Update 6/7/2012: The 4-month promotion continues, but the guaranteed rate is now 1.15% APY.
Flagstar Bank is offering a savings account promotion with a 1.25% APY guaranteed for 4 months. The details are listed in this Flagstar promotions page. However, it requires that you enter your zip code. It appears all zip codes are eligible, but the offer differs slightly depending on your location. If you live in their market area of Michigan or Indiana, the 1.25% APY applies to balances up to $2 million. If you're outside this area, the 1.25% APY applies to balances up to $250,000. For both cases, the 1.25% APY will last for 4 months after account opening. After that the rate will fall to the standard savings account rate. For those outside of Flagstar's market area, it's the Express Savings Account which has a 0.80% APY on all balances as of 11/30/2011. There is no monthly fee or minimum balance requirement.
I used Flagstar's online chat service to ask a few questions. That's where I was told that if the site accepts your zip code, you can apply online for this promotion. Unless additional identification is request after your application has been reviewed, you will not be required to send anything by mail. The application also allows for electronic funding where you can enter your bank's account information to initiate an ACH transfer. According to the CSR, the promotion did not have an expiration date. However, it's subject to change at any time.
Refer to Flagstar's savings account page for more details on the Express Savings account.
Flagstar also offers CDs, money market accounts and checking accounts at Flagstar Direct. It used to offer some competitive rates, but the rates have fallen over the last year. Currently, they're having a checking account promotion similar to this savings account bonus: 1.00% APY guaranteed for the first 4 months (as of 11/30/2011). Please refer to my Flagstar Direct review for more details.
Flagstar Bank currently operates over 100 branches in Michigan and Indiana. In July Flagstar announced that PNC would acquire its branches in the Atlanta, Georgia metro area.
The bank has been hit hard by mortgage problems that started during the financial crisis. However, its financial health has been improving. Its Texas Ratio is still below average at 68.26%, but this is an improvement from last year when it was 81.51%. It currently has an overall health score at DepositAccounts.com of 3 stars (out of 5) based on September 2011 data. Please refer to our financial overview of Flagstar Bank for more details. The bank has been a FDIC member since 1987 (FDIC Certificate # 32541).
How This Savings Account Rate Compares
Savings account promotions like this used to be common. EverBank had long offered a 3-month intro rate, but this ended earlier this year. There are a few banks that are offering promo rates near Flagstar's promo rate, but there's no guarantee how long they will last. The best is 1.30% APY at UFB Direct and 1.15% APY at MyBankingDirect and AmTrustDirect.
Capital One has the best promo in terms of length. It is currently guaranteeing 0.91% APY for up to $100K for one year on its Interest Online Checking Account (for those outside their market area).
These rates are accurate as of 11/30/2011.
Searching for the Best Savings & Money Market Rates
To review other top rates on liquid accounts, please refer to our savings account and money market account rate tables. You can often get better deals on checking accounts. To find the best rates, please refer to our checking account table for regular checking accounts and our reward checking account table.