In the past three weeks, Colorado Federal Savings Bank’s (CFSB) new Premier Savings account has experienced two rate increases, which added a total of 75 bps to its APY. The initial (and rather unimpressive) rate of 0.90% APY has rocketed to 1.65% APY on balances of $50k+ in only three months. The Premier Savings account is only available to new CFSB customers, who are defined as, “a customer who has not maintained a CD or savings account with the bank in the prior 60 days.”
The minimum opening deposit and the minimum balance required to earn the 1.65% APY is $50k. According to the Disclosure of Account document,
Colorado Federal Savings Bank reserves the right to convert your account to a High Yield Savings account on any account which falls below the posted minimum balance for a period of 30 days or more.
(Note: the High Yield Savings account currently earns 1.00% APY, with a $1 minimum balance requirement.)
The standard six withdrawals per monthly statement cycle applies, with a $25 fee charged for each withdrawal over the allowed six. Access to the funds is only available through ACH. The fine print on the Savings Rates page states,
CFSB will only allow transfers to and from your original linked account. It is our policy not to change linked accounts. It is recommended you link a checking account that you intend to keep open.
In other words, make sure the checking account you link to the Premier Savings account when funding is a checking account you intend to keep open, as CFSB is not flexible on this point.
While double-checking the FAQ page, I clicked on “Can I make a withdrawal with Online Banking?” The answer mentions a significant limitation:
Yes, you may schedule ACH withdrawals to your linked account in online banking. CFSB does not accept ACH transfers that are sent from other banks.
This means that if you have an account at a bank like Ally or American Express, you won’t be able to use their ACH service to transfer money out of your CFSB account. Your only option is to use CFSB’s ACH service to withdraw money to the original linked account. My primary concern was the possibility of a dollar limitation on ACH transfers imposed by CFSB. Banks often impose small limits on the amount that can be transferred using their ACH service, but according to a CFSB CSR, there are no dollar limits on either incoming or outgoing ACH transfers.
Two years ago, CFSB began offering PODs. According to the FAQ page:
The bank will only allow U.S. citizens and permanent resident aliens with a valid social security number to be added as a POD to an account. PODs can be added via the online application for new customers and secure message for existing customers. The bank will allow four joint owners to be designated on an account and up to five payable on death designations per account in equal percentages.
While CFSB’s position on PODs has changed, their stance on trust or business accounts remains the same – “No, we do not offer trust or business accounts.”
While the FAQ page provides many answers, more detailed information can be found in the Terms and Conditions of Your Account document. Although it’s not the most exciting reading, thoroughly reading all the disclosures before making a commitment is necessary.
In addition to raising the rate on the Premier Savings account, CFSB upped the rates on its 1-year CD (1.70% APY) and 18-month CD (1.79% APY). The minimum deposit is $5k, with no stated balance cap. Of the two, the 18-month is the more competitive CD, with its APY currently ranking third when compared to other nationally available similar length-of term CDs.
|1.79%||$5k||-||Colorado Federal Savings Bank||18 Month CD|
|1.70%||$5k||-||Colorado Federal Savings Bank||1 Year CD|
As stated on the Certificate Rates page, the Early Withdrawal Penalty reads as follows:
Early Withdrawal Penalty for withdrawals prior to maturity date equals 3 months’ worth of interest on Certificate Term of one year or less and 6 months’ worth of interest for a certificate term over one year.
As an internet bank, Colorado Federal Savings Bank is able to offer all its Savings and CD products online to all US citizens (18 years or older). Although CFSB's headquarters in Greenwood Village used to serve as a brick-and-mortar branch for local customers, that is no longer the case. All transactions, including opening new accounts, must be done online.
Colorado Federal Savings Bank has an overall health rating of "B+" at DepositAccounts.com, with a Texas Ratio of 0.44% (excellent), based on September 30, 2017 data. CFSB has excellent capitalization level (11.69%), the result of hold $1.77 billion in assets with $207.1 million equity. Please refer to our financial overview of Colorado Federal Savings Bank (FDIC Certificate # 33111) for more details.
Established in 1990, Colorado Federal Savings Bank was originally a savings institution. Following new ownership in 2008, CFSB became a “non-branch direct banking platform” – in other words, an internet bank. CFSB is currently Colorado’s ninth largest bank, with assets in excess of $1.7 billion and more than 161,000 customer accounts.
How the Premier Savings Account Compares
When compared to the Savings Accounts and Money Market Accounts that are nationally available and aren't limited by small balance caps, Colorado Federal Savings Bank’s Premier Savings APY currently ranks first.
The above rates are accurate as of 12/6/2017.