Update 9/14/10: The rate has fallen to 1.15% APY. The bonus is now $25.
Pinnacle Bank of Nebraska has launched an internet bank called BankOn. The internet bank has a no-minimum online savings account with a 2.05% APY as of 10/12/09. Unfortunately, it's not a nationwide deal. When you select the Apply Now button, the first page of the application states that they are only accepting online applications from Colorado, Kansas, Missouri, Nebraska and Wyoming residents. It looks like a good deal for residents of those states.
You are required to open BOTH the checking account and money market account. The only small print related to the bonus that I can see is that the bonus will be paid within 10 business days of account opening. Also, there's a limit of one per household. So it looks like an easy $50.
There's no mention about a hard credit inquiry in the application process (which can temporarily ding your credit score). I'll check with the bank tomorrow. Update 10/13/09: According to the CSR, they do check your credit report. She wasn't sure if this would be a hard pull.
There's also no mention about an ACH transfer service which allows you to transfer funds to and from your bank accounts at other institutions. I'll also check on this tomorrow. Internet banks often neglect this critical internet banking feature. Some may have a basic service, but it often lacks important features such as the capability to link to multiple external accounts, fast transfers in which little or no interest is lost and the allowance of large transfers. Update 10/13/09: The CSR wasn't too familiar with the ACH features. She suggested that transfer features were part of the bill pay service. I'll have to email for clarifications.
Below is a list of the important features described on the bank's website. I was able to get a few additional details from the disclosure documents which are available in the middle of the online application.
BankOn Checking and Money Market Savings Shared Features:
- No required minimum balance after opening
- No monthly fees
- No checks
- E-statements only
- Online only accounts
- Online application via andera.com
- Options to fund account: Credit or debit card or U.S. checking account
- Online application allows for joint accounts, but doesn't allow for beneficiaries
- Dormant Account Fee: $50.00 annually (per fee schedule)
- Incoming Wires: $12.00 per wire (per fee schedule)
- Must be a U.S. citizen or a U.S. resident alien
- Only available to residents of NE, CO, KS, MO & WY
BankOn Money Market Savings Features:
- 2.05% APY as of 10/12/2009
- No minimum initial deposit
BankOn Checking Features:
- No interest
- $100 minimum initial deposit
- Free Bill Pay
- Visa Check Card with Cash Back Rewards (0.50% on signature-based purchases paid monthly to account)
- Free foreign ATM transactions (but no mention of reimbursements of other banks' fees)
The state restriction may be good if you live in one of the eligible states. It should reduce the chance that they'll be overwhelmed with deposits. As we've seen many times this year, new online banks offering good deals are often overwhelmed with new customers, and they end up suspending new applications or restricting availability.
There's always the question about if it's worthwhile to chase rates at a new bank. I discussed this issue at length in this post.
BankOn is provided by Pinnacle Bank. One thing Pinnacle Bank did right is to include a link to the BankOn website at their main website at www.pinnbank.com. Pinnacle Bank is a FDIC member, and you can verify this and their website address at this FDIC page. According to the 6/30/09 FDIC data, the bank has $2.4 billion in assets, $2.1 billion in deposits and 57 branches.
Pinnacle Bank's ratings for safety and soundness are strong: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 6/30/09 financial data.
- 09/14/10: 1.15% APY
- 04/26/10: 1.60% APY; $25 new account bonus
- 02/21/10: 1.85% APY
- 01/20/10: $25 new account bonus
- 10/12/09: 2.05% APY; $50 new account bonus