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First Security Bank & Trust Of Iowa Cuts Reward Checking Rate

Tuesday, September 7, 2010 - 1:42 PMFirst Security Bank & Trust
I'm afraid this is the fall of another 4% RCA. First Security Bank & Trust of Iowa will be reducing its reward checking yield from 4.01% to 2.83% APY for balances up to $25K effective 9/9/2010. A reader just forwarded me this email he received from First Security Bank & Trust of Iowa:
“Effective September 9, 2010, the annual percentage yield (APY) on balances up to and including $25,000 will be 2.83%, and balances over $25,000 earn 1.00% APY.

If you do not meet the requirements per qualification cycle, your account will still function as a free checking account with no maintenance fees earning .17% APY, however it will not be eligible for the additional benefit of refunded ATM fees imposed by other ATM operators for that statement period. ”

This bank used to offer the reward checking account nationwide. In May they reduced availability of new accounts to IA and MN.
4
Ken TuminKen Tumin5,467 posts since
Nov 29, 2009
Rep Points: 124,994
1. Wednesday, September 8, 2010 - 1:29 PM
The table below might give a little perspective on how First Security Bank & Trust’s rate compares with others.  As you'll see, 2.83% is still a premium rate by far when compared to other liquid accounts, and even outperforms most that don't provide much access to their investment.  In fact, a customer would need to extend their maturity nearly 5 years in order to get a similar or better rate. 

These rates are accurate as of 11:45 this morning.

 

 
Institution

Product

Rate

Term

Features

Bankrate.com

Money Market

0.78%

1 day

$10,000 minimum balance

Discover Bank

Savings

1.35%

1 day

 

Ally Bank

Savings

1.25%

1 day

 

FSB&T

Reward

2.83%

1 day

Free Debit Card, ATM Refunds

U.S. Government

Treasury

0.13%

3 months

 

Bankrate.com

CD

0.79%

6 months

 

Bankrate.com

CD

1.12%

12 months

 

Charles Schwab

CD

0.85%

18 months

 

Ally Bank

CD

1.75%

24 months

 

Discover Bank

CD

2.90%

60 months

 

U.S. Government

Treasury

2.67%

120 months

Zero Risk

U.S. Government

Treasury

3.74%

360 months

Zero Risk

 

Respecfully,

 

Penny Gray

VP/Marketing Manager

First Security Bank & Trust Co.

pgray@1stsecuritybank.com

 

 
2
PGrayPGray1 posts since
Sep 8, 2010
Rep Points: 2
2. Wednesday, September 8, 2010 - 6:12 PM
It's nice that a bank VP is actually following this forum.  However, when making her comparisons, Penny neglected to point out that all the other institutions used for comparison are available to anyone living anywhere in the country, while FSB&T's rewards checking account is currently available only to residents of IA and MN.

She also neglected to compare her rewards checking account with others that are available nationally and offer a higher rate of return.  As a prime example, Danversbank's rewards checking account is nationally available and offers an APY of 4.01% compared to FSB&T's 2.83%.
4
dunkerdunker136 posts since
Jun 11, 2010
Rep Points: 409
3. Wednesday, September 8, 2010 - 8:56 PM
Yes, it is not apples-to-apples comparison since the RCA requires debit transactions/ACH/paperless statement.

The important take-away point here is that banks nowadays are also viewers for sites like this one.  Thus we all should exercise caution and sensitivity when we post, if we desire a good rate to continue for a while; if you know what I mean:-)
6
51hh51hh1,475 posts since
Jan 16, 2010
Rep Points: 6,423
4. Wednesday, September 8, 2010 - 11:58 PM
Kudos to Penny for standing up for her bank. However, the flaws in her retorte have already been pointed out by others.

 

And yes 51hh, I always cringe when some dimwit brags on here how s/he circumvents the 'intended' RCA requirements by making many tiny charges in a short amount of time at the same retailer (or online). I sure hope that if bank executives who read this such as Penny and come to the conclusion that something needs to be done about it, don't treat all their customers the same and/or punish them with more stringent requirements or lowering APRs or caps. Rather I hope that they do it in a surgical manner and weed out those cut-throat abusers of the system and let us cooperating customers continue to benefit to the fullest possible extent.
4
darkdreamer4udarkdreamer4u174 posts since
Jun 11, 2010
Rep Points: 632
5. Thursday, September 30, 2010 - 9:27 AM
Comments from PGray show just how this low interest environment has impacted ALL banks, large and small, and their treatment of depositors. All I know is that if a bank wants to raise capital through a nationwide online reward checking program and then slash interest rates and limit qualifying depositors, they should be a lot more honest about it upfront. Instead, First Security Bank and Trust required above and beyond the normal paperwork to open the account for this out of state depositor. They do a hard pull on your credit, leaving that big ding to impact future credit checks, and then in just a few weeks they decide they have raised enough capital so they slash interest rates, limit new accounts to local only, and they close out of state accounts, referencing a statement in their disclosure to close accounts for any reason at any time.  I used to have a better opinion of smaller and regional banks compared to the big boys, but after this experience with First Security Bank and Trust, I have no respect for any bank or banker. Buyer beware. Saver be ****ed.
3
CandyCaneCandyCane13 posts since
Sep 29, 2010
Rep Points: 76
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