Merchants Bank of Indiana (MBoI) recently boosted the rate on its nationally available Money Market Account (MMA) to 1.51% APY on balances up to $1 million. The 50 bps increase is the second substantial rate hike in the past four weeks. Opening MMA requires a $50 minimum deposit.
Added to MBoI’s product line in early 2019, the MMA’s initial rate was 1.75% APY, which remained in effect until March 2020. Following three rate drops, the APY bottomed out in December 2020 at 0.75%, where it remained until April 2022. While the 0.75% APY was in effect, it was actually quite competitive: the average online savings account at that time had a range of 0.45% to 0.51% APY.
The Truth-in-Savings disclosure for the MMA is part of the online application, with the following information coming from CSR.
- Interest compounds daily and credited monthly on the last day of the monthly statement cycle.
- There is no monthly service fee or minimum monthly balance requirement.
- Checking writing is available, subject to the six per month withdrawal limit.
- If you exceed the standard six transactions per month, there is a $2 fee for each transaction. According to CSR, even though the Federal Reserve paused Reg D, MBoI chose to enforce the six-transaction rule, which is completely within their rights.
- ATM/debit card, online bill-pay, and online banking transfers are not available.
Lack of ACH Initiated from MBoI
About 16 months ago, MBoI stopped offering external ACH transfers, which prompted a fairly lengthy Forum post. I confirmed with CSR that the “No ACH Zone” is still in effect; initial funding can only be done by wire transfer. There is a $15 wire fee, but CSR stated MBoI will reimburse the fee. CSR assured me that subsequent incoming/outgoing ACHs “initiated by an external financial institution will be honored. The only limits on the ACHs are those set by the initiating institution.”
Headquartered in Carmel, Indiana, Merchants Bank of Indiana has been offering its Money Market Account to all U.S. citizens and resident aliens (18-years or older with a valid Social Security number) for about 18 months.
In a November 2020 blog post, I stated that I was “cautious about labeling accounts ‘nationally available’ when offered by a non-internet bank. As we have seen in the past, banks sometimes change their position on account availability if the demand is too great.” MBoI has laid that concern to rest.
Note: According to CSR, the processing of applications may be slow: there is only one person who reviews applications. This person will call the applicant to confirm that he/she is a real person and eligible to open an account. Instructions for wiring the opening deposit will then be emailed to the applicant.
Merchants Bank of Indiana has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 0.39% based on March 31, 2022 data. MBoI has an excellent capitalization level (12.40%), the result of holding $9.36 billion in assets, with $1.16 billion in equity. Please refer to our financial overview of Merchants Bank of Indiana (FDIC Certificate # 8056) for more details.
Merchants Bank of Indiana was established in 1923 and was originally known as the Greensfork Township State Bank. In January 2009, Symphony Bank (Indianapolis) was acquired, with the Merchants Bank of Indiana rebrand occurring shortly thereafter. MBoI is a subsidiary of Merchants Bancorp, which has $9.7 billion in assets and $7.5 billion in deposits as of March 31, 2022. Other Merchants Bancorp direct and indirect subsidiaries include Merchants Capital Corp., Farmers-Merchants Bank of Illinois, Merchants Capital Servicing, LLC, and Merchants Mortgage, a division of Merchants Bank of Indiana. Currently the third largest bank headquartered in Indiana, Merchants Bank of Indiana has assets in excess of $9.3 billion and nearly 19,000 customer accounts.
How the Money Market Account 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 Merchants Bank of Indiana Money Market Account APY currently ranks second.
|APY||Account Name||Credit Union/Bank|
|1.65%||Online Savings (no min/$5m max)||First Foundation Bank|
|1.51%||Money Market Account ($1 min/no max)||Merchants Bank of Indiana|
|1.51%||UFB Money Market Account (no min/no max)||UFB Direct|
|1.50%||Bask Interest Savings Account (no min/no max)||Bask Bank|
|1.35%||Money Market Account ($1 min/no max)||mph.bank via SaveBetter|
The above information and rates are accurate as of 6/21/2022.