Update 1/12/2011: The rate has fallen to 0.90% APY.
Southern Community Bank and Trust has a new online savings account called the Ready Saver Account. It's a no-minimum and no-fee online savings account. It currently has a very competitive rate of 2.00% APY for all balances as of 2/15/2010.
The bank's About Ready Saver page has a few details:
- Can only be opened online
- Not available for North Carolina residents
- Minimum initial deposit is only $1
- No monthly service fees or other hidden charges
- No rate tiers
- interest accrues monthly
- monthly e-statement
- ACH bank-to-bank transfer service with automatic transfers
There are a few more details in the Ready Saver Truth-in Savings disclosure. Some details not mentioned above include:
- Interest rate on your account may change at any time.
- If you close your account before interest is credited, you will not receive the accrued interest.
- Minimum monthly required activity - You must sign into and access your online banking account monthly to verify you have access to your eStatement.
- $3.00 fee per withdrawal in excess of 6 withdrawals per month.
- A maximum of $15,000 in electronic transfers on any defined banking day (Update 2/16/10: Based on info from CSR, this does not seem to be enforced - see update below)
Update 2/17/10: A long-time reader contacted the bank and received many account details (see below). Some important issues to highlight:
- They do a hard credit pull with Equifax for all new accounts
- Any debit transactions in excess of 9 cumulative per calendar quarter are assessed a $3 service charge each.
- They do not link (store) external accounts for transfers like most other online banks, so you need to enter the account information each time you want to initiate an ACH debit/credit.
One thing to note about the Ready Saver online application is that it uses the same service (secureinternetbank.com) that is used by Southern Community Bank and Trust's website to open the reward checking account. With new internet banking websites, it's always a good idea to confirm the link with the parent bank. Southern Community Bank and Trust has been a FDIC member since 1996 (FDIC Certificate # 34321).
Southern Community Bank and Trust has its headquarters in Winston Salem with branches in several North Carolina cities including Asheville, Greensboro, Winston-Salem and Raleigh. I guess they're excluding NC residents so they can bring in only new money.
The bank's ratings for safety and soundness are mixed: 3½ stars (good) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 9/30/09 financial data.
Rate Chaser's Worries
As I mentioned this morning in my reward checking post, Southern Community Bank and Trust also offers a nationwide reward checking account, and the rate has remained competitive for the last two years (see account review). That's hopefully a good sign that this savings account rate will remain competitive over the long-term. Also, the bank is not small with over $1.3 billion in deposits based on 9/30/09 FDIC data. So it shouldn't be overwhelmed too quickly by a large influx of deposits.
Will this savings account rate fall to average or below average a year from now? That's always the question when there's a new hot online savings account. There have been a few disappointments over the last year. The latest one is 1st Constitution Direct's Savings Account which now has a mediocre rate of 1.25% APY. However, there have been some bright spots. CNB Bank Direct is over a year old, and it's still offering a competitive savings account rate of 1.50% APY. Incredible Bank is much younger, but it's still offering 2.02% APY on its internet checking account after more than 3 months.
If you're weighing the pros and cons of opening a new savings account, refer to my post Internet Banks and Rate Chasing - Is It Worth It?. It reviews some issues to consider.
Update 2/16/2010: One of this blog's long-time readers was nice enough to email me the following details that he received from his conversation with the bank's CSR:
Credit Pull--They do a hard credit pull with Equifax for all new accounts, with an additional inquiry to Chex Systems. Once you have an established account, can open others with no additional hard credit pull, unless you add another (new) joint holder. Exception allowed for no additional hard credit pulls if doing additional ITF/POD accounts in your same social security tax ID number.
Account Vestings--They do offer individual, joint and POD/ITF vestings. No Trust vestings (Living Trust, etc.) are allowed. For POD/ITF vestings the POD/ITF person(s) is/are named in the account title field and appear in both the on on-line account system and the quarterly statements (electronic delivery required).
Number of Accounts Limitation--Bank allows for a maximum of 2 accounts per social security tax ID, with exception for unlimited POD/ITF accounts (since in your social security tax ID).
Account Transaction Limitations--Total maximum of 9 debit transactions per calendar quarter. This is a cumulative total per quarter, so can have 2 in Jan, 4 in Feb and 3 in Mar. All statements cut-off on quarter-end. Any debit transactions in excess of 9 cumulative per calendar quarter are assessed a $3 service charge each.
Account Transaction Dollar Amount Limitations-- No standard policy limitations per CS. They do look over higher transfers and review on a case by case basis. Remember they have your credit report from Equifax and results from Chex Systems.
Account Legacy-- This account has been offered for about 18 months, not actively advertised and the rate has been the same 2% APY since inception. The Bank does have a rate committee that meets monthly.
Bank Phone Hours: M-F 7:30 AM - 7:30 PM, EST; SAT 9AM-1PM, EST.
The On-Line Banking Department has 5 employees that would take phone calls. They know their FAQ list needs to be expanded for this information. They are also aware that the Banking Blog has this account listed and have already received a number of quality clarification calls from blog followers.
Update 2/17/2010: The reader emailed me some additional account features that he was told by the Ready Saver CSR:
On-line account statements are available for a rolling 18 months. Also they do not link (store) external accounts for transfers like most other on-line banks, so you need to enter the account information each time you want to initiate an ACH debit/credit. This could be a little risky if one is rushed and not careful in entering the information. They do not send any kind of test deposits to check the external account either. You also got the fact that they limit (no fee) to first 9 debit transaction each quarter vs. 6 per month elsewhere. They say this relates to NC banking rules--I've never heard of this before.
- 01/11/11: 0.90% APY
- 08/17/10: 1.35% APY
- 05/17/10: 1.50% APY
- 05/03/10: 1.75% APY
- 02/15/10: 2.00% APY