Dedicated to Deposits: Deals, Data, and Discussion

UFB Direct Deposits FDIC Insured by Huntington and Countrywide

POSTED ON BY

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Agent for the deposit account(s) you open through the Banking Center, will be authorized to direct your funds to be withdrawn from The Huntington National Bank for deposit into an FDIC insured account at one of the FDIC insured financial institutions who participate in the Banking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.

  Tags: savings account

Related Posts

Comments