My Banking Direct Boost High Yield Savings Rate

In a Forum post last week, DA reader, Jim378, broke the news about the My Banking Direct High Yield Savings (HYS) account rate increase. Following a 62-bps increase, the HYS currently earns 5.00% APY on balances of $1+. An HYS can be opened with a $500 minimum deposit.

While the 5.00% APY currently applies to all balances, the Truth in Savings disclosure does show three tier levels, suggesting there is a possibility of tiered rates in the future.

• $1.00 – $9,999.99
• $10,000.00 – $49,999.99
• $50,000.00 and above

High Yield Savings Ins and Outs

• No monthly or maintenance fees.
• $1 minimum balance required to earned stated APY.
• Funding can be done by ACH, internal transfer, or by mailing a check.
• ATM card issued upon request. Additional deposits can be made using the ATM card.
• Withdrawals can be made using the ATM card or through ACH transfer.
• If a High Yield Savings account is closed using the NYCB Online banking platform, a cashier’s check will be issued to the address on file.
• If a High Yield Savings account is closed within six months of opening, an early closure fee of $30 will be assessed.

ACH Limitations

My Banking Direct has historically had low ACH levels, which are always a point of contention. In the past, outbound ACH transfers initiated from My Banking Direct were limited to $5k per day and $20k over rolling 30 days. While the current $50k per day and $200k over a rolling 30 calendar day period transfer limits are an improvement, they don’t necessarily meet the needs of everyone. As DA reader, Jarlath, stated in a March 2022 Review,

The daily external transfer rate is only 50k. And, monthly is 200k. While that may be fine for some, that is a deal-breaker for me. This is especially true as most of the good online banks are significantly higher.

While a standard ACH transfer (three days) is free, My Banking Direct charges $7 for a next day ACH transfer.

5-Month CD

My Banking Direct currently has only one CD in its product line: a 5-month CD earning 5.15% APY. There is a $2.5k minimum opening deposit, with no stated balance cap.

Although not mentioned on the Certificates of Deposit page, the 5-month CD is actually on add-on CD. According to the CD Truth-in-Savings (TIS) disclosure,

12 Months or less – You may make additional deposits into your account at any time during the term of the certificate. The initial funds may be deposited via electronic funds transfer.

Thereafter, you may not make deposits into your account via ACH, mobile deposit, telephone transfers or at any ATM terminal.

That last sentence is nothing but confusing: while listing the methods that cannot be used to make additional deposits, MyBanking Direct has neglected to state how to actually make an additional deposit. According to CSR, requesting a transfer from High Yield Savings or Money Market account into the 5-month CD is the only option available.

As stated in the TIS disclosure, the Early Withdrawal Penalty reads as follows:

Less than 6 months: 30 days’ simple interest on the principal amount withdrawn.

The ability to make an early withdrawal is not necessarily guaranteed:

You may not make withdrawals of principal from your account before maturity, unless we agree at the time you request the withdrawal.

CD Funding and Other Details

The following information is from a conversation with CSR.

• Funding – ACH, wire ($15 fee), internal transfer, or by mailing a check.
• Ownership – Individual, joint, or trust.
• Interest – Compounded daily/credited quarterly and can be transferred to an internal account.
• Maturing Funds – If a certificate is not renewed, the balance will be placed in an interest-bearing, Post-Maturity savings account.
• Beneficiaries – Unlimited, percentages can be assigned; Social Security numbers are required.
• Grace Period – 7 calendar days, if automatic renewal is available.
• Credit Check – ChexSystems.

Availability and Account Opening

My Banking Direct is now listed as “a service of Flagstar Bank, N.A.”, and Flagstar Bank is now a subsidiary of New York Community Bancorp, Inc. which has its headquarters in Hicksville, New York.

My Banking Direct offers its product line to U.S. citizens/residents aliens, 18 years or older, who have a valid Social Security number or Individual Taxpayer Identification number.

As an internet bank, opening a High Yield Savings account and/or a 5-month CD can only be done online. CSR stated that if an account is going to be a joint account, “all joint account holders should be available to validate their personal information” during the online application process.

Bank Overview

Following the December 2022 merger/acquisition of New York Community Bank and Flagstar Bank, My Banking Direct now operates under Flagstar’s FDIC Certificate and shares its financial history.

My Banking Direct/NYCB/Flagstar Bank, has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 1.51% (excellent) based on December 31, 2022 data. In the past year, the Bank has increased its total non-brokered deposits by $35.39 billion, an excellent annual growth rate of 201.71% APY. Please refer to our financial overview of My Banking Direct/NYCB/Flagstar Bank (FDIC Certificate # 32541) for more details.

Long Island-based New York Community Bank was established in 1859 as Queens County Savings Bank and remained so for over 140 years. In 2001, the New York Community Bank rebrand occurred with the headquarters moving from New York City to Westbury (Long Island). Between 2001 and 2018, eight banks in four states were acquired, with New York Commercial Bank being the most recent acquisition.

Flagstar Bank first opened its doors in 1987 as First Security Savings FSB, located in Bloomfield Hills, Michigan. The Flagstar rebrand occurred in early 1996 and was quickly followed by the acquisition of Security Savings Bank FSB (Jackson, Michigan).

As stated in a December 1, 2022 press release,

New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company" or "NYCB") announced that its acquisition of Flagstar Bancorp, Inc. ("Flagstar" or "FBC") was completed earlier today, creating a regional banking franchise ranking among the top 25 banks in the country based on total assets. In accordance with the Agreement and Plan of Merger dated April 24, 2021, as amended on April 26, 2022 and October 27, 2022 by and among the Company, Flagstar, and 615 Corp. (the "Merger Agreement"), Flagstar merged with and into the Company and Flagstar Bank, FSB now operates as Flagstar Bank, N.A., with New York Community Bank having merged into Flagstar Bank, N.A.

Also noteworthy was the acquisition of parts of Signature Bank as described in this March 20, 2023 press release,

New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company") today announced that its bank subsidiary, Flagstar Bank, N.A. (the "Bank") has acquired certain assets and assumed certain liabilities of Signature Bridge Bank ("Signature") from the Federal Deposit Insurance Corporation (the "FDIC"). All regulatory approvals, including approval from the OCC, have been obtained, and the transaction has closed.

How the High Yield Savings Compare

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, there are ten other banks that offers higher MMA/savings rates than available on the MyBanking Direct High Yield Savings. The table below includes the four highest APYs currently available.

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.

How the 5-Month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide and have minimum deposit requirements of $10k or less, only one credit union has a higher rate than currently offered on the My Banking Direct 5-Month CD. The following table compares the 5-Month CD to the two highest-rate CDs from other credit unions and the two highest-rate CDs from banks.

The above information and rates are accurate as of 5/22/2023.

To look for the best CD rates, both nationwide and state specific, please refer to our CD rates table page.