This has been another active day of rate increases at internet banks with Nationwide Bank being the latest to boost rates. The new rates are below the rate leaders, but a couple are competitive. The most competitive is the Money Market account. Its top-tier rate increased 5 bps to 1.45% APY. This applies to all balances of $10k+; balances below $10k earn 1.15% APY.
Before May 2017, the Money Market account had become uncompetitive. The rates of other internet banks bottomed out around 2013, but Nationwide’s Money Market continued a long free-fall, bottoming out at 0.50% in the summer of 2016. In May 2017, the rate was raised to 0.75% APY. It finally became competitive again in November with a big rate hike that increased the rate to 1.30% APY, and a week later it went up to 1.40% APY.
According to the Money Market account page, there are low, or possibly no fees associated with this account:
$0 monthly maintenance fee when you maintain a minimum daily balance of $1,000 or more. Otherwise $8.
$0 preauthorized withdrawals up to 6 per monthly statement cycle via telephone or electronic transfers, check or ATM card transactions. Each additional is $5.
$0 non-Nationwide Bank ATM transactions up to 2 per month. The fee is $1.50 after the first two. Fees from the ATM owner may apply.
$0 online statements detailing your monthly activity.
$0 money transfers with your Nationwide bank accounts and your accounts with other banks.
Nationwide Bank’s money market account rate may now be competitive, but its bank-to-bank transfer service is not. Standard transfers are limited to $5,000 per transaction and per day. The monthly limit (30 day rolling) is only $10,000. Full details are listed in the transfer section of Nationwide Bank’s online banking FAQs.
According to a CSR, standard transfers take 3 to 5 business days. They do have next-day transfers, but these have even smaller limits ($2k per day). I was told there are no dollar limits when the transfers are initiated by another bank.
One advantage of the money market account over the savings account is that you can access your money with checks. I confirmed with a CSR that the money market account does have check writing capabilities. When you apply, they’ll provide three convenience checks for free. Additional checks must be ordered. Due to federal regulation, money market accounts are limited to no more than six withdrawals by check per statement cycle.
24-Month CD Rate
Nationwide Bank also increased the rate on its 2-year CD. The rate increased 10 bps to 2.05% APY for the Jumbo CD ($100k minimum deposit) and 2.00% APY for the standard CD ($500 minimum deposit). One year ago I wrote about Nationwide Bank’s new 2-year CD rates which were about 50 bps under these new rates.
The CDs are also offered as IRAs (Traditional, Roth, CESA, and SEP), earning the same tiered APYs with the same funding requirements. All of Nationwide’s CD and IRA rates can be viewed from the CD section of DA’s Nationwide Bank rate tables.
As stated in the Terms and Conditions brochure, the Early Withdrawal Penalty reads as follows:
If your account has an original maturity of two years, but less than four years: The fee we may impose will equal 180 days’ interest on the amount withdrawn subject to penalty.
And according to the brochure, withdrawals of principal are allowed (subject to EWP) and credited interest can be withdrawn:
You may make withdrawals of principal from your account before maturity. Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty. You can only withdraw interest credited in the term before maturity of that term without penalty. You can withdraw interest any time during the term of crediting after it is credited to your account.
Also mentioned in the brochure are the important cases when the EWP is waived for IRA CDs:
- If you are at least age 59½ and younger than 70½, you can take a distribution at anytime without an early withdrawal penalty, however if you close the IRA CD account outside of its grace period, you are subject to the early withdrawal penalty.
- If you are age 70½ or older you can take a distribution and close your IRA CD account at anytime without an early withdrawal penalty.
Lastly, I found this special EWP waiver interesting. It provides a small benefit to CD customers who also hold Nationwide insurance policies.
CD Forgiveness for Nationwide Insurance Policy Holders Only - A penalty for a withdrawal from your CD before maturity will be waived if you experience a Nationwide Insurance claim and need your funds.
Nationwide Bank’s Other Liquid Accounts
In 2017, three of Nationwide’s liquid accounts became competitive. In addition to the Money Market account, its Online Savings account and its Member Checking account had large rate hikes after many years of rates that were low by internet banking standards. Has Nationwide changed? Do they intend to keep these accounts competitive over the long run? Based on the rate history of Nationwide’s accounts, it’s questionable. I’ll need to see a couple of more years of the rates remaining competitive.
Nationwide Member Checking
Nationwide Bank continues to offer competitive rates on its Member Checking account (1.15% APY for $10k+,1.00% APY for up to $10k). The rates may not seem competitive when compared to savings and money market accounts, but when compared to standard checking accounts, they’re near the top. The rates became competitive last June, and the rates have held since then. The Member Checking account has no monthly maintenance fee. Please refer to my Nationwide Members Checking review for more details.
Nationwide Online Savings Account
Nationwide Bank’s Online Savings Account became competitive last August when the rate increased an entire percentage point from 0.30% to 1.30% APY. This rate was near the rate leaders last August, but now it’s a little below the average for the big internet banks.
There are no minimum balance requirement or maximum balance cap in regards to the stated APY, but there is a minimum $25 opening deposit. In addition, there’s a $3 monthly maintenance fee unless you maintain a minimum daily balance of $300 or a monthly direct deposit of $25 or more. Please refer to my Nationwide Online Savings Account review for more details.
Availability and Applying for Accounts
Headquartered in Columbus, Ohio, Nationwide Bank is an internet bank that has no brick-and-mortar branch locations. Its entire product line is available nationwide. The Bank has this useful page, “How to apply for Nationwide bank accounts.” Some of the important details mentioned on this page include:
When opening an account, you have the option to add up to 5 account beneficiaries. All you need is the person’s name and address.
Account funding options include electronic transfer from another personal bank account, mailing a check and wire transfer.
Trust Accounts and Business Accounts can be opened, but there’s no online application for these. You must call their customer service.
Nationwide Bank has an overall health grade of "B" at DepositAccounts.com, with a Texas Ratio of 1.66% (excellent) based on September 30, 2017 data. Nationwide Bank has an average capitalization level (8.62%), the result of holding $7.19 billion in assets with $619.45 million in equity. Please refer to our financial overview of Nationwide Bank (FDIC Certificate # 30470) for more details.
While Nationwide Bank was established 19 years ago as the Nationwide Trust Company, its roots can be traced back to Nationwide Corporation, an auto insurer for farmers in Ohio in the 1920s. The name was changed to Nationwide Bank in 2007 when the Bank began offering products to the public. Nationwide Bank is currently Ohio’s eighth largest bank with assets close to $7.2 billion and more than 97,400 customer accounts throughout the country.
How the Money Market Compares
When compared to the Money Market accounts tracked by DepositAccounts.com that are nationally available and do not have low balance caps, Nationwide Bank’s Money Market APY currently ranks fourth, regardless of minimum required balance.
The above rates are accurate as of 1/18/2018.
To review the best Money Market rates, both nationwide and state specific, please refer to our Money Market rates table.