5.40% Savings Account, Only $100 Minimum, Available to All

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Update 2/27/09: The bank has been closed. Refer to this post for more details.

Security Savings Bank is offering a 5.40% APY savings account. It's called the SecurityAdvantage Statement Savings Account. Here's the basic info from the bank's website.
  • $100 minimum deposit to open
  • $100 minimum balance to avoid $10 fee per statement cycle
  • Interest compounded daily, credited quarterly
  • No closing fee after 90 days. Before 90 days, the closing fee is $20.
  • Typical 6 withdrawals per month allowed without a fee
  • Application available online. Must be mailed with check and copy of drivers license

It looked too good to be true, so I called the bank for more info. Here are some additional details that I received:
  • 5.40% APY is not a promo rate. Previous APY was 5.00%. In December, it was 3.55% APY.
  • Available from any state
  • Online banking is NOT available
  • Allows ACH withdrawals and deposits initiated by another bank
  • Without external ACH, withdrawals can be done my mail or by opening a money market account and initiating transfers by phone, then using MMA check
  • No hard credit pull, just Chex System check
  • $500K maximum allowed balance

The best way to use this bank seems to be in conjunction with an account at an online bank like GMAC or HSBC. Then you should be able to link your Security Savings Bank account and initiate ACH transfers from the online bank. For those who don't have an online bank that allows linking to savings accounts, Security Savings Bank's money market account is an option to allow convenient withdrawals. The money market account has a $1000 balance minimum to avoid fees and has check writing privileges with the first box of checks free. The rate is only 4.50% APY for balances over $1K, but you could keep most of your money in the savings account. Transfers from the savings to the money market can be initiated by phone.

The bank also has some very competitive certificate of deposit rates which range from 5.35% APY 3-month, 5.50% APY 6-month and 5.65% APY for 1-year and longer. The minimum deposit for all is $1K.

Security Savings Bank is a small, one-office bank located in Las Vegas, Nevada. Since this can be a little worrisome (what happens in Vegas, stays in Vegas), I've done a little research at FDIC and Bankrate.com.

Security Savings Bank is FDIC insured. Bankrate.com gives it a financial strength rating of 3 out of 5 stars (performing). Bauer Financial gives it 4 out of 5 stars (excellent).
Comments
Banking Guy
Banking Guy (anonymous)   |     |   Comment #1
A FW member visited this bank in Las Vegas and wasn't impressed, to say the least. Here's the link to his observations.
Anonymous
Anonymous   |     |   Comment #2
I just got back from a trip to Vegas and accidently (wasn't looking) found this bank. Yes, it is in a strip mall near an Albertson's, but I would not describe it as the FW member did. It does not look like a "normal" bank due to the fact they are a wholesale bank and not a retail bank. They apparently buy morgages and therefore can offer higher rates than most banks. I (stopped in, they gave me info on opening and account. I took it back to my hotel, read it over and went back the next day and opened an account). Very easy, particularly since I was there in person with my ID, etc. And you can open an account for as little as $100.00. I plan to link it to my GMAC account. There are no teller windows like you would see in a retail bank and that could be what concerned the FW poster, but if you know that up front, there is nothing to be concerned about. The whole process was very easy and I have no reservations about the bank (FDIC insured) and a place to park liquid money that can be accessed fairly easily. Hope that helps.
Banking Guy
Banking Guy (anonymous)   |     |   Comment #3
Thanks for the detailed review! It does seem like it could be a useful account to have along with GMAC to get an extra 0.40% APY. I hope they are able to keep the rate high. With added publicity of Bankrate.com, it may be difficult for them to continue to offer this high rate.