UPDATE 6/19/18: According to an alert on the bank's website "the promotional Money Market APY of 2.26% will no longer be available for new accounts as of 9:00 AM Eastern Standard Time on 6/20/18."
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.
|1.51*%||-||$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.
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.
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.
The above rates are accurate as of 6/11/2018.