Dedicated to Deposits: Deals, Data, and Discussion

KeyDirect's 5.25% Money Market Account - Now with a Low Minimum

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KeyDirect
Update: The current yield as of 8/7/08 is 3.00% APY

KeyDirect has long had competitive rates on its money market accounts, however, it has required a minimum opening deposit of $25K. This was changed in May. The Key Signature Money Market Savings' minimum opening deposit is now only $50. The current yield is 5.25% APY on all balances up to $250K.

They website doesn't have too many details, so I called their toll-free number. I was able to get through to the customer service representative (CSR) quickly, and she was polite and knowledgeable. The only thing that disappointed me about this money market account was the dollar limit on their ACH transfer system. Inbound and outbound electronic funds transfers initiated from the KeyDirect account are limited to only $2K/day, $10K/week and $20K/month.

Below is a list of features of the Key Signature Money Market Savings Account based on the website and my call to their customer service. Features noted with CSR are based from my call.
  • 5.25% APY on all balances up to $250K
  • $50 minimum opening balance
  • No monthly service charges (CSR)
  • Free checks
  • Account can be funded by ACH, check or credit/debit card (CSR)
  • Application can be done online or by phone (CSR)
  • After online application is done, a rep must reach you by phone for questions (CSR)
  • After the rep completes the questionnaire, they send you a signature card (CSR)
  • Statements are sent by mail by default. Can be changed to online (CSR)
  • Links can be set up online to other banks for ACH transfers (CSR)
  • Unlimited links to other banks can be set up (CSR)
  • ACH transfers initiated at KeyDirect: limit of 3 ACH outbound transfers per month, no limits on inbound
  • ACH transfers initiated at KeyDirect: inbound/outbound ACH transfers limited to $2K/day, $10K/week and $20K/month
  • No blocks done on ACH transfer requests initiated from your outside bank account
  • No hard credit inquiry. Only a soft pull and a ChexSystem check (CSR)

There's one thing to watch out for. KeyDirect has a history of starting new money market accounts with high rates while the old accounts are kept but with much lower rates. Often the rate changes are not well communicated. So the existing customers may end up with a money market account earning much less. KeyDirect has allowed existing customers to change to the new accounts, but it's up to the customer to request this change (see post).

KeyDirect also has some competitive CD rates (see post), although they've declined in the last few weeks. The long-term CDs are the most competitive. For a minimum deposit of $50K, 7 to 9 year CDs have a yield of 5.55% APY and a 10 year CD has a yield of 5.80% APY.

KeyDirect accounts are only for people who live in 37 states and in DC which don't have KeyBank branches. KeyDirect accounts are not available in AK, CO, ID, IN, KY, ME, MI, NY, OH, OR, UT, VT, or WA. KeyBank is based in Cleveland, Ohio and has been FDIC insured since 1956 (FDIC Certificate # 17534).

  Tags: KeyDirect, savings account

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