Late last week, FNBO Direct increased the rate of its Online Savings account by 15 bps to 1.75% APY. This is FNBO Direct’s second rate hike of the year. The last one was in late February when the rate went up 20 bps to 1.60%. Several of FNBO Direct’s recent rate hikes have followed the Federal Reserve’s rate hikes. In December 2015, FNBO Direct was the first internet bank to raise a rate following the Fed’s rate hike. The event itself was more noteworthy than the actual rate increase, which added 20 bps to its Online Savings account; the result was a fairly unimpressive 0.95% APY. This past December, the Online Savings rate was bumped up to 1.40% APY two days after the Fed’s latest rate hike. In this most recent case, FNBO Direct’s rate hike comes just days before the Fed’s June meeting which is widely expected to result in another Fed rate hike.
While FNBO Direct may not be the most familiar name when it comes to internet banks, FNBO Direct burst onto the scene in May 2007, offering a five month 6.00% APY promotion on its Savings account. Following the end of the promotional rate, the Savings APY began to drop and by early 2009 had fallen to 1.25% APY.
In June 2007, Business Week interviewed FNBO’s president regarding the Bank’s plans for FNBO Direct. While the interview was filled with public relations jargon, there were indications that FNBO intended to be a player in the burgeoning online banking market. That didn’t happen exactly as planned. FNBO Direct introduced a line of competitive CDs in late 2007, but rates fell within months and haven’t been competitive in years. An Online Checking account was also added at the same time, and its rates have never been noteworthy. Perhaps the recent rate hikes on the Online Savings account marks the beginning of competitive rates at FNBO Direct.
The Online Savings account can be opened with as little as $1. There is no monthly service fee or minimum balance requirement. The maximum principal deposit balance is $1 million.
The Online Savings Account Disclosure does list a few limitations, including,
You may not transfer or withdraw more than: (i) $100,000 from your account in any one transaction; (ii) $100,000 from your account on any one business day; or (iii) $500,000 from your account in any one month.
If our Next Day Transfer Service is made available on your account, you may use that service to transfer up to (i) $3,000 from your account in any one transaction; (ii) $3,000 from your account on any one business day; or (iii) $10,000 from your account in any one month.
You may not deposit more than: (i) $250,000 into your account in any one transaction; or (ii) $250,000 into your account on any one business day. You may not make a deposit that would bring your total principal balance on all your accounts with us to more than $1,000,000.
Thanks again to DA reader, njmacuser, for a Forum post about the Online Savings’ rate increase.
Headquartered in Omaha, FNBO Direct is the internet division of First National Bank of Omaha, which in turn is a subsidiary of First National of Nebraska (a multi-state holding company with a history that dates back to 1857).
All FNBO Direct accounts, including the Online Savings, must be opened online, and are available to U.S. residents, 18 years or older who have a valid Social Security or Tax ID number.
As an internet division of First National Bank of Omaha (FNBO), FNBO Direct operates under the FNBO’s FDIC Certificate and shares its financial history.
FNBO Direct/FBNO has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 5.07% (excellent) as on March 31, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $103.32 million, an above average annual growth rate of 0.66%. Please refer to our financial overview of FNBO Direct/FNBP (FDIC Certificate # 5452) for more details.
Founded in 1857 by brothers, Herman and Augustus Kountze, First National Bank of Omaha is in its sixth generation of family ownership. The Bank is one of the largest family-owned holding companies, in addition to being the largest privately owned banking company. With assets in excess of $19.8 billion and nearly 906,000 customer accounts, First National Bank of Omaha is Nebraska’s largest bank. Committed to serving the local community, the Bank is one of the largest commercial finance provides to the ethanol industry and the fifth largest agricultural lender in the country.
How the Online Savings Compares
When compared to the 215 nationally available Savings Accounts and 150 Money Market Accounts tracked by DepositAccounts.com that have small minimum balance requirements and are not limited by small balance caps, there are five savings accounts and two money market accounts with higher rates than FNBO Direct’s Online Savings account.
|Interest Rate||Account Name||Credit Union/Bank|
|2.01% APY||eMoney Market - New Money Promo ($100 min to open/no max)||Virtual Bank|
|1.85% APY||Money Market Account ($100 min to open/no max)||CIT Bank|
|1.81% APY||Online Savings (no min/$250k max)||MutualOne Bank|
|1.75% APY||Online Savings ($1 min/$1m max)||FNBO Direct|
The above rates are accurate as of 6/11/2018.