Dedicated to Deposits: Deals, Data, and Discussion

4.00% Savings Account at Goldwater Bank

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Goldwater Bank
Update 10/03/08: The yield has dropped to 3.00% APY.

Update 9/15/08: The yield for new customers has dropped to 3.50% APY. The savings account yield should remain 4% APY through 2008 for those who got in before today.

Goldwater Bank is offering a 4.00% APY savings account. According to the bank's rate table, the minimum opening deposit is $1,500, and the minimum balance to obtain the APY is $100.

This savings account is listed at Bankrate.com , and it appeared to be available nationwide. I just called the bank at 480-281-8200 and confirmed this. I was told that you can fill out the online application on the bank's website, and they will email you with additional instructions.

According to the CSR, the 4% APY will be guaranteed through the end of 2008. The CSR didn't seem too familiar with all of the account details so I just sent an email to corroborate what I was told and for additional details. I'll update this post when they reply.

It appears the bank doesn't provide any ACH transfer capabilities. According to the CSR, you can fund the account by check or wire transfer. The savings account does not offer check writing.

It's a small bank located in Arizona that was just established in April 2007. It only has 14 employees and $29.8 million in deposits. They're too new to have any financial ratings at either BauerFinancial or Bankrate.com. The bank is a member FDIC (FDIC Certificate # 58405).

Update 8/14/08: I'm happy to report that the bank responded very fast to my email questions. The answers they provided are below. One unexpected downside is that the interest is only paid quarterly, and if you close the account, you'll lose the accrued interest for that quarter. Another significant downside is the limit of 6 withdrawals per quarter rather than the standard 6 per month.

On the plus side, I did receive confirmation that they're guaranteeing the 4% APY through 2008. So that's at least 4 months of 4% APY which is better than any 3 or 4 month CD that's nationally avaiable. It's not too much longer than EverBank's 4.76% APY 3-month intro rate, but EverBank limits the amount that qualifies for this intro rate ($100K for the checking and $50K for the money market). Also, if you've already been an EverBank customer, you no longer qualify (see post).

Important Account Features:
  • 4.00% APY guaranteed through the end of 2008
  • Interest is paid quarterly. Next payment will be at the end of September.
  • Forfeit the accrued interest for the quarter if account is closed before interest is paid
  • $1,500 minimum balance to avoid a $15 service charge
  • No maximum deposit limit
  • Multiple POD beneficiaries allowed
Opening and Funding Account:
  • After submitting application, they will mail you a signature card
  • Check can be mailed with signature card or you can do a wire transfer
  • Free incoming wire transfers
Accessing the Money:
  • Limited to 6 withdrawals per quarter
  • No ACH capability, but the bank accepts ACH credits/debits initiated from your other financial institutions
  • $20 for outgoing domestic wire transfers
  • Withdrawals can be done by requesting a free cashier's check that will be mailed

Thanks to the reader who mentioned this savings account in the finding the best deals post.

  Tags: Arizona, savings account, Goldwater Bank

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Comments
7 Comments.
Comment #1 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
Wow...a bank with only $29 million in assets.

Them being in the wealthy Scottsdale, Arizona, area probably means they won't stay at that low asset level for long. Plus they are offering that 4% rate.

I look forward to BG's follow up. I am guessing this bank offers a free checking and that you can do an online transfer from your savings into your checking so you can simply write checks.

1
Comment #2 by lucian (anonymous) posted on
lucian
Thanks, Bank Guy, for the update today.

Quarterly postings is a deal-breaker for me and unfair, in my opinion. 99% of banks post interest monthly. This allows for the interest to be used as monthly income. Why should a bank be allowed to hold your interest money for 3 months, especially when their rate is only .25% more than the highest rate offered by a few other banks?

Skip this bank.

1
Comment #3 by Mark (anonymous) posted on
Mark
I concur. And three withdrawls per quarter? Might as well get a 4.5% CD, ot put your money into one of the 3.75% online savings accounts.

1
Comment #4 by Anonymous posted on
Anonymous
I guess they are on FDIC watch list. They need the funds badly.

I would stay away from micro small banks. They could fail overnight without warning.

Scottsdale has quite few foreclosures as per Realtors web site.

1
Comment #5 by Anonymous posted on
Anonymous
The actual size of the bank is $80 million. They are in excellent standing with the OCC. The growth they are experiencing causes the need for the extra funds.

1
Comment #6 by jaytorr (anonymous) posted on
jaytorr
Dead - Called the bank today, they said APY for the savings account is down to 3.50% as of today for new customers.

1
Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the update. Sorry to see the rate cut.

1