Update 2/19/10: The rate has been cut from 2.02% APY to 1.74% APY effective today.
River Valley Bank is offering a high-yield checking account at its new internet division, Incredible Bank. This is not a reward checking account. There are no debit card usage requirements or direct deposit requirements. So the yield isn't at the levels of reward checking, but it is currently at the level of top savings account yields. The checking account is an all electronic checking account with no paper checks. Payments can be made by free online bill pay or by debit card. Some of the important features include:
- 2.02% APY on balances up to $250,000, 1.00% for above (as of 11/09/09)
- Rate subject to change without notice
- $1,000 minimum opening deposit
- No minimum balance requirements
- No paper checks
- Free online bill pay and mobile banking
- Check card is available
- Wire Transfer fees: $5 for incoming, $20 for domestic outgoing (fee schedule)
- ATM surcharges are automatically reimbursed (ATM policy)
- Beneficiares can be listed in online application. Trust and custodial accounts are not offered
- Account can be funded by ACH transfer or by check
- Electronic direct deposits will be available on the day the bank receives the deposit
- Only offers e-Statements on a monthly basis
- ACH transfer service is not yet operational. CSR said it should soon be available. Update 11/14/09: Reader reported that it's now available. See comment.
- Allows you to initiate ACH transfers at other banks to deposit or withdraw money
- May be a hard credit inquiry in the application. CSR said that a credit inquiry is done via Transunion. She wasn't sure if this is a hard or soft pull. According to the CSR, ChexSystem is not used. Update 11/10/09: Readers have confirmed it is a hard pull (plus another hard pull via Equifax).
Will It Stay Competitive?
Every time there's a new internet bank offering a top rate on a liquid account, there's always the question of whether it's worth chasing yet another deal that doesn't offer any rate guarantees. I looked into this question in July when SFGI Direct first came out. Those who jumped on SFGI Direct in July are still earning 2.25% APY on all balances. So it can be worthwhile at least in the short term.
According to the CSR, Incredible Bank has only been around for about a month. They do intend to keep the rate competitive, but the CSR wasn't able to provide any specifics about how long the rate may last. The bank isn't large with about $740 million in deposits. As we've seen many times this year, small banks can quickly meet their deposit goals when they're offering a very competitive nationwide internet account. Once they reach their goals, they will either restrict new applications or lower rates (and often do both).
If Incredible Bank can maintain rates close to the best online savings accounts, this will be good long-term deal that could replace your need for an online savings account. As a checking account, it offers more liquidity than a savings account since there are no withdrawal limitations and payments can be made by online bill pay or by check card.
Past non-reward internet checking accounts don't have a good long-term record of offering rates competitive to the top online savings accounts. Some internet checking examples include those offered by Charles Schwab, Salem Five Direct and Bank of Internet. Checking accounts tend to be more costly for banks. Checking account features like online bill pay add cost. Another reason for lower checking account rates is the higher reserve ratio requirements for checking accounts.
There are some features of Incredible Bank's checking account which should help them keep rates competitive. Being fully electronic with no paper statements and with no paper checks should help keep costs down. Also, debit card usage should help bring in revenue. Even if it's not required, the average customer is likely to use debit cards to some degree.
Bank Overview
There's no mention of incrediblebank.com at River Valley Bank's website, so I called the customer assistance number listed at River Valley Bank's website, and I received confirmation that incrediblebank.com is part of River Valley Bank. I was told they don't have any mention of the incrediblebank.com at their River Valley Bank website since this internet product is intended to bring in new deposits. There's little incentive for banks to advertise their high-yield internet products to their existing brick-and-mortar customers.
River Valley Bank is headquartered in Wausau, Wisconsin with 18 branches in Wisconsin and Michigan. Total assets are $921 million and total deposits are $740 million based on 6/30/09 FDIC data.
River Valley Bank has strong ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 6/30/09 financial data.
The bank has been a FDIC member since 1967 (FDIC Certificate # 19772).
Credit for this find goes to FW member mh83 who mentioned it at this FW thread.
Other Competitive Checking and Savings Account Rates
