BMO Offers Competitive Online Savings Account and CD Rates
The large regional bank, BMO Harris (BMO), has been offering competitive online savings account and CD rates in the last few months. These online offerings are primarily available outside the Bank’s branch footprint. When you enter your zip code at the Bank’s website, you can confirm if the competitive online rates are available to you.
These rates have recently become especially competitive. The BMO Online Savings Account currently earns 4.20% APY on all balances. The highest BMO CD rate is currently 5.00% APY for a 1-year term. The Longer-term CDs (24-, 36-, 48- and 60-month) all have a 4.50% APY.
This deposit strategy of offering competitive online rates outside of the branch footprint has been used at a few of the large banks. It’s a way for the bank to attract deposits without expanding its branch network and without cannibalizing existing deposits, in which existing branch-based customers move their deposits into higher-rate products.
BMO High-Yield Online Savings Account
We began tracking the BMO Online Savings Account last November when the rate was 3.60% APY. The rate increased to 4.00% APY in early December and to 4.20% APY on February 1st. The small print of the Online Savings Account page lists who is eligible for this competitive rate:
You will receive these APYs if you do not reside in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri or Wisconsin.
The BMO Online Savings Account has the typical online savings account features. It has no minimum opening deposit, and there is no monthly maintenance fee. Interest is compounded daily and credited monthly.
BMO provides an Online Savings Deposit Account Disclosure and a Deposit Account Agreement on its Online Savings Account page. However, there are no details about the capabilities and limitations of its bank-to-bank ACH transfers service. I had to call to learn those details, and it took over 20 minutes before I was able to speak to a CSR. They do have an ACH transfer service in which you first link your external account with your BMO Online Savings Account. According to the CSR, there are no limits on the number of links that you can establish. The dollar limits on the transfers are fairly small: maximum $5k per transaction and maximum $25k per month. There are no BMO limits on ACH transfers that are initiated from your external accounts. According to the CSR, transfers take one to two business days and there’s no hold time on an ACH deposit. The lack of a hold time is unusual. If you’ve opened a BMO Online Savings Account, please share your experiences with ACH transfers in the comments.
An ATM card is available with free transactions at BMO Harris ATMs ($3 fee for each non-BMO Harris ATM transaction).
BMO CDs
BMO is offering CDs that can be opened online, and like the Online Savings Account, the rates are very competitive if your zip code is outside their branch footprint. The competitive rates include 5.00% APY (12-month) and 4.50% APY for terms of 18, 24, 30, 36, 48 and 60 months. Minimum deposit is $1k. The Bank also lists CD Specials with a $5k minimum deposit. The terms are slightly different, but the rates are currently the same: 13-month (5.00% APY), 25-, 35-, 45- and 59-month (4.50% APY).
The small print in the BMO CD page lists who are eligible to receive these rates:
To receive these APYs, you must open your account online, by phone at 1-888-340-2265, or at a branch in Florida. If you open your account online or by phone, you will not receive these APYs if you are a resident of Arizona, Illinois, Indiana, Kansas, Minnesota, Missouri or Wisconsin.
BMO provides a CD deposit account disclosure on its CD page. The early withdrawal penalties (EWPs) are described in this disclosure, and unfortunately, they are harsh. The following are the EWPs for terms of 12 months and longer:
- 12-23 months - 180 days interest
- 24-35 months - 270 days interest
- 36-47 months - 365 days interest
- 48 months or longer - 545 days interest
The disclosure gives BMO the right to refuse an early withdrawal request:
We reserve the right to permit withdrawals of principal only upon maturity.
As is typical for most banks, the EWP can eat into the principal if closed before enough interest is earned:
If the amount of the penalty exceeds the amount of your accrued and unpaid interest, then a reduction of principal would be required in order to pay the penalty.
The disclosure describes what’s required to close the CD and the two methods of receiving the funds:
CDs may only be closed or funds withdrawn by contacting a branch or our Customer Contact Center at 1-800-546-6101. CD funds may be transferred to another BMO Harris deposit account or a check mailed to the address listed on the CD Account.
I confirmed with the CSR that transferring CD funds by ACH to an external account is not an option when a CD is closed even though ACH can be used to fund the CD.
The grace period is 10 calendar days after the maturity date. The CD holder can withdraw funds from the CD without penalty during this time. According to the disclosure, “if you close your CD during the grace period, it will not earn interest after the maturity date.”
The CD disclosure describes how interest is paid:
For all CDs with maturities one year or greater, interest for your Account will be compounded daily and will be credited to your CD quarterly.
According to the CSR, interest can be paid out, but the only option is to be paid out to your BMO checking or savings account.
Availability and Account Opening
Headquartered in Chicago, BMO’s market area covers Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri, and Wisconsin. As I mentioned above, these competitive online offerings are primarily available outside the Bank’s branch footprint. When you enter your zip code at the Bank’s website, you can confirm if the competitive online rates are available to you.
The small print of the Online Savings Account page lists who is eligible for this competitive rate:
You will receive these APYs if you do not reside in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri or Wisconsin.
The small print in the BMO CD page lists who are eligible to receive these rates:
To receive these APYs, you must open your account online, by phone at 1-888-340-2265, or at a branch in Florida. If you open your account online or by phone, you will not receive these APYs if you are a resident of Arizona, Illinois, Indiana, Kansas, Minnesota, Missouri or Wisconsin.
To open an account online at BMO, you must be a U.S. citizen. Required contact information includes your U.S residential address, phone number, email address, date of birth and Social Security number.
To fund an account online requires providing the routing and account number of your existing bank account.
Beneficiaries can be designated without a limit on the number. Social security numbers are required for each beneficiary.
Bank Overview
BMO Harris Bank has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 2.98% (excellent) based on June 30, 2022 data. In the past year, BMO’s deposits have decreased by $2.36 billion, resulting in a negative annual growth rate of 1.77%. This negative deposit growth contributed to the below-A health grade. It’s also likely a reason for the competitive deposit rates. Please refer to our financial overview of BMO Harris Bank (FDIC Certificate # 16571) for more details.
BMO can trace its origins to the Glencoe National Bank, which was established in 1947 in Glencoe, Illinois. Almost 40 years later, the name was changed to Harris Bank Glencoe-Northbrook, N.A. May 2005 was a busy month for the Bank: the acquisition of 26 Illinois banks, the Bank headquarters moving to Chicago, and another name change (Harris National Association). The next six years saw another 11 acquisitions and the BMO Harris re-brand.
Yet another re-brand is underway. BMO is announcing the change with the following message:
To make things simpler and easier for our customers, we're shortening our name from BMO Harris Bank to BMO. This means that our website address will be changing too. Beginning Saturday, February 25, 2023, you’ll find us at bmo.com.
BMO Harris Bank is currently the largest bank headquartered in Illinois and the 25th largest bank in the country.
How the BMO 12-Month CD Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $10k or less, only one credit union has a higher rate than currently offered on the BMO 12-month CD. The following table compares the 12-month BMO CD to the two highest-rate CDs from credit unions and the two highest-rate CDs from other banks.
How the BMO Online Savings Account Compares
When compared to the Money Market Accounts and Savings Accounts tracked by DepositAccounts.com that are available within the market area and do not require large balances, direct deposit, or have small balance caps, the BMO Online Savings Account APY is competitive but there are several banks with higher rates.
The above information and rates are accurate as of 2/13/2023.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table.
To look for the best rates on liquid bank accounts, both nationwide and state specific, please refer to our Money Market Accounts Table and Savings Accounts Table.
Please add 60 month CD @ 4.50% to the CD rate table for 5 years. DA readers, please note EWP is 545 days of interest!!!
This comment is about BMO Harris Bank mentioned on this page at the very top.
BMO Harris Bank.
Are you a member at Navy Federal CU in California? They offer a 60 month certificate and a 84 month certificate for 4.25%. Are you a member of any other credit unions in California or other states? GTE Financial is located in Tampa, FL and you can become a member. You can use a coop branch to deposit the money and fund CD at GTE. They offer a 60 month Jumbo certificate for 4.80%
I posted about BMO Harris in the User Forums in January. Glad Ken had updated his post given the apparent interest.
You should be able to go to www.bmoharris.com and in the menu at the top, select CDs. Then from the drop down that opens Select Cert of Deposits. This should prompt you to add your zip code and then you should see at first, a SPECIAL 59 month CD at 4.50% (scroll to right if given multiple CD choices). Then if you scroll down further, you should see BMOs standard CDs. Here, if you live in an area where BMO allows you to open to these CDs, you should see a 60 month 4.5% offering.
Please keep in mind the EWP are very high and to redeem the bank is archaic with only phone redemption and a regular mail check, no ACH, no scheduling of maturity choices, no online anything.
Please share where the terms state "the rates are subject to change". This is highly unusual and I couldn't find any reference at all to the rates on the CD changing once you open and fund it.
Were you joking?
Rates like this one were locked in by many way back in September/October, and here we are mid February. We are living in a world of 4.5% - 5% for the long haul. There will be some above 5, sprinkled in here and there, but read the fine print on those...they will most likely be crazy EWP's, or weird terms. Good luck!
Sure they have high EWP, and their redemption process is old and manual, but their rates are high and are from a stable, old line bank (Bank of Montreal + Harris Bank + Bank of the West etc).
Marfa and Anonlol should provide the link to the terms for everyone's review and assistance in deciding where to deposit their own funds.
Kim, why not call the bank and ask them if you have concerns?