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Bank5 Connect0.76%$100-Bank5 Connect Checking
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Accounts mentioned in this post. Rates as of July 31, 2014

Bank5 Connect Raises Its Online Checking Account Rate

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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.

Account Opening

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.

Bank Overview

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.

To find the highest checking rates, please refer to our checking account rate table and our reward checking rate table.


  Tags: Bank5 Connect, checking account

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Comments
10 Comments.
Comment #1 by Anonymous posted on
Anonymous
How fast is ACH, limits, number of linked account.

Without that info I can not deside if the bank is worth it or not.

7
Comment #2 by RichReg posted on
RichReg
Given the measly $100 minimum balance requirement, the cost to try this bank out on a trial basis is virtually non-existent. Can easily decide later....especially since you can fund it with a credit card.  

1
Comment #3 by Anonymous posted on
Anonymous
just did initial opening, with credit card only up to one hundred bucks.

1
Comment #4 by Anonymous posted on
Anonymous
If we fund the Checking account with a credit card, then how does Bank5 or its merchant bank process the credit card transaction? What is the MCC (merchant category code) used? Will the consumer's credit card (issuing bank) treat the transaction as a CashAdvance or a Purchase? I heard that Citibank credit cards considers any transaction from a financial institution (even if it's for services transaction and non-cash) to be cash advance.

5
Comment #5 by Anonymous posted on
Anonymous
i guess when i get my bill I'll let you guys know.  i used a 2% back card.

2
Comment #6 by RichReg posted on
RichReg
No cash advances....mine went thru as a sale.

I used my Chase Freedom Visa.

4
Comment #7 by Bank5Connect posted on
Bank5Connect
As RichReg posted correctly, it goes through as a regular purchase, not cash advance. The merchant category code (MCC) is 6012 which is Financial Institution.

Please contact us if you have any additional questions.

Thanks,
John, Bank5 Connect Online Marketing Manager

3
Comment #8 by RichReg posted on
RichReg
Yes, the credit card funding is convenient & the interest rate is awesome.

However, not the most incredibly efficient transactional account. External ACHs take 3 days to be credited while the debit occurs almost right away. Have not tried the bill-pay service yet, but am told that your account will be debited within 2 days after the "send" date.  On the surface, it would appear that funds would be debited somewhat earlier than actually received by whomever you're paying, but how long that might be in real time remains to be seen.

1
Comment #9 by Bank5Connect posted on
Bank5Connect
Hi RichReg, again, I appreciate your feedback and am glad you found the credit card funding and interest rate to be huge positives for you!

Regarding the efficiency of our accounts, our goal has always been to offer the best products and services for our diverse customer base while balancing security, convenience, and consistency. We are always reviewing our offerings and again, appreciate your candid feedback. At this time, we feel that in order to deliver consistent and safe payments, our processing times are adequate and well within industry regulations and standards,. Again, we are always looking for the best solutions and will keep doing so for the benefit our customers.

As always, please contact us if you need anything else.

Thanks,
John, Bank5 Connect Online Marketing Manager

 

1
Comment #10 by DCguy (anonymous) posted on
DCguy
Opening an account was a very simple process.  Andera interface to provide account owner identification.  The minimum of only $100 allows you to earn the top tier rate for both checking and savings accounts.  Since this is a recent online banking operation, we shall see how well it maintains its standing with the other banks over time.

1