FNBO Direct is offering a new savings account promotion to its existing customers. This is similar to the promotion that FNBO Direct offered last year, but the bank has made it more straightforward. Here's the summary that FNBO Direct emailed to customers:
Thank you for being an FNBO Direct customer. To show our appreciation we're offering a six month promotional rate of 1.35% APY* beginning July 1, 2012 on all the money above what your balance was on the close of business June 29th, 2012. Your initial balance will continue earning a competitive 0.65% APY.**
Details of the offer can be viewed at this FNBO Direct page. The promotional rate will remain in effect until December 31, 2012. Thanks to DA member Maecl who posted on this promotion in this forum thread. If you are a FNBO Direct customer, and you didn't receive this email, you should call FNBO Direct to see if you can qualify. It appears it's going out to all customers who had accounts as of June 29th, even those who participated in last year's promotion.
If you were not a FNBO Direct customer as of June 29th, this offer won't help you any. Since this is the second straight year of this promotion, it might be something that becomes a yearly promotion. But there's no way to know if this will be repeated again.
FNBO Direct simplified the promotion as compared to last year when FNBO Direct required a minimum $50 deposit for 3 months before the 6-month promotional rate began. This new promotion begins immediately for existing customers. I wonder why FNBO Direct waited for almost 3 weeks after the start of the promotion period to email customers. So instead of 6 months of 1.35%, customers can only get close to 5 months.
One thing to remember about FNBO Direct is that it has a slow bank-to-bank ACH transfer service. You can speed up the transfers if you initiate the transfer from another bank or credit union.
FNBO Direct became popular back in 2007 when it offered a promotional 6% APY for 5 months. It also made many customers mad when it threatened account holds on certain customers who didn't provide sufficient employment history.
After the 2007 promotional period, rates remained fairly competitive. However, in the last few years, rates have been a little low as compared to savings accounts at ING DIRECT and Ally Bank. This can be seen today with FNBO Direct's standard online savings account rate of 0.65% which is lower than the rate of ING DIRECT Orange Savings Account (0.80%) and the rate of Ally Bank Online Savings Account (0.84%). Rates are accurate as of 7/20/2012.
Last year I discussed how this promotion shows the benefits of keeping old accounts opened. But there are also some potential gotchas for leaving old accounts opened. These include the inactivity fees and the potential for fees related to minimum balance requirements.
Other Savings & Money Market Account Deals
If you don't qualify for this FNBO Direct promotion, there are other banks that offer all customers a rate that's close to 1.35%. TIAA Direct has been offering 1.25% APY on its savings and money market account since the internet bank was open to the public in February. UFB Direct has a new money market promotion with a 1.25% APY. UFB Direct's money market was launched at the end of May with a 1.15% APY. The yield was increased to 1.25% at the end of June. Both of these banks are not guaranteeing their rates so they could end at anytime.
EverBank has a guaranteed 1.25% rate for 6 months for new customers on its money market and checking account. The downside with this promo is that the promotional yield is limited to the first $50K balance for the money market account and to the first $100K balance for the checking account (see review).
Searching for the Best Rates
To find the best rates on liquid accounts, please refer to the following rate tables. You can use these tables to search for both accounts available nationwide and accounts local to your state.