Update 5/12/09: Rates have dropped. Rate Builder Savings: 2.76% APY 30-day intro, 1.76% APY $5K-$25K, 2.01% APY $25K-$100K, 2.26% APY $100K+. Rate Builder 13-mo CD: 2.51% APY. Rates are from disclosure.
Choice Financial has two attractive deposit account deals: a savings account with a rate of up to 3.26% APY and a 13-month CD with a rate of 3.01% APY. The bank calls these their RateBuilder accounts. The savings account and CD are available nationwide. There's also a high-yield checking account for those in Minnesota, Montana and the Dakotas.
The savings account has a 30-day intro rate of 3.76% APY. After the intro period, the following tiered interest rates apply:
- 2.76% APY $5K to $25K
- 3.01% APY $25K to $100K
- 3.26% APY $100K and over
One downside to this account is that interest is only credited quarterly, and if the account is closed before the interest is paid, you'll lose the accrued interest. Some other features mentioned on the website and the disclosure (pdf) include:
- Minimum opening deposit of $5,000
- $2/month fee if balance falls below $5K on any day of the month
- Interest credited and compounded quarterly
- $50 closing fee if closed within first 90 days
- If account is closed before the interest is paid, you'll lose the accrued interest
- Typical limit of 6 withdrawals per month
There's also a good deal on the RateBuilder CD. As of 5/08/09, the rate is 3.01% APY for a 13-month term. Minimum deposit is $5,000. Some additional details mentioned in the disclosure (pdf) includes:
- 13-month term
- $5,000 minimum deposit
- Interest will be compounded and credited annually
- Early withdrawal penalty equals 6 months of interest on the amount withdrawn
- Grace period at maturity of 10 calendar days
- Add-on feature: You will be able to make additional deposits to the CD up to the original deposit amount without extending the term of the CD
For some additional details about the savings and CD, I called the bank's customer service number at 1-877-380-3623. At first, the voice message informed me that they were busy with other customers and that I should leave a message. Instead of leaving a message, I called back a little later and was quickly connected to a CSR. According to the CSR, they rolled out these RateBuilder accounts about 4 weeks ago. She said the posted rates are accurate. Some additional things I was told by the CSR include:
- No hard credit inquiry. They just use ChexSystem
- ACH service provided to allow electronic funding of savings account and CD. You can also mail a check
- Savings account has an ACH transfer service. Transfers are free, and there are no size limitations on transfers (CSR didn't appear too knowledgeable about this)
- CD rate locks at the time that the application is submitted
Savings account bonus: As described in the disclosure: Electronic gift certificate issued after receiving opening deposit valued at $10. Electronic account anniversary gift certificate issued one year from account opening date valued at $25 if your account has an average daily balance $500 on the account anniversary date. The CSR confirmed this. She said that the gift cerificate is for some online store.
Add-On Deposits in the CD: As descrbied in the disclosure: After the account is opened, you may make an unlimited amount of deposits. The total of the deposits may not exceed original amount of the opening deposit. The CSR did not think you could make additional deposits. Leave a comment if you are able to confirm. The add-on feature is limited in value since the add-on is capped to the initial deposit. Update: Another CSR confirmed that the CD does have this add-on feature.
Update: I received additional info from a CSR by email (I'm impressed by the speed of the replies). Below is what I received:
More RateBuilder CD info from the CSR:
The CD does have an add-on feature. You will be able to make additional deposits to the CD up to the original deposit amount without extending the term of the CD.
The CD starts earning interest on the business day that they receive the initial deposit. The CD rate that you will receive on the CD is the rate as of the date that they receive the application.
When the CD matures, you may elect to have those funds withdrawn by a mailed check, ACH transfer or wire transfer. You can close the CD over the phone. They'll use security questions to verify your identity.
More RateBuilder Savings Account info from the CSR:
I confirmed that they had mistakenly listed the rates instead of the APYs for the first two tiers on the RateBuilder webpage. It was correct in the disclosure. I've corrected the rates above.
The CSR didn't provide many additional details on their ACH bank-to-bank transfer service. They do seem to have such a service, and transfers are free.
You may fund the account by mailing a check, wire transfer or by ACH. This also applies to the RateBuilder CD.
Health Savings Account
Thc CSR confirmed that their Health Savings Accounts (HSA) are also available nationwide. A reader commented that she has been happy with their HSA for the last 3 years. It's a tiered account with rates that range from 1.04% APY to 2.53% APY as of 5/08/09. Refer to their HSA rates page for the latest info, and for general info and good nationwide options on HSAs, refer to this post.
Overview of Choice Financial Group
Choice Financial is a small bank with 11 branches in North Dakota. You can review the details about their financials at this FDIC page. They have some solid ratings for safety and soundness: 3.5 stars (good) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 12/31/08 financial data. The bank has been FDIC insured since 1934 (FDIC Certificate # 9423).
Thanks to the reader who emailed me news of these online accounts.