Flagstar Bank has made a nice change to its savings account promotion. The new promotion now guarantees a 1.15% APY for the first 12 months on its SimplySavings savings account. The old promo had only guaranteed a 1.05% rate for the first 6 months. Like the old promo, there’s no maximum balance, and no checking account is required. New money is required. This offer is listed at Flagstar’s SimplySavings promo page as of 6/11/2014.
Below is the offer’s small print:
1.15% APY is accurate as of 6/2/2014 on SimplySavings Promo accounts. Funds currently deposited in accounts at Flagstar Bank are not eligible for promotional rate. The 1.15% APY is guaranteed for the first 12 months. After the 12 month promotional period, account balances will earn the variable interest rate paid on the standard SimplySavings account in effect at the time and is subject to change. A maintenance service charge of $3 will be imposed every month if the average daily collected balance in the account falls below $300. This charge may be waived if the account is linked to any Flagstar personal checking account. Limit one account per customer. Not available for businesses or public units. Fees could reduce earnings. Limited time offer. No minimum deposit to open in a branch, $1 online. Personal accounts only.
I don’t see any significant issue in the small print. You only need to maintain a $300 balance to avoid the maintenance service charge. The main issue to consider is that after 12 months, don’t expect the rate to remain competitive. Currently, the standard rate on the SimplySavings account is 0.10%.
Online Application But Michigan Only
You can open this savings account promotion online or at one of the bank’s branches. For the online application, you have to enter your zip code at the start of the online application, and if you live outside their market area, it will tell you "Product Unavailable In Your Zip Code." It appears to be limited to Michigan residents.
Flagstar Bank currently operates over a hundred branches in Michigan. The bank used to have branches in Georgia, but in 2011 Flagstar announced that PNC would acquire its branches in the Atlanta metro area.
Flagstar used to have an internet bank called FlagstarDirect.com, but that now redirects users to Flagstar.com.
The bank was hit hard by mortgage problems that started during the financial crisis. However, its financial health has been improving. Its Texas ratio is now above average at 22.30%. Last year it was below average at 64.53%. It currently has an overall health grade at DepositAccounts.com of a B based on March 2014 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 Promotion Compares
This savings account promotion has the advantages of a 1-year CD without the disadvantages of locking in your money. The rate compares very favorably to the best 1-year CDs.
EverBank’s money market promotion is similar to this one, and unlike Flagstar, EverBank’s accounts are available online in all states. One advantage with EverBank is a higher rate. It’s guaranteeing 1.40%. However, this is only guaranteed for the first six months, and there are maximum balances which qualify for this promo rate ($50K for the money market and $100K for the checking). This rate is accurate as of 6/11/2014.