Customer Bank Offers Rate-Leading Max Savings Through MaxMyInterest
There’s a new online savings account rate leader with a yield back above 5%. Customer Bank increased the rate of its Max Savings account to 5.01% APY. What makes Max Savings different from Customer Bank’s previous rate leader, the High-Yield Digital Savings, is that it’s only available through the MaxMyInterest.com platform (Max). This is the first time that I can recall a bank offering a rate-leading savings account that’s only available through Max. In the past, all online savings accounts available on Max could also be opened directly from the banks. Due to this arrangement, it behooves all of us to understand Max.
Many thanks to DA reader, midas89, for posting this news on Max Savings in this DA Forum thread.
Overview of MaxMyInterest.com (Max)
Max has been around since 2014. The fintech behind Max, Six Trees Capital, LLC, designed Max to help savers keep their cash in the highest-rate savings accounts. It provides some automation for rate chasers to simplify the rate monitoring and fund transferring. According to “How does Max work?” FAQ,
Each month, Max intelligently proposes to you an optimal allocation of your balances to help you earn the best prevailing rates. Then, on your behalf, Max sends to your banks your funds transfer instructions to help you take advantage of higher interest rates.
The funds are transferred between your checking account, which functions like a hub account, and your multiple online savings accounts. The checking account can be your existing checking account. Max also offers the Max Checking account (deposits are held by LendingClub Bank, N.A.) to be used as this hub account. For the online savings accounts, if you already have an online savings account that’s on the Platform, that can be linked. Otherwise, the Platform has an application service, called the Max Common Application, that supposedly makes it easy for you to open the new online savings account and link it to the checking account.
Unlike other fintechs, you can maintain direct control over the bank accounts. You don’t have to go through Max to access your accounts.
Max primarily makes money from fees charged to customers. As described in the FAQ, “How much does Max cost?”,
Membership in Max costs just 0.04% per quarter, or $40 per $100,000 held in your savings accounts, subject to a minimum of $20 every 3 months.
Another important aspect of Max is that you can cancel Max membership at any time. According to the FAQ, “Can I cancel at any time?”,
Yes, you may cancel at any time. Max calculates and bills your membership fee 15 days after the completion of your first optimization and every 3 months thereafter. Upon cancellation, no further fees will be payable, but no credits are given for partial quarters.
Upon cancellation of your Max membership, you retain full access to all of your bank accounts, but Max will no longer propose to you how to optimize your accounts, and you will no longer have access to the Max Dashboard, Intelligent Funds Transfers?, Consolidated Tax Reporting and other features.
In addition to helping savers maximize the interest they earn on savings accounts, Max can also help keep your funds under the FDIC coverage limits by making sure large balances are distributed across online savings accounts from multiple banks.
Overview of Customers Bank Max Savings
A few details of the Customers Bank Max Savings are provided in the Customers Bank’s Consumer Disclosure document. It lists the interest rate as 4.90% with 5.01% APY. The rate can change at any time. Interest is credited and compounded monthly. There is no minimum deposit to open the account, and there is no minimum balance to earn the full APY. Also, there is no monthly maintenance fee.
In addition to the news of the new rate, DA reader midas89 also noted in the DA Forum thread this important ACH transfer limitation for new customers:
Customers Bank forces a probationary period of 30 calendar days for newbies, whereby no ACH transfers can be done when initiated at Customers.
According to a Customers Bank CSR, this 30-day probationary period does apply to the Max Savings account. The CSR also said that once the 30-day period ends, the ACH limit is $250k per day with a monthly limit of $1.5 million. There’s no limit on the number of withdrawals allowed per statement cycle (which banks are permitted to allow based on the 2020 change to the Federal Reserve’s Regulation D.)
DA reader midas89 also noted how Customers Bank credits interest:
Also, please know that Customers credits interest in the middle of the month (I prefer the end of the calendar month). They also do not offer an accrued interest running tally (another thing I prefer).
My Take
I understand the concern many readers have in dealing with a fintech for a deposit account. Max appears pretty safe. The fact that you have the account numbers and can manage the accounts directly from the banks is comforting. Regarding the Max service, it’s nice to see that Max clearly states that you can “cancel at any time” and that “upon cancellation of your Max membership, you retain full access to all of your bank accounts.”
It does seem a little odd that Customers Bank is only offering the top rate on the Max Savings account, an account that can only be opened on the Max Platform. This arrangement gives Max some publicity. In a March 2nd blog post on Max’s blog, it celebrated the 5% milestone:
Today marks an exciting day in the history of banking. Today, the highest rate on the MaxMyInterest.com platform has topped 5% for the first time
I’m sure the company behind Max is hoping this publicity will drive more customers to the Max Platform, and those new customers will see the value of paying the fee for the services that Max provides. With higher interest rates, the Max fee isn’t as onerous as it was when online savings account rates were below 1%. Nevertheless, if you maintain your Max membership, the fees will be a drag on your earnings. At a cost of 0.04% per quarter (subject to a minimum of $20 every 3 months), it’ll lower your average overall yield by at least 16 basis points.
How long will the 5.01% APY last? One thing to consider is that savings accounts on the Max platform don’t need a big lead to get the benefits of a rate leader. If a savings account just leads the others by a few basis points, the Max platform should still help move customers’ money to that account. So it seems that the 5.01% APY is overkill for bringing in more deposits from Max customers. So I have doubts that Customers Bank will maintain such a competitive rate for too long. However, with interest rates continuing to rise, it’s possible that they think they can maintain the 5.01% APY for some time.
Availability and Account Opening
Headquartered in Phoenixville, Pennsylvania, Customers Bank is offering the Max Savings Account on a nationwide basis to U.S. citizens and resident aliens with a valid Social Security number.
As mentioned at this Customers Bank savings page, the Max Savings account is “Only available through Max.”
The Max Savings account can be opened as an individual account or as a joint account. According to a Customer Bank CSR, once the account is opened, you can designate one or more beneficiaries using their account form. Customers Bank does not offer trust accounts for online accounts.
Bank Overview
Customers Bank has an overall health rating of "A" at DepositAccounts.com, with a Texas Ratio of 1.77% (excellent) based on June 30, 2022 data. In the past year, Customers Bank has increased its non-brokered deposits by $2.96 billion, an excellent annual growth rate of 25.32% APY. Please refer to our financial overview of Customers Bank (FDIC Certificate #34444) for more details.
Customers Bank is currently the third largest bank headquartered in Pennsylvania, with assets in excess of $20.2 billion and more than 1.3 million customer accounts. Founded in 1997 as New Century Bank, the Bank rebranded in 2011 following the acquisition of USA Bank (NY), ISN Bank (NJ), and Berkshire Bank (PA). According to a November 2022 press release,
A pioneer in Banking-as-a-Service and digital banking products, Customers Bank is one of the only banks that provides a blockchain-based 24/7/365 digital payment solution to its customers. In addition to traditional lines such as C&I lending, commercial real estate lending, and multi-family lending, Customers Bank also provides a number of national corporate banking services for Lender Finance, Fund Finance, Financial Institutions, Technology and Venture, and Healthcare clients. Major accolades include:
- #3 top-performing bank with over $10 billion in assets at year-end 2021 per S&P Global S&P Global Market Intelligence,
- #6 in top-performing banks with assets between $10 billion and 50 billion in 2021 American Banker, and
- #21 out of the 100 largest publicly traded banks in 2022 per Forbes.
How the Max Savings Compares
When compared to nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, that do not require large balances or direct deposit and do not have small balance caps, the Customers Bank Max Savings APY currently ranks first.
| APY | Account Name | Bank |
|---|---|---|
| 5.01% | Max Savings via MaxMyInterest (no min/no max) | Customers Bank |
| 4.60% | Digital Money Market ($2.5k min/no max) | Republic Bank of Chicago |
| 4.55% | CFG High Yield Money Market ($1k min/no max) | CFG Bank |
| 4.55% | UFB Preferred Savings (no min/no max) | UFB Direct |
| 4.55% | UFB Preferred Money Market (no min/no max) | UFB Direct |
| 4.45% | High Yield Savings via SaveBetter (no min/no max) | Western Alliance Bank |
The above information and rates are accurate as of 3/7/2023.
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.
"Why can't I just give it to Bob?"
"Doesn't work that way. Bob only takes money from Joe, not from you."
"How do I know Joe will give it to Bob?"
"Oh, you can trust Joe. Nice guy...."
"I don't get it - Bob has an FDIC number and insurance. Does Joe?"
"Don't worry about it - it's all on the up-and-up."
"Mmm.... Think I'll go with Bill the Bank over there...."
or
Joe needs to be Pampered. :)
As more banks become "marketing institutions" I expect to see more offerings of the short-term nature plastered around to get the consumer's eye. But bankers remember holding the CDs of 2005-6 when calamity hit in 2008. I don't expect a large amount of high-rate CD's exceeding 3 years duration because of their memory! Instead expect short term offerings to entice the saver instead of 36,48,60 month and longer rate leaders.
As Gen X comes into more money and the generations behind them demand "simple platforms" in banking among other retail offerings more FINTECHS will form to provide such services. See Savebatter, etc., et all
Pass.
Just what I want -- to PAY a Fintech to get rates the same or barely above what's available elsewhere -- and for them to have my info forever. Sure! Take my money!
Nope.
Next.
I will add the following which isn't all that important at all: Since Customers Bank pays interest on the 15th of every month, come December 15th, this will be the last interest posted for the calendar year. I mention this for tax purposes and/or for those who like to calculate how much interest they will earn for the calendar year. The interest that accrues between December 15th and December 31st posts on January 15th of the next year, which means you pay the taxes for this interest on the following year's returns.
Customers Bank offers nothing, but the clearing service and FDIC coverage while bank-to-bank transfer is in the progress.
There is no 5.1% Interest Rate, all there is;
"Earn UP TO 5.01% • Increase FDIC coverage • Keep your existing bank".
Max is liquid bank account broker, ala sweep. if it makes a deal with banks at 5.17%, those who follow Max' recommendations to allocate funds get 5.01% until notified that rates change downward.
There Max makes a deal at 5.5% those who follow Max' recommendations to allocate funds get 5.01% until notified that rates change downward.
I have pretty good idea how it is designed to work, but want to waste no time explaining.
I myself am not a fan of those middleman companies that sweep money into banks for you, where you do not have direct access and the routing # and acct # at the bank paying the interest. I am getting 4.90% APR, 5.01% APY on my Max acct at Customers. Yes, rates can change at any time, which is the same at any bank. I have had the Customers Max acct for a while now, and prior to the increase to 5.01%, I was getting 4.05% APY.
I just follow basic principal; where SAVINGS Account needs to be explained it is NOT REGULAR Savings Account!
REGULAR Savings Accounts are not termed as "UP TO 5.01%"
REGULAR Savings Accounts Do NOT "Increase FDIC coverage" while "Keep(ing) your existing bank"
Max is a robo-cash management system that helps you earn more on your savings by transferring your funds between high-interest bearing online savings accounts. It is not a bank. It doesn’t hold your money. Instead, it allows you to increase your FDIC insurance by spreading, or sweeping, your funds into multiple bank accounts. It automatically balances funds between your linked online savings accounts and you can view all of those accounts in one place.
You can let Max decide when to transfer money between your linked online bank accounts or you can do it yourself.
The platform works on an algorithm that searches for high interest rates among online banks. It then automates transfers.
When it sounds and smells like FTX, it is because something like Alameda Research is always lurking on the background.
Let me be inaccurate, but I am not giving to some fancy fintech access to all or some of my Deposit Accounts.
If Customers Bank pays you extra 96 basis points because of Max referral commissions, ACH fees or overnight lending spread, it makes me worry for my Deposits at Customers Bank
MaxMyInterest offers an optional paid service. While it is required to open Customers Max acct via MaxMyInterest website, it is not required to deal with MaxMyInterest after the Customers acct is created.
I am not worried at all about my deposits at Customers at all. MaxMyInterest has no access whatsoever to any of my money or any of my accts. They cannot touch it. They even have in the FAQ that if one decides to not deal with MaxMyInterest, you retain full access to your accounts at whatever bank or banks one decides to place their money. This fact alone should set this whole experience apart from other fintechs. Anyway, I am neither recommending the Customers acct or suggesting people open it. My only goal from the start is to just report the facts, and make sure anyone considering this or merely just reading about it has a full understanding of everything.
Also I emailed Maxmyinterest (no phone contact available) about recovering my funds due to a breach in their security but did not trust their answer, see in quotes beloe, so I called the FDIC and the agent told me that this was absolutely false, that FDIC insurance is only there for covering failed Banks
"...In the unlikely event that our website or platform is hacked, your funds are protected by FDIC insurance up to $250,000 per depositor, per insured bank, as provided by Customers Bank, our partner bank. Additionally, we have implemented various security measures such as two-factor authentication and encryption to mitigate the risk of any potential unauthorized access to your account... "
The money swept out of the account can end up in FI trading the stock market and be used to cover up shorts and help the liquidity of the stock trades, just ask yourself, what B of A does every day with the customer's deposits?
To address what @solardo wrote below: Yes, FDIC does not cover your money if someone takes it without your authorization, they only cover bank failures. However, we have federal law to protect us from unauthorized withdrawals. As long as there's no negligence on our part, and as long as we report the theft in the required time period, banks have to give us our money back. Of course, if we fall for a scam and give the money to a thief, there is no protection.
Regarding Customers policy change: At the time I opened my Max Savings account, there was no restriction regarding initiating ACH transfers at Customers from day one. Subsequently, Customers changed their policy, most likely due to fraudsters, where newbies to Customers must now wait 30 days before they can initiate ACH transfers at Customers. For those first 30 calendar days, all ACH transfers must be initiated at one's external bank accounts.
Now, we know that Customers subsequently changed it to where you cannot access Customer's ACH until 30 days have passed. This means you either have to fund it from the external acct you link at MaxMyInterest, or go to an external bank acct directly and push the money in from there, or use the Customers Mobile app on your phone.
Also, maybe MaxMyInterest changed the policy forcing people to use their external acct to do the very first initial funding. Either way, MaxMyInterest would absolutely allow one to choose the exact amount of money they want to initially fund.
Thus, it is my guess that remmymo accidentally missed something when doing the set-up.
Opened an account with MaxMyInterest, linked to my checking account, opened a Max savings account with Customers Bank using the MMI website, noted down the login credentials, logged into CB to confirm, authorized a wire transfer into CB from another bank, came back to MMI, unlinked my checking account and sent them email asking to close my MMI account. All this in one session.
A bit fiddly but I have no relationship with MMI any more and I have a high yield savings account that CB is not allowing to be opened directly, at least not online.
As a bonus, I used to have an Ascent Money Market Account with CB because of which I was not a new customer and could originate ACH transfers right away.
But also, while the Customer's Bank page does state that the account WILL PAY 5.01% APY, it also says the rate is variable! Well, then, is it still giving that rate today?! How long is the 5.01%, a day? The FinTech, Max, does NOT state it like that -- the two are out of sync about what you will get! Max says you WILL get "up to 5.01%." That means no more, but maybe less. They give no clue what they are getting today.
Wow. Between the two, this sounds like a bait-and-switch involving a fast-buck artist. And if this is guaranteed by the feds, whether NCUA or CUNA, then why is FinTech making a plan everye three months to diversify your money, rather tyhatn put it all in the top-rate account out there? For mutual fudns or the stock market, yes, you want diversification. But as long as yourmoney is backed by NCUA or FDIC, that should not be needed. So why is Max wanting to spread it all around (other than for those with more than $250,000 so wanting the extra insurance)? What are they actually investing in, it is really all covered by FDIC or NCUA?
The Max acct is just like any other regular savings acct. The only difference is that one must open the acct via a third party site. Once the acct is opened, one has the option of never dealing with the third party site ever again and thus never paying them any money at all, or opting in to paying the third party site for their offered service. Since the Max savings acct is a regular savings acct, if interest rates climb, the bank can increase the savings acct rate, as was done recently with this Max acct. Also, the bank can lower the rate at any time, just like every bank can.
Today the Silvergate Bank is being liquidated, why, their holding company Silvergate Capital is involved in a very sketchy deals.
Someone (name is intentionally withhold), borrowed $209 millions from the bank and bought BTC with the money and then, that individual or (group) borrowed another $209 millions using the BTC as collateral and bought more BTC and gave the bank the collateral papers as payment in lieu to the bank (worthless collateral).
FDIC agreed to pay the depositor the full insurance at a great loss (the assets at the bank are gone) and the FDIC "cries uncle now". The reserves are depleted by billons upon billions of loses.
Question, what will happen to FDIC when more and more banks (upper management) learn of the scam that is going around and be implemented by themselves (without any consequences) to enrich themselves and deceive the FDIC and the customers?
As far as what will happen to the FDIC, it's backed by the full faith and credit of the US Government. Others may opine, but I imagine that in the event of MASSIVE abuse like Silvergate's resulting in massive systemic losses - the US would print every last dollar needed to cover all (insured) losses.
Either that or watch as the US banking system collapses.
The FDIC is financed by the FIs and a token gift from the treasury department.
What truly settles it is today's notable failure of SVB.
I wish @midas89 sleeps well tonight, despite his vague membership in MaxMyInterest, unlike Customers Bank executives due to its vague engagement with FinTechs
Sure, there are other good things out there that are paying more, and with no required sign-up at MaxMyInterest first, but I would remind you there is one extra benefit of being a Customers account holder regardless of which acct one opens there or if one eventually decides not to keep a large balance in this acct, and that is as of this writing, Customers makes for one helluva fantastic Hub bank, and arguably one of the best Hub banks ever. Truly, a wonderful Hub bank for anyone that wants a Hub bank.
Full Article (I made it an "Archive" link for faster loading): https://archive.ph/X5NKa
Customers Bancorp Inc.
First Republic Bank
Sandy Spring Bancorp Inc.
Community Bancorp Inc.
First Foundation Inc.
Ally Financial Inc.
Dime Community Bancshares Inc.
Pacific Premier Bancorp Inc.
Prosperity Bancshares Inc.
Columbia Financial Inc.
Thanks much goes to @HIMARS4UA who originally advised of the article in another forum page.
Warning to anyone unfamiliar with this account: Opening of this acct. must be done at MaxMyInterest website. Any newbies to Customers Bank must wait 30 days plus 2 business days after that to be able to utilize the Customers Bank ACH service to do transfers.
I urge anyone considering this acct. to first read all the comments at the multiple locations here at Deposit Accounts. Many people are understandably feeling that in order to have this acct., one must pay MaxMyInterest money every quarter. It's easy to feel this way because in order to sign up for MaxMyInterest (MMI), one must first click they agree that MMI can auto charge their checking account fees every quarter. However, other people, myself included, have reported that we opted to not utilize MMI's optimization service and have paid MMI nothing. Again, read all the articles and the comments at the various pages if you are considering this account.
The question that would be ridiculously rhetorical two weeks ago has now totally different implication!
Ally offers 7.22% and that rightfully scares the hell out of some readers here.
extra 0.04%, subject to be changed at any time, suppose to make a difference?
you reported rate increase, I speak my opinion.
Let's let posts to be posts
Now, I'm not saying it's not still available (I don't know). (Reference to it is still at their separate full Disclosures page.) I just find it interesting that they pulled the direct reference and link to it. What they have now instead is a Contact Us button and "Talk with us today about what option is right for you and your family."
it vindicates me and validates my point, I'll appreciate the acknowledgement!
Take this as whole, when every CU and many Banks flood you with reassuring email and text messages;
Customers and many other Regionals Board Rooms are contemplating the necessity of applying for BTFP. While they take the position in cue, they were told in no uncertain terms that they must be absolutely transparent when they approach the FBR Credit Window asking for Discounted Credit.
BTFP is still the Discounted Collateral Loan, not yet the Rescue or Bailout.
There Customers cannot afford being vague about how much Bank has on Deposits, How many Accounts Bank Has and who are the Account Owners.
Going back to #30 "vague" reference wasn't related to @midas89, it was the description of [email protected][email protected] extended relationship.
It is the beginning to the end of unregulated Fintechs in the like of MaxMyInterest, SaveBetter, etc., those robo-brokers who insert themselves between Depositor-Deposit-Depository with no defined responsibilities and thinly disclosed rights. Others like T-Mobile or SoFi, etc. have different business models.
That is just the beginning, I'm sure Boards and Fixed Income Desks are revisiting and reevaluating Brokered CDs Portfolio and Policy
It is another dagger into FIs ability to generate profit, but at the end will leave more money available to be paid to Depositors while cutting off the middlemen