New All-Digital ZYNLO Bank Offers Top Money Market Rate
The Massachusetts-based, PeoplesBank, has a digital bank that offers checking, savings and money market accounts. In today’s environment, it’s always nice to see a new online bank that’s offering competitive deposit rates. The online-only bank is called ZYNLO Bank, and its money market account should be most appealing to those looking for top deposit rates. The current standard rate (0.80% APY on all balances) is very competitive,
and there’s also a promotional rate for new customers. Details of this promotion are listed below. First is my review of ZYNLO Bank and its money market account along with short reviews of the checking and savings accounts.
Thanks to the DA reader who emailed me news of this new bank and to the DA reader ichaelm who first posted info on this bank and promo in the DA Forum.
ZYNLO Bank Features
PeoplesBank partnered with the technology provider, NYMBUS, to provide online and mobile banking services through ZYNLO Bank. Unlike some digital-only neobanks that only allow account access through their smartphone app, at ZYNLO you can apply and access your account with either a smartphone app or through the website.
NYMBUS may have helped PeoplesBank with technology, but that didn’t help the Bank with documentation. ZYNLO Bank’s website is light on account details and FAQs. I could not find any account disclosure on the website. However, I was able to find an account disclosure document at PeoplesBank’s website that mentions the ZYNLO Bank accounts.
Most of the details that I described below are either based on my conversation with a ZYNLO customer service representative or from the above disclosure document. The CSR seemed fairly knowledgeable, but as is often the case with CSRs, accuracy may not always be 100%. So if you were told something different, please leave a comment. In fact, please leave a comment about account details that you were told by the CSR even if they’re the same as I mention below. I’ll make updates based on new and or more accurate information.
According to the FAQ, customer service is available 24/7 by phone at 1-844-996-5622. Once you’re a customer, you can also reach customer service by logging into your account and sending a secure message.
Another important FAQ highlights the fact that there are no monthly fees with any of the accounts.
In my conversation with the CSR, I was told that the money market account has an excessive withdrawal fee. If you withdraw more than six times in a month, the excessive withdrawal fee is $25 per additional withdrawal during that same month.
There’s also a $10 monthly dormant fee that’s charged if your balance is under $2,500 and you have at least 12 months of inactivity. According to the CSR, automatic transactions (like ACH transactions initiated from an outside bank) do not qualify as an activity. Manual transactions like initiating an ACH transfer from ZYNLO qualifies as an activity.
Bank-to-Bank ACH Transfers
It’s common for new online banks to be weak on their electronic transfer service. Not only are the transfer features weak, the banks often do a poor job at documenting the features and limitations. This is the case for ZYNLO Bank. There’s no information on the website detailing the electronic transfer features (what is often called the ACH transfer features). The following information was provided by the ZYNLO CSR:
- The typical trial-deposit system is used to establish links to your accounts at other banks before ACH transfers can be initiated from ZYNLO Bank.
- Multiple links to outside bank accounts can be established for ACH transfers.
- ACH transfers initiated at ZYNLO Bank have the following dollar amount limitations:
- Incoming: $50k/day and $50k/month
- Outgoing: $10k/day or $25k/month
- Limits can be temporarily raised to $250k/month for incoming and $100k/month for outgoing with pre-approval via phone or secure message
- ZYNLO Bank allows ACH transfer requests to originate from your other banks.
- No wire transfers allowed (either incoming or outgoing)
Money Market Account
ZYNLO Bank’s money market account non-promo rate is currently very competitive (0.80% APY). This is a variable rate that can change monthly at the discretion of the Bank. According to the CSR, this applies to all balances. Interest is compounded daily and credited monthly.
Minimum balance to open the account is $10, and the minimum balance to qualify for the APY is only $0.01.
If you close your account before interest is credited, you will not receive accrued interest.
You can’t order checks from ZYNLO, but you are allowed to order paper checks from a third party and make payments using those checks. This is according to the CSR. The FAQ only mentions this as a feature of the checking account.
As I mentioned above in the fee section, I was told that the money market account has an excessive withdrawal fee. If you withdraw more than six times in a month, the excessive withdrawal fee is $25 per additional withdrawal during that same month.
Note, it’s rare for new online banks to maintain top rates over the long run. After a year or two, their rates typically fall near or below the rates offered by the major online banks.
Only the ZYNLO Checking account offers a debit card and ATM access. ZYNLO has “partnered with Allpoint to offer customers over 55,000 ATMs completely free of charge.” ZYNLO doesn’t charge a fee when you use an out-of-network ATM, but the ATM owner will. There are no refunds of ATM fees charged by ATM owners that are outside the Allpoint network.
You can’t order checks from ZYNLO, but you are allowed to order paper checks from a third party and make payments using those checks.
ZYNLO Bank offers online bill payment, person-to-person payment system, touchless mobile phone payments (via Apple Pay, Google Play or Samsung Pay), mobile check deposits ($10k limit) and the Early Payday feature that allows direct deposits to be available up to two days early.
The primary feature of the ZYNLO Bank Savings Account is the round up. When you use your Checking Account debit card to make purchases, ZYNLO Bank will round up the purchase and transfer this round-up amount to the Savings Account. In addition, ZYNLO Bank offers a round up reward that is calculated as follows:
All new customers get a 100% match during their first 100 days. Customers who maintain an average daily balance of $3,000 will continue to receive a 100% match thereafter. And customers who maintain a balance below $3,000 will still receive a 25% match.
Update 3/29/21: The website now lists the rate for the savings account (the Tomorrow Savings) in this PeoplesBank PDF of ZYNLO Deposit Rates.
The website doesn’t list any rate or APY for the Savings Account. According to the CSR, the savings account does earn a minimal amount of interest (currently 0.04% APY on all balances).
DIF Deposit Insurance
ZYNLO Bank offers more protection for large deposits through its Depositors Insurance Fund (DIF) membership. The DIF is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at Massachusetts-chartered savings banks. The DIF has been insuring deposits since 1934.
Money Market Promotion - Expired
The promotion is no longer available as of 3/29/21.
ZYNLO Bank is currently offering a promotional rate for its Money Market Account. New customers who apply from this promotion landing page and who use the promo code “BANK” will earn a promotional rate (currently 1.25% APY on balances up to $250k). Balances above $250k earn only 0.10%. This promo may end at any time, and there’s no promo guarantee period. The period in which you’ll earn this promo rate may end at any time.
Note, the standard non-promo rate does not have the $250k balance cap according to the CSR.
If the promotional period lasts for three months and you maintain the maximum $250k balance, you’ll earn an extra $281 above the amount you would have earned from the non-promo rate (assuming the non-promo rate remains at 0.80%).
If you are going to apply for the Money Market Promotion, it must be done from this promotion landing page and the promo code “BANK” must be entered into the application.
If the promotion is over or if you do not want to participate in the promo, accounts can be opened from the ZYNLO Bank website or using the ZYNLO Bank app (link to the app download is located on the ZYNLO Bank homepage.)
One important FAQ describes who is eligible to open an account:
Any U.S. citizen 18 or older with a valid Taxpayer Identification Number. We can open accounts for people throughout the United States with the exception of CA, CT, MA, & NY.
The three Eastern states make sense since PeoplesBank has branches in Massachusetts and Connecticut which are close to New York. Banks often don’t want their online-only bank to attract existing brick-and-mortar customers to high-interest accounts. I’m not sure why California is included on this list. A reader mentioned that Lake Michigan Credit Union doesn’t accept new members from California because they do not comply with the California Consumer Privacy Act.
According to the CSR, applying for the ZYNLO Bank accounts does not incur a credit check (neither hard nor soft pull). Only ChexSystem is used.
Funding an account can be done by debit card (up to $500). Credit cards are not accepted. The funding can also be done with an ACH transfer after you go through the trial deposit verification step.
Beneficiaries and Account Ownership
Accounts can only be opened as either an “individual account” or “joint account.” According to the CSR, you cannot designate beneficiaries, and accounts cannot be opened in the name of a trust.
As a digital-only division of PeoplesBank, ZYNLO Bank operates under PeopleBank’s FDIC Certificate and shares its financial history. Also, PeoplesBank and ZYNLO Bank are treated as the same entity for the purpose of calculating FDIC insurance limits and deposits.
ZYNLO Bank/PeoplesBank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.30% (excellent) based on December 31, 2020 data. In the past year, the Bank increased its total non-brokered deposits by $545.88 million, an excellent annual growth rate of 29.21%. Please refer to our financial overview of ZYNLO Bank/PeoplesBank (FDIC Certificate # 90213) for more details.
ZYNLO Bank was launched in May 2020, but according to this press release, the banking services were only “offered to customers in Madison, Wisconsin and Anchorage, Alaska.” In the “about section” of the press release, the following information was provided:
ZYNLO is a digital-only bank designed to make banking just a bit easier for all of us. While we may seem "Brand New", ZYNLO is actually backed by PeoplesBank, with over 135 years of experience in creating satisfied customers.
PeoplesBank is a mutual bank and therefore responsible to our depositors, employees, and the community. This organizational structure allows us to focus on the long-term viability of the bank and the best interests of our customers. We currently have 20 banking centers located in Massachusetts and Connecticut.
One thing that has helped PeoplesBank is its mortgage business. Low rates have been very helpful in driving strong mortgage demand. In addition, PeoplesBank had been well positioned to do well during the pandemic as this news article described:
PeoplesBank launched its paperless mortgage-application system in October 2019 after two years of refining it. When COVID-19 arrived and disrupted so much of daily life, Sherbo said having a touchless system already up and running made it easier to maintain business levels.
PeoplesBank is a sizable bank with $3.35 billion in assets and $2.44 billion in deposits based on December 31, 2020 financial data.
How the ZYNLO Bank Money Market Rates Compare
When compared to Savings Accounts, Money Market Accounts and Checking Accounts that have no relationship/activity requirements or small balance limitations and are available nationwide, ZYNLO Money Market rates (promo and standard) rank very well.
The above rates are accurate as of 3/19/2021.
To search for the best liquid accounts, please refer to DepositAccounts.com’s rate tables for Savings Accounts, Money Market Accounts and Checking Accounts.
What some, including me, might consider curious is that a popular choice here on DA, Northern Bank Direct (with corporate HQ ostensibly in Woburn, MA), is NOT also under the aegis of the Massachusetts DIF insurance (at least, according to my inquiries re. about 6 months ago).
See p. 8, col. 1 of PDF at https://www.difxs.com/reports/AnnualReports/DIFAnnualReport2019.pdf
Northern Bank & Trust Company of Woburn MA (a/k/a Northern Bank/Northern Bank Direct) is not such a bank. It is not a savings or co-operative bank.
You can go to https://services.oca.state.ma.us/LicenseeLookup/in-choose.asp and enter the bank's name. (The word "Direct" is not part of its name for these purposes.) And remember to enter appropriate terms in the "Charter Type" field.
I will still say, as indicated in my original post, that the Massachusetts DIF provision is an excellent additional benefit extension to the basic FDIC insurance coverage.
One thing that bothers me is the moronic dormancy policy. Apparently only activity initiated from within zynlo count as activity to keep the account from going into dormancy. I never link from the new bank to the source bank but I do it the other way around. In this case initiating a monthly $1.00 from the external bank to keep the account from going dormant will not work.
"There’s also a $10 monthly dormant fee that’s charged if your balance is under $2,500 and you have at least 12 months of inactivity. According to the CSR, automatic transactions (like ACH transactions initiated from an outside bank) do not qualify as an activity. Manual transactions like initiating an ACH transfer from ZYNLO qualifies as an activity."
I've never heard of that one before. I do a $0.01 ACH to or from all of my FIs once a year whether they have a dormant policy or not. It's a pain, but it's easier than keeping track of which ones have what policies. Only one has a 6 month dormant fee... ridiculous. So I do that one twice a year. But I've never seen one that requires initiation from the subject FI to avoid dormant fees. That's a tricky twist.
Other than that, this place seems like it may have some potential... and if not for the fact that it is not available in my state, I might find some use for it. Seems like it may be a good find for some people.
"Manual transactions like initiating an ACH transfer from ZYNLO qualifies as an activity"
Well, it just so happens that I don't use text, it is just another irritant in life. I find that the telephone equipment I have on my land line is the best way to screen out unwanted communications.
Most financial institutions, in their two factor authentication routines, provided a choice on how to receive the authentication code. And while they differ, one choice, at least, is always voice or email. So, it appears the NYMBUS design failed again by not accommodating alternative communication modes. One less customer for ZYNLO is the result.
from the NYMBUS website:
"Frictionless account opening. A fully digital banking experience that expedites the new account opening process across any device or channel."
The unanswered question is whether one can switch to Google Voice or something else *after* sign-up. From what I see so far, changing your phone number online isn't even possible with the website. Can anyone with the app installed say whether it's an option in the account settings there? (I prefer avoiding apps unless truly necessary.)
In a SIM swapping scam, criminals convince your mobile phone carrier that you lost your phone and you need to put your phone number onto a new SIM card they control. After they take over your phone number, they can go through the 'forgot password' process with your online accounts where they're able to receive authentication codes sent to your mobile number.
Then, 2 comments below, me1004 quotes CSR as saying 'Incoming ACH $50K max per month ($250K with pre-approval), outgoing max $10K/day $25K/mo ($100K/mo max with pre-approval)'. Which do you now think is the policy? Thanks.
The limits me1004 mention appear to be the limits on their transfers (IE incoming/outgoing transfers initiated from Zynlo Which, you'll note are the same limits mentioned in Ken's article under the bullet point "ACH transfers initiated at ZYNLO Bank "), not limits on transaction initiated from outside FI's (for example, from Ally), as you seem to be interpreting it (note that Ken's article doesn't mention any limits under the bullet point "ZYNLO Bank allows ACH transfer requests to originate from your other banks").
Of course with wires you usually have to pay a fee. But when dealing with larger amounts, the fee is often less than the amount you will lose on the ACH float (...which is another topic... why should there be any float in 2021? Transfers should be instantaneous. This isn't 1960. No wonder cryptocurrency is eating the treasury's lunch.).
Update: I received an email saying they are reviewing my application. I will receive another email with a secure link to upload some documents.