Heartland Bank Direct - New Online Savings Account


Update 1/09/10: The rate has fallen from 1.31% to 1.11% APY. Refer to the bottom of the post for the rate history. Bonus is no longer available.

Heartland Bank is another bank getting into the online banking market with Heartland Bank Direct which offers a 5.05% APY online savings account. There's a minimum opening balance of $500, but it can drop below $500 after it's opened without any monthly fees.

The unique thing about this account is a bonus feature. You can earn $5 per $1,000 average monthly balance of the previous 6 months for a maximum bonus of $50. So for those who have $10K or less in deposits, the bonus would add about an extra 1% to the interest rate resulting in a rate close to 6% for the those 6 months. Update: I spoke with the head CSR today and he said the bonus is only available for new accounts. So a customer won't be eligible for another $50 bonus the following year unless he opens a new account. The CSR admitted the bonus page was misleading when it stated there's a limit of one bonus per account per calendar year.

Like the problem with FNBO Direct, the main problem with this account may be the slow ACH transfer speeds. Based on the Electronic Fund Transfer (ETF) documentation, free standard transfers can take 3 days. If you want one-day transfers, you have to pay $12 for the Premium ETFs (see disclosure).

When I called their toll-free number (877-444-5148), I was pleasantly surprised to have a customer service rep immediately answer my call. I was told that this account just started today. Unfortunately, being so new meant that the CSR wasn't able to answer a few of my questions, but she did offer to call me back with the answers tomorrow.

Questions the CSR wasn't sure about include whether there's a hard credit inquiry, number of linked accounts allowed and if interest would be lost if account is closed before the end of the statement period. I'll update this post once I receive answers to these. [Update:: Received info from CSR on these. See bottom of list.] Below is a summary of the main features of this online savings account based on the website documentation and from what I received from the CSR.
  • 5.05% APY (interest rate 4.98%)
  • $50 Bonus after 6 months and $10K balance (see bank's page)
  • $500 minimum opening balance
  • No fees if balance drops below $500 after opening
  • Initial funding by Electronic Funds Transfer (ETF) or by check
  • Cashedge based system
  • Free standard ETF (3 days), $12 for Next-Day ETF
  • $20 fee for each withdrawal over 6 per month
  • Several dollar limits to inbound and outbound transfers (see bank's page)
  • Do not block ACH transfers in or out initated by your outside bank account (CSR)
  • Linked account can be a savings or checking accounts (CSR)
  • Only one beneficiary can be listed per account, but you can open as many accounts as you like
  • Interest is deposited quarterly
  • No ATM card or paper checks
  • Electronic Statements only
  • No hard credit pull, just a soft pull (CSR)
  • Number of linked external accounts limited to 6
  • Interest would not be lost if account is closed before the end of the quarter

Heartland Bank Direct has the same problem as FNBO Direct in that there's no easy way to confirm its connection with the parent bank. You can view Heartland Bank's FDIC information here. The FDIC page only lists the URL for www.heartland-bank.com and there's no mention of heartlandbankdirect.com at heartland-bank.com. Please refer to this FNBO Direct post for more discussion on this issue. I did send heartland-bank.com a message from their contact form to confirm the new online bank. I don't suspect an issue, but I just want to be 100% sure.

Thanks to Craig who mentioned this new savings account in the finding deals post.

[Edit 6/26/07: Updated info from CSR. I was called back as promised.]

Rate History:
01/09/10: rate has fallen from 1.31% to 1.11% APY
12/27/09: rate has fallen from 1.51% to 1.31% APY
11/21/09: rate has fallen from 1.65% to 1.51% APY
09/26/09: rate has fallen from 1.76% to 1.65% APY
07/18/09: rate has fallen from 2.01% to 1.76% APY
06/04/09: current savings account rate is 2.01% APY
06/25/07: 5.05% APY
Anonymous   |     |   Comment #1
They have 30 days hold period. You can;t withdraw first 30 days from deposit.
Banking Guy
Banking Guy (anonymous)   |     |   Comment #2
Thanks for pointing this out. That is a very long hold period. Is that only for the initial deposit or is it for all deposits?
Anonymous   |     |   Comment #3
yes, only for initial deposit. you are not allowed to withdraw first 30 days from initial deposit.
Heartland Bank Direct
Heartland Bank Direct (anonymous)   |     |   Comment #4
We are glad our product has received some interest (pardon the pun), but what anonymous posted is not actually correct. Heartland Bank Direct does not place any hold on depositor EFT funds. Customer can access their funds within the standard 2-3 day ACH period at no cost. Same-day ACH transfers are available with a service charge of $12.00.
Anonymous   |     |   Comment #5
I noticed on the FAQ listing that Trust account vestings are not allowed.

OC Steve