Northern Bank Direct Offers 2.26% APY On New Money Market
There’s no need for a wordy introduction about Northern Bank Direct’s (NBD) promotional Money Market Account: 2.26% APY (up to $250k), guaranteed through June 30, 2019. The minimum opening deposit is $5k minimum deposit, with a $250k maximum opening deposit.
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 2.26*% | - | $250k | Northern Bank Direct | Money Market Account | |
| OTHER TIERS: 0.01% → $1mm+ | 0.75% → $250k - $1mm | |||||
This limited-time offer is for “new account opened June 8, 2018 and after, which is subject to change at any time.” I asked CSR if they had any indication how long the promotional rate might last. She replied “it will be available until it isn’t.”
Balances above $250k have two tiered rates: the balance portion between $250k and $1 million earns 0.75% APY, with the portion of the balance over $1 million earning 0.01%. This results in a blended APY, which is not always the case with tiered rates.
When compared to a savings account, an advantage of the MMA is its limited fee-free check writing, with a maximum of six checks per month. (NBD also offers complimentary standard checks.) While there is no monthly service charge, there is an excessive transaction fee of $20 for each withdrawal over the permitted six per statement cycle. As a member of the SUM ATM network, NBD account owners have access to thousands of surcharge-free ATMs throughout the country.
NBD has added a FAQs page, which includes information about their ACH transfer system. Nothing has changed since I last wrote about the MMA in January, so using another bank’s ACH transfer service to get money in or out of the MMA is probably the best option.
If you initiate the electronic transfer from your Northern Bank Direct account, there is a maximum daily limit of $5,000.00 (or the available balance in your account, whichever is less) for Interbank (external) transfers per transaction; $5,000 in aggregate per day; and $25,000 in aggregate per calendar month.
The maximum number of transfers is 10 per day and 100 transfers to your account per calendar month.
Although not mentioned in the FAQs, there are fees: $3 for outgoing ACH transfers (when initiated from NBD) and $25 for outgoing wire transfers.
Top 30-Month CD Rate
NBD appears to be trying hard to attract deposits. NBD began June by introducing a new product: a 30-month CD earning 3.01% APY. The 30-month CD can be opened with a $500 minimum deposit and while there is no stated balance cap, the FAQs page states, “The maximum amount you can initially fund your account with is $500,000.”
As stated on the FAQs page, the Early Withdrawal Penalty (EWP) reads as follows:
Term of 12 months to 35 months: 12-months interest
CSR stated that partial principal withdrawals are not allowed: any withdrawal of the principal will result in the CD being closed. Accrued interest, on the other hand, can be paid out at any time by check or NBD ACH, or through a transfer to an NBD Money Market Account (MMA). Transferring any interest to an MMA is probably the easiest withdrawal route, but there is a monthly $4 dormant account fee for MMAs with account balances of less than $500 for 12 consecutive months, with the $4 fee starting in the thirteenth month.
Availability
As the internet division of Massachusetts' Northern Bank, Northern Bank Direct offers it services and product line nationwide online only.
Opening a Money Market Account must be done using NBD’s online application. According to CSR, even though this MMA is referred to as “promotional,” existing NBD customers are eligible to open a new account and take advantage of the 2.26% APY and the year-long rate guarantee.
Bank Overview
As the online division of Massachusetts-based Northern Bank, Northern Bank Direct operates under the Bank’s FDIC Certificate and shares its financial history.
Northern Bank/Northern Bank Direct has an overall health grade of “A” at DepositAccounts.com, with a Texas Ratio of 10.77% (excellent), based on March 31, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $213.31 million, an excellent annual growth rate of 20.68%. Please refer to our financial overview of Northern Bank/Northern Bank Direct (FDIC Certificate # 18266) for more details.
While Northern Bank Direct is a new institution, Northern Bank is not. Established in 1960 by brothers Jim and Thomas Mawn, it's the largest privately-held, family-run, full-service bank in Massachusetts. In 58 years, Northern Bank has grown to become 23rd largest bank in the state, with assets in excess of $2.08 billion and more than 30,800 customer accounts. From 2010 to 2017, Northern Bank was rated by the S&P Global Market Intelligence Ratings as the top New England bank with assets of $500 million to $5 billion.
How the Money Market Account Compares
When compared to the Money Market Accounts and Savings Accounts tracked by DepositAccounts.com that are nationally available, Northern Bank Direct's Money Market Account APY currently ranks first, regardless of deposit requirements.
| Interest Rate | Account Name | Credit Union/Bank |
|---|---|---|
| 2.26% APY | Money Market Account (no min/$250k max) | Northern Bank Direct |
| 2.01% APY | eMoney Market (no min/no max) | Virtual Bank |
| 1.85% APY | Money Market Account ($100 min/no max) | CIT Bank |
| 1.85% APY | Popular Direct Plus Savings ($5k min/no max) | Popular Direct |
The above rates are accurate as of 6/11/2018.
Looking for the best Money Market Account rates, either nationwide or state specific? Please refer to our Money Market Account rates table or our Rates Map page.
Without a rate guarantee I have to wonder what NBD will do to the rate once they have acquired the funds they are seeking. Both Northpointe and Virtual have given us rate locks, albeit at a lower rate of interest. To my way of thinking that establishes a standard and eliminates concern about being whipsawed. I'm sticking with the providers offering such a guarantee, at least for now.
This is the correct question to be asking. Popular Direct did the exact same thing over the past few months. Teaser rate was 2% on their savings account. Now they have dropped it to 1.85%.
Also check for any fine print in the terms as far as fees or restrictions.
The comments on the Popular Direct page give a glimpse of how it may not be worth the effort.
https://www.depositaccounts.com/banks/popular-direct.html
I have little double that by June 2019, 2.26% will no longer be a top rate. Transfering money out or writing a check is just not that difficult if Northern does not increase their rate later on.
If I recall correctly, the $3 outgoing ACH fee isn't only when initiated by NBD; they will also charge you if another bank initiates it.
More withdrawals from other accounts where there are restrictions;; another length of time before checks arrive, etc.
is this confirmed true? or is the $3 fee only when initiated by NBD?
https://www.igobanking.com/Home.aspx
I just open it for a 2.35% for just one year CD and will make extra $250 on the $250K in comparison to Northern.
Nor is 3.3% or whatever the 5 year brokered CDs are paying.
You are being tempted to keep the money in a MM (liquid) account for less apples per month just to say my money are liquid. What happens when 6-12 months down the road the rates are still the same as the present interest rate?
By the way a already have a CD at Connexus CU for the 12 month period and earning much more apples than your apples will earn in a year. Liquid accounts come with a price and a penalty attached at the same time.
It just depends on how fast you expect rates to go up over a stated period of time.
If they go up fast enough, even that 2.5% CD at Connexus will turn into sour grapes.
Beside that, both are losers versus inflation.
If you expect interest rates to go up faster than inflation over the next couple of years, keeping cash liquid is a good idea.
If not, it's not.
I did some calculations, if you keep your money longer then 3 months in MM, you have already lost extra interest and even if you get better rates then 2.5% later, the lost already occurred and you are trying to do a catchup. .
I got filled on this order just now...
Action Buy
CUSIP 065680NF3
Description BANK WEST SAN FRANCISCO CALIF CD 1.95000% 11/02/2018
Quantity 6
Coupon 1.950
Maturity Date 11/02/2018
Trade Date 06/12/2018
Settlement Date 06/14/2018
Order Type Price Limit at 99.650
Time in Force Fill or Kill
Trade Type Margin
Limit Price 99.650†
Mark-up 0.10
Price w/Mark-up 99.750
Effective Yield 2.597689
Accrued Interest 13.78
The cost of this trade without mark-up $5,992.78
Mark-up(%) $6.00 (0.10%)
Cost of this trade with mark-up $5,998.78
------------
The math does not make sense to me but Fidelity assures me it is correct.
The difference between 2% and 2.6% for 5 months is only about $15.
Gosh, it just goes to show how little it means when 1 or 2 CDs show up at what looks like a good rate for a short term.
1. They could raise the interest rate on the MMA multiple times within a year.
2. Another CD deal could pop up which blows your current one year CD away and since your funds are liquid you can take advantage of it.
3. You can do bank bonuses with you liquid cash like the Citibank $400 bonus for example and earn 10% ROI.
4. Another savings account could hike their rate much higher and you could just move your funds.
5. 0% no fee balance transfers. You need a high yielding account to make the monthly minimum payments from and to pay that cash back quickly when the 0% expires.
I didn't even touch on stock trading because that is not guaranteed.
Your interest rate and APY are accurate as of June 8, 2018 and guaranteed through June 30, 2019.
The signup for online banking immediate follows the account application - none of this "2-part" stuff like some banks where you can't sign up for online banking until a few days later. In my case, at least, there was nothing that will have to be mailed, faxed or scanned then emailed back to them for ID purposes.
You have the option of getting at ATM card for this account. You get 50 free checks.
One issue is that a poster above said they did charge a $3 transaction fee for even those transactions that were NOT initiated on their website. That annoys but is not a big problem for me since I don't foresee using this account for a lot of small-to-middle size transactions. Those who do, though, may want to confirm this.
As noted by others, their own transfer system has limits too small to be useful.
If they do NOT have that charge any more, that's great!
But get in while the gettins' good, folks,... LOL!
To me, that says that once the initial funding hurdle of $5K is met, anything from $0 to $250,000 will earn 2.26% APY. But as always, you might want to call and confirm that with them.
Me - "Is there any guarantee on the 2.26% rate, for any number of weeks or months?" Them - "The current advertised Money Market rate is only guaranteed until June 30,2019. After June 30, 2019 your interest rate and annual percentage yield may change and at our discretion we may change the interest rate on your account daily."
Also - their website lists this guarantee - https://www.northernbankdirect.com/money-market (fine print at the bottom).
From past experience with them - does anyone know?
IMO banks really should not do this since we're loaning to them and not vice-versa, but it seems that several of them do.
And 3 of those accounts are now obsolete. But they seemed like good ideas at the time. LOL
I suspect we will have more of that going forward.
Ally pays 1.60% and SPRXX paid 1.71% as of 5/31.
Those that pay significantly more all have roach motel aspects to go along with the higher rates.
Ditto for Penfed where I have another CD maturing in about a month and a half. Do I spend for the wire or pull out $5000 a day?
Make your decisions wisely, but DO NOT let a troll tell you that .54-.65% is "a few basis points".
No reason for that.
40 extra basis points, which lasts one month, equates to 40 / 12 = 3.3 basis points for the year. The very definition of a few.
Because Vanguard's Prime pays about 2% and Treasury pays 1.8%.
The extra 40 basis points, for one month or whatever it was, calculates at 3.3 basis points. Or maybe 6 basis points.
Getting a part time job is going to pay a whole lot more.
But why are you giving a one-month example for an account which guarantees its rate for over one year?
What is your point again?
Chase Slate, Amex everyday and BankAmericard. Chase has a $15,000 cap but you can bump that to $30,000 by doing 2 transfers 30 days apart withing the 60 day window.
Used previous permissions given last year as my defense to allow it again, for MORE $$. But again, we're talking small potatoes here ($10K).
OTOH, I'm also talking about AMEX BlueCash, a rewards card, which I pay off every month (incidentally, I thought that was AMEX's signature policy?). So I wasn't carrying any sort of balance to start with. I can see them being upset if I tried to take a 'credit' back after what would look like me paying down a balance.
Below are 2 great such BT offers that would allow just what I was talking about (after I transferred the balance to AMEX):
https://www.bankofamerica.com/credit-cards/products/bankamericard-credit-card/
https://creditcards.chase.com/balance-transfer-credit-cards/chase-slate
"How is interest calculated?
Interest is compounded monthly and credited monthly. If you close your account before the interest is credited, you will not receive the accrued interest."
Each is optional. You make these 2 selections during the online application.
If you don't want to lose interest, you'd need to get a check out and deposited by the 1st of the following month. Only other drawback w/this account (I think) are the ACH limitations.
What are the dollar limits for electronic transfers?
If you initiate the electronic transfer from your other financial institution, Northern Bank Direct does not impose a limit on the amount of the transfer. However, you should check with your other financial institution to see what their limits are.
https://www.northernbankdirect.com/faqs?open=depositsinsured#depositsinsured
Thank you for your interest in opening a new account.
Unfortunately, we cannot process your application.
For assistance, please contact us at (800)273-6908.
Should I try again?
Oh, well!
But, I have number of new accounts within the last 6 months and this one opened for me just fine.
Way back then, I tried to call in and get the bank to manually override it. They could not and would not. But, as is often the case, another bank deal came down the pike in short order.
I had the same thing happen happen at Bank 5 last month, and it was due to having my files locked at Experian, which are now unlocked.
I guess they are overwhelmed with applications and their server(s) cuts off or times out after a while. I'll try again tomorrow.
Can I go ahead & start the linking process with another bank or do I have to wait for the initial deposit of over $5000?
Make your check payable to Northern Bank & Trust Company.
Include your account number on the memo line. (Your new account number is provided at the end of the application process).
Send your check to the address below:
Northern Bank & Trust Company
Deposit Operations Dept.
P.O. Box 282
Woburn,MA 01801
--------
I later read they have to send a signature card by snail mail and that's when I add beneficiaries. So I was pondering holding off for that before sending the check.
Sounds like I got an account number because I was sending a check?
Did the initial fund show up in your northern account today(Wednesday)? I assume you verified the trial deposits on Tuesday.
Thanks
Do you know how many external banks can I add into the northern bank account? Hopefully it's more than one.
Really, I've seldom encountered a smoother experience in opening a deposit account.
During the application process you opted to fund your new account by Direct Deposit. Your application has been submitted and your account is now open.
https://www.northernbankdirect.com/content/disclosures/account-agreement.pdf
Me - "If for whatever reason I choose to close my account, is there an "early closing fee"? If so, how much? After how many months of having the account open, would that fee NOT be charged?" Them - "There is a $25.00 early close out fee within 120 days of account opening."
Me - "Is there a dormancy or inactivity fee? How much? After how many months of dormancy does it kick in?" Them - "For dormant accounts there is a $4.00 per month starting in the 13th month for account balances less than $500.00." (Note that their response to me on this question matches what Ken Tumin posted.)
Question about the inactivity fee, I spoke to the CSR and said the accounted needed a transfer/ACH activity of any amount (even $1) every 12/13 months. She didn't indicate that this only applied for accounts less than $500 though, she seemed to explain it as every account needing this. The Deposit Account Agreement on their site shows this to be true as well, with the fee being $3.75 for "checking accounts" without activity in 12 months. I'm not sure if this MM account is considered checking, since it has an ATM card and checks, and they don't seem to have a checking account at this time. There is also a dormant account fee which others were discussing for accounts less than $500.
ALSO - I was told the ACH limit is $5000/day when you push from NTD, but uses the limits of the other bank when you originate it there. So, I use ALLY BANK, which has high limits, and will use it for both deposits and withdrawals. He also did tell me that the $3 service charge to originate the ACH would be going away on June 15.
Routing # is 011303097. She said I can go ahead & link other accounts while my check is in the mail.
FYI - most banks and credit unions do have lower ( like 5K ) limits, and some have limits both at their own institution as well as another. NBT does not have external originated ACH limits, per the bank officer that I spoke with on this topic.
They were helpful and answered all my questions!
The funds usually take 2-3 business days to be processed. If you have any other questions please feel free to give us a call.
from the bank's FAQ
What are test deposits, and what do I need to do to verify them?
Test deposits will allow us to confirm the link between your Northern Bank Direct account and your other financial institution that you are making the initial deposit from. We will send two test deposits to your existing account. After you see these small amounts credited to your account, you will then return to our website and confirm the amounts by using the "finalize my account" link found at the top of the homepage. Once we confirm the correct amounts of the test deposits, we will transfer your opening deposit.
https://www.northernbankdirect.com/faqs
So I am set for 3 day transfers to/from ally. Well, I will be set when the northern account has available funds. I will pull $200 out as soon as possible just so that 2 months from now I will have 1 day transfers.
I did not try Northerns ACH because it was only $5000 and because of the possibility of fees.
If you tried sending "trial deposits" usually just a few cents each on your own to Northern you may have ****ed up. Trial deposits are sent FROM Northern to your outside acct. You then verify AT northern what they were
Geeze how picky can it get?
I cannot link my broker until I have a statement to send them and wait a few more days after that.
(I guess an extra security measure after so many linked accounts or a certain dollar balance. It did not used to be that way) But I can send a physical check and that is what I did.
Per their terms you must have a minimum of $500 in order to avoid the $4.00 dormant account fee. They do not state how to close the account other then that it will cost you $10.00 if done by mail.
Also the exit timing must be just right because If you close your account before the interest is credited, you will not receive the accrued interest.
1) Ken's writeup states: "there is a monthly $4 dormant account fee for MMAs with account balances of less than $500 for 12 consecutive months, with the $4 fee starting in the thirteenth month." So, once you drop the balance below $500, you have 12 months to decide what to do. Only after that will you be charged a dormancy fee.
2) Personally, I'm not going to sweat a $10 closing fee even if they charge me. (They did tell me there's a $25 EARLY closing fee for closing before 120 days, but I would avoid that.) But - I would bet you $10 that if you close it (after 120 days) in a way OTHER than by mail - they won't charge you even that $10!
3) Just my opinion - when one removes the bulk of the funds, the general practice of leaving either $1 or the lowest remaining balance to avoid a fee, whichever is lower, should be just that - a general practice. Leave that minimal amount there until 2-3 days following the next monthly statement, then close it Sure, some banks WILL pay you the accrued interest even if you close in the middle of a statement, but why sweat that for (probably) less then $5?
Because I am sure many of us are wondering how soon we can get out without it costing us, I went back & found the details from Kens original post.
------------------------
$4 monthly service fee if the balance on any day is below $500.
$25 early closing fee if account is closed within 180 days of opening.
$5 monthly dormancy fee if there has been no activity for 12 months.
Withdrawals only allowed via an external account, internal transfer to another Popular Direct account, or ACH.
$5 fee for each additional debit exceeding the limit of six per statement cycle.
---------------
Won't be too painful to leave $500 in there for 4 more months. (I recently made it 60 days) Just do not want to go below $500.
While the rate is great I refuse to do business with any institution that charge fees to exit, make it hard to close the account, or fail to post clear and concise information about their business. If you read the their FAQ section the questions are very general, lacking, and the answers are very vague leaving it for them to interpret it any way they choose.
Initially I felt RBJ's response was perhaps just a bit terse, so I tried a different approach. In retrospect, however, I'm wondering if his approach was not as or more correct.
1) I applied Monday, was accepted, and received an account number near the end of my application (I'd chosen to fund via paper check - if you chose some other way, you may not have gotten an account number immediately). I wrote and mailed my check then. Afterwards, I started to wonder about the signature card - was I supposed to wait on it before sending the check? Well, the CSR said no, it's the other way around - them receiving the initial deposit check is what triggers them sending you the signature card.
2) For those keeping large balances, keep in mind that the drop-off in interest rate above $250,000 is SEVERE. (This may be the point where some might think "why would someone keep that much in a liquid account anyway... etc., etc.", to which I would say that there are sometimes valid reasons, for certain periods of time, etc., etc.)
In any case, since interest is credited monthly, that means any amount above $250,000 should be siphoned off monthly to some other account, to avoid the lower rate.
As a general rule, I don't like to go over for obvious reasons but Northern is clearly interested in gathering money so why would they limit the amount per account with an interest rate penalty?
As a side note, since my Popular account was unfrozen, I tested a $500 transfer and it went thru so I did a 6 figure pull and it went thru fine too.
I will pull more soon given the bad taste the bank has left in my mouth and Northerns emergence as a rate leader. (But there are early closing fees there too I believe so I need to familiarize myself with them)
https://www.fdic.gov/deposit/covered/categories.html
You may close this account by a written letter or send us a secure message through your online banking account. We currently have not been charging the $10.00 mail close out fee.
And I also asked about atm fees/sum network, and was told: If the ATM card is used at a SUM Network, that ATM will not charge a fee but our bank will charge $1.50 for each withdrawal made at a non-Northern ATM.
I look at parking $500 for 4 months as a small price to pay for a premium rate. Even though the 2.26% rate today may not be a rate leader 3 months from now.
I have never paid an account closing fee in my life, Its fairly easy to meet their simple requirements. When the time comes, I either call or email and then I do what they say.
But the trials & tribulations of rate chasing are real. My new Northern bank already has 3 withdrawals with a 4th set up before month end. Which only leaves me with 2 more for the rest of the month. What will I do?
Wait, I know. Don't Sweat the Small Stuff.
Will be pulling out $200 via Ally next week so that 60 days from now I get 1 day transfers via Ally if I need them. (versus 3 days otherwise)
Still waiting for trial deposits to hit since applying Thurs. night.
Opened account on Wednesday, trial deposits confirmed Thursday morning,
initial (rather large) deposit credited to NBD as of Thursday, money leaves the UnPopular one on Friday. So, extra day's of interest on the house!
The entire mailing pin numbers seems obsolete. Can't they just let you set up a pin when you call to verify you got the card?
I hope I am able to change their pin.
Normally, I don't even ask for cards but I may be closing accounts at local credit unions just because they are obsolete for me. At one time, one had a good rate for a rewards checking and the other had a better than internet rate.
Now, their RCA pays 2% and the other one pays 1.51%. Obsolete.
Its probably been at least 7-8 years since I used an ATM to get cash. Just not much need for cash.
My account is showing 2 small ACH transfers in and hopefully my checks will get there today.
One thing I have observed, before EVERY sign in, they require a phone call. Thats massive overkill. At first I just thought it was for a new computer. They need to fix that. Fire their security guy or something.
1. The $3 ACH fee has been removed as of 6/15/18.
2. Once the interest is credited for the month the account information tab with the current interest rate will be populated.
3. For the first 30 days of account opening there is a 5 day hold on funds before they will become available.
Wasted a stamp to tell me that.