Northern Bank Direct's Money Market (2.50% APY) Available Again
Remember Northern Bank Direct’s (NBD) Money Market Account promotion from last year? For ten days last June, newly opened MMAs were guaranteed to earn 2.26% APY on balances up to $250k through the end of June 2019. That deal was sweetened in January when the APY on existing MMAs was raised to 2.50% APY.
As DA reader, AnnO, noted in a Forum post yesterday,
The rate has already been 2.5% since January for those of us who signed up last summer. They had continued offering the MMA at a lower rate (1.7% or something like that) to new people after that for a while, but stopped some number of months ago (you could not sign up for a Northern Bank Direct MMA at any rate anymore).
Which leads us to yesterday’s news from NBD: the MMA (2.50% APY on all balances, $5k minimum opening deposit) is again being offered, with a rate guarantee through December 31, 2019.
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 2.50*% | - | $250k | Northern Bank Direct | Money Market Account | |
| OTHER TIERS: 0.25% → $1m+ | 1.25% → $250k - $1m | |||||
Based on last year’s ten-day account opening window, I asked CSR if there was any indication how long this offer might last. The answer was “it will be available until it isn’t.”
Last June, the MMA offered a blended APY, based on two balances tiers (up to $250k and up to $1 million). This has changed dramatically, with the fine print on the landing page stating
If your average daily balance is less than $250,000.00, the interest paid on the balance of your account will be 2.47% with an annual percentage yield of 2.50%.
If your average daily balance is $250,000.00 up to $999,999.99 the interest rate paid on the balance in your account will be 1.24% with an annual percentage yield of 1.25%.
If your average daily balance is $1,000,000.00 and above the rate will be .25 % with an annual percentage yield of .25%.
NBD has 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 still probably a better 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 is a $3 for outgoing ACH transfers (when initiated from NBD) and $25 fee for outgoing wire transfers.
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.
Availability
As the internet division of Massachusetts' Northern Bank, Northern Bank Direct offers its product line nationwide through its online banking platform.
Opening a Money Market Account must be done using NBD’s online application. Although the MMA is somewhat of a promotional special, CSR stated that existing NBD customers are eligible to open a new account and take advantage of the 2.50% 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 6.09% (excellent), based on March 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $313.94 million, an excellent annual growth rate of 25.25%. 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 59 years, Northern Bank has grown to become 20th largest bank in the state, with assets in excess of $2.2 billion and more than 33,200 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 nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, Northern Bank Direct's Money Market Account promotional APY currently shares the top spot with four other Money Markets, regardless of deposit requirements.
| Interest Rate | Account Name | Credit Union/Bank |
|---|---|---|
| 2.50% APY | Money Market Account ($5k min to open/$250k max) | Northern Bank Direct |
| 2.46% APY | Month Market Account ($10k min to open and to avoid fee/no max) | earn.bank |
| 2.45% APY | Online Money Market Account ($50 min to open/$1m max) | MemoryBank |
The above rates are accurate as of 6/12/2019.
Looking for the best Money Market Account rates, either nationwide or state specific? Please refer to our Money Market Account Rates Table page.
A) not giving you checking ability or charging you for checks, or
B) significantly DELAYING ACH times so that these oh-so precious high dollar limits everyone's so concerned about end up LOSING interest, or
C) creating other restrictions like not allowing other banks to use ACH on their accounts..
...then you're sadly mistaken. Northern's MM suffers from none of these maladies.
And BTW, Northern Direct does NOT ...repeat: DOES NOT ... charge any $3 fees for using their ACH service. They ended that almost as soon as it began.
Its nice to have access to stocks/mutual funds/bonds on the fly. But as any experienced investor knows...you can't time the market. Besides, most MFs have a 3-day settlement period, so that's plenty of time to ACH dollars in to cover a trade.
BTW, Northern's been in business since 1960, which is even longer than Vanguard.
Many suffered losses from the Lehman collapse, but I'm pretty sure they didn't all succumb to a secondary attack of "Vanguard Tunnel Vision". Being a SAVER, (as opposed to a hedge fund manager) doesn't make you PASSIVE. You can still access a great allocation of Equity/Fixed/Alternative while using Northern's MM quite easily. Because when your external account is properly linked to any of these MF companies, you can easily execute trades the next day after you request money to be transferred.
Concerning yourself with 1 or 2 days is ridiculous. Furthermore, if you want to ONLY invest in Vanguard's funds, that's your prerogative;; doesn't mean everyone has to. And (as Att stated) there are NO guarantees from Vanguard that they'll provide support to their fund during any "crisis";; so I don't see how that makes their MM any more secure.
I do prefer an FDIC insured account and Northern has a guaranteed 2.5% till the end of the year. Northern is an A rated bank. Prime's rate will fluctuate.
Some clips from Prime's prospectus:
The fund seeks to maintain your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors.
The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
At the moment, I have moved a chunk of my money over to a US Treasury MM mutual fund paying 2.33%. It is state tax free, so the net amount is better than putting the money in a Prime MM mutual fund.
There's no match for Fidelity in index investing – not even Vanguard.
https://www.fidelity.com/mutual-funds/investing-ideas/index-funds
But, Vanguard money market is higher than Fidelitys.
2.38% versus 2.15%. Which is why Northern comes in handy.