On Friday SFGI Direct increased the rate on its Savings Account by 20 bps to 2.27% APY. While the 2.27% APY applies to all balances of $1+, the account must be opened with a minimum deposit of $500.
SFGI Direct’s last rate increase was on November 5th. In the last year, SFGI Direct’s rate hikes have been gradual with increases between 5 and 20 bps. The rate hikes began in June 2017 when the rate increased from 1.06% to 1.16% APY. Since that time, there have been an additional nine rate hikes that have added a total of 111 bps to the rate.
Thanks to DA reader, Carpline, for his Forum post about this latest rate increase.
Almost 10 Years of Competitive Rates
With several internet banks raising their savings account rates to 2.30%+, it’s difficult to get excited about 2.27% APY. However, I always like to highlight SFGI Direct’s long track record of maintaining one competitive savings account.
Later this year will be SFGI Direct’s ten year anniversary since it launched in 2009. There are several reasons to be impressed by SFGI Direct’s long life.
First, it’s rare for a small bank to maintain an internet bank this long. Over the years we’ve seen several banks with internet divisions that were acquired by larger banks which had no internet bank aspirations. Remember Wilmington Trust and its internet division WTDirect?
Second, it’s rare for a small bank to maintain just one internet savings account for this long. We’ve seen several banks over the years play games like create new accounts or new internet divisions to offer higher rates.
Third, it’s rare for a small bank to maintain competitive rates for this long. Several internet banks have given up on staying competitive. Remember CNB Bank Direct? They’re almost as old as SFGI Direct, but their savings account rate has remained at 0.26% since 2014.
Here are examples of SFGI Direct Savings Account long history of maintaining a competitive rate. Between June 2015 and June 2017, the Savings Account’s APY remained static at 1.06%. During that time, this was one of the top online savings accounts that wasn’t a promotional rate and that didn’t have any large deposit requirements. In its history since 2009, the lowest rate ever seen on this account was 0.86% during part of 2013. This was still in the upper half for the top savings accounts, and it exceeded the savings account rates at Ally, Discover and Capital One 360.
SFGI Direct Savings Account Overview
The SFGI Direct Savings Account has some nice features, such as no monthly fees and no maximum dollar limit on external transfers. The transactional requirements and limitations haven’t changed much since I began writing about the Savings Account. SFGI Direct still only allows one linked external account for bank-to-bank ACH transfers. You are allowed to initiate ACH transfers from your other bank which helps offset the one-link limitation.
The following feature list is from my September 2018 blog post. I called SFGI Direct late Friday and spoke to a very knowledgeable CSR who confirmed the unpublished details are still in effect today.
- No monthly fees or minimum balance requirements (opening deposit ranges from a minimum of $500 to a maximum of $25k).
- Online account application and funding (per FAQ).
- No hard credit inquiry in the application. It’s a soft pull (per CSR).
- Fast external ACH transfers (readers have reported one day delays).
- Initiating ACH transfers through another institution is allowed (per CSR).
- No maximum dollar limit on external transfers (per FAQ).
- Only one external link for ACH transfers allowed (per FAQ). The linked account can be changed 90 days after account opening.
- Five business days hold for the initial ACH deposit and a two-day hold for ongoing ACH deposits (per account disclosure).
- Online application now allows up to four named beneficiaries. In addition to the usual name/address/birthdate information, SFGI Direct requires a Social Security number for each beneficiary (per CSR).
- Beneficiary changes are not allowed. To make changes requires closing the account and opening a new one (per CSR).
- No trust or business accounts (per CSR).
- Multiple savings accounts can be opened, each with a different external link. You have to call a CSR to have the multiple accounts accessible under one user ID (per CSR).
SFGI Direct is the online division of Summit Community Bank, which is headquartered in Moorefield, West Virginia. U.S. citizens and resident aliens, 18 years or older, can open a SFGI Direct Savings Account through the Bank’s online application.
SFGI Direct has quite a detailed FAQs page that answers almost any question you might have about the Savings Account. If you need additional information, CSR can be contacted at 877.776.9722. To view the account disclosure, start the online application. The disclosure can be viewed before you have to enter your personal details.
As the online division of Summit Community Bank, SFGI Direct operates under Summit’s FDIC Certificate and shares its financial history.
SFGI Direct/Summit Community Bank has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 16.50% (above average), based on September 30, 2018 data. In the past year, the Bank has increased non-brokered deposits by $30.85 million, an above-average annual growth rate of 2.21%. Summit Community Bank’s parent, Summit Financial Group, provided some interesting details on 2018 deposit changes in its Q3 earnings:
At September 30, 2018, deposits were $1.65 billion, an increase of $50.5 million, or 3.2 percent, since year end 2017. During first nine months of 2018, checking deposits increased $110.0 million or 17.5 percent, time deposits declined by $2.6 million or 0.4 percent and savings deposits declined $56.9 million or 15.9 percent.
Note, savings deposits declined $56.9 million for the first nine months of 2018. That might explain the continued competitive rates of the online savings account. That had me wondering about how much does SFGI Direct contribute to Summit Community’s deposits. The FDIC breaks down deposits by branches and it includes cyber branches with brick-and-mortar branches. As of June 30, 2018, the cyber branch held a total of $469 million in deposits. This was 28.53% of Summit Community’s total deposits. It’s surprising to me that after almost 10 years of offering a competitive nationally-available savings account, the bank’s internet division is responsible for less than a third of the bank’s deposits.
Please refer to our financial overview of SFGI Direct/Summit Community Bank (FDIC Certificate # 34102) for more details.
Summit Community Bank (Summit) is currently West Virginia’s third largest bank, with assets in excess of $2.1 billion and more than 79,000 customer accounts. Summit’s history traces back to the South Branch Valley National Bank, which was chartered in 1883. Summit extended its market area into Virginia in 2000 and today has 30 full-service branches in West Virginia (18) and Virginia (12).
Summit is growing in size, but it’s not due to SFGI Direct. It’s due to an acquisition of a brick-and-mortar bank. Summit recently reported the completion of its acquisition of First Peoples Bank which was headquartered in Mullens, West Virginia. First Peoples Bank had three branches, assets of $134 million, and deposits of $115 million.
How the Savings Account Compares
When compared to 213 Savings Accounts and 184 Money Market Accounts tracked by DepositAccounts.com that are available nationally with similar minimum balance requirements (minimum balance of under $5k), six savings accounts and four money market accounts have higher rates than SFGI Direct Savings Account's rate.
|Interest Rate||Account Name||Credit Union/Bank|
|2.45% APY||Savings Builder w/mo deposits (no min/no max)||CIT Bank|
|2.40% APY||MySavings Account (no min/no max)||MySavingsDirect|
|2.40% APY||Online Money Market ($50 min to open/$1m max)||MemoryBank|
|2.27% APY||SFGI Direct Savings Account ($500 min to open/no max)||SFGI Direct|
The above rates are accurate as of 1/20/2019.