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UFB Direct's No-Min Savings Account Now 5.26%


UFB Direct made a big bump to its no-minimum High Yield Money Market Savings Account today. The rate was increased from 4.50% to 5.26% APY which matches the rate of the Jumbo Money Market Account. It had been 4.50% since June 7th and has been around 4.50% for most of this year except for a period in March when the rate plummeted to 3.75%. In early April it came back close to 4.50% at 4.40%. So UFB Direct does have a record of some drastic and temporary rate changes. Luckily, it's in the right direction this time. Last August it was offering a $25 sign-up bonus for this account. Perhaps, they've decided to follow HSBC and ING and do a high rate promo this time. Since savings account rates are never guaranteed to last, they don't have to call it a promo.

On UFB Direct's website, I noticed they're making the most of the change in their status. UFB Direct's parent, Union Federal Bank of Indianapolis, is now rated 4 out of 5 stars (sound). It had been as low as 1 star earlier this year. I had thought this improvement might have been due to their acquisition by Sky Financial Group, but this has not yet been completed and is not scheduled until this third quarter.

This High Yield Money Market Savings account has no minimum balance requirements and no monthly fees. It does not offer check writing, but it does come with an ATM card. UFB will reimburse up to $4.50 per statement period for ATM fees charged when using other banks' ATMs. If you want check writing, UFB Direct does offer a free checking account with no minimums.

The main problem with UFB Direct is the lack of an ACH bank-to-bank transfer system. So making deposits and withdrawals are not as convenient. However, it should be easy to link from other online banks like HSBC and GMAC Bank.
  |     |   Comment #1
I called today, and the CSR mentioned that UFB only does a soft credit pull, just to verify a customer's information.
Banking Guy
  |     |   Comment #2
Thanks for the info. I received the same info on an email response from them. For some reason I had forgotten about it:

We run a soft hit with equifax to verify your address. Chex Systems is also used.
  |     |   Comment #3
Good example of a situation in which it pays to leave a minimal amount in an online savings account, where the bank was once a rate-leader but then slipped, e.g., UFB, ING.

When the bank sees the light, and raises rates, you are poised to move cash back into the acct without having to go through the whole acct-opening process.
  |     |   Comment #4
i see this rate only for a min. of $50k , am i missing something?
Banking Guy
  |     |   Comment #5
UFB Direct offers a money market account which has a current rate of 5.26% APY for balances over $50K. This jumbo MMA usually has a higher rate than this no-minimum savings account. From the rates page, it looks like all balances on this High Yield Money Market Savings account earn 5.26% APY.

It would be less confusing if UFB just called this a savings account.

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