Union Federal Savings Bank has a new online money market account with a yield of 3.50% APY for all balances. It has no minimum balance requirements or monthly fees. According to the CSR, the money market account was just started in early May.
Since it lacks check writing, I consider it an online savings account. As a no-minimum online savings account, the yield is currently very competitive. However, we've seen many other online savings accounts which start out competitive and slowly drop off. We'll have to wait and see how this one goes.
It does have an ACH transfer capability, but with some limitations. According to the banking rep, it only allows for one link to an external bank account (the original link set up to fund the account). This link can be used for deposits and withdrawals. They also allow you to transfer out funds to another bank account by entering the bank's routing and account number for each time you want to do a withdrawal. I was told they are working on an enhancement to establish more formal links to other bank accounts.
Below is a summary of the account features based on the FAQ's, the Rates and Fees Schedule, the Personal Deposit Agreement, and from my discussion with the the customer service representative (CSR):
General Account Features
- 3.50% APY on all balances as of 7/15/08
- No minimum balance requirements
- No monthly service charges
- No check writing
- compounded daily and credited monthly
- Available to people in any state
- No hard credit inquiry, only a soft pull (per CSR)
- Minimum initial deposit is $1
- Maximum initial deposit is $100,000
- Online application (by Andera) is used to open account
- Signature card must be mailed in
- Account is funded by electronic funds transfer via ACH
- The external account used to fund the initial deposit (initial link) can be a savings or checking account
Electronic Funds Transfer Features
- The initial linked account can be used for additional deposits and withdrawals after the account is opened
- Only the initial link can be set up (per banking rep)
- ACH deposits are generally available on the day they're received
- Typically, funds are received 3 to 5 business days after transaction is initiated
- ACH transfers are free
- ACH withdrawals are limited to the standard 6 per month limit as required by regulation
- No dollar limit on the ACH transfers as long as the balance remains under the maximum balance limit (per CSR)
Large Balance Features
- Accounts are limited to a maximum balance of $1 million (confirmed with banking rep)
- Only one beneficiary can be specified per account
- Does not support Trusts as beneficiaries (or account holders)
Union Federal Savings Bank is a small bank located in Rhode Island. It has 23 employees and $647 million in assets based on FDIC's 3/31/08 data. It was established in 2001, and is FDIC insured (FDIC Certificate # 57189). It has a 4-star rating (excellent) at BauerFinancial based on 3/31/08 data.
Thanks to the reader who emailed me info on this new online account.
Other High Yield Online Savings Accounts
To compare Union Federal Savings' money market account to accounts at other banks and credit unions, please refer to my weekly savings account summary. As of 7/15/08, the highest non-promo yield for a savings account is 3.75% APY.
Update 7/22/08: Corrections made to ACH capabilities, max balances and beneficiaries.
Update 7/17/08: Corrections made to ACH capabilities based on new info from banking rep.
Update 01/09/10: The APY has fallen from 1.25% to 1.20%.
Update 12/19/09: The APY has fallen from 1.40% to 1.25%.
Update 12/12/09: The APY has fallen from 1.50% to 1.40%
Update 12/05/09: The APY has fallen from 1.60% to 1.50%.
Update 11/21/09: The APY has fallen from 1.65% to 1.60%.
Update 10/24/09: The APY has fallen from 1.70% to 1.65%.
Update 10/17/09: The APY has fallen from 1.80% to 1.70%.
Update 9/26/09: The APY has risen from 1.75% to 1.80%.
Update 8/01/09: The APY has fallen from 2.00% to 1.85%.
Update 6/27/09: The APY has fallen from 2.05% to 2.00%
Update 5/02/09: The APY has fallen to 2.10%.
Update 4/25/09: The APY has fallen to 2.15%.
Update 3/21/09: The APY has fallen from 2.40% to 2.25%.
Update 1/17/09: The APY has fallen to 3.10%.
Update 8/1/08: The yield has increased from 3.50% to 3.75% APY.