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Build My Savings Account at BBVA Compass - Hot Deal or Marketing Gimmick?

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BBVA Compass has a new savings program called Build My Savings that has similarities to Wachovia's Way2Save program. Like the Way2Save program, Build My Savings requires monthly transfers from your BBVA Compass checking account to the Build My Savings account. Unlike Way2Save, no transfers are done for any debit card usage or ACH transactions. There are only two ways to get money into the Build My Savings Account: 1) initial deposit and 2) monthly transfers.

As with any of these programs, it's not a great deal for those with large savings. However, the program is currently set up so that a depositor could make a very respectable yield on deposits over $40,000.

Here are the steps to open the Build My Savings account

  1. Open a BBVA Compass consumer checking account if you don’t already have one
  2. Open the Build My Savings Account with an initial deposit ($25 minimum)
  3. Set term of the account (from 6 months to 3 years)
  4. Set the amount of the reoccurring transfers ($25 minimum)
  5. Set the frequency of the reoccurring transfers (at least once a month)

If your initial deposit and reoccurring transfers are large enough, you can receive a Match Bonus of $250 per year. The account also earns interest, but it's practically nothing (currently 0.10%). So your rate of return is primarily based on this Match Bonus which will be paid 30 days after maturity.

How Much Can You Earn?

How much does it take to earn the $250 Match Bonus? Compass provides a calculator which allows you to see how much it'll take. The lowest initial deposit and monthly transfers that I could find to qualify for $250 in one year is an initial deposit of $1,000 and 12 monthly transfers of $640. This would require a total deposit of $8,680.

If you have a lump sum to invest, you can make it simple and treat it like a CD. You would deposit $8,680 in your Compass checking, and open the Build My Savings account with a $1,000 initial deposit from the checking and set up $640/month transfers. This should allow you to qualify for the $250 Match Bonus. That would result in an annual rate of return of about 2.88% (250/8680). Below is the snapshop that I took of this tool:

BBVA Compass Build My Savings Example


According to the disclosure (TX), there's a limit of 5 Build My Savings accounts per customer. So if a customer opens 5 of these accounts as described above, the total deposit would be $43,400. A one-year rate of return of 2.88% on $43K is a good deal these days (It appears the $250 Match Bonus would apply to each of the 5 accounts).

Possible Gotchas

There are risks that you may never see the Match Bonus. These are described in the product disclosure (see the disclosure page). The following is from the Texas disclosure:

  • You will not be eligible for the Match Bonus if the Transfer is cancelled, stopped or missed or if the Transfer amount is reduced during the term of the Savings Plan, and will result in cancellation of the Savings Plan.
  • If the Transfer does not occur [due to an overdraft], any applicable NSF fees will be charged to your checking account and you will no longer be eligible for the Match Bonus and your Savings Plan shall be cancelled.
  • The initial Savings Plan deposit amount must be received within 6 calendar days of account opening or you will not be eligible for the Match Bonus.

One thing that does not appear to put the Match Bonus at risk is an early withdrawal. However, they do charge you $10 for each early withdrawal. That is the only penalty I see. This may not be a bad deal. Since the account earns practically no interest, it may be worthwhile for the 2-year or 3-year terms to do yearly withdrawals.

Another thing that worries me a little is that you have to trust the Build My Savings calculator. The match percentages that the calculator displays don't seem to be consistent with the dollar amounts of the match. I called Compass yesterday for more explanations, but the CSR wasn't much help. I would recommend taking a snapshot of the calculator tool output for future reference.

Another risk is if BBVA Compass is closed by regulators. I'm not sure how the FDIC would handle a Match Bonus. When banks fail, the FDIC guarantees that you receive all accrued interest up to the day of closure. I doubt the Match Bonus would be handled this way.

Do you see any other possible gotchas?

Maximizing Your Rate of Return

One way to improve your returns is to avoid doing a lump sum deposit into the checking account. You can set up monthly transfers from a high-yield savings account into the Compass checking account before the automatic transfers into the Build My Savings Plan take place. That would allow you to earn a decent rate on around half of your money, and this would not affect the Match Bonus.

Do you have any other tips to receive a higher rate of return?

Account Opening Info

According to the CSR, you can fund the Build My Savings account with an ACH transfer from another bank. You can also fund it by check or from an existing Compass account. You do have to first open a Compass consumer checking account. Opening a Compass checking account does result in a hard credit inquiry (which can ding your credit score). However, according to the CSR, there's no hard pull for opening the Build My Savings account.

In addition to opening the accounts at a branch, you can also apply online. However, there are some restrictions:

  • Must be a U.S. Citizen
  • Have a permanent residence within a state where BBVA Compass has a banking center (Alabama, Arizona, California, Colorado, Florida, New Mexico, or Texas) and your permanent residence must be located in close proximity to a BBVA Compass banking center.

BBVA Compass now has branches in California after its acquisition of the failed Guaranty Bank last August.

New $100 BBVA Compass Checking Account Bonus

I just noticed a new BBVA Compass checking account bonus. It's not as good as the previous one, but it's a good deal if you're interested in this Build My Savings program. Here's the promotions link. This is scheduled to last until May 31, 2010. This does require direct deposit. Here's the important small print:

$100 minimum opening deposit required to qualify for offer. Offer available for consumers only. Accounts opened online between 04/30/2010 and 05/31/2010 that establish a recurring payroll direct deposit by 06/30/2010 will receive $100 bonus. Bonus deposit will occur within 120 days of account opening in the checking account

  Tags: Alabama, Colorado, Arizona, New Mexico, Texas, checking account, Florida, California, savings account, CD rates

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Comments
13 Comments.
Comment #1 by Anonymous posted on
Anonymous
Compass bank is famous for not honoring the bonuses, they will mess you up and will not pay the bonus, it happened to me before and I will stay away from this bank.

5
Comment #2 by Anonymous posted on
Anonymous
Banking Guy said:

"It appears the $250 Match Bonus would apply to each of the 5 accounts"

If it appears it means it is not sure and I bet you the bank will negate their commitment or find a reason not to pay for five savings accounts.

3
Comment #3 by Anonymous posted on
Anonymous
The way I read the bonus is that the maximum per person is $250 per year total in up to five saving accounts that will not pass the $250 yearly bonus.

And if you read the bank statement of rules, the last one says:

"All accounts subject to approval", which means they can deny anything wild like opening 5 accounts with $250 bonus for each account.

4
Comment #4 by Anonymous posted on
Anonymous
I've done business with Compass for several years and they have pulled every trick in the book including mysteriously canceling automatic transfers into my saving account with them, which would negate this deal.  The worst thing they did was charge my freshly widowed father an NSF fee because they allowed a debit after they forced him to close their joint account with them. Even though he had a death certificate with him, they would not simply remove her name, so he ended up getting a newer account with fewer benefits.  More recently they charged me an NSF fee on a Friday for a debit that cleared late Monday. Not only did they have the free use of my money for Friday through Monday, they also charged me another NSF for not having enough money to cover the original NSF because they applied the money I transferred in there to cover the overdraft AFTER the second NSF charge. They gave me the second NSF back after I threatened to go to the St's Atty General's Office here. I am in the process of closing my accounts with them and do advise anyone considering doing business with them to stay as far away from this bank they can.

2
Comment #5 by TFB (anonymous) posted on
TFB
You will need the exact term for how the Match Bonus is calculated. Just this vague language in the disclosure is not enough:

"The Match Bonus will be a percentage of your transfers and will be based on your Savings Plan options selected at account opening and may not exceed $125 per six months or $250 per year."

I'm not sure if the visual calculator is legally meaningful.

If you are indeed able to get $250 bonus with $1,000 initial plus $640 monthly for 12 months, your yield goes to 4.76% if you keep your $640/month outside and only transfer in when needed.

4
Comment #6 by Jack (anonymous) posted on
Jack
Actually, I've have had good experience with their bonuses.

About 2 years ago I got on on their ipod shuffle and did get it.

Then I year later, I asked why I didn't get my $25 annual bonus. They said I didn't have that feature but could add it now and I will get in a later ltr. I just closed the account.

Then Compass Bank was brought or transfer to BBNA Compass Bank.

This year in January or so I got on in the $150 bonus. I am reporting that I did get my $100 so far recurring direct deposits and another $25 for 3 billpays a month. I am hoping to get my last $25 in a month or two. For DD, I actually used a real DD or about $500 from my employers. So I can't safely say a transfer from another saving account will work. Good luck!

 

2
Comment #7 by Anonymous posted on
Anonymous
Compass bank is known to amend rules at any time. They are at the command post with their legal departement and are in business to rob custemers.

0
Comment #9 by Anonymous posted on
Anonymous
I never got the last bonus.  Avoid Compass bank.  Lousy service.

1
Comment #10 by Anonymous posted on
Anonymous
I think $2000 intial and 555/mo is the optimum amount for a 8910 ending balance.

2
Comment #11 by Anonymous posted on
Anonymous
I have done business with this bank for over 2 yrs and love it.  They have the best CS and have always honored all of their bonuses.  Great bank... I recommend this bank to anyone.

1
Comment #12 by Anonymous posted on
Anonymous
Compass shows the specifics for calculating the match bonus in this PDF: http://www.bbvacompass.com/buildmysavings/images/bms_calculate.pdf.

I found this link on Compass' calculator page: a box in the lower right hand side says "How is the Match Bonus calculated?" and has the link.

2
Comment #13 by Anonymous posted on
Anonymous
I have opened over 7 build my saving over the last two years and I have received $250 for every single one. It's a really easy way to obtain interest w/o any risk!

2
Comment #14 by Anonymous posted on
Anonymous
fwiw, wouldn't a person want to have the following?
smallest amount of money tied up
highest interest rate in the end (750/small amount)

if that's the case, wouldn't 3k initial deposit with $380 monthly transfer for 36 months be the best(?) option?  final total and interest rate would be 750/16680, effectively 4.5% interest rate?  just curious

1