Flagstar Direct continues to offer a nice promotion on its free interest Checking Account. First, it's offering an intro rate of 1.50% APY for the first 4 months. Second, it's offering an additional $100 bonus for establishing direct deposit within the first four months. Only one promotional account is allowed per household. This promo is listed at Flagstar Direct's Express Checking Account page as of 12/21/2010.
The Express Checking Account has some nice features:
- No monthly maintenance fees
- $1 minimum opening deposit
- Free checks
- Fee-free access to ATMs in the Allpoint and Presto! networks in all 50 states
The standard interest rate isn't the best, but it's competitive for regular checking accounts (non-reward). As of 12/21/2010, the rate is 0.85% APY on all balances.
I last reported on this promotion in this September blot post. One reader already has reported receiving the $100 bonus. Today I used the online chat to ask the Flagstar customer service rep some questions. Below is what I was told regarding the direct deposit requirement for the bonus. It appears you can substitute debit card purchases and/or online bill payment. You may want to double check. CSRs are not always correct.
you: What is defined as a direct deposit?
CSR: Direct deposit is defined as a minimum of $250 in ACH activity per month, or perform at least 15 transactions monthly via debit card or online bill payment.
you: thanks. do you mean that one could qualify for the $100 bonus by making at least 15 debit card purchases or online bill payments?
CSR: That is correct Ken. In order to receive the $100 bonus, you must perform 15 debit card or online bill payment transactions per month.
I also asked about hard credit pulls and ChexSystem.
CSR: Flagstar Bank does a soft credit check to verify your credit history. We use Chexsystems to verify this information.
you: thanks. In the ChexSystem verification, do you reject applicants with too many recent inquiries (account openings).
CSR: That information does not apply to our credit check.
The use of ChexSystem to reject applicants who have too many recent inquiries appears to be more common these days. Readers have also commented that they did not receive a hard pull when they opened accounts.
Flagstar Direct used to offer some good deals on its CDs, but its CD rates are now under 1.00%.
Its Express Money Market account has a yield of 1.06% APY (1.20% APY for $100K+) as of 12/21/2010. Like the checking account, the money market account is free with no minimum balance requirement and checks are free. A reader mentioned that they have an ACH bank-to-bank transfer service via Cashedge. It allows up to 5 links to external banks, and transfers take 3 business days.
Flagstar Bank currently operates around 165 branches in Michigan, Indiana and Georgia. The bank has been hit hard by mortgage problems that started during the financial crisis. It has made some improvements this year with an increase in its Tier 1 Capital Ratio.
Flagstar Bank has an overall health score of 2 out of 5 with a Texas Ratio of 85.27% (poor) based on September 2010 data. The Texas Ratio has become worse since it was based on June data when it was 70.87%. It is also operating under an OTS supervisory agreement which was issued last January. Please refer to our financial overview of Flagstar Bank for more details. The bank has been a FDIC member since 1987 (FDIC Certificate # 32541).