SunTrust's Money Market Promo with 3-Month Rate Guarantee in Several States - Are Teaser Rates Worthwhile?
SunTrust Bank is offering a 3-month promo rate of 1.60% APY guaranteed for 3 months in its Premium Money Market Performance Account. Like many of these promos, once the promo period ends, the rate will go back to the standard rates which will likely disappoint. Are these types of promos worthwhile? I'll discuss more on this later.
For SunTrust's special, the promotion doesn't seem to be listed at the bank's website. It was advertised last week in the Treasure Coast Newspaper in Florida. The ad is avaialable here. I did a chat with the CSR this morning, and I confirmed it's still available as of 1/18/2010. Here are some of the important details of this promo based on the ad documentation, SunTrust's website and from my chat with the CSR:
- $10,000 minimum balance required to earn 1.60% APY (0.05% for under $10K)
- 1.60% APY guaranteed for the first 3 months
- Requires either the Solid Choice Checking or Signature Advantage Checking
- Money market account requires a $2,500 minimum to avoid a $15/month fee
- Solid Choice Checking requires a $5K minimum or $15K combined minimum to avoid a $14/month fee
- Money market rate reverts to standard rates after 3 months. Current rates are low (0.10% to 0.65%)
- Appears to be no hard credit inquiry (CSR, see below)
- No account closure fees (CSR)
- It is available in the following states: FL, GA, AL, TN, MS, AR, NC, SC, WV, VA, MD and DC (CSR)
Regarding the hard credit inquiry, here are the details that the CSR mentioned:
SunTrust requires two security checks prior to opening an account. We will compare your application to Equifax and Decision Power, which are credit bureau based systems used to qualify new account applications. The Equifax inquiry posts to your credit report as a non disclosed inquiry and will not affect your credit score nor appear on any credit watch services. If we are unable to verify you through Equifax or Decision Power, Telecheck may also be contacted.
SunTrust is a FDIC member (FDIC Certificate # 867). It's one of the large regional banks with $166 billion in assets and $126 billion in deposits.
Are These Promos Worthwhile?
These types of deals are common. Bank of America has been offering a similar one. The issue is that after the promo period, the rates are no longer competitive. With the checking requirement, the bank hopes it'll be too much of a hassle for you to close both accounts. Also, the bank often has early closure fees which make it costly to close accounts. I'm actually surprised that the SunTrust CSR said they don't have any closure fees. If you've heard something different, please leave a comment.
If you don't mind the extra work to open and close these accounts, it could be a better deal than a short-term CD. There are very few 3-month or 6-month CDs over 1.60% APY in today's low-rate environment. The money market account also has the advantage of being liquid. You can add money during the 3 months and make withdrawals without having to worry about penalties (just make sure you maintain the minimum balance).
What do you think? Are these promos worthwhile? Or should you just open an account at a savings account leader like Alliant Credit Union, SmartyPig or Incredible Bank? How high would the rate have to be to make it worthwhile?
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