Less than a month ago, I wrote about WebBank’s new nationally available High-Yield Savings account, which earned 2.40% APY; WebBank ended the week by raising the rate to 2.45% APY. The minimum deposit required to open and earn the stated APY is $1k. Initial funding is also capped at $500k.
Utah-based WebBank had been a “behind-the-scenes” player in the loan industry for more than 20 years, before they began to offer an online savings account and several CDs late last year. Since its introduction in mid-December, the High-Yield Savings account has had five rate increases, adding a total of 55 bps.
CD Rates Drop
Not all is good news. While the savings account rate increased, WebBank’s CD rates went down. The 1-year CD rate fell 6 bps, and the longer-term CD rates fell by 10 bps. Please refer to the CD rates section of our WebBank’s information page for the full rate details.
High-Yield Savings Account Details
The Terms and Conditions document provides a great deal of important information, including:
The minimum deposit required to open and maintain a Savings Account is $1,000.00. If your account balance falls below this minimum amount, your Savings Account will be closed and the balance of the funds remaining in the Account will be returned to you in a manner deemed appropriate by us. Funding must be initiated using electronic funds transfer, also known as ACH, at the time of account application.
The Bank reserves the right to establish a maximum aggregate deposit balance for its customers or for any individual customer, in its sole discretion. The maximum initial funding limit per account is $500,000.
If you make more than six (6) withdrawals or transfers in a monthly statement period, we may, in our discretion, deny and/or reject the excess transfer(s), and we may close your Savings Account.
The Truth-in-Savings document contains several pages of detailed information concerning depositing and withdrawing funds, but the bottom line is that all deposits and withdrawals MUST be done by ACH or wire transfer.
WebBank does not accept checks for deposit to any Account. All deposits must be by ACH Transfer or wire transfer. WebBank does not offer withdrawals via check.
We do not accept any deposits in cash, whether in U.S. dollars or any foreign currency. All deposits are considered to be non-cash deposits. If you send any cash to us, it will be returned to you.
Accounts may be opened as an individual account or a joint account (limit of two owners per account). A total of six beneficiaries (“a natural person” or a trust) may be named, with each beneficiary designated to receive an equal share.
Like many banks, WebBank does not provide all the “ins-and-outs” of ACH transfers on its website. While the a 21-page Terms and Conditions document contains a great deal of information, the following was obtained in a conversation with CSR.
- Upon opening a Savings account, you are automatically enrolled in WebBank’s online banking program, which allows customers to initiate transfers to/from a linked external bank account.
- Only one linked account is permitted.
- ACH transfers are fee-free.
- ACH transfers that are initiated by the account owner from an external bank are allowed.
- There are no maximum dollar amount limitations, except for an online $50k limit per day on outgoing ACH transfers. If more than $50k is to be transferred out, the transaction must be done by phone.
Headquartered in Salt Lake City, Utah, WebBank is a pure internet bank, having no brick-and-mortar branches. The Bank’s product line is offered to individuals who are 18 years or older, have a valid Social Security Number or Individual Taxpayer Identification Number, and have a physical street address in the U.S.
The High-Yield Savings Account must be opened online.
All Accounts must be opened through our website.
We do not offer account opening by telephone or U.S. Mail.
WebBank has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 2.07% (excellent), based on December 31, 2018 data. WebBank has an excellent capitalization level (18.43%), the result of holding $871.58 million in assets with $160.66 in equity. Please refer to our financial overview of WebBank (FDIC Certificate # 34404) for more details.
WebBank is currently the 22nd largest bank in Utah, with assets in excess of $871 million and more than 566,000 customer accounts. Chartered in 1997, WebBank is an industrial lending company (ILC), a type of bank that is allowed to be owned by non-financial institutions. ILCs are only permitted to be chartered in seven states and more than half of existing ILCs are based in Utah.
In collaboration with its 16 “Brand Partners” (including PayPal and Yahama), WebBank provides “niche financing solutions to businesses and consumers.” According to a PYMNTS.com article,
When working with one of its partners — say Lending Club or Prosper — WebBank is actually the financial entity that underwrites the loan offered by the alternative lending platform. WebBank than holds that loan on its own books until an investor purchases it — usually a day or two later.
WebBank also comes with an additional benefit of being classified as an industrial bank, meaning that it is not subject to direct oversight by the Fed, which has authority over many state-chartered banks and holding companies. It is however answerable to both the FDIC and Utah’s state regulator to make sure it is compliant with anti-money laundering rules. But what WebBank is doing is creating an environment that benefits the lending market and its participants greatly.
How the High-Yield Savings Account Compares
When compared to the nationally available Savings Accounts tracked by DepositAccounts.com, which have a minimum balance requirement of $1k or lower, WebBank’s High-Yield Savings Account APY currently ranks third.
|Interest Rate||Account Name||Credit Union/Bank|
|2.47% APY||High Dividend Savings ($500 min)||USALLIANCE Financial|
|2.46% APY||High Yield Online Savings Account ($100 min)||Vio Bank|
|2.45% APY||High-Yield Savings Account ($1k min)||WebBank|
The above rates are accurate as of 4/20/2019.
To compare the top savings account rates, both nationwide and state specific, please refer to our Savings Account Rates Table page.