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2.00% Checking Account with Rate Guaranteed for One Year at Flagstar Bank


Flagstar Bank
Update 8/15/09: The 2% promo appears to have ended. It's no longer listed on Flagstar's promo page. Only offers include a $100 bonus or 10,000 rewards points.

Flagstar has a promotion for its S.M.A.R.T Banking in which you can lock in a rate of 2% on balances up to $100K for 12 months when you open a new Flagstar checking account. As an alternative, you can choose a $100 bonus. Here's the link to the promo page as of 8/11/09. The offer has the following requirements:
  • New interest-bearing checking account customers only
  • Minimum opening deposit of $50
  • Direct deposit of income of at least $250 per month
  • Direct deposit must be established within first 60 days of account opening
Flagstar's Interest-Bearing Checking has a $10 monthly service charge for balances under $1,000, and as is typical for interest checking accounts, the standard rates are very low. So this might not be an account you want for the long-term.

There may be some extra complications for those outside Flagstar's market area (Michigan, Indiana and Georgia). The online application requires you to enter your zip code, and if it's outside of MI, IN or GA, it states:

We're sorry - this checking product is not available in your market area.

You may still take advantage of our $100 or 2% offer. Please click Continue below to select the checking product best for you, or call (800) 642-0039 to speak to a banking expert.

If you get this message, you may want to call to confirm that you're eligible for the offer.

Flagstar's Express Money Market Account

Flagstar has been offering an internet money market account since July 2007 (see post). The rates have remained competitive. As of 8/11/09, the APY is 1.81%. It has no minimum balance requirements and offers free checks. The main downside is a slow ACH transfer service (Readers have reported you have to submit transfer requests on Monday or it'll drag on over the weekend with at least 4 days of lost interest). Another downside with their ACH service is a limit on the amount you can transfer ($5K/day and $25/month).

Financial/FDIC Info

Flagstar has been hit hard by the mortgage crisis. As you can see in their 2nd Quarter results "non-performing mortgages and loan charge-offs continue to soar." Its ratings for safety and soundness are weak, but they are not too bad as of 3/31/09 financial data. BauerFinancial gives Flagstar 3 stars (adequate) and give the bank 2 stars. The bank is a member FDIC (FDIC Certificate # 32541).

Credit for this find goes to SD member kyunbi who posted info on this promo in this SD thread.

For other high-yield checking and savings accounts available nationwide, refer to my weekly rate summary.

  Tags: Indiana, Flagstar Bank, Georgia, Michigan, checking account

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Comment #1 by Anonymous posted on
Tried to use the link. Don't seem to find the 2% guarantee offer, only $100 cash + 10000 rewards points. Did the bank switch the offer?

Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
You're right. The 2% promo seems to be gone. It does look like Flagstar switched the offer.

Comment #3 by Atlanta Wolf (anonymous) posted on
Atlanta Wolf
Depending on your zip, you may have "eChecking" account option which has no monthly fee (but a *gasp* $1 per paper check charge).

Interest rates are 0.10% to 0.40% depending on balance, so you don't keep much money in this account.

Flagstar ACH transfers are typical 3rd business day. (debited the next business day, skip the second, arrives the third). If you have $750 in the account, had successful transfer at least 30 days prior, no failed transfers at all in the past 6 months, you get next-business-day option (but low limits).