I wrote about WauBank, the online division of Pennsylvania-based First National Bank, in September 2019, when WauBank opened its virtual doors for the first time. The initial product line included the High-Yield Savings Account and six CD Specials. Their rates have fallen, but they have remained fairly competitive.
High-Yield Savings Account Overview
The High-Yield Savings account currently earns 1.50% APY on balances of $5k and above; balances of less than $5k earn 0.50% APY. Although the High-Yield Savings APY has dropped 70 bps in five rate decreases, it’s remained competitive as the decreases mirrored the general rate climate of the past seven months.
According to the fine print on WauBank’s home page,
If your average daily collected balance drops below $5,000.00 in your WauBank High-Yield Savings account you will not receive the APY of 1.50% on your WauBank High-Yield Savings account. The current interest rate for any average daily collected balance below $5,000 is 0.50% APY.
The following are from the FAQs:
Are there monthly fees?
None. WauBank charges no fees for opening your account and no monthly maintenance or service fees.
How do I fund my account?
Funding your account is simple. You can add funds with a debit or credit card or transfer funds directly from another financial institution. You can also transfer funds to and from other bank accounts that you own through online banking once your account is opened — or add funds by check using the remote deposit capture feature of our award-winning mobile app, FNB Direct.
How do I access my money?
We provide easy, 24/7 access to your funds through our secure online banking site. Once you sign up for FNB Online Banking, you can link your account(s) to other financial institutions to make transfers and use our award-winning mobile app, FNB Direct, to manage your account on the go.
I was able to learn a few additional features by calling WauBank’s customer service. I was happy that I was connected quickly to a friendly CSR. According to CSR:
If you initiate external funds transfers via ACH from WauBank, you’re charged a $0.50 fee for each transfer. There’s a limit of $10k for each outbound transfer and $20k for each inbound transfer. There are no dollar limits for ACH transfers that you initiate from your other bank, which would probably be the best approach to avoid fees and size limits.
According to CSR, this account is coded as a money market account with check writing. You can request checks from them. I was told checks are limited to 3 per month due to regulation. They appear not to be familiar with the Regulation D changes that occurred in 2009 or the latest changes that occurred last week.
Special Online CDs Overview
The Special online CDs continue to have odd terms. They’re considered specials since when they mature, the standard rates apply. However, according to the CSR, an automatic CD renewal would result in the same Special term with the standard rate. For example, if the 13-month CD matured today, it would be automatically renewed into a new 13-month term with today’s standard 12-month APY. The standard rates/APYs are not listed on WauBank’s website. As you might expect, they will probably be much lower than these Special rates. According to the CSR, today’s 12-month CD APY is 0.55% and the 60-month CD APY is 1.00%. In summary, you should be careful not to let these Specials CDs automatically renew. The grace period is 10 days, during which you can close the CD without an early withdrawal penalty.
The CD early withdrawal penalties are harsh: 3% of the principal withdrawn plus $25 for terms over 12 months. This is according to CSR. I was not able to find an account disclosure with these details. With today’s low rates, a 3% penalty is almost equal to two years of interest. That’s especially harsh for the 13-month CD. One nice feature is that they do allow partial early withdrawals.
When the CD is closed, the only option to receive the funds, according to the CSR, is by requesting them to mail you the check. If you also have WauBank’s High-Yield Savings acount, you could also request that the funds be transferred into that account.
CD funding can be done via ACH from your existing account at another bank. During the online application process, you would provide the routing and account number. Trial deposits would then be done to verify your ownership of the account. The maximum deposit is $500k.
I don’t see many improvements from last year in terms of account features, online account management or documentation. Unless WauBank’s rates significantly exceed the rates at the major online banks, I don’t see a benefit from choosing WauBank’s High-Yield Savings account or Special CDs. Perhaps we shall see a return of very competitive rates from WauBank at some time in the future.
Headquartered in Pittsburgh, Pennsylvania, WauBank in First National Bank’s online division, which was established in the last year. WauBank’s online market area includes Arizona, Connecticut, Florida, Massachusetts, Rhode Island, Tennessee, and Virginia. Interestingly, First National Bank’s physical market area is completely different: Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, and West Virginia, including three major metropolitan areas (Pittsburgh, Baltimore, and Cleveland).
Opening a WauBank High-Yield Savings account must be done online. When you click on the “Open an Account” button, you’ll land on a page that asks if you’re a new or existing First National Bank customer; don’t worry, it's the right page. As one of my colleagues put it: FNB is “treating WauBank like a separate internet bank, except that it doesn’t have its own domain. And the WauBank page is hidden from their (FNB) main site with no links.”
While “WauBank” might seem like an odd name, the Bank’s FAQs explains its origins:
A nod to our past with an eye toward the future, WauBank carries on the mission of William Waugh, one of the founders of First National Bank. The strength, stability and financial solutions Waugh and his co-founders established over 150 years ago continue today through a new online innovation called WauBank.
As the online division of First National Bank (FNB), WauBank operates under FNB’s FDIC Certificate and shares its financial history.
WauBank/First National Bank has an overall health grade of "A+" rating at DepositAccounts.com, with a Texas Ratio of 2.53% (excellent) based on December 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $1.96 billion, an excellent annual growth rate of 8.69%. Please refer to our financial overview of WauBank/First National Bank (FDIC Certificate # 7888) for more details.
Established in 1864, First National Bank was originally known as the First National Bank of Mercer County (western Pennsylvania, bordering on Ohio) for its first 128 years. Beginning with a re-brand to its current name in 1992, the Bank began 25 years of expansion that included the acquisitions of 19 banks in Maryland, North Carolina, Pennsylvania, and Ohio. Today, First National Bank is the second largest bank headquartered in Pennsylvania and 53rd largest bank in the country, with assets in excess of $34.5 billion and more than 1.11 million customer accounts.
How the High-Yield Savings Compares
With such a disparate multi-state market area, there’s really no ideal comparison group for the High-Yield Savings account, so I’ve chosen to use nationally available products for the comparisons.
When compared to the Savings Accounts tracked by DepositAccounts.com that are available nationwide, WauBank’s High-Yield Savings APY currently ranks seventh, regardless of minimum balance requirement. (The 1.55% APY is currently available on savings accounts offered by five other internet banks.)
The above rates are accurate as of 4/29/2020.
To look for the best Savings Accounts rates, both nationwide and state specific, please refer to our Savings Account Rates page.