Northern Bank Direct's Money Market (2.50% APY) Available Again

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Deal Summary: Money Market Account, 2.50% APY on all balances up to $250k, rate guaranteed through December 31, 2019.

Availability: Nationwide (internet bank)

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.

APYMINMAXINSTITUTIONPRODUCTDETAILS
2.50*%-$250kNorthern Bank DirectMoney Market Account
OTHER TIERS: 0.25% $1m+ | 1.25% $250k - $1m
Rates as of June 15, 2019.

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 RateAccount NameCredit Union/Bank
2.50% APYMoney Market Account ($5k min to open/$250k max)Northern Bank Direct
2.46% APYMonth Market Account ($10k min to open and to avoid fee/no max)earn.bank
2.45% APYOnline 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.

Related Pages: money market accounts, nationwide deals, Internet banks

Comments
Test3
Test3   |     |   Comment #1
Rate lock is great. Low transfer amounts are not. Does the electronic 5K/25K limit apply to wires? Is the dollar amount on a check unlimited?
Test3
Test3   |     |   Comment #2
Quick email back: "Those limits only apply to external transfers made through our online website. Wires and check writing do not have limits."
Andy
Andy   |     |   Comment #13
Checks are unlimited
#3 - This comment has been removed for violating our comment policy.
redfarm
redfarm   |     |   Comment #4
When a a bank like Northern Bank Direct has a $3 fee for routine outgoing ACH transfers it's out of the race for my savings. You can get a 2.5% APY from Customers Bank, Western State, or Investors along with respectful business practices that don't nickel and dime customers.
willy12
willy12   |     |   Comment #5
I thought I read many months ago that they did away with the ACH fee but maybe not since Ken is still reporting it. It has not been hard to navigate however as I can pull from Ally, AA and Fidelity or write a check.
Dan
Dan   |     |   Comment #8
This account has a rate guarantee through the end of 2019. None of the others have that. If the $3 fee still exists, it's easy to circumvent, just pull your money out using another account.
Test3
Test3   |     |   Comment #9
Dan is correct. They also offer checks, which many savings accounts do not.
RichReg
RichReg   |     |   Comment #11
If you think those 'other' instututions aren't saving money by:

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.
HARK!
HARK!   |     |   Comment #6
Meh....I have it but yawn......redneck is at 2.40. Who cares?
777
777   |     |   Comment #7
What a waste of time....just go with Vanguard prime money mkt.
deplorable 1
deplorable 1   |     |   Comment #10
Why would you go for a lower rate that isn't even FDIC insured? If I'm going to invest the yield is going to be much higher than 2.5%. This is good for liquid cash.
777
777   |     |   Comment #12
Vanguard prime money mkt is earning 2.41%apy... sitting in an acct where funds can be moved into a s/p 500 fund immediately to catch any to catch any sudden market moves to the downside.At Northern Bank you only get one additional benefit FDIC. However we just went thru the worst financial crisis since the Great Depression and Vanguard Funds.was not affected in any negative way. Which institution do I trust more with my assets ... Vanguard or Northern? I will go with John Bogle, father of the low cost mutual fund who created Vanguard and their 4.2 trillion dollars of investors money they manage.
RichReg
RichReg   |     |   Comment #14
We "just" went through that crisis? Like over 10 years ago?

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.
777
777   |     |   Comment #15
comment14.. "Just" yes, in fact many people are now turned off from all financial instruments because of the "recent" financial crisis. 10 years is like yesterday to many who lost money in that crisis, and many did. Also, you are incorrect about settlement unless you are using a brokerage account.In a "reg" account assets need to be in the Prime MM in order to exchange/purchase mutual fund shares. As far as timing the market, experienced investors are always timing the market. Example...we are currently at stock market highs.Is this a good time to be putting new money to work?If your answer is no you are timing the market. Would it be a better time to wait for a 5/10/15 percent correction to put new money to work? Of course, a smart experienced investor would surely seek this path. Invest with Northern, your options are severely limited with no additional upside potential. Of course if you are a passive investor with no desire to be involved in the stock market whatsoever, Northern is an option.
RichReg
RichReg   |     |   Comment #17
@ 777, #15; "No additional upside potential". That's a bit much. Sounds a lot like trying to time the market.

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.
Att
Att   |     |   Comment #16
#12 I agree with you that Vanguard is a solid company and Prime should be a safe investment that Vanguard MAY back if it has problems. The fund holds several investments and no can say what can happen to those investments( Remember Lehman Brothers).

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.
DCGuy
DCGuy   |     |   Comment #21
MM mutual funds have no guarantee that you could not suffer a loss from investing in them. Any company stating otherwise would be lying to you. During the 2009 financial crisis, the MM mutual fund regulations were changed to reduce the possibility of a massive withdrawal upheaval by allowing them to add redemption fees and a halt to the trading of the fund if required to prevent the fund from having to cover massive losses and requests for withdrawals. These restrictions did not apply to US Treasury MM mutual funds since their underlying assets are backed by the Federal Government. But even with these type of MM mutual funds, a loss is still possible (though much smaller).

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.
Hector
Hector   |     |   Comment #18
Need your 2 and 3yr cd rates.
Numb d
Numb d   |     |   Comment #19
What is the investment amount?
Doris
Doris   |     |   Comment #20
I love Vanguard funds...and with assets under management over 5 trillion compared to Northern Bank's 2 billion I think many others share my feeling.
Att
Att   |     |   Comment #22
#20 It's not the companies that matter it's the products and the prime money market account and the Northern savings account are not the same. The Northern savings account is insured by the FDIC. Vanguard Prime account has no insurance and if you read what I posted does not guarantee the account. I have my brokerage with Vanguard as well as mutual funds.
Doris
Doris   |     |   Comment #23
#22 my comment was "I love Vanguard funds" which clearly means i love the mutual funds offered by The Vanguard Group. the funds are "the products" i like as Vanguard is the low cost leader in the mutual fund industry.
willy12
willy12   |     |   Comment #24
Except when they are not...
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.
51hh
51hh   |     |   Comment #25
Like many others here, I regard Vanguard (or Fidelity) Mutual Funds a totally different investment vehicle from HYS or MM due to obvious reasons. It is like apples-to-oranges comparisons to me, and just me.
Doris
Doris   |     |   Comment #26
I have Accra at Fidelity and Vanguard and yes Fidelity is the better choice especially if you are a stock trader. However the Vanguard PMM account has consistently beat Fidelity mm account over the years by a large amount . Vsnguard is too conservative for my liking and back office can be slow to process some requests. If I had to choose I would go with Fidelity.
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Availability: Nationwide (internet bank)

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Availability: Nationwide (internet bank)

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