ValleyDirect Boosts Online Savings Account Rate
ValleyDirect, an online division of Valley (formerly Valley National Bank), has increase the rate of its Online Savings Account from 0.55% APY to 0.70% APY on all balances.
Although ValleyDirect has been operating for about two years, the only account in the product line is the Online Savings Account, which made its debut offering 1.70% APY on all balances. That rate lasted for a month before it dropped to 1.00% APY in April 2020. Four months later, the rate fell to 0.55% APY where it remained until this week’s rate increase.
An Online Savings Account can be opened with a minimum deposit of $1. Initial funding can be done by ACH, but after an Online Savings Account is opened and funded, the linked account can no longer be used.
According to ValleyDirect’s FAQs section,
There are 4 ways you can add money to your account:
- #1 Deposit funds during the initial account opening. You will need a valid U.S. bank online account username and password.
- #2 Initiate a money transfer or wire transfer from another financial institution, or transfer from a Valley Bank account.
- #3 Deposit checks via the Valley Mobile Banking App.
- #4 Set up a direct deposit of your payroll, pension or government benefit such as Social Security.
The FAQs also state,
How do I make a withdrawal from my account?
You can withdraw your money by requesting a check either by sending a secure message via online banking on ValleyDirect.com, or by calling 866-899-9900. For calls made from outside of the U.S. and Canada, please call 973-305-8800. We're available Monday through Friday from 8 AM - 6 PM ET. Checks are payable to the account owner only.
I found it hard to believe that requesting a check is the only withdrawal method for an online savings account. Oddly enough, CSR confirmed that requesting check was indeed the only to make a withdrawal initiated through ValleyDirect. He suggested that I use the ACH service of another bank to initiate ACH deposits or withdrawals. ValleyDirect has no ACH transfer limits (either incoming or outgoing) simply because ValleyDirect does not initiate ACH transfers.
When asked about beneficiaries, CSR stated that “currently, beneficiaries cannot be named.”
Availability
Headquartered in Wayne, New Jersey, ValleyDirect is an online division of Valley, the largest bank headquartered in New Jersey. ValleyDirect was launched in February 2020 in response to the “rising trend of customers who want digital and mobile-focused banking solutions.”
ValleyDirect’s online application is available to U.S. citizens/resident aliens, 18 years or older, who have a valid Social Security number and a physical U.S. address in any state except California.
While opening an Online Savings account can only be opened online, additional deposits and withdrawals in/out of an Online Savings account can also be done at any Valley brick-and-mortar locations. Valley currently has 219 full-service branch locations in Alabama (1), Florida (43), New Jersey (130), and New York (45).
Bank Overview
ValleyDirect is an online banking division of Valley (formerly known as Valley National Bank). Deposits at ValleyDirect and Valley are combined for the purpose of calculating FDIC insurance limits and are not separately insured.
ValleyDirect/Valley has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 4.01% (excellent) based on December 31, 2021 data. In the past year, the Bank increased its total non-brokered deposits by $5.38 billion, an excellent annual growth rate of 18.6%. Please refer to our financial overview of ValleyDirect/Valley (FDIC Certificate # 9396) for more details.
Valley National Bank’s history has been one of steady growth and expansion. Founded in 1929 as the Passaic Park Trust Company, the Bank changed its name in the mid-1930s to the Bank of Passaic and Trust Company. In 1956, the purchase of the Bank of Allwood began 65 years of development, including the acquisition/purchase of 23 New Jersey, five New York, and three Florida financial institutions, and two name changes. Today, Valley National Bank has assets in excess of $43 billion and has a market area covering one of the most populated part of the country.
I was puzzled why ValleyDirect’s focus seems to be on account opening rather than account management features (like transferring funds, which is crucial). I did a little searching and found a transcript of a 2021 investors call, in which the executives were questioned about ValleyDirect.
Ira Robbins -- President and Chief Executive Officer
Yeah, I think we just reported on this in the first quarter. Valley Direct is really [an] opportunity to revamp our online account opening process. We don't need it today for deposit gathering, we're not really using it for that benefit, we're using it primarily to improve the process, create efficiencies, roll out this account opening process online in each of our branches, developing those efficiencies there. We have seen traffic slow in the branches, we have seen our online and mobile utilization increase 15% and 25% respectively from last year and we'll continue to use that Valley direct as an efficiency for on boarding new accounts into our system.
I think I would be a bit hesitant choosing an online bank with a parent institution that has such little commitment to the online bank. ValleyDirect seems to be just a side project, rather than an essential division which focuses on being competitive.
How the Online Savings Account Compares
When compared to the nationally available Savings Accounts tracked by DepositAccounts.com that do not require a large minimum balance and are not limited by small balance caps, ValleyDirect’s Online Savings Account APY currently ranks second.
The above information and rates are accurate as of 3/18/2022.
To search for the best Savings Account, both nationwide and state specific, please refer to DepositAccounts.com’s Savings Account Rates page.
