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Century Bank Direct - New Online Bank with Savings, Checking and CDs

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Update 3/31/09: Rates continue to fall. New APY's: 1.69% MMA, 1.79% Savings and 1.45% Checking. Refer to the bank's website for the latest rates and the bottom of this post for the rate history.

Century Bank of Kentucky launched a new internet bank in November called Century Bank Direct. They don't have any attention grabbing rates, but their rates are competitive. The current yields for their online accounts include: 4.54% APY for the savings, 4.23% APY for the money market, 3.35% APY for the checking and 5.01% APY for their 5-month CD. Two nice features include no minimum balance requirements on the liquid accounts and free checks for the money market and checking accounts. One significant issue in my opinion is that they don't have an ACH bank-to-bank transfer system (although they do claim to have this soon). However, the biggest issue for some is that it's not available in 7 states (Texas, New York, New Jersey, Florida, California, Illinois and Arizona). When I asked about this, here was their reply "There are seven states that are restricted due to Patriot Act Guidelines." I haven't seen other banks with similar restrictions so I'm not sure what they mean.

Update 3/31/08: I just received confirmation from the bank, that people in any state can now apply for this account. Also, according to the CSR, there's no hard credit inquiry when you apply. They only do a soft pull and a ChexSystem verification.

Here's their summary of features of these accounts. Below is my summary:

Common Features on Savings, Money Market and Checking Accounts:
  • No minimum balance requirements or monthly fees
  • No ACH transfer system
  • They don't block ACH transfers initiated from your other bank
  • Postage paid bank-by-mail
  • Monthly e-statements
  • Possibly only a soft credit pull. This is what the CSR stated on my question about a hard credit pull: "Credit bureau is used to verify information. This should not have an effect on your credit score."
  • No new account bonuses

Online Savings Account:
  • $100 minimum to open
  • 3 free withdrawals per month ($5.95 for additional withdrawals)

Online Checking Account:
  • $100 minimum to open
  • Free checks
  • VISA Debit/ATM Card
  • Automatic ATM surcharge reimbursement (5/month)
  • Interest only paid on the first $50,000 of balance

Online Money Market Account:
  • $1,000 minimum to open
  • Free checks
  • VISA Debit/ATM Card
  • 3 free withdrawals per month ($5.95 for additional withdrawals)

Online Certificate of Deposit:
  • $1,000 minimum to open
  • Maximum deposit of $100,000
  • Terms from 5 to 20 months
  • Interest calculated daily and paid monthly
  • Automatic transfers to outside bank of monthly interest available
  • Online CD redemption form can be used to close CD
  • 10-day grace period when a CD matures
  • Early withdrawal penalties on the amount withdrawn: 90 days of interest for terms 12 months and under, 180 days for terms over 12 months

Century Bank of Kentucky is FDIC insured (Certificate # 35450). It's a small bank with only 39 employees, $125.8 million in assets and $102.7 million in deposits based on 9/30/07 data. It does have a good rating at Bankrate with a 4 out of 5 star rating (sound) based on 6/30/07 data.

Rate History:
Update 3/31/09: New APY's: 1.69% MMA, 1.79% Savings and 1.45% Checking
Update 3/18/09: New APY's: 1.89% MMA, 1.99% Savings and 1.65% Checking
Update 3/04/09: New APY's: 2.29% MMA, 2.39% Savings and 2.05% Checking
Update 2/14/09: APY's include: 2.82% MMA, 3.04% Savings and 2.59% Checking.
Update 1/13/09: APY's include: 3.32% MMA, 3.31% Savings and 3.05% Checking. CD rates have also fallen.
Update 6/27/08: The latest rates include: 3.57% APY money market account, 3.41% APY savings account and 3.35% APY checking. See this post for CD info.
Update 4/10/08: The savings account rate fell to 3.61% APY and the money market rate fell to 3.82% APY. Please check the bank's website for the latest CD rates.
Update 3/31/08: The savings account rate is now 4.01% APY. People from any state can now apply for this account.
Update 2/20/08: The CD rates have fallen. Please check the bank's website for the latest rates.
  Tags: money market accounts, CD rates, checking account, savings account

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Comments
29 comments.
Comment #1 by Craig (anonymous) posted on
Craig
This isn't a terrible deal. If SBoT and Schwab fall below this, it would be a good option. It does have CheckFree bill pay.

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Comment #2 by Anonymous posted on
Anonymous
I would really like to know more about the CSR's explanation that "There are seven states that are restricted due to Patriot Act Guidelines.", since I live in 1 of those states. I've never heard of this before. This smacks of something made up on the spot. Has anyone else ever heard this, from a CSR of any bank?

1
Comment #3 by Anonymous posted on
Anonymous
Is there a hard inquiry to open this account ?

1
Comment #4 by Anonymous posted on
Anonymous
Those seven states happen to have the largest illegal immigrant populations in the U.S. I bet this is why although it doesn't seem to stop too many other banks from offering accounts in these states. I happen to live in one of them, too.

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Comment #5 by virgquest (anonymous) posted on
virgquest
I opened an account with this bank on Monday and have been pleased with service so far. The application went smoothly and I received a welcome email within hours. Online banking required my account number to set up, but I was able to get that via secured email from a CSR. The webpage says it can take up to three days for online access to become active, but I was able to get in a few hours later. My opening deposit has already been withdrawn from my checking account.

Two issues I had were quickly resolved. At the end of the online application, you are asked to print and mail in a signature card that contains every single piece of personal info you entered into the application from your SSN to your driver's license. I wasn't willing to send that through the mail, so I contacted the back. They told me I could white out all the sensitive information (except name, last 4 of SSN, etc) and then fax a copy directly to them. The second issue was that I was required to use my SSN as my userID when I set up online banking. However, the first time I logged in, I was directed to change my userID as the very first step, so that was resolved automatically.

Overall, good customer service so far. I'm linking my E*Trade account to this savings account so I can move money between my checking account and CBDirect. I chose this bank over Provident Direct because I live in KY and I wanted to support local banks. We'll see how the rates hold up - hopefully I made a good decision!

1
Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. Glad to read of the good customer service.

1
Comment #7 by Anonymous posted on
Anonymous
Has anyone confirmed whether there is a hard credit pull when opening the account? The website still shows 4.54% APY savings which is the top of the chart. Has anyone tried opening in one of the 7 prohibited states?

1
Comment #8 by Anonymous posted on
Anonymous
Online system forces you to use your SS# as your User ID instead of allowing you to create a new ID. This creates a security issue. It would also be more convenient if they let you set up online access at the same time you open your account instead of forcing you to re-enter all your personal info again.

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Comment #9 by Anonymous posted on
Anonymous
Once they approve your online access (which takes 1-3 days), you are forced to change the user ID to something other than your SSN.

I applied for the CD (not a savings account) and they did NOT do a hard pull. One thing I liked about this bank is that they allow you to fund by ACH.

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Comment #10 by Anonymous posted on
Anonymous
I'm not so sure about the great customer service. I called their phone number today just before 4 p.m. eastern and after many rings, was sent to an answering machine that said I could leave a message if I was calling during their 9-5 eastern business hours.

1
Comment #11 by virgquest (anonymous) posted on
virgquest
Regarding the phone calls... according to their website, their lobby closes at 4 PM. Only their drive-through is open until 5 PM. However, I called a couple days ago at 4:30 and someone called me back at 5:30, to answer my question, which was a pleasant surprise. I don't know if that person was just working late or what, but my question was ultimately answered.

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Comment #12 by Anonymous posted on
Anonymous
Caveats: 1) They never answer their telephone (caller must leave voicemail message) 2) Cash withdrawals using ATM card limited to $200 a day. 3) Purchases using debit card limited to $1000/day. 4) They charge you $39.95 to close the account within first 90 days. This is all in the fine print.

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Comment #13 by Anonymous posted on
Anonymous
Rates are down to 3.61% APY on Savings, but at 3.82% APY on the Money Market. Very annoying as I just opened the savings account a week ago to get the best rate and now I must open a new account to get the best rate.

1
Comment #14 by Anonymous posted on
Anonymous
Current Online CD Rates:
5 Month CD: 2.95% APY
10 Month CD: 3.15% APY
15 Month CD: 3.35% APY
20 Month CD: 3.75% APY

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Comment #15 by Anonymous posted on
Anonymous
I just opened my Money Market account. It went very smoothly - they do a soft pull through Experian. You need to lift a security freeze (if you have one) in order to be approved for the account.

The customer service has been fantastic so far. I left a voice mail the night before and the lady called the next day with very detailed answers (about the credit pull). I also called back the next day to ask if I could wait to order my free checks until later, and she said that was fine. She answered the phone right away, no voice mail necessary.

I have a lot of hope for this account! It seems very promising.

1
Comment #16 by Jeff (anonymous) posted on
Jeff
Does anyone know what is going on with this bank? The Bankrate.com rating is down to 1 star. The rating was 4 star back in June of 2007, then down to 3 on December 2007.

I was going to open a checking account since it has an attractive rate of 3.35% APY but I'm not to sure with the ratings dropping to rock bottom this fast.

1
Comment #17 by Anonymous posted on
Anonymous
They appear to have a lot of non-performing assets (probably "bad" loans) and, therefore, their reserves aren't large enough (double wammy). This might explain why their interest rates have not gone down.

Realise that the determination by Bankrate is based on data that is now four months old. The bank could be in substantially better or worse condition. Based upon the fact that they haven't raised their rates radically, I doubt that they are in much worse a condition than they were in June.

1
Comment #18 by Bob (anonymous) posted on
Bob
You know, I just breezed through here, checking CD rates, and saw the same thing. If you stay under the FDIC limits, there's no reason to worry about it. If they're in a bad way, rates won't drop much -- and that's a good thing!

1
Comment #19 by Anonymous posted on
Anonymous
I wonder why banks describe themselves as online only ("Direct") banks and yet don't allow ACH transfers to be initiated through them. It is like you have to mail deposits and applications to them to open an account and then you still have to use these same methods to conduct business with them or have it set up at another bank. Their rates have not changed over many months, but we will see if that continues or not.

1
Comment #20 by Anonymous posted on
Anonymous
An additional comment regarding the personal identifiable information that is printed on an online application. That is done with many online bank applications that I have seen. I guess they need a paper trail regarding when you actually sent your application. Your information is also being stored on a bank server which could technically be used by a hacker later. Regarding the use of the SSN during signon. My Bank of America online signon uses my SSN oddly. It has been this way for many years. BofA just notified me the other day to change it after their security policies changed. My BofA account has never been compromised, but of course since keylogger hacking software is floating around the Internet, it is best not to use that number. It is too bad that every individual is labeled with a unique number at birth (or after 1920). They should come up with some other means to identify people.

1
Comment #21 by Anonymous posted on
Anonymous
tried signing up today and it wouldn't let me fund my account.. some error with the website

1
Comment #22 by CornHusker (anonymous) posted on
CornHusker
I have one checking and one MMA with them for a while. and they automatically closed my mma account as I left 0 balance while their rate is not as high as GMAC. there is the reply "the account will close automatically after 30 days if there is a zero balance". they can't re-open it for me asking me to re-apply. I will pass this time. their checking rate is good enough for me currently.

Their customer service is very responsive and friendly though.

1
Comment #23 by Anonymous posted on
Anonymous
Savings now 3.31%, Checking at 3.05%, MMA at 3.32%. Sad to see the rates fall but still competitive.

1
Comment #24 by Anonymous posted on
Anonymous
Rates dropping again...

1
Comment #25 by Anonymous posted on
Anonymous
Do you offer bank-to-bank transfers?

Not at this time. We are diligently working with our online banking provider to offer bank-to-bank transfer in the near future. If you open a checking or money market account, you have both check writing and debit card access to the money in your account.

Until we are able to implement bank-to-bank transfers, you can transfer money to Century Bank Direct from another bank by setting your account with us as a payee with your bank’s bill pay service. If another bank you deal with offers bank-to-bank transfers, you can draw money from your Century Bank Direct account using their transfer service. Or, if you request, we will send you a check.

1
Comment #26 by Anonymous posted on
Anonymous
How do I make withdrawals and deposits?

Once your account is set up and confirmed by us, you may make deposits to an Online Checking, Savings or Money Market account by:

Setting up Direct Deposit with your employer or a government agency.

Transferring money electronically from another account you may own.
Sending money from another bank via wire transfer (send to Bankers Bank of KY, routing number 083901896; beneficiary bank Century Bank of KY, routing number 083908310; for credit to "your account number").

Sending a deposit by mail using a deposit envelope supplied by us. Make your check payable to yourself and, on the back, write “For Deposit Only”. Sign your name and write your Century Bank Direct account number below your name. Mail the check to Century Bank Direct, 201 West Woodford Street, Lawrenceburg, KY 40342.

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Comment #27 by Anonymous posted on
Anonymous
Working to set up ACH transfers in the near future? They have been saying that on their website for AGES. Don't expect any changes in the near future.

1
Comment #28 by Anonymous posted on
Anonymous
savings dropped to 2.74%

1
Comment #29 by Anonymous posted on
Anonymous
MMA at 2.09% APY now...

1