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H&R Block Bank Money Market and Checking Accounts - Nationally Available

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H&R Block Bank
Update 2/19/09: The money market and checking account rates have fallen substantially. Refer to the bank's website for the latest rates.

My last post on H&R Block Bank focused on its high-yield CDs. After two weeks, the bank continues to offer these CD rates (which are also available in IRAs). In addition to competitive CD rates, H&R Block Bank has fairly competitive money market and checking account rates. I briefly mentioned these accounts in my CD post, but after a few readers commented on these accounts, I thought a full post on these accounts would be worthwhile.

The money market account provides tiered interest rates. As of 2/07/09, the rates are as follows:
  • 3.25% APY $50,000+
  • 3.00% APY $25,000 - $49,999
  • 2.50% APY $10,000 - $24,999
  • 2.25% APY $5,000 - $9,999
  • 2.00% APY $1,000 - $4,999
  • 1.00% APY $0 - $999
Some important features of the account include:
  • $1,000 minimum daily balance to avoid $10/month fee
  • monthly refund up to $6 on non-H&R Block ATM transactions
A reader who commented about his experience opening this account mentioned it was pretty easy to open. They use ChexSystem to verify identity, and they use an ACH transfer for the initial funding of the account. I don't have the ACH transfer capabilities once the account is opened. Please leave a comment if you have experience with this.

The Interest Checking Account also provides tiered interest rates. As of 2/07/09, the rates are as follows:
  • 2.25% APY $50,000
  • 2.00% APY $25,000 - $49,999
  • 1.75% APY $10,000 - $24,999
  • 1.50% APY $5,000 - $9,999
  • 1.25% APY $500 - $4,999
  • 0.75% APY $0 - $499
These rates may not seem competitive, but compared to other checking accounts in today's rate environment, they're not bad. As a comparison, ING Direct Electric Orange's rate for under $50K is 0.50% and Charles Schwab Checking's rate is 1.00%.

Some important features of the account include:
  • $500 minimum daily balance to avoid $10/month fee
  • monthly refund up to $6 on non-H&R Block ATM transactions
  • free online bill pay
H&R Block Bank also offers business checking and money market accounts. The business money market account has a similar tiered interest rate structure as the personal account, however, the rate tops off at 2.50% APY at the $10K tier (as of 2/07/09).

For more details about H&R Block Bank certificates of deposit, please refer to my previous CD post. The CD and IRA rates include 3.25% APY for 1 year and 4.25% APY for 5 years as of 2/07/09.

The bank's ratings for soundness are a little weak: 2 stars (problematic) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/08 financial data. The bank has been FDIC insured since 2006 (Certificate # 58124). It's a small bank that's operated out of a Kansas City, Missouri office. From the FDIC database, as of 9/30/08, the bank has $1.06 billion in assets, $746 million in total deposits and 51 employees.
  Tags: money market accounts, H&R Block Bank , Missouri, checking account

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Comments
9 comments.
Comment #1 by Anonymous posted on
Anonymous
I decided to open a savings account with H&R block bank and it was pretty easy. They use the CHEX system to verify identity. THey also use the ACH transfer to get the initial deposit into the account. Their highest tier rate is 3.25% for a deposit of at least $50,000. Hopefully, with the tax season going strong now, the rate can last for a while.

I posted this message just the other day after opening my account. I will wait for the account opening information from the bank and then update if I online access includes the ability to perform ACH transfers. From what I read on the website, it should be an option for the accounts.

1
Comment #2 by Anonymous posted on
Anonymous
From the FAQ webpage, it appears that you can perform ACH transfers from an external bank to H&R Block bank, but you have to fill out a withdrawal form and either mail or fax it to them to initiate a withdrawal action. So it appears that external transfers going out require you fill out a form which isn't part of the online banking process. That is a bit of an inconvenience and not sure why they don't have that option after your account is opened. If you need to transfer the money to another account within the bank, you also need to submit this form.

Maybe Broadway Savings Bank is operating this same way as well? This sort of reminds me of the way that I use to bank with out of state banks before the age of the Internet. I would open accounts via mail and send letter to the bank that included deposit and withdrawal requests. I sometimes had a checkbook and an ATM card if those were available with the account. I don't have a major beef with banks that operate this way. This does reduce the chance of online fraud.

1
Comment #3 by Anonymous posted on
Anonymous
By the way, here the links to the withdrawal forms.

http://www.hrblock.com/bank/help_center/general.html

Click on the FAQ and Savings Account tabs to open up the withdrawal information.

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Comment #4 by Anonymous posted on
Anonymous
One additional note. Most "online banks" allow you to do business with them via phone, mail, and/or computer. ING Direct is one good example. Not every bank with an online presence, however, will allow you do business with them in each of these manner. I think it is safe to say, that those with the "DIRECT" or "INTERNET" name as part of the bank operation are true "online" banks and allow you to do business completely online. Those without that designation are not true "online banks" and may force you to do business with them the "old fashioned" way.

1
Comment #5 by Anonymous posted on
Anonymous
I think I am going to move some money that is in a low earning account over to H&R Block even though the online banking menu doesn't include any external transfer option. I have to mail the payment since the other account is serviced through another custodian bank. At least I will get more for my money by the transfer (from 0.7% to 3.25%).

1
Comment #6 by Anonymous posted on
Anonymous
The highest rate on the MM account amazingly dropped from 3.25 all the way down to 1.75

1
Comment #7 by Anonymous posted on
Anonymous
Thanks for the update. Now I can close out the account (after 6 months to avoid the early closure fee) since they pulled the rug out from under me.

1
Comment #8 by Anonymous posted on
Anonymous
how long does it take them to processthe withdrawal request form?

 

2
Comment #9 by Anonymous posted on
Anonymous
Yeah I deposited 500 into an Ira account about 11years ago today I my total is $527.48. Five hundred that's it . Dose this seem right

1
Comment #10 by Anonymous posted on
Anonymous
#9  Didn't you pay attention as to what kind of account that was?  Eleven years ago you should have made a decent amount of interest even if you had it in 5 year CD and just rolled it over when it matured.  That must have been some low paying money fund it was sitting in all those years.  Good thing it was only $500 or you really would be in bad shape today, imo.

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