Luana Savings Bank Money Market Account Is New Rate Leader
Barring any unanticipated major rate changes, next week’s Liquid Bank Account Rates summary will feature a new top-rate money market. Following a substantial 35 bps increase, the Luana Savings Bank Money Market now has five very competitive rate tiers.
As stated on the Money Market landing page,
- $2,500 Minimum Deposit to Open Account
- $2,500 Minimum Daily Balance (to avoid $10/mo fee)
- Up to 6 withdrawals, transfers, or checks per statement cycle
- Variable Interest Rate (traditionally has paid higher rate of return than NOW account)
- Interest Calculated on Daily Balance
- Interest Paid and Compounded Monthly
According to CSR, paper checks are available, but there is no ATM/debit card associated with the Money Market account. There is a $10 fee for each withdrawal transaction over the six allowed.
ACH transfers initiated by Luana (using the online banking platform) are limited to $3k incoming and $2k outgoing on a daily basis. An unlimited dollar amount outgoing ACH can be initiated by Luana if a voided check from the receiving external bank is provided to Luana. According to CSR, the voided check is a security measure, ensuring the funds are transferred to the correct external account. There is a $5 fee for this type of ACH.
Luana does not place any restrictions on ACH transfers that are initiated from an external bank
Availability
Headquartered in Luana in northeast Iowa, Luana Savings Bank offers its product line nationwide to U.S. citizens and resident aliens (18 years or older) who have a valid Social Security number or Tax Identification number.
The ”Apply Now” button on the Money Market account landing page leads to an application of sorts. It's more like a "Contact Me" form that captures basic personal information.
Thank-you for your interest in an account with Luana Savings Bank! Please submit the form below (which is secured) and we'll contact you within one business day. All forms are checked by a human; if you're not an existing customer, Federal Law requires us to obtain proof of your identity.
Opening a Money Market account (and any other type of account) can also be done at any of the six Iowa branches located in Clive, Luana, New Hampton, Norwalk, Ossian, and Polk City.
Bank Overview
Luana Savings Bank has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 0.06% (excellent), based on March 31, 2022 data. In the past year, Luana Savings Bank has increased its total non-brokered deposits by $481.98 million, an excellent annual growth rate of 99.41%. Please refer to our financial overview of Luana Savings Bank (FDIC Certificate # 253) for more details.
Founded in 1908, Luana Savings Bank is currently the tenth largest bank in Iowa, with assets in excess of $1.9 billion. At first glance, Luana’s logo seemed to be six abstract lines. The meaning of the logo became clear when I read that Luana is the largest agricultural lender in Northeast Iowa and among the largest in Iowa: those golden lines represent a sheaf of wheat.
Luana’s About Us page states some of the bank’s recent accomplishments.
$645 Million in Single Family Home Originations in 2020 $346 Million - Record Home Loan Originations in the first 6 months of 2021 18.20% Return on Equity >$2.1 Billion of Loans Serviced Top 100 Farm Lenders Nationally as reported by American Banker's Association Top 1% of Most Efficient Banks Nationally as ranked by Bauer Financial
How the Money Market Compares
When compared to nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, the Luana Savings Bank Money Market top-tier rate currently ranks first, regardless of minimum deposit requirements.
| APY | Account Name | Credit Union/Bank |
|---|---|---|
| 1.56% | Money Market ($750k min) | Luana Savings Bank |
| 1.51% | Money Market ($250k min) | Luana Savings Bank |
| 1.46% | Money Market ($100k min) | Luana Savings Bank |
| 1.36% | Money Market ($50k min) | Luana Savings Bank |
| 1.26% | Money Market ($1 min) | Luana Savings Bank |
| 1.26% | High Yield Savings ($1 min) | TAB Bank |
| 1.25% | Bask Interest Savings Account (no min) | Bask Bank |
| 1.17% | CFG High Yield Money Market ($1k min/no max) | CFG Bank |
| 1.15% | Jumbo Money Market ($100k min) | State Bank of Texas (SBT) |
The above information and rates are accurate as of 6/10/2022.
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.
I always viewed a savings account as a safe haven for money to build without stipulations. It never ceases to amaze me how banks like this one have somehow found a way to hit savers with fees for the most ridiculous of reasons. I can see a fee if you exceed the antiquated 6 withdraw limit but a fee for not maintaining a certain minimum balance, is beyond ridiculous. Why have a $1 minimum but then hit the customer with a $10 fee. Unacceptable, I will take my funds elsewhere without these bs policies.
https://www.google.com/amp/s/who13.com/news/iowas-luana-savings-bank-receives-cease-and-desist-order-from-federal-regulators/amp/
More current article
https://www.desmoinesregister.com/restricted/?return=https%3A%2F%2Fwww.desmoinesregister.com%2Fstory%2Fmoney%2Fbusiness%2F2022%2F04%2F25%2Fregulators-concerns-luana-savings-bank-iowa-loans-before-judge-fdic%2F7403936001%2F
Luana Savings Notice of Charges and of Hearing - FDIC Enforcement Actions
PDF document with list of charges:
https://orders.fdic.gov/sfc/servlet.shepherd/document/download/069t000000RPomDAAT?operationContext=S...
I have toyed with rate chasing on liquid accounts in the past. But there are too many pitfalls. Without a rate guarantee there is nothing from stopping them from lowering the rate the day your funds arrive and then you have to move the funds all over again. And even if they keep the rate, it may soon be obsolete. Especially with the red flags this bank has with regulators going on now, that is a legitimate concern. They are potentially unscrupulous (but still entitled to their day in court so I use the word "potentially"). And if you are always opening new accounts to go with the latest fad rate, and the FIs do a hard pull, you dinged your credit for 2 years for nothing. If you keep repeating that, you can really hurt your score with no guarantee of anything.
I don't think you can draw any conclusions yet because the pressure for deposits at the FIs still isn't hot enough. But so far, rate guarantees seem to be reduced on this round of increases and the few add-ons I have seen are at very low conservative rates. You could attribute it to the FIs "learning a lesson" in the last round, but I don't think the game is over yet. If the competition gets hot enough, they may not have any choice but to go to guarantees and add-ons if they want to stand out.
In the meantime, no rate chasing on liquid accounts for me at least without rate guarantees. In my case it's not a profitable strategy.
Another unusual thing about this offer is the very rare high rate tiers. When was the last time you saw a $750k rate tier? Personally I like having these tiers, but it is certainly not standard at banks these days. Any time something is not standard, you should increase your due diligence to understand why. In this case I am confident it has to do with their regulatory battle and apparent need to attract retail deposits in a hurry ahead of a court battle.
Decades ago you could actually negotiate a deposit rate if you had lots of funds to deposit. But at some point that was either frowned upon as elitist and possibly became prohibited by regulation as offering different rates to different depositors (unfortunately) somehow became viewed as "discriminatory."