), we never know when one of these newcomers will launch a promotion. So it's worthwhile to do some research now in hopes of good things in the future. The online savings account has many of the typical online banking features. The nice thing is that there's no limit to the ACH links you can have with other banks. However, they seem to use CashEdge for the funds transfers, so they may have similar delays as HSBC or FNBO Direct. Below are some of the account features that I received from their FAQ, their disclosures and from their customer service.
- Minimum initial deposit is $1 to open an account
- Maximum initial deposit is $100,000
- No monthly fees or minimum balance requirements
- Monthly statements are delivered electronically
- CashEdge is used for their cash transfer service (similar to HSBC and FNBO Direct)
- Applicaion can be done all online. Some may be requested to send in copies of IDs or address verification.
- No limits on the number of accounts you can link. Checking, money market and savings accounts are all eligible for funds transfer sources.
- Square Deposits may take 2-3 business days to process. Temporary holds of 5 business days may be placed on deposits received subsequent to you initial deposit. A hold of 10 business days may be placed on your initial deposit.
- They don't block ACH pushes/pulls initiated from your external account
- No ATM card or checks
- No hard credit inquiry - just a soft pull and ChexSystem report
- No sign-up bonus
SavingsSquare.com has the same problem as FNBO Direct in that there's no easy way to confirm its connection with the parent bank. You can view Kirkpatrick Bank's FDIC information here. The URL that's listed points to KirkpatrickBank.com. The problem is that there's no link or mention of SavingsSquare.com at KirkpatrickBank.com. Please refer to this FNBO Direct post for more discussion on this issue. I did call the phone number listed at Kirkpatrick Bank and received confirmation that SavingsSquare.com is a product of Kirkpatrick Bank and is FDIC insured.
Update 11/28/08: Kirkpatrick Bank's website now has a reference to SavingsSquare.com at this page.
As I mentioned in my first FNBO Direct post in February, new online banks need to do more than just offer a competitive rate if they want to attract deposits. There are too many online banks that already offer a decent rate. There is a lot to worry about with a new online bank. Will they stay competitive? Are there going to be application complications? What's the real funds transfer delays? What issues will arise when you're transfering funds? So the benefits of the new online bank have to outweigh these concerns. Hopefully, SavingsSquare will learn from FNBO Direct :-)
11/28/08: 3.60% APY
05/10/08: 3.05% APY
04/12/08: 3.25% APY
03/22/08: 3.50% APY
02/22/08: 4.00% APY
02/02/08: 4.50% APY
01/26/08: 4.80% APY
12/15/07: 5.00% APY
05/18/07: 5.10% APY