Popular Direct Unveils Ultimate Savings Account, 2.55% APY
As DA reader, IvoryMale, noted in a Forum post yesterday, Popular Direct has unveiled yet another savings account, the Ultimate Savings Account, which currently earns 2.55% APY. The minimum opening deposit is $5k, although the minimum balance to earn the stated APY is only $0.01.
Popular Direct has a history of creating a new savings account with a higher rate to attract new customers and/or new money, leaving the owners of the phased-out accounts stuck with a lower rate. The Ultimate Savings Account is the fifth savings account Popular Direct has introduced in the last three years. In May 2018, Popular Direct discontinued its Exclusive Savings Account, only five months after being introduced. Its replacement was the Plus Savings Account, the very account the Exclusive Savings Account displaced in January 2018. (I know – it’s hard to keep the players straight.) The Plus Savings Account (2.36% APY) was available until the Ultimate Savings Account made its debut this week.
Opening an Ultimate Savings Account
Getting the “true” facts about opening a new account is always challenging. I spoke to several different CSRs over the past two days and received some conflicting information, but every CSR stated that new money is NOT required to open an Ultimate Savings Account (USA) and funds from an existing Plus Savings Account (PSA) can be used. I was told that the way to transfer PSA funds is to “fast track” those funds. The USA online application asks if you have funds in an existing Popular Direct account. If you reply “yes”, the next step is to provide the PSA account number and the dollar amount in the account as of the last statement. You may “fast track” the PSA funds into the new USA, but a minimum of $500 must be left in the PSA. After the USA is established, you can then close the PSA and transfer the remaining $500 to the USA.
Ultimate Savings Account Facts
The Ultimate Savings Account Disclosure provides important information about fees and policies. FYI – even though the name of the savings account has changed, the information stated in the Account Disclosure has not changed since I cited it in a February 2018 blog post.
- Minimum opening deposit is $5k
- $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.
- Deposits only allowed via an external account, internal transfers to another Popular Direct account, ACH, or Popular Direct mobile app.
There’s one fact that seems to contradict the information I received about opening a new Ultimate Savings Account. The “Transaction Limitations on the Account” section states,
As part of the account opening process, you must make a deposit into your Popular Direct account from an External Account.
Taken at face value, it would seem to imply that only new money can be used. CSR explained it this way: the establishment of a validated external account is the intent of that statement, not the origin of funds being used. If you already have an account with Popular Direct, you have a validated external account in place. If you are new to Popular Direct, a required part of the application process is establishing a link to an external account.
Last year, Popular Direct announced a new policy that prevented new customers from accessing money in their accounts for 60 days, effectively freezing accounts for two months. There has been a slight improvement made in this unpopular policy. If you hover your mouse on the “Apply Now” button, a pop-up window displays the following:
Effective January 2, 2019, Automated Clearing House (ACH) debits that originate from external financial institutions, other than from the deposit account that you have successfully validated through the “External Transfers” function in Popular Direct Online Banking (the “External Account”), will not be permitted during the first 70 calendar days after opening your Popular Direct Ultimate Savings Account. During such 70-day period you will only be permitted to complete online transfers from the External Account or from your other Popular Bank accounts.
While the account freeze has been lifted, you can only withdraw funds using ACH to the validated external account. As DA reader, SYC, noted in a Forum post today, “the External Account” means one account.
Beware: Only one external bank account is allowed to be linked to your Popular Savings account.
Many thanks to IvoryMale and SYC for their helpful Forum posts.
Availability
An online division of the New York-based Banco Popular North American (BPNA), Popular Direct’s website states,
All Popular Direct deposit products are offered by, and will be opened through, Banco Popular North America (BPNA). BPNA is a Member FDIC institution and a New York state chartered bank.
Opening any type of account with Popular Direct, including the Ultimate Savings Account, must be done online.
Bank Overview
Popular Direct/BPNA has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 5.74% (excellent) based on March 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $584.9 million, an excellent annual growth rate of 9.42%. Please refer to our financial overview of Popular Direct/BPNA (FDIC Certificate # 34967) for more details.
BPNA is currently the 11th largest bank headquartered in New York, with assets in excess of $9.5 billion and more than 208,000 customer accounts.
In June 2017, The New York Times published an article about Santander’s takeover of the failed Spanish bank, Banco Popular. The similarity in names caused some concern for a few DA readers about BPNA. To quote myself from a Forum post,
Popular Direct is a division of Banco Popular North America, which is a subsidiary of the Puerto Rico-based bank holding company, Popular, Inc. I can find no connections between Popular, Inc. and the Spanish Banco Popular.
How the Ultimate Savings Account Compares
When compared to 218 Personal Savings accounts tracked by DepositAccounts.com that are available nationwide, Popular Direct’s Utlimate Savings APY currently ranks second.
The above rates are accurate as of 7/31/2019.
To look for the best Savings account rates, both nationwide and state specific, please refer to our Savings Account Rates Table page.
Popular Direct Ultimate Savings
Account number: ##########
Interest Rate: 2.519%
APY: 2.55%
Deposit amount: $...
Funding
We will immediately transfer money from your existing account *### to make a deposit into your new account.
You can finish up and login to check that the account is there and set document delivery to Online. The default is Paper. Under "Account Activity" it shows that the amount funded is the balance and all of it as available. You will also get an email confirmation. Real simple.
For example, Marcus isn't a golden child by any stretch but they currently have a 2.35% APY No Penalty CD w/ minimum $500 deposit (1/10 of the opening here and the same as the amount to avoid the monthly fee).
$10,000 will generate $20+/year or ~$1.66/month at Popular over Marcus* so I ask myself if I would "pay" $2/month to avoid this crap. YMMV as the principal greatly determines what threshold you should be comparing it to as if you're bucking up against the FDIC limit, $250,000 (25x more) will generate $500+/year or ~$41.66/month. At some point you need to place a value on your time, your understanding of the rules, and any extra work you need to do to make these restricted accounts work out for you. This is why the bite of rate drops or a previously leading great bank like Ally dropping to the middle of pack sucks so much for savers. You end up losing money, and time, … and sanity.
*The numbers are very close but not exact. Yearly interest can be calculated very easily assuming no additional deposits via `amount * APY`. Divide that by 12 to get a reasonable approximation of monthly interest.
You're not wrong that it almost is easy money considering it doesn't take long to fill out an application but all the hidden additional costs need to be illuminated as there are plenty of opportunities for the bank to reduce your earnings. You need to work or plan around all of them in order to achieve that additional money which takes non-zero time and effort.
We can make up contrived examples all day like the rate plummeting the day after you open the account and how many days of lost interest you'd have if you must transfer it back to the originating bank (due to their unnecessarily limited ACH system) and then wait again for it to clear before being able to put it in a more optimal location. There's the additional $25 closing fee if you want to do this within 6 months of opening or you must leave $500 in there to avoid a monthly service fee. I'm also sure there isn't a single useful reminder of that in their online banking software or anything that mentions the completely bull**** dormancy fee.
My point is that I've started to evaluate banks on more than just basis points. It depends greatly on how much money you have available to move and how much work/planning you're willing to do, but I've gotten to the point where it's not worth it for me to deal with a bank that
I've played that stupid game with the criminals at UFB / BofI and won stupid prizes.
It makes it look like they rely on uninformed investors, the opposite of what this website represents.
If I want to play games I'll load up Steam.
In fact my comment was about Popular Direct.
After all, we play games with them too. That's all part of a fair relationship to maximize your profit on both sides.
What I find unacceptable though is to obfuscate the rules of the game so that you can't even know what they are. Or worse, give misleading information about the rules.
FIs that consistently do this, should be avoided. I'm sure there's enough uninformed investors out there to keep them in business though since this isn't the only FI that does these same kinds of things. I could name several others but I won't.
I had an ACH transfer REJECTED because of it. The other bank mistakenly listed it as per OFAC which scared me. I thought the government froze my funds.
JUN 1 2018 ACH RET ACCOUNT FROZEN/RTN PER OFAC
For the record, NOBODY tried to warn me.
Sound like the rate can be cut quickly with no notice. I’ll post any changes I spot and encourage others to do the same."
so no time guarantee on the 2.55apy for new accounts? I am trying to verify this on their... if anyone know where to see this, pls post
From https://www.mymoneyblog.com/best-interest-rates-cash-august-2019.html