Update 8/15/08: The savings account and Jumbo MMA yields have fallen to 3.05% APY.
Update 7/31/08: The savings account and Jumbo MMA yields have fallen to 3.20% APY.
Update 6/14/08: The savings account and Jumbo MMA yields have fallen to 3.50% APY.
Update 5/24/08: The savings account and Jumbo MMA yields have fallen to 4.05% APY.
On Friday, I first posted on the AARP Financial Savings Center and their very high yield savings account and money market accounts. The savings account yield is 4.50% APY (as of today) for all balances of $1 and up. The Jumbo Secured Money Market account has a yield of 4.75% APY for balances over $50,000. I listed several details in that Friday post, but there were a few issues that I had missed.
Does Seem to be Legit
I did confirm today that AARP Financial Savings Center and the website aarpsavings.com are legitimate and affiliated with AARP Financial. I called the number at AARP Financial this morning. Note, this is not the same number at aarpsavings.com. I consider aarpfinancial.com to be a trusted site since it's linked from aarp.org. The rep said aarpsavings.com is affiliated with them. I asked about why there wasn't a link from their site, and he said that they focus on mutual funds and annuities.
FDIC Insured via Huntington National Bank
After calling AARP Financial, I then called AARP Financial Savings Center again for some questions that I didn't ask on Friday. It took me about 15 minutes before I could reach a CSR, so it seems these high rates may be attracting more attention.
First, I asked about which bank will hold the deposits, the CSR stated it'll be Huntington National Bank. A reader also mentioned in the comments of the previous post that the pdf application instructs you to mail a check payable to Huntington National Bank.
About beneficiaries, I was told that you could list POD beneficiaries on the signature card that you mail in. You can also include a separate sheet with instructions for the PODs. Make sure you sign these instructions. The CSR said that this was a common practice of using qualified PODs to increase your FDIC coverage. However, the CSR wasn't familiar with the "account title requirement". So I recommend verifying this yourself with them. For more details about this, please refer to my extending FDIC coverage post.
Jumbo Secured Money Market Account
I was a little confused about the Jumbo Secured Money Market Account and how this relates to the Secured MMA. If you start out in the Jumbo with a minimum $50K balance, and the balance falls below $50K, I was told that you would automatically be swithced into the Secure MMA with the lower rates. However, I was told it doesn't work that way in reverse. The Secure MMA won't automatically become the Jumbo Secured MMA once your balance reaches $50K, but you can call and have this changed into the Jumbo.
AARP Member Qualification
Another issue is qualification for this account. As I mentioned before, you have to be an AARP member to open these accounts. The applications include an AARP member ID which must be included. According to the AARP, you have to be at least 50 to be a full member. This is stated in the AARP FAQs:
Q: How old do I have to be to join AARP as a full member?
A: We welcome all persons 50 years or over, retired or not. A full member is entitled to a membership card and all of our benefits and services.
Q: What if I am too young to join as a full member of AARP?
A: For those under 50 who support the association's goals and objectives, we offer an associate membership. Once an individual celebrates a 50th birthday, the associate member automatically becomes a full member, receives a membership card, and can take advantage of all of our benefits and services.
I asked the AARP Financial Savings Center rep if an AARP associate member would qualify, and he was not sure. It looks like unless you're a full membership, you may not receive a membership card with a member ID.
$20 Sign-up Bonus
Update 5/21/08: Readers have reported that this bonus has ended.
During my call with the CSR, he mentioned that there's a $20 sign-up bonus if you open one of these accounts with a minimum $500 deposit. It requires a code to be included in the application. He didn't provide this code, but he said you can apply by phone, and they'll include this code. They may also provide you with this code to include in your online or mail-in application. So you may want to call before applying.
Reader's Experience in Account Opening
A reader emailed me about his experience with opening this account. He had some complications apparently due to his past UFB Direct account. This is what he described:
I tried opening an account online but was thwarted doing so. I got to a screen that said that I had already had a Waterfield Financial Savings account and that I was supposed to call their toll-free number. As it turns out, some years ago I had opened a UFB Direct account and subsequently closed it, but UFB Direct and Waterfield Financial are essentially the same thing, I was told, and therefore I couldn't open my AARP account online. Instead, I have to print out the application form and mail it in.
The reader also helped a friend open the account online, and this time, the process went smoothly.
Part of the process was answering 4 questions to verify identity [mortgage lender, mortgage monthly payment, previous street address, previous city lived in]. The account was approved and a signature card was provided with the numbers of both the checking and savings accounts. The signature card can be mailed or faxed to the bank.
He was told he could add and withdraw funds using ACH initiated at another bank. If you want checks without the worries of minimum balances, they also have a free checking account. Finally, he noted that there's a $30 early-closure fee if an account is closed within the first 180 days. Hat tip to the reader who emailed me his experience on this.
Huntington National Bank is FDIC insured (Certificate # 6560). Bankrate's rating for this bank is 3 out of 5 stars (performing) based on 12/31/07 data. For those who have accounts at UFB Direct or directly at Huntington, please note that this will be added together with deposits at AARP Financial Savings Center for FDIC insurance coverage purposes.
[Edit: Added UFB Direct in the last sentence on FDIC coverage.]