Update 5/01/09: I'm afraid another bank changes the availability of its online savings account. From the bank's website:
Effective May 1, 2009 available to Georgia residents only.
Dary Direct is offering a no-minimum internet savings account with a 3.00% APY as of 4/12/09. It looks like a typical online savings account. Some of the features as described in the bank's FAQ include:
- Open to all residents of the United States. You must be a United States citizen at least 18 years of age to apply online
- No monthly fees, no minimum balances
- Interest is accrued daily, compounded monthly and credited at the end of each month.
- Initial deposits begin to accrue interest 2 business day after being processed. They are available to be withdrawn after this 2 day period
- Electronic statements only
- Customer support available by phone (1-866-599-4256), email, and secure BankMail
- Limited to the typical six online withdrawals as required by Regulation D
- For bank-to-bank ACH transfers, you can link your Online Savings Account to any other account at another financial institution
- Wire transfers are also accepted
Update 4/13/09: I called the bank several times today, and the line was always busy, but I was finally able to contact a Darby Bank representative. Below is a summary of the info I received from the rep:
- The bank-to-bank ACH transfer service is free
- For the number of links to external accounts, the rep didn't think there was a limit. However, a reader who just opened an account said it looks like it allows up to three.
- (Update, see below) There are small limits in the transfers that you can initiate at Darby Direct: $2,500 per transaction and $5,000 per month for inbound, $2,500 per transaction and per day for outbound. They may consider increasing these limits on a case-by-case basis.
- 2 to 3 day holds on ACH deposits. Interest starts accruing on the day the funds are deposited.
- There's no hard credit inquiry.
- They don't allow beneficiaries to be listed.
A big downside is the limitation on the ACH transfers. A $2,500 limit is small. However, it appears you should be able to originate ACH transfers at your other bank. Plus, they also accept wire transfers. Update 4/21/09: Readers have reported that the inbound transfer limit using Darby Direct's own transfer service has been increased from $2,500 to $10,000 per transaction. If you originate your ACH transfer from your existing bank, there is no transfer limit.
Not allowing beneficiaries to be listed may also be a major issue for some. This will mean that you won't be able to go above $250K in one account for the current FDIC limits ($500K for joint accounts).
Is Darby Direct a Legitimate Bank?
Yes, I think it's legit. The bank is an online division of Darby Bank & Trust Co., a member FDIC (FDIC Certificate # 14580). As is common for internet banks, the FDIC only lists the bank's main website URL in its database, and DarbyBank.com doesn't seem to have any references to darby-direct.com. That always makes me a little concerned. However, the application link at darby-direct.com takes you to the uMonitor.com domain. uMonitor.com provides online account opening and funding service to several banks and credit unions. One of the banks is Bank2 which I reported on last month. So I feel confident that it's legitimate.
How Long Will It Remain Competitive?
The other issue I'm sure many have is how long will this bank keep the rate competitive. I don't see any intro-period guarantee. On the front page, it states "Annual Percentage Yield (APY) is accurate as of November 1, 2008 and may vary." (I wonder if we had missed this for the last 5 months). Even though there's no minimum balance requirements, it's still a hassle to open a new account only to see the rate fall to mediocrity after a few months. I doubt they'll be a rate leader for the long term, but they could remain competitive for a while. Darby Bank is a little larger than Citizens National Bank, which I reported on in September 2008. The bank's internet division, CNB Bank Direct, continues to offer a competitive rate on its online savings account.
Statistics from the FDIC as of 12/31/08:
- 7 offices in Southeast Georgia
- 170 employees
- $785 million in assets
- $649 million in deposits
- 2 stars (below peer group) at Bankrate.com based on 9/30/08 data
- 3 stars (adequate) at BauerFinancial based on 12/31/08 data
Edit 4/14/09: Corrected customer service number (Their FAQ under "How do I reach a live person" had 888 rather than 866. It should be 866).