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High Yield Installment Savings Accounts at NewBank in NY & NJ - Local Only

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NewBank
Another Korean American bank, NewBank, is offering high rates on installment savings accounts. Below is a summary of the three types of installment savings accounts being offered with the rates as of 4/24/09:
  • Christmas / Vacation Club Account: 6.50% APY, 168-day term, $5K maximum contract amount
  • Installment Club Savings: 4.60% APY, 12- to 36-month term, $25K maximum contract amount
  • Education Club Savings: 5.50%, 6.50%, 7.00% APY for terms of 5, 10, 15 years, $100K maximum contract amount
These rates don't seem to be listed at the bank's website. Credit for this find goes to FW member mh83 who posted details and the scan of the rates at this FW thread. Also thanks to the Bank Deals reader who mentioned this in the comments. Refer to the FW thread for more details. Some important points mentioned include: Christmas Club Account requires bi-weekly auto-transfers from other NewBank account, customers can open accounts for any purposes, allowed to open as many accounts as you want, branch visit is required to open an account.

Installment savings accounts require equal monthly deposits from the bank's checking account to the savings account. Like a CD, the rate is fixed during the term. Also like a CD, there is an early withdrawal penalty. If you open one of these, it's best if you can set up automatic transfers from a high yield savings account. You would want to make sure you maximize the interest of the money before the transfers are made into the installment savings account. If you have too much sitting in a checking account before the money is transferred, you'll lose out on the interest.

NewBank branches are located at Flushing, New York and Fort Lee, New Jersey.

The bank has strong ratings for safety and soundness: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate. Both ratings are based on 12/31/08 financial data. The bank was recently established in 2006. It's a member FDIC (FDIC Certificate # 58203).

Other Installment Savings Accounts

These installment savings accounts seem to be popular among Korean American banks. In the last couple of months, I've posted on several with high rates. Similar to NewBank, most are located around California and New York and require a branch visit. However, Wilshire State Bank is offering one that is available nationwide via an online application. It has rates up to 5.12% APY for a contract term of 3 years (see post). To find other installment savings accounts, refer to my Installment Savings Accoung Page.

  Tags: New York, NewBank, New Jersey

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Comments
7 Comments.
Comment #1 by Anonymous posted on
Anonymous
does biweekly mean twice a week or every 2 weeks?
it seems to be too much hassle for a 5k max hybrid cd.

1
Comment #2 by anonymous77 (anonymous) posted on
anonymous77
RE: "Installment savings accounts require equal monthly deposits from the bank's checking account to the savings account . . . If you open one of these, it's best if you can set up automatic transfers from a high yield savings account."

Did you mean:

HY Savings (at *outside* institution) ->
NewBank Checking account (via auto-transfer) ->
NewBank Savings account (via 'installment program') -- ?

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
@Anonymous 2:04pm: Yes, the bi-weekly is once every 2 weeks for the Christmas Club Savings. I confirmed this based on the term and payment amounts listed on the rate sheet.

@anonymous77: Yes, that is what I meant. The HY savings could be at NewBank, but I'm not sure if they offer any competitive rates. There are several online banks offering competitive high yield savings accounts that make it easy to set up automatic monthly ACH transfers to another bank.

1
Comment #4 by anonymous77 (anonymous) posted on
anonymous77
Banking Guy -- re: "There are several online banks offering competitive high yield savings accounts that make it easy to set up automatic monthly ACH transfers to another bank."

Are these reviewed/listed here? (If so, where?)

Thanks.

1
Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
Most banks that provide an ACH transfer service allow you to set it up for monthly transfers. I listed 4 last week in this post. I have reviews for most of the savings accounts in my weekly rate summary.

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Comment #6 by anonymous77 (anonymous) posted on
anonymous77
Banking Guy wrote:

"Most banks that provide an ACH transfer service allow you to set it up for monthly transfers. I listed 4 last week in this post. I have reviews for most of the savings accounts in my weekly rate summary."

OK, I would not call those "high-yield" though certainly better than leaving the funds in NewBank's checking account (until transferred to the installment savings account).

If you ever can, breaking up the "Checking/Savings/Money Market Accounts" listings into sub-categories (so that the 'Savings' accounts can be viewed as a unit) would be appreciated.

Thanks for your reply.

1
Comment #7 by Anonymous posted on
Anonymous
How would the taxes work on the longer term accounts since interest is only added at the end?

1