Update on SaveBetter - mph.bank Offers Top Money Market And CD Rates

Just two weeks ago I published an updated review of the deposit platform, SaveBetter (SaveBetter.com), and its latest competitive products. I’m happy to report higher rates from one of the SaveBetter banks. The bank mph.bank (brand of Liberty Savings Bank, F.S.B.) raised the rate of its Money Market Deposit Account (MMDA) from 0.71% to 0.85% APY. Also, mph.bank has introduced two very competitive short-term CDs on SaveBetter: a 10-month CD (1.25% APY) and a 15-month CD (1.45% APY).

When I first reviewed SaveBetter in 2021, it lacked any compelling deposit products, but that has changed. SaveBetter platform is managed by Deposit Solutions LLC, a New York based company that is part of the large German financial technology company, Raisin GmbH. The SaveBetter platform allows savers to open deposit products at several partner banks under just one account. When I first reviewed SaveBetter, there were only three partner banks. Now there are seven partner banks, and a few are now offering competitive rates.

SaveBetter Money Market and Savings Accounts

mph.bank now has the most competitive liquid account at SaveBetter. In my review two weeks ago, Ponce Bank had this position. Ponce Bank’s MMDA (0.75% APY) is now second to mph.bank’s MMDA (0.85% APY). The account has a minimum opening deposit of $1, and the APY applies to all balances.

The following is a list of all the money market deposit accounts and high yield savings accounts with current rates that are listed at SaveBetter:

SaveBetter High Yield CDs

In addition to the highest-rate liquid account, mph.bank now has the highest rates on short-term CDs at SaveBetter: 1.25% APY (10-month CD) and 1.45% APY (15-month CD). Minimum deposit is only $1.

Ponce Bank continues to offer its competitive CDs: 11-month (1.21% APY), 13-month (1.31% APY), and 48-month (1.61% APY). The State Exchange Bank also continues to offer competitive CD rates. Its three most competitive CDs are 60-month (1.71% APY), 36-month (1.51% APY), and 9-month (0.90% APY). Minimum initial deposit for all these CDs is only $1.

The following is a list of all the High Yield CDs with current rates that are listed at SaveBetter:

SaveBetter Money Market and Savings Account Features

The available liquid account products from the SaveBetter banks include money market deposit accounts (MMDAs) and high yield savings accounts (HYSAs). Each product listed at SaveBetter has its own Product Terms page with account details. Except for the rate and offering bank, there are essentially no differences in the product terms between the MMDAs and HYSAs that are currently listed at SaveBetter. Sometimes money market accounts have check writing capabilities, but that is not the case with the SaveBetter MMDAs. Check writing is not allowed for both SaveBetter MMDAs and HYSAs.

Currently, all the SaveBetter MMDAs and HYSAs have a minimum opening deposit of only $1, and the listed APYs apply to all balances. There are no monthly service fees. There’s also no fee for excessive withdrawals. According to the Products Terms documents, the accounts would normally be limited to six withdrawals during a monthly statement cycle. However, enforcement of this limit is suspended until further notice (The Federal Reserve allowed banks and credit unions to do this starting in 2020).

ACH Bank-to-Bank Transfers

As is typical for online banks, little information is provided about the bank-to-bank ACH transfer service. That was the case last year, and it remains the same. By phone, I confirmed the details that I learned last year. First, the initial funding link is retained to make additional deposits and withdrawals. According to the CSR, there is no dollar limit on the transfers. Many new online banks have small limits like $5k. Only one link can be established. They don’t allow multiple links to multiple banks.

Cannot Initiate ACH Transfers from Other Banks

I also asked if they would allow ACH transfers that were initiated by the customer’s external bank or credit union? According to the CSR, they do not allow this. The following FAQ confirms this since it states that “SaveBetter accounts do not have bank account or routing numbers.” These numbers are required if you want to be able to link an account at another bank. Here’s the full contents of this FAQ:

Does my SaveBetter account have a specific bank routing or account number?

SaveBetter accounts do not have bank account or routing numbers. You can access your account with your email address and SaveBetter password. Your linked bank account is the source of all deposits and the destination for all withdrawals.

The reason why you don’t have access to a bank account or routing number appears to be based on how the SaveBetter deposits are held at the partner banks. From what I can understand from the SaveBetter Terms of Service (ToS), you don’t actually hold individual deposit accounts at a partner bank. Instead, you hold a piece of a large deposit account, what the ToS refers to as an “omnibus custodial deposit account.” This appears to be set up like a brokered CD. I have more details on this arrangement in the “Common Features” section below.

SaveBetter CD Features

SaveBetter used to list two types of CDs: Fixed Term CDs and No Penalty CDs. That has now changed, and the only CDs listed are called “High Yield CDs”. The High Yield CDs are the same as the Fixed Term CDs. It appears SaveBetter decided the term “High Yield CD” was more inline with other online banks. I’m sorry to see SaveBetter remove No Penalty CDs from its product line. Last year, some of the SaveBetter no-penalty CDs had been competitive.

The High Yield CDs are conventional CDs with fixed rates and terms that range from three to 60 months. Each High Yield CD listed at SaveBetter has its own Product Terms page with account details. Except for the rate, term and offering bank, there are essentially no differences in the product terms between the High Yield CDs.

All the SaveBetter CDs have a minimum opening deposit of $1. At maturity, the CD will automatically renew unless you log into your SaveBetter account and elect to pay-out and close the CD before the maturity date. You have a 7-day grace period at maturity in which you can cancel renewal without an early withdrawal penalty.

Early Withdrawal Penalties

Partial early withdrawals are not allowed. Only a one-time full withdrawal of the CD is allowed. There is no language in the Product Terms that gives the bank the right to refuse an early withdrawal request. Being able to do an early withdrawal is an important feature for CDs when interest rates are rising fast. Below is the early withdrawal penalties (EWP) that are included in each High Yield CD Product Terms:

CD Term = “Less than 12 months”

Early Withdrawal Penalty = “90 days simple interest on the principal at the rate in effect for the CD”

CD Term = “12 months to 5 years”

Early Withdrawal Penalty = “270 days simple interest on the principal at the rate in effect for the CD”

CD Term = “Greater than 5 years”

Early Withdrawal Penalty = “365 days simple interest on the principal at the rate in effect for the CD”

Note, there is a big increase in the EWP from 11 months to 12 months. That’s an important issue to consider when deciding between a 10-month CD and a 15-month CD.

Withdrawing CD Funds

In my phone call with the CSR, I learned additional CD details that I couldn’t find online.

First, interest from the CD will only be added back to the CD (credited monthly and at maturity). There is no option for the interest to be paid out by check or to another account.

If you choose to have the CD automatically renew at maturity, the original principal is included in the new CD along with interest accrued from the previous matured CD. (Update 4/22: Updated based on input from Deposit Solutions official.)

If you choose to have the CD closed at maturity, your only option to receive the funds is an ACH transfer back to the linked external account that was used to fund the CD. You can change this linked external account, but this requires contacting a CSR. They do not provide an option to transfer funds to another SaveBetter account (which seems to reduce the usefulness of providing access to multiple banks for CDs.)

If you choose an early withdrawal, you must contact a CSR. An early withdrawal can only be done with the help of a CSR. The transfer of funds back to the linked account typically takes one to three business days.

Common Features for All SaveBetter Products

The benefit that SaveBetter is promoting is added simplicity in being able to access accounts at multiple banks by using one website and maintaining just one online account. Also, instead of receiving multiple year-end tax statements from each bank, SaveBetter will consolidate these into one year-end tax statement as long as you earned $10 or more in interest at SaveBetter during the calendar year.

Customer Service

Another benefit is that you’re dealing with just SaveBetter customer service instead of different customer service from each bank. You can access SaveBetter customer service 9 am to 4 pm ET from Monday to Friday by phone (844-994-3276) or by SaveBetter’s online chat service.

In my contact with customer service, my first call went to voicemail. I was instructed to leave my name and number so that a representative could call back. After 90 minutes without a call back, I called again. This time I was able to get through to a knowledgeable CSR.

Important Deposit Account Details

An important issue regarding going through a middleman company like SaveBetter to open and manage deposit products is if there is any time when the funds may not be held at a FDIC-insured bank. Here’s a relevant FAQ on this issue:

Since SaveBetter is not a bank, where are my funds held?

SaveBetter customers’ funds are held in a custodial account with the bank that is providing your selected savings product(s). All banks involved in the SaveBetter platform are FDIC insured, so your funds are held at federally insured bank at all times.

Details about how the partner banks (the Product Banks) interact with you and SaveBetter are described in the SaveBetter Terms of Service (ToS) document. In addition, the ToS describes the “Service Bank”:

To process your Transactions, the Service uses an intermediary bank (referred to as the “Service Bank” and, together with each Product Bank, the “Banks”).

Note, the ToS defines a “Transaction” as “your deposit to or withdrawal from a CD or MMDA via the Service.” According to the small print on each SaveBetter page, “Central Bank of Kansas City, Member FDIC, d.b.a. Central Payments is the Service Bank.”

In the above FAQ, it refers to a “custodial account.” The ToS provides more details on this account:

Each of these omnibus custodial accounts is referred to as a “Deposit Account.” Each Deposit Account at a Product Bank will hold only funds of customers participating in the Service who choose to deposit money with such Product Bank and will be used solely for the purpose of the Service. Deposit Solutions will keep records of your beneficial ownership of funds in each Deposit Account.

As I mentioned in the section on money market and savings accounts, the SaveBetter deposit account arrangement sounds like the arrangement used for brokered CDs. For the case of brokered CDs, the brokerage firm keeps records of the customer’s ownership of funds in the brokered CD. An important consequence of this is that adding beneficiaries may not increase your FDIC coverage as it would when you directly own a deposit account at a bank. To play safe, you may want to keep your total deposits at any one of these banks below $250k.

As I mentioned above, this custodial account arrangement is likely the reason why you cannot initiate ACH transfers into or out of your SaveBetter account from another bank. This also would prevent you from making deposits via direct deposit. The following FAQ mentions another consequence of this custodial account arrangement:

Can I link my SaveBetter account or selected savings product to a third-party app?

You cannot currently link your SaveBetter account to a third-party app, but we may offer this feature in the future. For now, you will not be able to link your selected savings product to a third-party app even if the bank offering that product does so outside of the SaveBetter platform.

Joint Accounts, IRAs and Trust Accounts

One positive change from last year is that they now allow joint accounts. However, they still don’t offer IRA accounts or trust accounts.

Designating Beneficiaries

Beneficiaries cannot be designated in the application. However, the CSR said that a customer can call to add beneficiaries after the account is opened. There is no limit to the number of beneficiaries that can be designated. Only equal allocations are allowed. Also, only persons are allowed to be designated beneficiaries. Charities and trusts can’t be designated. Only the last four digits of a beneficiary’s social security number are required.

No Hard Credit Pull

Regarding a hard credit inquiry in the application, the CSR said that they do not check your credit. They only confirm your identification in order to comply with federal law.

Miscellaneous Details

Lastly, here are a few additional details regarding SaveBetter and the SaveBetter accounts from the FAQs:

Interest is compounded daily and posted to your account monthly.

The SaveBetter platform uses multi-factor authentication

banks set the rates for the products they offer independently and may take into consideration facts like market conditions or their individual funding needs.

New Account Bonus

SaveBetter has regularly offered cash bonuses for new accounts with the size of the bonus being based on the amount that the customer deposits.

With the current bonus offer, new customers can earn up to $125. It’s scheduled to expire on 6/20/22, but SaveBetter may terminate the offer early. The current bonus is listed at the top of SaveBetter.com page:

Grow your savings this spring: Enter offer code “BLOOM” at signup to earn a bonus of up to $125*

The size of the bonus (up to $125) is based on the size of the total deposits made during the first 30 days after the date of the first deposit (the end time being no later than the expiration date). Customers must maintain the minimum daily deposit amount for each level of bonus for a period of at least 90 days following the Deposit Eligibility Period. The deposit amounts and the bonus levels are as follows: First $5,000 deposit qualifies for a $25 bonus. The next $5,000 deposit (total of $10,000) adds $5 for a total bonus of $30. The next $5,000 deposit (total of $15,000) adds $5 for a total bonus of $35. This continues until a total deposit of $105,000 is reached. This qualifies for the maximum bonus amount of $125. Additional deposits do not qualify for any additional bonus amounts. The bonus will be deposited to the customer’s account within 30 days after the day on which the customer qualifies for a bonus.

The bonus page lists all bonus-eligible savings products. Currently, it lists all of the accounts that are available at SaveBetter. So if you’re a new SaveBetter customer who plans to deposit at least $5k, it makes sense to include the offer code in your application whether you’re applying for a money market account, savings account or CD.

For a $5k deposit, the $25 bonus would effectively increase the 13-month CD APY from 1.31% to about 1.77%. For a $105,000 deposit, the $125 bonus would effectively increase the 13-month CD APY from 1.31% to about 1.42%.

Availability

To be eligible to open an account through SaveBetter, you must be a U.S. citizen or U.S. resident alien with a U.S. social security number, who resides in the U.S. Also, you must have an existing deposit account that you maintain at a bank or credit union in the U.S. That deposit account will be used to fund your SaveBetter account and to receive the funds from a SaveBetter account. In the online application, you’ll need to provide the routing and account number of the funding deposit account.

SaveBetter and Partner Banks Overview

The first SaveBetter FAQ has the best overview of SaveBetter. The following is an excerpt:

SaveBetter is not a bank. It’s a New York-based financial technology company (“Fintech” for short) that provides the digital “storefront” where banks can promote their deposit products.

SaveBetter.com is operated by SaveBetter LLC, a 100% subsidiary of Deposit Solutions LLC (Deposit Solutions). Headquartered in New York, Deposit Solutions provides a proprietary open architecture platform for deposits products. Deposit Solutions helps banks improve their deposit funding by offering national reach for their retail deposit products, and provides savers with better access, more choice and higher convenience when evaluating savings products from FDIC insured banks.

Deposit Solutions LLC is a 100% subsidiary of Raisin GmbH, a trailblazer for open banking in the deposits and investments space.

When I reviewed SaveBetter last year, they were part of Deposit Solutions. A few months after my review, Deposit Solutions and Raisin announced a merger. According to this June 2021 Reuters article:

Under the name Raisin DS, the merged company will work with around 400 banks and have a deposit volume of around 20 billion euros ($24 billion).

The deposits are held at the partner banks, and thus, the financial health of the partner banks should be considered when deciding to open an account via SaveBetter. The following is the list of the current partner banks with their DA health grades and asset size based on December 31, 2021 FDIC data. Click the name of the bank name to view the financial details:

• Central Bank of Kansas City - Health Grade = A+, Total Assets = $310.8 million
• Continental Bank - Health Grade = A+, Total Assets = $220.1 million
• mph.bank (Liberty Savings Bank, FSB) - Health Grade = A , Total Assets = $983.9 million
• Patriot Bank - Health Grade = B+ , Total Assets = $947.5 million
• Ponce Bank - Health Grade = A, Total Assets = $1.64 billion
• The State Exchange Bank - Health Grade = C+, Total Assets = $84.6 million
• WEX Bank - Health Grade = A, Total Assets = $4.09 billion

Note, mph.bank is a brand of Liberty Savings Bank, FSB. It’s also a website with the “.bank” TLD which offers an app-based mobile checking account.

How the mph.bank’s 10-Month High Yield CD Compares

When compared to CDs with terms from seven to 11 months tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $10k or less, no banks or credit unions currently have a higher rate than offered on the mph.bank’s 10-month CD. The following table compares the 10-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

How the mph.bank’s 15-Month High Yield CD Compares

When compared to CDs with terms from 15 to 20 months tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $10k or less, only one bank has a higher rate than offered on the mph.bank’s 15-month CD. The following table compares the 15-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

How the mph.bank Money Market Deposit 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, mph.bank’s Money Market Deposit Account’s APY currently ranks second.

The above information and rates are accurate as of 4/21/2022.

To look for the best rates, both nationwide and state specific, please refer to our CD Rates Table, Money Market Accounts Table and Savings Accounts Table.