CD Rates Summary
Federal Reserve, the Economy and CD Rate Forecast - June 21, 2022
Fed Meeting: First 75-bp Rate Hike in 27 Years! Strategies for SaversUFB Direct Deposits FDIC Insured by Huntington and Countrywide
POSTED
ON BY Ken Tumin
A reader just informed me today of a surprising issue. Deposits at UFB Direct may be FDIC insured through either Huntington National Bank OR Countrywide Bank. This could be a major issue for those who have deposits near the FDIC limits at both Countrywide and UFB Direct. You could actually be over the FDIC limits without knowing it.
This relationship with Countrywide is documented at this UFB Direct page. I called the UFB Direct customer service rep to see when this relationship started, and she said it has always been that way. I've never noticed this before and had assumed all deposits were covered through Huntington National Bank.
The CSR said that a UFB Direct customer can choose to have his or her deposits insured by either Countrywide or Huntington. The reader who informed me of this issue said he found out from UFB Direct that his deposits were under Countrywide. On his request they were able to change things around so his deposits are now under Huntington.
[ Update 11/30/07: A reader pointed out that more information about UFB Direct's relationship with multiple banks is described in their disclosure:
The reader made the good point that it would behoove UFB Direct depositors to check the list of participating banks periodically to see if there may be FDIC limit issues.]
With Countrywide's savingslink account yield at 5.30% APY and UFB Direct's Absolute Savings Account yield at 5.31% APY, it seems likely that many people may have large deposits in both accounts.
For more information on UFB Direct and its high yield savings account, please refer to my UFB Direct savings account review.
Thanks to the reader who emailed me info on this issue.
This relationship with Countrywide is documented at this UFB Direct page. I called the UFB Direct customer service rep to see when this relationship started, and she said it has always been that way. I've never noticed this before and had assumed all deposits were covered through Huntington National Bank.
The CSR said that a UFB Direct customer can choose to have his or her deposits insured by either Countrywide or Huntington. The reader who informed me of this issue said he found out from UFB Direct that his deposits were under Countrywide. On his request they were able to change things around so his deposits are now under Huntington.
[ Update 11/30/07: A reader pointed out that more information about UFB Direct's relationship with multiple banks is described in their disclosure:
All deposit accounts offered through the Banking Center will be opened with The Huntington National Bank. Affinity Financial Corporation, the provider of the Banking Center site, (hereafter referred to as AFC), acting as your Agent for the deposit account(s) you open through the Banking Center, will be authorized to direct your funds to be withdrawn from The Huntington National Bank for deposit into an FDIC insured account at one of the FDIC insured financial institutions who participate in the Banking Center Program (hereafter called a Participating Bank) ....
Your deposit account(s) will at all times be insured by the FDIC to the full extent permitted under the law, whether they are held by The Huntington National Bank or one of the other participating banks. You may contact Customer Service if you have any questions or if you do not want AFC to deposit your funds into a particular FDIC insured financial institution listed as participating in the Banking Center Program.
The reader made the good point that it would behoove UFB Direct depositors to check the list of participating banks periodically to see if there may be FDIC limit issues.]
With Countrywide's savingslink account yield at 5.30% APY and UFB Direct's Absolute Savings Account yield at 5.31% APY, it seems likely that many people may have large deposits in both accounts.
For more information on UFB Direct and its high yield savings account, please refer to my UFB Direct savings account review.
Thanks to the reader who emailed me info on this issue.
It would behoove depositors to check the list of participating banks from time to time to see if there are any that you have FDIC limits or other problems with.
http://ufbdirect.com/ufbdirect/fdic.asp
and go to "disclosures"
as well as being listed on the bottom of the main page for Huntington National Bank
Who insures your money while it is on the way to Countrywide or whoever?
Does your account statement from this outfit indicate which bank has your money?
The domain name ufbdirect.com comes back to NATIONAL INTERBANK INC. , 140 Broadway, 46th Fl, NEW YORK, NY 10005.
There is no "National Interbank" on the FDIC's list of insured banks.
I wouldn't touch this outfit with a ten foot pole.
What value does a broker like this add anyway? Deal directly with Countrywide or whoever.
Banking Guy - do you think UFB is safe and legitimate?
Why not just pay the $10 to get a cashiers check for all but $1?
Then leave the $1 in the account until the 180 days is over. You'll save $20.
Heck, let them keep the $1, you'll still save $19.
What I did was add UFB as one of my external accounts with my other bank. Once that goes through (I initiated the process, from my other bank, yesterday), I SHOULD be able to transfer funds into my other bank, when I initiate the transfer from there. That's the theory; we'll see how it goes!
I'd been thinking of opening a new account with them, and looking at what had been pretty steadily their 5.19% rate/5.31% APY.
But in checking their website again today, it now says 5.10% rate and 5.22% APY, with the chart indicating the rates are effective as of December 6.
It's still a good rate for a general savings account. But, I was concerned to read some of the comments above about issues of their FDIC insurance status, and about a $30 early withdrawal penalty that one poster mentioned, especially when his only recent change was one of a different account with them, not opening a brand new one...
Hmmmmm..... Not a very good thing for UFB to do, if that post is in fact correct.
John in Los Angeles