Bank5 Connect made a big rate increase this week on its online checking account. When Bank5 Connect launched in July, the checking account had a rate of 0.25% for balances of at least $100. The rate was increased to 0.76% which is now comparable to other internet checking rates. As I mentioned in my initial review of Bank5 Connect accounts, this checking account has some nice features:
- There’s no monthly maintenance fee
- Free ATMs - No charge you for using an ATM, and Bank5 Connect will reimburse other banks’ surcharges up to $15 per statement cycle
- Free first order of basic checks
- Free online billpay
- Free mobile apps including a check deposit app
- Person to Person payment service called Pay People
The checking account could come in handy when paired with the bank’s savings account. The checks offer an easy way to make withdrawals for things like funding a CD at another bank.
Other Bank5 Connect Accounts
Another reason you may want to consider Bank5 Connect is due to its CDs and savings account. I have more details on these accounts in my Bank5 Connect account reviews and in my interview with a Bank5 Connect official.
The accounts are available nationwide with the exception of residents in Massachusetts and Rhode Island (BankFive’s market area).
There’s an online application that’s powered by Andera, a company that powers the online applications of many banks and credit unions. The account funding can be done with an ACH transfer from your existing bank account. I was told that the maximum amount for ACH funding of a checking account is $10,000. You can also fund accounts with a credit card or you can mail the bank a check.
Bank5 Connect is an internet-only division of BankFive. It was launched in July 2013. BankFive is a community bank headquartered in Fall River, Massachusetts. It operates 12 branches in southeastern Massachusetts.
Bank5 Connect customers are insured by the FDIC to at least $250,000, and all deposits above the FDIC insurance amounts are insured by the DIF which is a private insurance fund that insures all deposits above FDIC limits at Massachusetts-chartered savings banks. I reviewed DIF and other private insurance funds in this blog post.
BankFive has an overall health score at DepositAccounts.com of B+ with a Texas ratio of 9.07% (above average) based on June 2013 data. Please refer to our financial overview of BankFive for more details. The bank has been a FDIC member since 1981 (FDIC Certificate # 23286).
How This Checking Account Compares to Other Internet Checking Accounts
With the latest rate hike, Bank5 Connect Checking is now a better deal than the internet checking account from the two big online banks, Capital One 360 (formerly ING DIRECT) and Ally Bank. Both of these have rate tiers that require a large balance to qualify for a decent rate.
In the case of Capital One 360, the checking account pays only 0.20% for balances under $50K. Balances from $50K to under $100K earn 0.80% and balances of $100K+ earn 0.85%.
In the case of Ally Bank, the checking account pays only 0.40% for balances under $15K. Balances of $15K+ earn 0.75%.
One thing we don’t know is if Bank5 Connect will be able to maintain this competitive rate. As we have seen with other banks, the online checking account rates often don’t hold up over the long run. Incredible Bank is one example. It used to be the clear online checking rate leader. Now its checking account pays only 0.66%. Another example is Charles Schwab Bank. For the first couple of years after its launched, it was offering competitive checking rates. Now its checking account pays a pathetic rate of 0.10%.
The above rates are accurate as of 9/13/2013.
Another option for a checking account is a high-yield reward checking account. This can be a good option if you want the highest rates for balances under $25K and you don’t mind using your debit card. You can get rates over 2% with these accounts. I have more details on these accounts in this post.