Yesterday, FNBO Direct increased the rate of its Online Savings account by 10 bps to 2.25% APY. The last increase was on December 13th. Last year, FNBO Direct increased the Online Savings Account rate five times, adding a total of 75 basis points to the yield. With the current Fed situation, it’s unlikely we’ll see a repeat of those rate increases in 2019.
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. Last December, the Online Savings rate was bumped up to 1.40% APY two days after the Fed’s rate hike.
While FNBO Direct may not be the most familiar name when it comes to internet banks, it has a long history, and its parent bank, First National Bank of Omaha, is sizeable with assets in excess of $20 billion. Also, it offers something that several internet banks don’t offer, an online checking account.
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.
Thanks to DA reader, thowellIII, for a Forum post about the Online Savings’ rate increase.
Online Savings Account Details
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.
Since FNBO Direct first launched in 2007, its ACH bank-to-bank transfer service has been known to be slow. This still appears to be the case. Standard ACH transfers can take at least three business days to complete.
A standard incoming transfer is limited to $250k per transfer, $250k per day, and $1 million per month. A standard outgoing transfer is limited to $100k per transfer, $100k per day, and $500k per month.
FNBO Direct offers express transfers in which outgoing transfers complete in one business day, but there’s a $10 fee per transfer and the limits are small ($3k per transfer, $3k per day, and $10k per month).
If you need a fast transfer, you can always initiate an ACH transfer from your other bank.
Transfer limitations and details are listed in the Online Savings Account Disclosure.
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.
Trust Accounts and Beneficiaries
The online application provides no options for designating beneficiaries. However, according to the CSR, POD beneficiaries can be designated once the account has been established. Multiple beneficiaries can be designated with equal percentages. This can be done via the online message system that’s available when you log into your account.
According to the CSR, FNBO Direct accounts cannot be opened in the name of a trust. However, a trust can be a POD beneficiary.
No Hard Credit Pull
According to the CSR (and according to readers), FNBO Direct does not perform a hard credit inquiry in the application for either the Online Savings Account or the Online Checking Account.
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/FNBO has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.66% (excellent) as on September 30, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $890.17 million, an excellent annual growth rate of 5.86%. Please refer to our financial overview of FNBO Direct/FNBO (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 $20.42 billion and 926,000 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 Account Compares
When compared to 211 Savings Accounts tracked by DepositAccounts.com that are available nationwide and do not require a large minimum balance, FNBO Direct’s Online Savings APY currently ranks eleventh.
|Interest Rate||Account Name||Credit Union/Bank|
|2.45% APY||Savings Builder w/monthly deposit ($100 min/no max)||CIT Bank|
|2.45% APY||High Yield Savings ($1k min/$500k max)||Rising Bank|
|2.41% APY||High Yield Online Savings ($100 min/no max)||Vio Bank|
|2.25% APY||Online Savings ($1 min/$1m max)||FNBO Direct|
The above rates are accurate as of 2/15/2019.
To search for the best Savings Account, both nationwide and state specific, please refer to DepositAccounts.com’s Savings Account Rates page.