Dedicated to Deposits: Deals, Data, and Discussion

UFB Direct Deposits FDIC Insured by Huntington and Countrywide

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A reader just informed me today of a surprising issue. Deposits at UFB Direct may be FDIC insured through either Huntington National Bank OR Countrywide Bank. This could be a major issue for those who have deposits near the FDIC limits at both Countrywide and UFB Direct. You could actually be over the FDIC limits without knowing it.

This relationship with Countrywide is documented at this UFB Direct page. I called the UFB Direct customer service rep to see when this relationship started, and she said it has always been that way. I've never noticed this before and had assumed all deposits were covered through Huntington National Bank.

The CSR said that a UFB Direct customer can choose to have his or her deposits insured by either Countrywide or Huntington. The reader who informed me of this issue said he found out from UFB Direct that his deposits were under Countrywide. On his request they were able to change things around so his deposits are now under Huntington.

[ Update 11/30/07: A reader pointed out that more information about UFB Direct's relationship with multiple banks is described in their disclosure:
All deposit accounts offered through the Banking Center will be opened with The Huntington National Bank. Affinity Financial Corporation, the provider of the Banking Center site, (hereafter referred to as AFC), acting as your Agent for the deposit account(s) you open through the Banking Center, will be authorized to direct your funds to be withdrawn from The Huntington National Bank for deposit into an FDIC insured account at one of the FDIC insured financial institutions who participate in the Banking Center Program (hereafter called a Participating Bank) ....

Your deposit account(s) will at all times be insured by the FDIC to the full extent permitted under the law, whether they are held by The Huntington National Bank or one of the other participating banks. You may contact Customer Service if you have any questions or if you do not want AFC to deposit your funds into a particular FDIC insured financial institution listed as participating in the Banking Center Program.

The reader made the good point that it would behoove UFB Direct depositors to check the list of participating banks periodically to see if there may be FDIC limit issues.]

With Countrywide's savingslink account yield at 5.30% APY and UFB Direct's Absolute Savings Account yield at 5.31% APY, it seems likely that many people may have large deposits in both accounts.

For more information on UFB Direct and its high yield savings account, please refer to my UFB Direct savings account review.

Thanks to the reader who emailed me info on this issue.

Related Pages: savings account

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Comments
14 Comments.
Comment #1 by Anonymous posted on
Anonymous
if a customer asked for this information, would any customer service person be able to answer this? or does the customer have to ask several people before finding out which bank insures his account

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Comment #2 by Anonymous posted on
Anonymous
The disclosure page also implies that the list of "participating banks" where your deposit is held may change from time to time.

It would behoove depositors to check the list of participating banks from time to time to see if there are any that you have FDIC limits or other problems with.

1
Comment #3 by DailyBanker.com (anonymous) posted on
DailyBanker.com
You really provide quality content, keep up the good work.

1
Comment #4 by Tim (anonymous) posted on
Tim
Yup, there is no maybe about it:

http://ufbdirect.com/ufbdirect/fdic.asp

and go to "disclosures"

as well as being listed on the bottom of the main page for Huntington National Bank

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Comment #5 by Anonymous posted on
Anonymous
This "UFB" outfit gives no street address on their site, just a PO Box in Indiana, and not itself FDIC insured.

Who insures your money while it is on the way to Countrywide or whoever?

Does your account statement from this outfit indicate which bank has your money?

The domain name ufbdirect.com comes back to NATIONAL INTERBANK INC. , 140 Broadway, 46th Fl, NEW YORK, NY 10005.

There is no "National Interbank" on the FDIC's list of insured banks.

I wouldn't touch this outfit with a ten foot pole.

What value does a broker like this add anyway? Deal directly with Countrywide or whoever.

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Comment #6 by Anonymous posted on
Anonymous
I've just opened a UFB Direct Absolute Savings account, and now I'm getting nervous, especially after reading anonymous 2:05am.

Banking Guy - do you think UFB is safe and legitimate?

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Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
UFB Direct has been around for many years so I wouldn't be concerned about it being any type of scam. About the legal protections when dealing with an agent like UFB Direct, I'm not sure. This is going to take some more research.

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Comment #8 by Anonymous posted on
Anonymous
I'm not sure this was brought up. I asked UFB how I can get my money if I needed it. I looked at the bank transfer option online .. they told me the only way is if they mail me a Cashiers Check or a Wire.. However for them to cut a cashiers check they will charge you $10.00 to get your own money out. $20.00 for a wire and whatever your own bank charges on top of that. Seems they make it difficult and i refuse to pay fee's. I asked does it cost to close out an account they informed me no. So I faxed and emailed them to have that be done. Today I get a call even though I've had an account since 2006 with them they are charging me $30.00 to close out the account because they said it was recently switched from a jumbo checking to a different type of account I believe a UFB Direct Absolute Savings to get the better interest. So they said I had to wait it out 180 days before I can withdraw without a penalty... I think I'll feel safer with the money in my pocket. I'll pay the $30.00 but next time I'll ask more questions. I'll let you know how long it takes me to get the money.

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Comment #9 by Anonymous posted on
Anonymous
To anonymous 1:02pm:

Why not just pay the $10 to get a cashiers check for all but $1?

Then leave the $1 in the account until the 180 days is over. You'll save $20.

Heck, let them keep the $1, you'll still save $19.

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Comment #10 by Anonymous posted on
Anonymous
note to anonymous 1:02pm: why not set up transfer capabilities between your UFB account with an account at another institution (assuming you use more than one bank). Then just initiate a transfer of funds from your OTHER bank. I believe there's no charge for this.

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Comment #11 by Anonymous posted on
Anonymous
I did'nt even think of that !! Well its done.. I'll let you know how long it takes to get my check however they donot have transfers at all.... They informed me there was no way to link accounts etc..

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Comment #12 by Anonymous posted on
Anonymous
note to anonymous 9:36pm:

What I did was add UFB as one of my external accounts with my other bank. Once that goes through (I initiated the process, from my other bank, yesterday), I SHOULD be able to transfer funds into my other bank, when I initiate the transfer from there. That's the theory; we'll see how it goes!

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Comment #13 by Anonymous posted on
Anonymous
It looks like UFB Direct has just lowered their interest rate on their Absolute Savings Account.

I'd been thinking of opening a new account with them, and looking at what had been pretty steadily their 5.19% rate/5.31% APY.

But in checking their website again today, it now says 5.10% rate and 5.22% APY, with the chart indicating the rates are effective as of December 6.

It's still a good rate for a general savings account. But, I was concerned to read some of the comments above about issues of their FDIC insurance status, and about a $30 early withdrawal penalty that one poster mentioned, especially when his only recent change was one of a different account with them, not opening a brand new one...

Hmmmmm..... Not a very good thing for UFB to do, if that post is in fact correct.

John in Los Angeles

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Comment #14 by tresho (anonymous) posted on
tresho
Thanks greatly for this information. I sent a "bankmail" to UFB from my online account, got the following reply a few days later: "The accounts have been opted out of the Countrywide Bank FDIC program per your request."

1