UFB Direct is offering yet another online savings account with a competitive rate. This new one is called US Savings. The rate as of 6/22/09 is 2.00% APY. There are no minimums and no monthly fees.
It appears UFB Direct hasn't changed much in the last few years.
Update 7/26/09: A reader has reported that UFB Direct now provides free ACH transfers. The 3-day standard transfers are free, and you can set up to 3 external accounts. Here is what the reader described in the comments:
I just wanted to update on both outgoing and ingoing ach's so long as you use the standard 3 day transfer, it is free to your linked external banks. There is a fee if you want next day. Don't go through money HQ, go through transfers, and then there is a tab for external transfers, set up to 3 external accounts and your good to go.
How long will it last?
This account review is probably more of a warning than a deal alert. UFB Direct has a long history of coming out with new high-interest accounts. After around 4 to 8 months, the rate plummets, and before long they start another new account with a high rate. So if you open this account, you need to make sure to keep an eye on it. Not only have they slashed rates, but they've also started monthly fees. Their Absolute Savings Account started out with no monthly fees. It now has a fee of $5/month for balances under $10,000.
UFB Direct appears to be trying to change by offering the following guarantee:
UFB Direct guarantees to keep the yield on your account in the top 10% of competitive accounts as tracked on Bankrate.com National Index. All right reserved.
I wonder what national index at Bankrate.com they're referring to. If it's similar to what the FDIC is now using, the top 10% may still be low for internet savings accounts.
Another downside of UFB Direct is that it isn't a bank. It's just a banking center. Here's what they describe in their FDIC page:
Deposit Products offered through this Banking Center are FDIC insured up to an aggregate of $250,000* per customer through one of the following participating FDIC insured financial institutions. See Disclosures for details.
View Waterfield Bank FDIC Certificate #34976
View Bank of America, FDIC Certificate #3510
View Citibank, FDIC Certificate #7213
View Huntington National Bank, FDIC Certificate #6560
On their rates page they state the following:
Deposit Processing Services Offered Through This Site Are Provided By Waterfield Bank
It appears Waterfield is the main bank that holds most of UFB Direct's deposits, but as UFB Direct's FDIC page states, other banks may also be used.
Other High Yield Savings Accounts
To find high yield savings accounts available nationwide, refer to my weekly rate update.
01/09/10: 1.55% APY
11/28/09: 1.60% APY
11/07/09: 1.70% APY
10/17/09: 1.75% APY
10/08/09: 1.80% APY
09/16/09: 1.85% APY
06/22/09: 2.00% APY