Dedicated to Deposits: Deals, Data, and Discussion

UmbrellaBank Raises CD Rates & Update on its Money Market Account - Nationally Available


Update 10/24/2009: Latest MMA rate tiers include: 1.25% APY up to $50K, 1.60% APY $50K+. Please refer to the bank's website for the latest rates.

A bank actually raised CD rates today. UmbrellaBank raised its 12-month CD yield from 3.20% to 3.50% APY and its 24-month CD yield from 3.25% to 3.50% APY. The 3.50% APY for 1- and 2-year CDs is nothing to get excited about, but the rate is very competitive in this low-rate environment. UmbrellaBank just changed the CD rates today (1/15/09), so they should last for a little while. Refer to UmbrellaBank's rate table for the full list of rates.

A description of the basic CD features is available at UmbrellaBank's CD overview page. More details are in their Truth in Savings Disclosure. Some of the important features include:
  • $1,000 minimum deposit
  • Monthly or quarterly interest checks available
  • Paper certificate issued and mailed to you upon activation of the account
  • Early withdrawal penalty for terms of one year or more is AT LEAST 180 days of interest on amount withdrawn (There's a long paragraph in the disclosure describing this)
  • 10 calendar-day grace period in which you can close a CD at maturity without penalty
  • If CD is not renewed at maturity, no interest will be paid on the account during the grace period
  • Traditional and Roth IRAs are available
UmbrellaBank has an online chat system. Below are some details I learned yesterday from a CSR via that chat system:
  • You have 7 calendar days after you apply for UmbrellaBank to receive the funds to guarantee the rate on the day you apply
  • CD application allows funding using an ACH electronic transfer from another bank
  • Maximum ACH transfer amount is $99,999.99
  • At CD maturity, an ACH transfer cannot be used to withdraw funds. Allowable options include wire transfer ($25), mailing a check or transfer to your UmbrellaBank's money market or checking account
  • CD closure instructions are accepted by fax, mail or secured email
  • Hard credit inquiry is used to process applications for all accounts
In addition to an ACH transfer, you should also be able to fund the CD with a free wire transfer or mailing a check. Refer to UmbrellaBank's FAQ and fee schedule for more details.

UmbrellaBank's Money Market Account Update

UmbrellaBank still has a competitive rate on its Pot O'Gold Money Market Account. However, the yield has fallen in the last month. It's now 2.75% APY for balances of over $1,000 and 3.00% APY for balances over $50,000 as of 1/15/09. Unlike most online savings accounts, this money market account has limited check writing. I also asked the CSR questions about the Money Market. They appeared to have improved the ACH bank-to-bank transfer system. The CSR mentiond the following features:
  • ACH transfer limit is $99,999.99
  • Allows up to 6 free per month. Over 6 there is a $10 fee (typical due to Reg D)
  • There is no limit to the number of external accounts you can link
  • Trial deposit method is used to verify an external account
UmbrellaBank Overview

UmbrellaBank is the online banking division of New South Federal Savings Bank, a privately held company based in Alabama. You can find UmbrellaBank mentioned in this New South FSB press release. New South FSB is FDIC insured (FDIC certificate # 32276). It doesn't have a history of high ratings at Currently, it only has 1 star (lowest) based on 9/30/08 data. The rating at BauerFinancial is a little better with 2 stars (problematic) based on 9/30/08 data. As I recommend with any bank, it's best to stay under the FDIC limits.

Other Top Certificate of Deposit Rates

For terms around 12 months, Western FCU is still offering a 4.05% APY 13-month CD. The best bank 12-month rate continues to be 3.75% APY at GMAC Bank as of 1/15/09. Several credit unions have rates in the high 3-percent range. The best 24-month CD rate at a bank continues to be 3.75% APY at MetLife Bank. Please refer to my weekly rate summary for more information on these CDs, banks and credit unions.

Rate History:
10/24/2009: Latest MMA rate tiers include: 1.25% APY up to $50K, 1.60% APY $50K+.
07/11/2009: Latest MMA rate tiers include: 1.15% APY up to $50K, 1.35% APY $50K+.

  Tags: money market accounts, CD rates, IRA rates

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Comment #1 by Anonymous posted on
umbrellabank mm down to 2.60% for most tiers. 2.85% for balances over 50,000.

Comment #2 by Anonymous posted on
once again, another rate cut. down to only 2% for lowest tiers. 2.27% for $10,000 and above.

Comment #3 by Anonymous posted on
rate down to 1.6% for most tiers. 1.95% for balances $25,000 and above.

Comment #4 by Anonymous posted on
I had a money market account with the bricks and mortar bank operation (New South Federal) back in the mid-1980's. They offered among the highest rates back then, but don't come close now.

Comment #5 by Anonymous posted on
rates were bumped up to 1.90% and 2.05% for balances $25,000 and above...

Comment #6 by Anonymous posted on
Umbrella Bank appears to have reversed the course on their savings rates. The top tier is now 2.7% for regular savings and money market accounts.

Comment #7 by Anonymous posted on
Filled out online app. to open CD requesting ACH to fund CD. Faxed requested documents to verify ID the next day. Hadn't heard from them in 2 days, so called to see what the story was. The CSR said the account had been opened and that they had mailed me a letter (snail mail?)to notify me, and that I would need to mail them a check to fund account. Time is money. The ACH was no longer an option since they requested verifying documents. Rate does not lock till CD is funded. May pass on this one. What a hassle.

Comment #8 by Anonymous posted on
Be careful with this Umbrella Bank, sub of New South FSB. They seem to have weak capital ratios and may be closer to failure.