Dedicated to Deposits: Deals, Data, and Discussion

5.13% Online Savings Account at Broadway Federal Bank - Nationally Available

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Broadway Federal Bank
Update 08/22/09: For existing customers, the rate has fallen to 1.00% APY.
Update 05/15/09: For existing customers, the rate has fallen to 2.53% APY. The Special Anniversary Savings Account is no longer available for new customers.
Update 04/25/09: The Special Anniversary Savings Account is no longer listed on the bank's website. Contacting bank to find out if account is still available.
Update 03/11/09: APY has fallen to 3.05%.
Update 02/27/09: APY has fallen to 3.56%.
Update 11/26/08: APY has fallen to 4.08%.

Broadway Federal Bank is offering a special anniversary savings account that's paying 5.13% APY with a rate of 5%. There are just a few details listed in the bank's online account page: $1,000 minimum, ATM Card, and it's available only online. Also, the rate is subject to change.

I called this afternoon for more information. The CSR was able to confirm that it is available to people from any state. Also, she confirmed that the rate could change at any time. However, she said this special has been going on now for a year. I checked the Internet Archive and it appears she was correct. There's a page from November 2007 showing this savings account with a 5.00% APY. I'm not sure when it changed to 5.13% APY.

I also asked about other potential restrictions or limitations. According to the CSR, there is no maximum deposit limit or checking account requirement. The online application does allow you to select ACH funding, but I'm not sure if it allows you initiate ACH transfers once it's opened. The CSR didn't seem familiar with these details.

It's important to note that this bank doesn't seem to be the type trying to start an internet bank. There's no toll-free number, and there are no banking reps ready to help with this online account. With the current rate environment, it seems likely that we'll see the rate on this account fall. The question that I can't answer is will the high rate last long enough to make opening this savings account worthwhile.

Update 11/22/08: A reader provided his/her experience with this bank in the comments:

I have an account with them. They did a HARD pull and Chexsystems on me few months ago.
Customer service is very bad.
You must mail picture ID and prove residence.
ACH is very slow and they put random days of hold on the money deposited, from 2-6 days.
If it wasn't for the high interest rate, I would never open anything with them. When the limit of deposit is reached, for sure the rate will go down by at least 2% points.

Another reader provided the following account details:
  • It is a tiered account. Balances under $1,000 earn an APY of 0.40%.
  • There is a monthly service fee of $10 if the balance falls below $1,000 any day of the month.
  • Interest is compounded daily and credited monthly.

The bank has some decent financial ratings for soundness: 3.5 stars (good) at BauerFinancial and 4 stars (sound) at Bankrate.com. These ratings are based on 6/30/08 data.

It's a small bank with 5 offices in Los Angeles and Inglewood, California. The bank has 84 employees, $390.6 million in assets and $256.9 million in deposits based on 6/30/08 data. It has been FDIC insured since 1947 (FDIC Certificate # 30306).

Thanks to the reader who mentioned this savings account in the Finding the Best Deals post.
  Tags: California, Broadway Federal Bank, savings account

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Comments
55 comments.
Comment #1 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
Ahhh, people? Oh my God! This account has offered 5% for a year and we're just finding out about this today?

Do you remember how many people jumped on the AARP Savings ship when they first offered their 4.75% opening rate?

Knowing about this L.A. bank could have been huge. Why didn't anyone come along and post this info until now? I don't get it.

Of course this 5% rate will drop. But sadly, we could have all been making 5% on our savings until it drops for the last year. We were in WaMu Savings for 3.75% and we are in Alliant CU at 3.75% now.

So frustrating.

Thanks to Banking Guy for posting this account. But what do we do now? Do we jump on this 5% rate knowing the rate might drop next month or next week...and the Fed will be dropping the Fed Funds Rate Dec. 16th?

This bank lists that they try to cater to urban people and businesses. Could be similar to OneUnited when they were offering their very high rates, which eventually dropped.

Oh, and someone needs to find out if interest is paid monthly or quarterly.

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Comment #2 by Anonymous posted on
Anonymous
Broadway Financial Corporation (the "Company") is primarily engaged in the savings and loan business through its wholly owned subsidiary, Broadway Federal Bank, f.s.b. ("Broadway Federal" or the "Bank"). Broadway Federal is a community-oriented savings institution dedicated to serving the African-American, Hispanic and other communities of Mid-City and South Los Angeles, California. Broadway Federal's business is that of a financial intermediary and consists primarily of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to make mortgage loans secured by residential and non-residential real estate located primarily in Southern California. At September 30, 2008, Broadway Federal operated five retail-banking offices in Mid-City and South Los Angeles and two loan production offices in Irvine and Torrance. Broadway Federal is subject to significant competition from other financial institutions, and is also subject to regulation by federal agencies and undergoes periodic examinations by those regulatory agencies.

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Comment #3 by Anonymous posted on
Anonymous
I have an account with them.
They did a HARD pull and Chexsystems on me few months ago.
Customer service is very bad.
You must mail picture ID and prove residence.
ACH is very slow and they put random days of hold on the money deposited, from 2-6 days.
If it wasn't for the high interest rate, I would never open anything with them. When the limit of deposit is reached, for sure the rate will go down by at least 2% points.

1
Comment #4 by Anonymous posted on
Anonymous
not worth the salt in my tears

1
Comment #5 by Anonymous posted on
Anonymous
Is opening account etc online as easy as at ingdirect.com ?

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Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
@ Anonymous 8:12pm, Thanks for providing your experience with this account.

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Comment #7 by Anonymous posted on
Anonymous
Yes, according to the first comment, why are we finding out about this bank now, when they have been paying this kind of interest, 5% for a year.
I filled out the application today for the Anniversary Offering. Now I'm hoping if it's their Anniversary Offering, it may last for a while.
I have one question, how easy is it to get your money out when the rate goes down?

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Comment #8 by Trevor Plantagenent (anonymous) posted on
Trevor Plantagenent
Anonymous above: Ask the bank if you can also open up their free checking account, and then link your Anniversary Savings with the free checking. And then see if you can do online transfers from the savings to the checking. If you can, it will be very easy to remove your money by simply writing a check.

Please post your findings. Thank you.

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Comment #9 by Anonymous posted on
Anonymous
With Alliant Credit Union lowering their savings account to 3.5%, we might need this bank.

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Comment #10 by Anonymous posted on
Anonymous
When I call Broadway Federal, all I get are answering machines.

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Comment #11 by Anonymous posted on
Anonymous
During these times, I'll sacrifice some interest for quality customer service and sound banking. This bank has decent ratings, but the customer service leaves a lot to be desired.

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Comment #12 by Anonymous posted on
Anonymous
I called and called and called, maybe 20 times yesterday and no live person ever picked up the phone.

Today, I called before opening hours, hopping to speak with a CSR, but a lady in training answered and she put me on hold to relay the question to a supervisor. After 30 minutes wait, someone else reply with a question instead of an answer on my question. I got frustrated and hanged up on her.
Forget this bank. I wonder what will happen if there is an error or wrong balance in my account.

I will not proceed with opening an account.

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Comment #13 by Epicurean Odyssey (anonymous) posted on
Epicurean Odyssey
In addition to calling them to get my questions answered, I emailed them.

Two days: no reply.

This bank doesn't want our money.

And if you check their Website you won't find answers to the questions. They want you to apply online but they don't want to provide answers.

1. Interest paid monthly or quarterly?

2. Is there a time frame one must meet before closing the account without penalty should the rate drop?

3. Can one do immediate online transfers between the savings and checking accounts?

I live within driving distance of their L.A. branches, but you can't open up the Anniversary Savings Account at the branch. The in-branch rates are awful for CD's and not listed for any other accounts. For rates you are asked to call the bank. But again, you can't get someone on the phone.

Again, this bank doesn't want our money. If they did, they would at least put up a Web page that answers all the questions.

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Comment #14 by Anonymous posted on
Anonymous
the rate went down to 4% folks. Better luck next time.

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Comment #15 by Anonymous posted on
Anonymous
Of course it went down.

And it would have gone down sooner if the word had gotten out prior to a few days ago.

Other Websites were mentioning the 5% rate now. I'll bet a lot of people were applying. I hope Broadway Federal Bank dies!

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Comment #16 by Matthew (anonymous) posted on
Matthew
A few more details about this account if anyone cares:
It is a tiered account. < $1,000 has an APY of 0.40%.
There is a monthly service fee of $10.00 if the balance falls below $1,000 any day of the month.
Interest is compounded daily and credited monthly.
You must leave the original principal and all accrued interest in the account to obtain the disclosed APY.

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Comment #17 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
Thank you, Matthew, for the extra details.

With the Fed going to cut the Fed Funds Rate down to close to zero percent on Dec 16th, it's a pretty safe bet that Broadway Federal will drop their rate again.

After Dec. 16th, it might be nearly impossible to get over 3% on an Savings Account. I'd also bet Alliant CU, which dropped their rate to 3.5%, will go down to 3%.

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Comment #18 by Anonymous posted on
Anonymous
Broadway federal was fast and easy my money is earning 4.08% where else can i go to get this rate if it do fall all i have to do is close the account and look for a better rate ....

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Comment #19 by Anonymous posted on
Anonymous
The website gives me a network error message when I attempt to access it today. Maybe they have some kind of server problem? This is not good if you solely bank online. I hope those that have accounts here live close to the LA area. If the bank should fail and isn't assumed by another bank, you can't close the account right then because all accounts will be frozen until the FDIC finishes the shutdown process. The rate is still listed at 4.08% at this website, but cannot confirm this since I can't bring up the bank website.

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Comment #20 by Anonymous posted on
Anonymous
Another innercity based bank. One United Bank appears to also serve the same type of communities. These small community based banks need to offer very high rates to attract depositor money. My area has quite a few small community based banks, but hardly anyone ever shows up in their parking lots.

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Comment #21 by Anonymous posted on
Anonymous
The bank website appears to be up again now. Rate for the special anniversary account is still 4.08%.

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Comment #22 by Anonymous posted on
Anonymous
Just spoke to a CSR in a local branch. She said (contrary to what someone posted above) that the interest rate drops if the account balance falls below $1000 average in a month, not on only one given day. But given the contrary information, I wouldn't trust that unless I saw it in writing (which I couldn't find on their website).

Also, you cannot link this online savings account to a checking or other account at any other financial institution--it would need to be linked to a second account at Broadway Fed.

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Comment #23 by Anonymous posted on
Anonymous
You know the neon lights are bright on Broadway...... ;-)

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Comment #24 by Anonymous posted on
Anonymous
sounds like our money is trapped once Broadway Federal Bank gets our money.

Anniversary Savings Account RATE is 4.08% APY

2/4/2009

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Comment #25 by Anonymous posted on
Anonymous
Why do you say "our money is trapped" once Broadway gets it? Are they refusing to honor withdrawal requests???

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Comment #26 by Anonymous posted on
Anonymous
Regarding the comment about money being trapped when you give it to them. If you read the bank comments above about no toll free number, little Customer Service help, and uncertain ACH options for the account. If all true, then you better hope that the ATM access is enough to get at your money or unless you already live in the LA area.

I tried the promo online banking demo and the transfer menu ONLY lists "INTERNAL INSTANT" and "SCHEDULED INTERNAL", so that seems to indicate that external transfers are not an option. With no checks, no external transfers, and only an ATM and since I live on the east coast, I say "NO WAY, BROADWAY"

This bank reminds me of a bank located inside a local Wal-Mart called Urban Trust which is a community bank. They have a few branches spread out over several states. Some people like to bank at local community banks and I don't have a beef with that. But I always was a bit suspicious of the customer base and whether that kind of bank can last long. There has been a recent wave of mergers of these small community banks as of late.

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Comment #27 by Jake (anonymous) posted on
Jake
At a minimum, an online bank needs to allow free ACH transfers to at least three external banks. Otherwise, the bank is not an online bank as far as I'm concerned. Also, the telephone customer service needs to be decent. I wouldn't blame anybody but myself if I joined this silly bank and experience some frustration.

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Comment #28 by Anonymous posted on
Anonymous
Broadway Federal isn't an "online bank" and doesn't pretend to be. It's a small regional bank. BTW, I've called three times and each time got through immediately to a pleasant and competent CSR. (Certainly far more intelligent answers than I can get from the frightfully-clueless bankmail "CSR's" at "non-silly" Bank of America). And they DO send a toll-free number with the welcome package.

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Comment #29 by Anonymous posted on
Anonymous
"frightfully-clueless bankmail "CSR's" at "non-silly" Bank of America"...priceless yet true. With that being said, I also called with questions for Broadway Fed Bank, and the CSR was very friendly and knowledgeable; almost as if he was a stake-holder with the bank fortunes. I'm opening an account with them...

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Comment #30 by Anonymous posted on
Anonymous
Some recent posts at Fat Wallet have advice on how one person opened an Anniversary Savings Account smoothly and quickly (for a process that involves the US Mail). Also opened a Free Checking at the same time as a safety net for ready access to Savings funds in the *unlikely* event there are any issues initiating pulls from other institutions. Just search the FW Finance forums for Broadway Federal. But be aware that funding by check -- while it might make things go more smoothly than using the ACH funding option -- will probably result in a longer period until availability for the funding deposit. Disclosures state that check deposits (or at least a portion of them -- don't have the document handy here) are held for nine business days during the first thirty days a deposit account is open.

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Comment #31 by JCE (anonymous) posted on
JCE
I considered this bank but I do not like their website. There is very little detailed information on savings and CD accounts. I find it completely unacceptable that on the current rates page it says to email them to get current rates. Why can't they publish their rates like every other bank does? I'll pass on this bank.

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Comment #32 by Anonymous posted on
Anonymous
There are many banks that don't post their interest rates on their website. Suntrust Bank is one example. I guess they are too lazy to have to change their webpage when the rates change.

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Comment #33 by Anonymous posted on
Anonymous
Time to move all of your money to Broadway. But remember, that you don't have check access or EFT capability. If you are willing to access money via ATM and the "old fashioned" snail mail, then you should be OK. Or you can open a checking account and then do an internal transfer in order to write checks. The community bank inside the Wal-mart in my area just dropped rates by quite a bit the other day. I am not going to move my money across the country and have that same thing happen to me.

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Comment #34 by Anonymous posted on
Anonymous
You DO have EFT capability, if you push and pull from elsewhere. That's what always do with Corus (or I should say "did," since I plan to close that ocne-lofty-APY account soon).

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Comment #35 by Anonymous posted on
Anonymous
hello, Has anyone read the "New Account Online Banking Agreemant" that you have to agree to, to open an account with Broadway Fed Bank. Here's the link to the agreement. You may have to cut and paste the link to your address bar.

thhttps://secure.broadwayfederalbank.com/engine/newaccountapps/newAccounts.asp?Template=DepositApp1&ProductCode=1012&ProductDescription=Anniversary

There's a few things in the agreeement that concern me. I was wondering if anyone has read it and shares my concerns or if it is just standard legal speak? My specific concerns are the following paragraphs in the agreement:

No. 5., Accessing your Broadway Federal Banking Account, paragraph C.

No.6., Terms and Conditions, paragraphs C, D, and E.

No. 9., FDIC Insurance. Only $100,000.00 of FDIC insurance.

Comments appreciated.

Thank you

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Comment #36 by Anonymous posted on
Anonymous
All boilerplate disclaimers. If you've had many accounts, take a look. As for the FDIC insurance limit, it's out of date. Many smaller banks have yet to update this, especially on their websites. The FDIC decides the limit, not the banks. It's $250,000 at least until the end of the year. All that said, they do well to tidy up some of their communications, including a few that come with the welcome letter.

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Comment #37 by Anonymous posted on
Anonymous
Guess it was inevitable I would omit a word in the sentence about the need to tidy up communications :)

1
Comment #38 by Anonymous posted on
Anonymous
I applied online on 2/19, I went in on 2/20 to make an in-person deposit. The CSR on the phone said I could do that. When I got there, they called the internet account person who said I needed to first receive the welcome packet. It is now 6 days after opening it and I have not yet received a packet. I live within 1 day mail of this bank (LA to LA). They say once I get it, I can bring my deposit in. Assuming I get interest immediately, I've already lost $157 in interest due to this (4.0% interest vs 0% I'm getting now). Since then, I've moved some of my money into a 3.5% account to mitigate this delay harm. But if anyone wants to open an account with Broadway, they best make sure they are earning interest somewhere so they don't get TOO hurt on the inevitable delay. Basically, from what I can tell, they have ONE person doing the internet applications.

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Comment #39 by Anonymous posted on
Anonymous
Hi all, I need some straight forward advice In regard to the "New Account Online Banking Agreement" at Broadway Federal Bank.

SHOULD I BE CONCERNED WITH SIGNING IT?

The lanquage in the agreement is very ambigious and one sided to say the least. Is this just your standard bank agreement legal speak or what?

Here are some examples:

The agreement states things like:

The bank can charge fees for accessing your acct online. But doesn't state what the fees are now or could be later.

The bank can change fees at their discression and will only attempt to notify you 30 days before change is made. If you have a CD, and the bank changes their fees you cannot just closeout a CD without stiff interest penalties.

The Bank has the right to terminate the agreement at any time without prior notice.

I WANT TO OPEN AN ACCOUNT WITH THE BANK BUT THE AGREEMENT CONCERNS ME SOMEWHAT. SHOULD I SIGN THEIR AGREEMENT?

Thank you

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Comment #40 by Anonymous posted on
Anonymous
To Anonymous, at 10:32 AM, February 25, 2009. It's too bad you have to go through that. But you should have followed the above suggestion to send in a funding check, copy of your driver's license, and printout of your online application -- all *immediately* after applying. And a cover note clearly explaining what you're doing. Worked like a charm for me. Account open and earning interest 6 days after applying, even though I am across the country. And I earned float because of the check-clearing time. Disadvantage is if for some reason you want to make a withdrawal before the 9-business-days check hold that applies during the first 30 days. BTW, if for some reason your account request is denied, they can just destroy or return the check.

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Comment #41 by Anonymous posted on
Anonymous
To anonymous at 12:22 PM, February 25, 2009: If you're wringing your hands over disclaimers like that, I think you may want to keep your money in a shoebox. Most bank disclosures are filled with stuff like this -- or often worse. It is standard corporate cover-our-**** lingo that is rarely anything to worry about. And that includes fees, which can easily be avoided.

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Comment #42 by Anonymous posted on
Anonymous
I notice that as of a day or two ago they stopped listing "current rate" in the account-status snapshot, even though as of today it's still paying 4.00 APR/4.08 APY. Don't know whether to read anything into that or not.

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Comment #43 by Anonymous posted on
Anonymous
I am sure the bank notices that other banks are dropping their rates and the pressure to lower theirs will be enticing.

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Comment #44 by Anonymous posted on
Anonymous
"Current rate" once again appears in online banking.

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Comment #45 by Anonymous posted on
Anonymous
APY dropped today to 3.56%. Not surprising; I thought it would drop even lower, and it's still the highest rate in the country.

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Comment #46 by Anonymous posted on
Anonymous
Dropped again.

3.0% APR 3.05% APY

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Comment #47 by Anonymous posted on
Anonymous
Still the country's #1 Savings/MM rate for deposits > $37,000. Just by a hair, though. Now we'll see how much longer that distinction lasts.

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Comment #48 by Anonymous posted on
Anonymous
I guess that last statement wasn't 100% correct. Centennial Bank is paying the same rate (for $50k-$100k) or higher (> $100k) if you're willing to put up with the heavy-duty restrictions and highly-limited access.

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Comment #49 by Anonymous posted on
Anonymous
I called the bank this a.m.

The Anniversary Account is no longer being offered.

For those who still have an account - the interest rate has NOT changed - as of today, it is still 3.0% (or 3.05% APY).

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Comment #50 by Anonymous posted on
Anonymous
Rate has now dropped to 2.5% (2.53APY).

;-(

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Comment #51 by Anonymous posted on
Anonymous
I recently broke up my savings account which went to almost no interest to try to get some interest somewhere; got various CDs effortlessly and then went for the Anniversary account at Broadway Federal for two-thirds of my "liquid" savings. It's 5-6 weeks now and I've never seen a bank so slow and cumbersome--my money is still basically unavailable to me despite my immediate and complete response to every request from them. While every other online account I opened was done within 3 days, at Broadway you have to fill out app online, then do paperwork, mail in ID, etc.; they do test withdrawals from your funding account, which made me think I'd me able to do transfers to them from it in future--but no, I can't--then you have to fill in an entire app again (and these are extremely detailed and lengthy) to get the "online" factor going. They delayed over two weeks in actually funding the account, said they'd give me interest from about the midpoint when I said fund and they did it, but they didn't honor this. I learned no way to do online transfers. I ended up having to mail in my next deposit and the receipt says it'll be held 10 days!!! which I assume means no interest on it for that time? And I had to open a checking account as the only way to get $ from their savings account into my checking account locally, had to repeat entire ID and mail-in process yet again, and despite repeated requests, no checks of any kind received. I've never dealt with a bank that drags its heels like this ever in my life. They've seriously wasted my time and so I'm simply not going to get the interest the account promised. I'll end up paying fees to close it and I just just envision how long it'll take them to transfer my money elsewhere. Sure, I got an ATM card, but I think I'm limited to some $300 or so per day, when I might need to transfer several thousand at a go. Really archaic. They're an African American bank and they give an impression of mistrust and not wanting my particular money.

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Comment #52 by Anonymous posted on
Anonymous
Sorry to hear about what the last poster went through. That all sounds quite frustrating. My experience with Broadway Federal has been a strange mix of big positives (including easily-accessible, responsive CS) with some annoyring and frustrating mistakes and delays (but there again, the errors were all admitted and rectified promptly...though sometimes with further errors along the way). That said, the last few months have been as smooth as can be, with a continued excellent rate. I do think the poster should have been well aware from the outset that the bank offered no online transfer system. This was discussed in the online posts. There are many small banks that allow ACH funding but do not have an online transfer system of their own. I would never have opened an account at BFB without at least one account at another bank that *did* have a transfer system, so that I could readily push to and pull from BFB (works fine, BTW). (I also got the free checking, and the checks -- first set free, BTW -- took ages to arrive due to a clerical error which they rectified by overnighting them at no extra charge.) I can, however, see how the fact that they called the Anniversary Savings an “online account” could give people the wrong impression; there is nothing “online” about it except part of the account opening process (which perhaps went more smoothly for me because I did it via check) and the usual online banking system (a pretty decent one, BTW). I am caucasion and have seen absolutely ZERO evidence of mistrust based on race. Some big banks like E*Trade have behaved much more distrustfully to me. The above poster may or may not have mis-perceived any distrust, but even if any really existed in their situation I can assure them it was not based on race. BTW, I see that Broadway’s latest rating on BankRate was four stars. In summary, I’m really glad I opened an account with BFB despite some early problems, but I still feel badly for the above poster and others who may have had such bad experiences.

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Comment #53 by Anonymous posted on
Anonymous
P.S. To my already long post above. The disclosures provided upon account opening DO point out the 10-day hold on initial deposits (not all that uncommon, BTW). But you DO earn interest during that period! Also, you can get quickly register for online banking on the system itself, without any kind of prior setup (it will ask you identification questions, of course). That's what I did...I knew if I asked first there might be some unnecessary delay or hoops to jump through. Also, be sure that any requests (e.g, "where are my checks?") are by phone, not email!

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Comment #54 by Anonymous posted on
Anonymous
Rate has now dropped to 2.00%.

Time to move to a rewards checking account and 10 purchases of a pack of gum a month with a $10 ACH transfer...

;-(

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Comment #55 by Anonymous posted on
Anonymous
MoFo's dropped the rate to 1.5%.
What a bunch of scum su.((#&($&(*&#$ *@&I#$(*&(*$ (@&(*$9@*(

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