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New High Savings Account Rate at UFB Direct


UFB Direct did something quite dramatic today. It raised its savings account rate from 0.20% to 1.25% APY. The 1.25% APY applies to balances of at least $25,000. The rate remains at 0.20% for balances below $25,000.

UFB Direct and this savings account are just over three years old. They were launched in August 2011 by BofI Federal Bank. UFB Direct’s focus has been on airline rewards. However, UFB Direct has occasionally offered very competitive interest rates. Those competitive rates ended dramatically on April 2013 when UFB Direct’s money market and savings account rates plummeted from 0.80% to 0.20%.

Based on UFB Direct’s history, you have to wonder how long this new rate will last. However, I think it’s likely that it’ll last for several months which makes this a better deal than any short-term CD. Below is the rate history of UFB Direct’s savings and money market accounts. The rate history can give us some ideas about how rates may change in the future.

UFB Direct Savings Rate History

  • 08/04/11 - 1.30% APY (launch)
  • 01/18/12 - 1.10% APY (~6 mo from launch)
  • 02/01/12 - 1.05% APY
  • 02/07/12 - 0.95% APY
  • 02/13/12 - 0.90% APY
  • 02/22/12 - 0.85% APY
  • 02/28/12 - 0.80% APY (~7 mo from launch)
  • 04/23/13 - 0.20% APY (~21 mo from launch)
  • 10/09/14 - 1.25% APY

UFB Direct Money Market Rate History

  • 05/30/12 - 1.15% APY (launch)
  • 07/14/12 - 1.25% APY
  • 08/06/12 - 1.30% APY
  • 09/04/12 - 1.10% APY (~3 mo from launch)
  • 10/10/12 - 1.05% APY
  • 10/29/12 - 0.95% APY (~5 mo from launch)
  • 11/19/12 - 0.80% APY (~6 mo from launch)
  • 04/23/13 - 0.20% APY(~11 mo from launch)

UFB Savings Account Features

One thing to note is that this UFB Savings Account is a little different than the previous Airline Rewards Savings Account. First, the old savings account didn’t have a rate tier like this one. Also, you used to be able to earn airline miles/points. If you like earning airline miles/points, you’ll have to open UFB Direct’s Airline Rewards Checking account.

Below is a list of the noteworthy features of the UFB Savings Account:

  • Minimum deposit to open an account is $100.
  • No minimum balance requirement and no monthly maintenance fee.
  • No online banking external funds transfer (see below)
  • Online banking and mobile banking that allows you to deposit checks via desktop PC or mobile phone

The lack of an external funds transfer service is not ideal. However, there’s an easy solution for those who already have an internet bank with an ACH transfer service. You can initiate the ACH transfer from your other bank. You can also transfer money from your UFB Savings account to your UFB Rewards Checking account. The checking account offers free external transfers.

Online Application

At the UFB Direct savings account page, click the "open account" link. One of the options to fund the account is by credit or debit card. However, I was told the funding limit using your card is only $100, and it’ll be coded as a cash deposit which would be considered a cash advance rather than a purchase by your credit card company. A better funding option is an ACH transfer from your current bank checking or savings account. I was told the ACH funding option is limited to $25,000. You can also mail in a check or wire funds from another institution.

UFB Direct Overview

One thing that's important to note is that this new UFB Direct has no connection with the old UFB Direct. That old UFB Direct had its deposits held by Waterfield Bank which failed in March 2010. The old UFB Direct stopped operating when Waterfield was shut down.

This new UFB Direct is a division of BofI Federal Bank (formerly called Bank of Internet USA). Thus, deposits that you make to UFB Direct will be held by BofI Federal Bank. This is the oldest pure internet bank, and it has always been financially strong. It's also part of the public company, BofI Holding Inc.. BofI Federal Bank has an overall health grade at DepositAccounts.com of an "A" with a Texas Ratio of 5.16% (excellent) based on June 2014 data. Please refer to our financial overview of BofI Federal Bank for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35546).

Related Pages: UFB Direct, savings account

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  |     |   Comment #1
I would never deal with them again, they flip flop on the rates without telling their customers in advance, I lost over $1000 in interset by leaving the money thinking the rate is still the same for a whole month and receive almost no interest. The rate cut usually happens in the beginning of the next cycle so you have no time to react in advance.
  |     |   Comment #2
What, you had 1,000,000 in the account and didnt pay attention?
  |     |   Comment #3
There is something to be said about finding a bank or credit union savings account that pays a reasonable rate but historically keeps the rates competitive most of the time.  I am not interested in a bank or credit union that historically lures you in by paying the highest savings rate and then later jacks the rate down to an unacceptable lower rate.
  |     |   Comment #4
 Well I see a lot of complaints. So keep your money at .9%, I'll that the 1.25 as long as it lasts.
  |     |   Comment #7
As long as it lasts?  Fine.  Go for it.  But you might not have to wait very long!  Myself?  I have better uses for my time than to bother with the inconsistent, unreliable, ****balls who set the rates at this bank.
  |     |   Comment #5
The rate is tempting but when I went to apply for the account, the first screen that comes up reads "Welcome, and thank you for choosing ABC Credit Union for your financial needs." Something isn't right.
  |     |   Comment #6
My experience with this outfit coincides with Ken's use of the term "dramatic".  It's a good place to put your money if you want drama.  It's not a good place to put money if you're seeking any kind of consistently higher rates.  In the end, this bank is simply not worth the trouble and aggravation of becoming involved.  They fooled me, and messed with me, once.  It's not going to happen again!  
  |     |   Comment #8
not to mention you need to watch your balance with them or they hit you with fees
  |     |   Comment #9
Just got the "You're missing out on the 1.25%" email from UFB Direct.  If history is a guide, somehow, I don't think that's true.
  |     |   Comment #10
We agree.  I received the same e-mail.  Did not bother to open it.  Just laughed and moved on.
  |     |   Comment #11
The consensus seems to do no one likes or trusts this bank and 1.25% isn't attractive enough. I have also had the BofI experience and I'm also not giving them any money and if they don't or can't attract new money they'll have to raise the rate.
Patricia Burleson
  |     |   Comment #12
I have a UFB Direct acct from 2011.  When they dropped their rate I pulled my money out, but I left $1.16 in the account.  So I'm going to ACH $100K from Alliant CU back into the acct. and collect the 1.25% interest.  Even though you are all saying "not interested", I say "why not" collect that interest for a span.
  |     |   Comment #13
What are the ACH transfer limits when originated at UFB?
  |     |   Comment #14
Think ACH limit of 25k
  |     |   Comment #15
Flip flop on rates happened to me also without notice. To be fair the small print tells you they have the right to do this without notice. Too much trouble. Never again.
  |     |   Comment #16
Here's how to ACH large amounts into ufbdirect: In order to enjoy the large 1.25% APY, one can deposit money into ufbdirect much more than 200K at once, if they open a new savings account online and make the large opening deposit as ACH deposit. But for subseqent ACH, there are limits of say 5K or so per transfer or per month if I recall. So one can open multiple savings account as needed, and close initial ones.
  |     |   Comment #17
Not worthy the +0.2 %...bank unsecured defoulted in 2010, changes rates as it wants, the phone calls not helpfull, no operator in weekends, site unfriendly...look around and get that safe peace of mind 1% somewhere else.
  |     |   Comment #18
Where would you recommend?   I'm guessing they don't all play these games, but who does not who pays that 1% rate??
  |     |   Comment #19
GE Capital Bank has 1.05. They have paid consistently higher rates.
  |     |   Comment #20
I've read about the ridiculously low ach transfer limits.  What about if you push money into UFB or pull money out of UFB, initiating the transfer from another bank?  Can UFB prevent that transfer?  If not, then who cares about UFB's transfer limits?  If anyone knows, please post!
  |     |   Comment #22
I opened a UFB account last month.  The highest limit by far is to push/pull from my Capital One savings account, where the limit is $250K per transaction, $1M per month.  The limit from my Capital One checking is only $10K per transaction, $25K per month but that's not a problem since I can instantly transfer any amount to the Capital One savings.  Hope that helps.
  |     |   Comment #21
I am also interested in understanding of pulling out money procedures.
Brian S
  |     |   Comment #23
It's gone down to 1.10% as of today.
  |     |   Comment #24
Give 'em just a little time.  It'll be down further real soon.
  |     |   Comment #25
for transfers initiated AT UFB checking from an external bank, is it in & out same day or is a day of interest lost or gained ?

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