Update on SFGI Direct - The Top Online Savings Account

Update 8/09/10: The rate has fallen from 1.51% to 1.35% APY.

SFGI Direct, the highest yielding nationwide savings account, recently improved its terms in regards to electronic funds transfers. They now allow you to use your other bank to initiate electronic fund transfers to withdraw money from your SFGI Direct account. Here's how their FAQ page changed:

Old FAQs as of October 17:

Q: How do I move money in and out of my SFGI Direct high interest savings account?

A: You can make withdrawals and deposits on your SFGI Direct high interest savings account using only our online banking service, SFGI Direct Access. You can make either one-time or scheduled transfers between your SFGI Direct high interest savings account and your account with us or at other institutions.

Q: Is there a limit on how I can withdraw funds from my SFGI Direct high interest savings account?

A: Yes, all withdrawal from the account must be done though the SFGI Direct Internet Banking.

New FAQs as of October 26:

Q: How do I move money in and out of my SFGI Direct high interest savings account?

A: You can make withdrawals and deposits on your SFGI Direct high interest savings account using our online banking service, SFGI Direct Access, or initiating through another institution. You can make either one-time or scheduled transfers between your SFGI Direct high interest savings account and your account with us or at other institutions.

Q: Is there a limit on how I can withdraw funds from my SFGI Direct high interest savings account?

A: No, you can withdraw funds either through your SFGI Direct account or another institution.

I'm not sure if they had actually been blocking ACH transfer requests, but at least now there's no doubt that such transfers will be allowed. This change is more important now that they only allow one external account linked for transfers. Previously, they allowed as many external accounts as you would like. Banks have more liability for ACH transfers that are initiated from their end, so this explains why there are more limitations. You can read more about this issue from my post and from the comments in my PenFed ACH transfer review.

SFGI Direct is still paying 2.25% APY on all balances as of 10/27/09. That's the highest yielding nationwide non-promo savings account rate on my nationwide list. The rate has held since July; however, the bank suspended accepting new accounts during most of August and September. As I described in this post, they started accepting new customers again on September 30th. I don't know if they made changes so they can handle more customers and deposits or if they just need a little more deposits. There's always the question about how low will the rate drop once they reach their deposit goals.

Refer to my original review of SFGI Direct for more details about the account and to read comments from readers who have opened this account.

Thanks to the reader who mentioned this change in the comments.

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