Dedicated to Deposits: Deals, Data, and Discussion

4.75% Money Market Account at AARP Financial Savings Center

POSTED ON BY

Update 6/14/08: The savings account and Jumbo MMA yields have fallen to 3.50% APY.
Update 5/24/08: The savings account and Jumbo MMA yields have fallen to 4.05% APY.

AARP Financial Savings Center has some excellent rates on its online savings account and money market account. The savings account yield is 4.50% APY for all balances $1 and up. The money market account has a tiered rate structure. The yield for balances over $50K is 4.75% APY. For smaller balances, the yield is 2.74% APY (under $25K) and 3.00% APY (between $25K and $50K).

The website lists two money market accounts: Secure MMA and the Jumbo Secure MMA. According to the banking rep, you can apply for the Secure MMA, and you'll receive the Jumbo rate once your balance reaches $50K. Likewise, when your balance falls below $50K, you'll receive the Secured MMA rates.

One important restriction regarding these accounts is that it's only available to AARP members. This is stated when you enter the application page.

I was surprised to see any liquid account (non reward checking) with rates this high. During my call with the banking rep, I was told that these rates have been this way since January. As with any liquid accounts, the rates may change at any time.

How the Accounts are FDIC Insured

Update 5/5/08: I called AARP Financial today and confirmed that AARP Financial Savings Center and aarpsavings.com are legitimate. Please see my latest post for more details.

When you review the account details, you may notice there are several similarities between this and UFB Direct. That's because both are managed by subsidiaries of Affinity Financial. The Affinity Financial subsidiary managing these accounts is Waterfield Financial Services. Like UFB Direct, the FDIC insurance comes from either Huntington National Bank or Countrywide Bank. This is explained at this AARP savings center page:
AARP Financial Inc. makes available the AARP Financial Savings Center brought to you by Waterfield Financial Services Inc. AARP and AARP Financial Inc. receive fees from Waterfield Financial Services Inc. for AARP's license of its intellectual property and AARP Financial Inc.'s oversight of the AARP Financial Savings Center.

However, these two banks don't seem to cover the AARP CDs. Instead, Reliance Trust Company manages the CDs:
Certificate of Deposit products and services available through the Savings Center are offered by and available through Reliance Trust Company.

Reliance Trust Company is not a bank. It's an investment firm. From my conversation with the CSR, it appears the CDs are managed like CDARS in which the deposits are divided up and held at several banks. This allows the FDIC insurance coverage to be up to $5 million (according to the AARP Savings Center CD page). The CD rates are fairly competitive with a top yield of 4.16% APY for a 60-month CD with a minimum deposit of $100K.

Account Features:

The savings account and money market account share the following features. This is based on their FAQ page, the Fee Schedule, and from my conversation with the CSR:
  • AARP membership is required
  • Initial funding can be done by check or wire transfer (FAQ)
  • Wire transfers: free incoming, $20 outgoing (fee sch)
  • ACH transfers cost $2 via MoneyHQ service for incoming and outgoing (fee sch)
  • MoneyHQ ACH in/out transfers limited to $5K/day and $35K/mo (CSR)
  • ATM card with $4.50/mo in reimbursements (fee sch)
  • Only a soft credit pull (CSR)

Savings Account features:
  • $1 minimum opening deposit
  • no monthly service charges

Money Market Account features:
  • $200 minimum opening deposit
  • $10/mo fee if balance falls under $200
  • check writing

Interest Checking Account features:
  • $50 minimum initial deposit
  • No monthly service fees for balances over $25
  • First 25 online bill payments per month are free
  • ATM card with $6/mo in reimbursements (fee sch)

Thanks to the reader who mentioned these accounts in the finding-the-best-deals post.

  Tags: money market accounts, CD rates, savings account

Related Posts

Comments
31 Comments.
Comment #1 by Anonymous posted on
Anonymous
Don't you think it's odd that the official AARP website has no links to aarpsavings? http://www.aarp.org/aarp_benefits/offer_financial/

1
Comment #2 by Michael (anonymous) posted on
Michael
I looked up membership costs to join AARP:

Membership Fee

5 Years for $39.95 ($7.99/yr)
3 Years for $29.50 ($9.84/yr)
2 Years for $21.00 ($10.50/yr)
1 Year for $12.50 ($12.50/yr)

I would like to inquire: Does the AARPSavings.com people check every year to verify you are still a member of AARP? If not, you could pay the $12.50 for one year and then drop out.

Also, AARPSavings.com will put your money market and/or savings account through the Huntington National Bank. How is it that Huntington National Bank can pay 4.75% on a Jumbo Savings account in today's rate environment? Something just isn't right here. There has to be some subsidizing somewhere, and there is no way AARP could make up the difference.

So...what is the catch?

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
Anonymous, you made a good point about the lack of a link at aarp.org. I forgot to call AARP Financial before I posted, and now I'll have to wait until Monday. I've updated the post on this.

Michael, I'm not sure if AARPSavings will check to verify continued AARP membership.

Based on my call at AARPSavings and what I see at the website, it appears legit. It seems a lot like UFB Direct, which also has higher rates than Huntington.

1
Comment #4 by Michael (anonymous) posted on
Michael
Thank you, Banking Guy. (Of course, even if they did verify AARP membership after the first year, the membership fee is pretty cheap.)

Again, I wonder how Huntington National Bank can afford to pay 4.75% APY on a Jumbo Savings Account? (They either have to be desperate for money, or the sponsor of this account is paying them the difference.)

Off Topic:

If one desires to keep their money in a Money Market Account at Wachovia Bank, make sure you know their latest special is a 90-day guaranteed rate of 2.96% if you bring in $10K of new money. (Please know that you don't have to keep that new money in your account for the 90 days. You could deposit it one day and then transfer it out the very next day.)

I am in Orange County, CA and spoke with a Wachovia rep today.

1
Comment #5 by Bob (anonymous) posted on
Bob
Well, like others said, there must be some kind of catch.

Like we join monday and they drop the rate to 2.50% a week later.

However, it might be they view money market accounts for retired folks like a long term CD in which case the rate is similar to 5&7 year CDs.

1
Comment #6 by Trevor Plantagenent (anonymous) posted on
Trevor Plantagenent
Interesting theory, Bob, but there is no age restriction to joining AARP. Clearly, Huntington Bank would have to know that people of all ages would sign up for a rate a lot higher than many online banks.

I would tend to think that Huntington Bank will lower this rate shortly.

1
Comment #7 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
I did a WhoIs search of aarpsavings.com and it kicked back that it was registered to aarp.org out of Washington, DC.

Questions: Due to the fact that ACH transfers cost money and are so restricted regarding the dollar amounts, can one have both a checking account and money market or jumbo savings account and then do an instant and unlimited transfer to the checking, and then you could just write a check?

1
Comment #8 by Montrachet (anonymous) posted on
Montrachet
Banking Guy wrote in his account synopsis that the Money Market Account offers check writing, so you wouldn't need to transfer money into an AARP checking account. You can simply write yourself a check out of the money market account if you need your money. (I am assuming that unlike the ACH limits, there would be no limit on the amount of the check written from your money market account? Yes, there would be that 3 or 6 checks per month limit, but no limit on the amount.)

Also, what about listing beneficiaries? If you open up a jumbo money market account to get the 4.75% rate, can you list FDIC approved beneficiaries to get more than $100K insurance?

Thank you.

1
Comment #9 by Michael (anonymous) posted on
Michael
You can download the mail-in application to sign up for an AARP Savings, Money Market, or Jumbo Money Market account at:

http://www.aarpsavings.com/docs/aarpfsc_application.pdf

You will see that there is no place to write in a beneficiary. There is no place to put in a P. O. Box mailing address (if your mailing address is different than your street address).

They require you to put in your AARP Membership Number.

There is a place for you to put in Joint Account info, but that Joint Account person will also need an AARP Membership Number.

They request the application be mailed to an Indiana address.

1
Comment #10 by Michael (anonymous) posted on
Michael
Sorry, BlogSpot limits the amount of characters in a posted Web address. So, I converted it to a TinyUrl:

http://tinyurl.com/3epd7z

The mail-in application requests that you include a check made out to The Huntington National Bank.

1
Comment #11 by Anonymous posted on
Anonymous
Regarding the spouse membership: If a husband or wife is a member of AARP, then the wife/husband is automagically a member.

My husband and I are members (no, I'm not over 50...yet). They often run specials for membership. The latest offer we received was 5 yrs for 29.95. Check out walgreens.com. They often have membership specials, too.

1
Comment #12 by Franklin (anonymous) posted on
Franklin
Yes, Bank Guy, if you are going to call AARP anyway Monday, please ask if they would allow the use of beneficiaries so we can get over the FDIC limit? Thank you very much.

1
Comment #13 by Anonymous posted on
Anonymous
I remember seeing these guys at AARP's Life@50 event - they are legit.

1
Comment #14 by Anonymous posted on
Anonymous
For the joint account, couldn't you just put yourself as the free aarp partner holder and then use that number to sign up for the account?
How trustworthy is Aarpsavings? Have they always been offering high rates and keeping them high?

1
Comment #15 by Anonymous posted on
Anonymous
I have a membership with AARP Motor Club from Mobil. They found out I didn't renew my AARP membership. I haven't renewed it for 2 years, so it took awhile before they were aware. They gave me a complimentary membership to AARP for one year.

1
Comment #16 by Anonymous posted on
Anonymous
A few years ago we purchased a life time memebership for $50.

1
Comment #17 by Anonymous posted on
Anonymous
Are these accounts FDIC insured?

1
Comment #18 by DollarBill (anonymous) posted on
DollarBill
If the FDIC insurance comes from Countrywide or Huntington, how does that affect FDIC coverage if you already have deposits directly with those banks? For example, if I already have $90k directly with Huntington and I deposit $90k with AARP (insured via Huntington), is my FDIC insurance coverage $180k or just $100k?

1
Comment #19 by Anonymous posted on
Anonymous
Following on DollarBill's question abut FDIC insurance thru Huntington or CWB, is there a way to tell AARPFinancial which bank to put your money in? I'm maxed at CWB so would have to request Huntington -- if they let Californians use it.

1
Comment #20 by Xavier (anonymous) posted on
Xavier
If you want the Money Market or Savings Accounts, you have no choice. Your money is with Huntington.

If you get a CD, you have no choice as to which bank they will choose for you.

If the bank crashed, the FDIC will pay out based on account title/registration. So, if you have multiple accounts at the institution but both are titled identically, your FDIC coverage would be for $100,000 total assuming your account is not a joint account or a POD/ITF account.

1
Comment #21 by Anonymous posted on
Anonymous
Anyone opened an account yet? How was the opening process? And do they give you an account number instantly so you can wire the funds?

1
Comment #22 by Anonymous posted on
Anonymous
There's a FatWallet thread about this too: http://www.fatwallet.com/forums/finance/827807/

It's stated there that you have to be a full AARP member. And to be a full member, you must be age 50+. I'm just the messenger, YMMV.

1
Comment #23 by Bob (anonymous) posted on
Bob
Did some searching and there are numerous mentions all over the net that one must be 50 to join.

Another thing I did not know is AARP seems to profit a great deal on the things it promotes.
---------------
$185 million!

That’s how much AARP estimates it makes on average in royalties and revenues from the sale of health insurance products, according to an article in USA today.

And the organization says that future sales will probably garner about $1.5 billion over the next seven years.
-------------
The above makes me further question how long these rates will last. (Not that it matters for me as Im under 50)

1
Comment #24 by Anonymous posted on
Anonymous
Rejoined AARP on their 866 phone number and received membership number instantly. I then went online and filled out bank application for jumbo money market. After being accepted I called and received my account number. Wire is now on way from previous credit union. Very easy and fast. Bank has 3 star rating

1
Comment #25 by Anonymous posted on
Anonymous
Their site indicates:

Annual Percentage Yield Calculation: APY = 100 {(1+Interest/Principal) (365/Days in term) -1}.

Does anyone know if this is the standard way of calculating APY?

1
Comment #26 by Banking Guy (anonymous) posted on
Banking Guy
Yup, that APY formula is specified at this FDIC page.

1
Comment #27 by Anonymous posted on
Anonymous
Note that AARP is merely renting out its name and mailing list.

The early withdrawal penalty doesn't seem to be specified because it varies with whichever bank they buy the actual CD from.

"If an Account is invested in a certificate of deposit ("CD") and withdrawn before the maturity date, a penalty will be imposed by the financial institution that issued the CD and will be charged to your Account. An early withdrawal penalty may invade principal.

If you have a problem with a transaction, there are too many outfits involved to make it easy to untangle your lost deposit, error in the records, delay in payout, etc.

You are dealing with a deposit broker called Waterfield. Then "Waterfield Financial Services Inc. contracts directly with The Huntington National Bank and Reliance Trust Company."

Somehow, an outfit called "Promontory" is also involved.

All of them disclaim any responsibiity whatsover in the 37 pages of fine-print terms & conditions.

1
Comment #28 by THE END IS NEAR (anonymous) posted on
THE END IS NEAR
Well, okay. We are hooked. We deposited our life savings into this AARP jumbo money market thing at 4.75%. We just matured at 6% at Navy Federal credit union after 10 wonderful months. After seeing the pits for rates everywhere else, AARP looks very good accordingly. We called {FDIC -EDIE} to make sure of the revokable trust pod thing- assured it is just dandy! Added the kids, grandkids to insure us fully. I always heard if it sounds to good to be true... Well, we will hope this remains as long as possible. It surely is good to see your money compounded on a daily basis.
This is the best advertisement AARP will ever have IMHO. If it fails and we lose our money along w/the rest of you I suppose we will all be in good hands with Hussien Obama? Did I say that? Is this America? Please wake me, please, from this terrible nightmare I'm having..... But WHO? Surely the not so conservative Lucas McCain won't give us away to the other side - but he will never get it. His bedtime story sounding speeches leave so much to be desired.:( We know who the media has pushed in to this position from out of no where, and he will win as sure as shootin. President Barick Hussien Obama ...GOD help us.

1
Comment #29 by Anonymous posted on
Anonymous
What has that semi-literate diatribe got to do with deposit accounts? If that's the kind of "thought" process most Americans go through, then I wholeheartedly agree that the end is near. BTW, if you insist on using that childish cheap-shot about Obama's middle name, please at least spell it correctly: Hussein. Hopefully Banking Guy will delete both the last post and this one.

1
Comment #30 by Anonymous posted on
Anonymous
I just contacted them and as of 5/24 the rate of 4.75% is no longer available. They do have a 4.05% but not as nice as the old 4.75%!!

1
Comment #31 by O-Qua Tangin Wann (anonymous) posted on
O-Qua Tangin Wann
AARP Savings Jumbo MMA rate dropped to 4.31% (4.40% APY) on my account today (my account was opened May 14th).

Looks like AARP is not waiting 30 days to drop the existing accounts' rate.

1