In the last three months, I’ve been reviewing the latest competitive money market and CD deals from the deposit platform, SaveBetter (SaveBetter.com). This week, one of SaveBetter’s partner banks, Ponce Bank, increased the rate of its Money Market Deposit Account (MMDA) by 100 bps to 1.75% APY. This is now the highest liquid account rate at SaveBetter, and it’s one of the highest rates for online savings and money market accounts in the nation.
A new partner bank has just been added to SaveBetter, and it’s a bank well known to DA readers. It’s Sallie Mae Bank, and it’s offering two very competitive no-penalty CDs on SaveBetter: a 14-month No Penalty CD (2.20% APY) and 10-month No Penalty CD (1.85% APY). Sallie Mae Bank has a long history of offering a savings account, money market account and standard CDs directly to consumers from its website. However, it has never offered no-penalty CDs. Sallie Mae Bank must have felt SaveBetter would be a good way to offer no-penalty CDs.
|4.05%||$1||-||Sallie Mae Bank||14 Month No-Penalty CD via SaveBetter|
|4.00%||$1||-||Sallie Mae Bank||10 Month No-Penalty CD via SaveBetter|
When I first reviewed SaveBetter in 2021, it lacked any compelling deposit products, but that has changed. SaveBetter platform is managed by Deposit Solutions LLC, a New York based company that is part of the large German financial technology company, Raisin GmbH. The SaveBetter platform allows savers to open deposit products at several partner banks under just one account. When I first reviewed SaveBetter in early 2021, there were only three partner banks. Now there are nine partner banks and one partner credit union. In addition, a few of the partners are now offering competitive rates.
You can read the details about the SaveBetter platform and the company in this updated version of my original SaveBetter review. In my opinion, SaveBetter’s main issue now is that you don’t actually hold individual deposit accounts at a partner bank. Instead, you hold a piece of a large deposit account, what’s called an “omnibus custodial deposit account.” You still have FDIC deposit coverage, but you don’t have an account number and routing number that you can use to access the account from outside the SaveBetter platform. Thus, if you have an Ally Bank account, you won’t be able to log into Ally and link your SaveBetter account. To deposit and withdraw money into and out of your SaveBetter accounts, you have to completely depend on the SaveBetter platform and its ACH transfer service.
Ponce Bank Money Market Deposit Account (MMDA) Features
Ponce Bank is one of the first three banks that partnered with SaveBetter. I first wrote about SaveBetter and Ponce Bank in February 2021. At that time, Ponce Bank was offering a High Yield Savings Account (HYSA) at SaveBetter. That made me wonder if those existing customers have been moved into this new high-yield MMDA or are they still in this HYSA, and if they are, what rate are they earning. SaveBetter does not mention the Ponce Bank HYSA, so I called SaveBetter customer service. After a few minutes on hold, I was connected to a knowledgeable CSR who informed me that those Ponce Bank HYSA customers were not moved over and they are likely earning a much lower rate (he did not have the current Ponce Bank HYSA rate available). Those Ponce Bank HYSA customers who would like to get the Ponce Bank MMDA yield will have to transfer their funds back to their linked account and apply for the MMDA.
The Ponce Bank MMDA has the same features as all the other available liquid account products from SaveBetter. Each liquid account, either High Yield Savings Account (HYSA) or MMDA, has its own Product Terms page with account details. Except for the rate and offering bank, there are essentially no differences in the product terms between the MMDAs and HYSAs that are currently listed at SaveBetter. Sometimes money market accounts have check writing capabilities, but that is not the case with the SaveBetter MMDAs. Check writing is not allowed for both SaveBetter MMDAs and HYSAs.
Currently, all the SaveBetter MMDAs and HYSAs have a minimum opening deposit of only $1, and the listed APYs apply to all balances. There are no monthly service fees. There’s also no fee for excessive withdrawals. According to the Products Terms documents, the accounts would normally be limited to six withdrawals during a monthly statement cycle. However, enforcement of this limit is suspended until further notice (The Federal Reserve allowed banks and credit unions to do this starting in 2020).
As I described above, ACH transfers to and from your other bank accounts can only be done inside the SaveBetter platform. Based on my CSR conversations, SaveBetter’s ACH service has no dollar limits on transfers. Only one link can be established. They don’t allow multiple links to multiple banks. Once the link is established, that same link can be used to transfer money into and out of any of the SaveBetter HYSAs, MMDAs and CDs that you have opened. According to the CSR, transferring funds out to the external bank typically takes three business days.
Sallie Mae Bank No Penalty CD Features
Other partner banks had offered no-penalty CDs at SaveBetter last year, but for the last several months there have been no no-penalty CDs. The Sallie Mae Bank No Penalty CDs at SaveBetter function like the standard no-penalty CD that Ally Bank started more than a decade ago. Withdrawals can only be made after 7 days from opening. There’s no loss of interest. According to the product terms, if “funds are withdrawn before the maturity date, then interest is credited through the date of withdrawal.” Only one-time full withdrawals of the CD can be done. Partial withdrawals of the CD are not allowed.
Just like any of SaveBetter CDs, the Sallie Mae No Penalty CD is funded by using the external link that connects to an existing checking or savings account at another bank or credit union. If you’re already a SaveBetter customer, you can use the same link that you already had established. When you want to close your No Penalty CD, you have to call SaveBetter customer service and request a closure. According to the CSR, funds will be transferred out via that link within three business days.
As with any of these no-penalty CDs, a longer term is always advantageous. I can’t think of a good reason to choose a shorter-term CD if that shorter-term CD has the same or lower rate. In this case, there’s no reason to choose the 10-month No Penalty CD over the 14-month No Penalty CD. If you want to access the CD in 10 months, just do an early closure of the 14-month No Penalty CD after 10 months. That’s the beauty of a no-penalty CD. You can make it have any maturity date you want (as long as it is after the first 7 days and it’s no later than the maturity date.)
More SaveBetter Account Details
For more account account details, please refer to my updated review of SaveBetter.
To be eligible to open an account through SaveBetter, you must be a U.S. citizen or U.S. resident alien with a U.S. social security number, who resides in the U.S. Also, you must have an existing deposit account that you maintain at a bank or credit union in the U.S. That deposit account will be used to fund your SaveBetter account and to receive the funds from a SaveBetter account. In the online application, you’ll need to provide the routing and account number of the funding deposit account.
The SaveBetter online application for the Ponce Bank MMDA and the Sallie Mae Bank No Penalty CDs are available at savebetter.com.
SaveBetter, Ponce Bank and Sallie Mae Bank Overview
The first SaveBetter FAQ has the best overview of SaveBetter. The following is an excerpt:
SaveBetter is not a bank. It’s a New York-based financial technology company (“Fintech” for short) that provides the digital “storefront” where banks can promote their deposit products.
SaveBetter.com is operated by SaveBetter LLC, a 100% subsidiary of Deposit Solutions LLC (Deposit Solutions). Headquartered in New York, Deposit Solutions provides a proprietary open architecture platform for deposits products. Deposit Solutions helps banks improve their deposit funding by offering national reach for their retail deposit products, and provides savers with better access, more choice and higher convenience when evaluating savings products from FDIC insured banks.
Deposit Solutions LLC is a 100% subsidiary of Raisin GmbH, a trailblazer for open banking in the deposits and investments space.
When I reviewed SaveBetter last year, they were part of Deposit Solutions. A few months after my review, Deposit Solutions and Raisin announced a merger. According to this June 2021 Reuters article:
Under the name Raisin DS, the merged company will work with around 400 banks and have a deposit volume of around 20 billion euros ($24 billion).
The deposits are held at the partner banks, and thus, the financial health of a partner banks should be considered when deciding to open an account via SaveBetter.
Ponce Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 6.14% (excellent) based on March 31, 2022 data. In the past year, Ponce Bank has increased its total non-brokered deposits by $35.75 million, an excellent annual growth rate of 3.38%. Please refer to our financial overview of Ponce Bank (FDIC Certificate # 31189) for more details.
Ponce Bank is one of the first three banks that partnered with SaveBetter in late 2020. Ponce Bank is part of Ponce Financial Group, a bank holding company that recently became a fully stock-traded company. Its 2022 Q1 earnings report was its first quarterly report as a fully publicly traded company. In its earnings report, Ponce disclosed a $8.1 million write-off due to fraudulent microloans that were originated by the fintech, Grain. This was reported in this May 2022 American Banker article. According to the article, Ponce had a solid quarter despite the problems with Grain:
Analysts who cover Ponce said issues with Grain overshadowed an otherwise solid quarter, marked by loan growth, an expanding net interest margin and excellent core credit quality. First-quarter revenue of $19.6 million increased 17% year over year, despite a steep decline in mortgage banking revenue.
The article also noted that “real estate loans made up 90% of Ponce’s $1.3 billion loan portfolio.” The press release of the earnings report included some information on Ponce Bank’s deposits. According to the press release, “Deposits were $1.18 billion at March 31, 2022, a decrease of $23.6 million, or 2.0%, from December 31, 2021.” The fall in deposits may be a reason why Ponce Bank is being aggressive on rates.
Sallie Mae Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 3.66% (excellent) based on March 31, 2022 data. In the past year, Sallie Mae Bank’s non-brokered deposits have fallen $23.63 million, resulting in an annual growth rate of -0.2%. This weakly negative deposit growth was a factor that contributed to an “A” grade rather than an “A+”. Please refer to our financial overview of Sallie Mae Bank (FDIC Certificate # 58177) for more details.
I consider Sallie Mae Bank as one of the major online banks. I first began writing about its online savings account and CDs in 2010. In 2015 I began writing about its money market account, which has a history of being more rate competitive than its savings account. It also has a history of offering competitive online CD rates.
Sallie Mae is probably best known for its student loan business. The Student Loan Marketing Association (better known as "SallieMae") opened its doors as a Government-Sponsored Enterprise (GSE), designed to support the guaranteed student loan program created by the Higher Education Act of 1965. Chartered in 2005, the internet-only Sallie Mae Bank has expanded its product line beyond student loans to include CDs, Savings Accounts, Money Market Accounts, Insurance, and Credit Cards. Sallie Mae Bank is currently the 71st largest bank in the country, with assets in excess of $28 billion.
How the Ponce Bank Money Market Deposit Account Compares
When compared to nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, that do not require large balances or direct deposit and do not have small balance caps, Ponce Bank’s MMDArate currently ranks second.
The above information and rates are accurate as of 7/8/2022.
How the Sallie Mae Bank 14-Month No Penalty CD Compares
No-penalty CDs are somewhat rare and the longer the term, the more competitive the CD. Thus, I’ll only compare the 14-month CD. When compared to the nationally available no-penalty CDs tracked by DepositAccounts.com, Sallie Mae Bank’s 14-month No Penalty CD APY currently ranks first.
The above information and rates are accurate as of 7/8/2022.
To look for the best rates on no-penalty CDs, please refer to our No-Penalty CD Section of the biweekly liquid bank account summary.