Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
UFB Direct0.20%$5k-Money Market
Accounts mentioned in this post. Rates as of July 24, 2014

UFB Direct Raises Money Market Account Rate

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UFB Direct

Update 8/6/2012: The top yield now applies to all balances up to $250K. Previously, the balance had to be at least $5K for interest to be earned.

Less than a month since UFB Direct launched a new money market account, UFB Direct raised the yield of this account from 1.15% to 1.25% APY. This yield applies to all balances up to $250,000. There is a $10 monthly maintenance fee, but it can be avoided by maintaining an average daily balance of $5,000. The account details and the rates are listed in the money market section of UFB Direct.

It has been about one year since Bank of Internet USA (now called BofI Federal Bank) started UFB Direct with its high yield Airline Rewards Savings Account. I first reported on this account last August when the savings account was paying a very competitive yield of 1.30%. This top rate held steady for about 6 months. The rate started to plummet in January. The yield is now 0.80% which puts it in the middle-of-the-pack as compared to other internet banks.

Based on this rate hike, it appears UFB Direct wants this money market account to get more attention. With this rate hike, UFB Direct's Money Market account rate is now a leader with a rate that matches the intro rate at EverBank and the rate at TIAA Direct.

This rate hike doesn't help answer the question about how long will it be before this rate falls. Based on the savings account history, it's likely this money market rate won't hold up over the long run. However, if it holds up for at least 6 months, that can still be a good deal.

UFB Direct's Online Banking Features

UFB Direct does offer some nice banking features such as online check deposits (called MyDeposit), mobile banking and free postage-paid envelopes. However, the bank-to-bank ACH transfer service has low limits. Here are the limits that I've been told:

standard inbound and outbound limit is $2,000 daily and $5,000 monthly. Once you are with UFB Direct for 90 days and have used the standard inbound, had no NSF incidents and have maintained the account in good standing, you can fall in the standard high limit: $15,000 daily and $25,000 monthly.

Standard transfers are free, and there should be no dollar limits on UFB Direct's side when you initiate transfers from another bank. Please refer to my UFB Direct savings account review for more details about UFB Direct online banking.

UFB Direct & BofI Federal Bank Overview

BofI Federal Bank is putting a lot of resources into UFB Direct. It should be noted that the site's main focus is airline rewards which can be earned primarily with the checking account.

Deposit accounts held at UFB Direct are FDIC insured through BofI Federal Bank (formerly called Bank of Internet USA). BofI Federal is one of the oldest pure internet banks. Its financials have remained strong. Currently, it has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 9.52% (above average) based on March 2012 data. Please refer to our financial overview of BofI Federal Bank for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35546).


  Tags: UFB Direct, money market accounts

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Comments
Comment #1 by Kaight posted on
Kaight
Suuuu-weet!!  Thanks, Ken.  Keeps pressure on TIAA Direct, too.  Gotta love this!

1
Comment #3 by TacticalInvestor (anonymous) posted on
TacticalInvestor
Their external transfer limits are unacceptable in todays standards. I would definitely hesitate to invest money in this bank.

Maximum per day in or out $2,000.00

Maximum per month $5,000.00

4
Comment #4 by ctgottapee posted on
ctgottapee
I'm guessing the pay interest on that first $5,000 if you have over that amount - ie is the first 5 grand always excluded from earning interest??

1
Comment #6 by Kaight posted on
Kaight
#4:  Naaaa.  If you have over US$5K they still pay you interest on the first five thousand.  You earn interest on your entire deposit.

3
Comment #5 by Kaight posted on
Kaight
TacticalInvestor:  You're likely right.  I've never checked because I'd never dream of using UFB's CashEdge ACH "service".  It is a joke just for being CashEdge, not to mention any dollar limitations they might or might not impose.  Any ACH transfers I do with UFB will be originated elsewhere . . . without the dollar restrictions you mention, and more importantly without need to deal through that odious and malodorous entity, CashEdge.  CashEdge has a unique high powered vacuum system they use literally to suck money out of the pockets of honest, hard working savers like us.

CashEdge is a catastrophe and UFB should be ashamed to be using their so-called "service".  But as long as you don't originate ACH transfers at UFB the problem can easily be circumvented.   

4
Comment #7 by Anonymous posted on
Anonymous
This is great!  Haven't seen a rate move up in "many  moons".  I recently withdrew some of my funds from UFB and moved it to tiaa.  So now we have a little competition between these 2 establishments.

1
Comment #8 by DollarBill (anonymous) posted on
DollarBill
Does anybody know if the first order of checks for the money market fund is free?

1
Comment #9 by Anonymous posted on
Anonymous
Yes, checks are free. My account was set up and funded in less than 24 hours. Most professional opening I have experienced and I have many accounts. Night and day compared to Amboy Direct which took 2 weeks to barely function.

2
Comment #10 by Anonymous posted on
Anonymous
People, stop the premature enjoyment, the rates will be in effect for couple of months only, like any other previous offer form Bank of Internet.

5
Comment #11 by Anonymous posted on
Anonymous
Not long ago, I pulled all my money out of the Airline Account and transferred it to TIAA Direct, and I am not going to be such a fool as to put it back into this new UFB account.  Unless you have over $500k in cash, you shouldn't even be thinking about this one (you can have 2 separate FDIC insured accounts at TIAA Direct paying 1.25% each). I expect the rate to hold for a few short months and then to plummet, just as the other UFB account did....I'm actually surprisingly happy with TIAA's customer service too.

2