Western State Bank Substantially Increases High Yield Money Market Rate

Last week, North Dakota-based Western State Bank (Western) substantially increased the rate on its nationally available High Yield Money Market* (HYMM). The new 4.25% APY applies to all balances up to $10 million (an increase from the previous $3 million cap). While there is no minimum balance requirement, a HYMM does required a $5k minimum opening deposit.

*I have included a link to the HYMM’s landing page because it has its own URL that cannot be found on Western’s main website.

While the current 4.25% APY applies to all balances up to $10 million, the landing page lists six balance tiers, leaving open the possibility of tiered APYs in the future. Those six balance tiers are,

• $0-24,999.99
• $25,000-249,999.99
• $250,000-999.999.99
• $1,000,000-1,999.999.99
• $2,000,000-2,999,999.99
• $3,000,000 and up

When the HYMM became available on a nationwide basis in February 2019, the initial rate was 2.50% APY. Between August 2019 and January 2021, a series of ten rate drops resulted in a 0.50% APY that remained in effect until this past June. A total of 375 bps (in five rate increases) were added in the past seven months, including the most recent gain of 75 bps.

Western changed its FAQs section several years ago, removing much of the relevant information it previously provided. The following facts were confirmed by CSR.

• There are no monthly maintenance fees applied to the account.
• Debit cards and checks will not be issued on this account.
• There is no access to the account through an ATM withdrawal.
• A $5.00 fee is imposed for each additional withdrawal or debit over ten per month.
• If your balance plus accrued and credited interest exceeds $10,000,000.00, a representative from Western State Bank will contact you to reduce the balance in the account.
• A cashier’s check can be mailed to the address on file by contacting Customer Care (877-846-9345).

Availability and Account Opening

Headquartered in Devils Lake, North Dakota, Western State Bank currently offers its High Yield Money Market on a nationwide basis to all U.S. citizens and resident aliens (18 years of older) with a valid Social Security number. The rest of the product line is only available to residents of Arizona and North Dakota.

Opening a High Yield Money Market account can be done online. According to CSR, a soft pull is done when applying for a HYMM.

Following account opening, HYMM transactions can be done at any of six North Dakota branches located in Devils Lake, Fargo, Granville, Towner, Upham, and West Fargo or the seven Arizona branches located in Casa Grande, Chandler, Mesa, Phoenix, Scottsdale, Sun City, and Sun City West.

Funding and Accessing

According the FAQs section,

There are five ways you can add money to your account:

1. Check: If you send a check to Western overnight, we’ll cover your delivery/shipping fees.

2. Wire transfer: When you wire the funds to Western State Bank, we'll cover the fee on both sides of the transaction. Western also allows one free outgoing wire per month.

3. "Pushing" funds via ACH: Your bank can initiate an ACH fund transfer to Western State Bank by providing them your Western account and routing number. The maximum amount you can send is determined by your bank

4. External transfers from Western State Bank Online Banking: After 60 days you will have access to External Transfer where you can add up to five external accounts and transfer money back and forth. The limits are $5,000 per day ($10,000 per 30-day period) transferred in and $10,000 per day ($20,000 per 30-day period) transferred out.

5. Bank visit: You can walk into any Western State Bank location (North Dakota or Arizona) and make a deposit.

You can also request that Western State Bank send a wire transfer to another bank by contacting the Wire Department at 701-499-6376 or [email protected] One outgoing wire fee per month per account is waived. The wire is only available to be sent to the external account in which the initial deposit was made from. Wire cut off time is 4 pm CT.

Beneficiaries

Unlimited beneficiaries with equal shares are allowed, but according to CSR, the Bank prefers an even number of beneficiaries. Social Security numbers are not required when naming a beneficiary.

One of the questions in the FAQs is “What do I need to open an account?” The answer contains the usual personal identification documents, but the last item listed is a “recent phone bill.” I didn’t think much about that request until I read DA reader, endsuer’s description of his attempt to open a High Yield Money Market about three years ago.

I applied online with this bank and was unable to complete the application process because they demand a cellphone bill statement. I explained to them that my cellphone is prepaid monthly, the only notice I get to pay is a text stating the amount to pay and the due date. I also told them that I have had the same number for over 14 years. They still demanded a copy of the cellphone bill.

I was able to create a login account with the cellphone carrier and get a copy of my last months statement. I submitted a copy of that statement and I was again declined this time because the cellphone can't be a prepaid number. No getting around this with this FI unless you have a contract with a wireless carrier.

I had hoped this requirement had changed, but according to CSR, it’s still in effect.

Bank Overview

Western State Bank has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 5.17% (excellent) based on June 30, 2022 data. In the past year, the Bank has increased its non-brokered deposits by $133.56 million, an excellent annual growth rate of 10.38%. Please refer to our financial overview of Western State Bank (FDIC Certificate # 39123) for more details.

In 1966, the Bank of Webster (established in 1902) was purchased by a group of investors, seeking to found a new bank. Two years later, the corporate name and headquarters were changed, and the Western State Bank of Devils Lake, North Dakota, opened its doors for business. Currently the eighth largest bank headquartered in North Dakota, Western State Bank has assets in excess of $1.7 billion and more than 27,000 customer accounts.

How the High Yield Money Market Compares

When compared to nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, that do not require large balances or direct deposit and do not have small balance caps, the Western State Bank High Yield Money Market APY currently ranks second.

The above information and rates are accurate as of 1/10/2023.

To look for the best rates on liquid bank accounts, both nationwide and state specific, please refer to our Money Market Accounts Table and Savings Accounts Table.