Since its launch date in October 2011, UFB Direct’s UFB Savings account APY has been on the "Rate Roller Coaster." Today’s rate increase (1.20% APY) puts the APY within ten basis points of the initial 1.30% APY, and a dramatic 100 basis points higher than the 0.20% APY of April 2013.
The minimum balance required to earn the 1.20% APY is $25K, with balances below $25K earning 0.20% APY. In addition, the stated APY requires new money, which is defined as funds that did not originate from another Bofl Federal Bank Brand. Those include Bank of Internet USA, BofI Advisor, Bank X, NetBank, Apartment Bank, Annuitants Federal Bank, and Virtus Bank.
|1.00*%||$25k||-||UFB Direct||UFB Savings (New Money)|
|OTHER TIERS: 0.20% → Up to $25k|
Today’s 80 basis point increase places the UFB Savings account in the top four of the Savings/Money Market accounts listed in DA’s most recent Best Bank Account Interest Rates Summary.
My enthusiasm for today’s rate increase is tempered by UFB Direct’s history of maintaining a top rate for only 3-6 months. Following the first rate cut, further smaller cuts are made, typically within 1-3 month intervals. The chart below shows the rate history of the UFB Savings account since launch date.
This type of behavior on a financial institution’s part illustrates one downside to rate chasing: banks frequently use a strategy of attracting customers with temporary promotional rates, in hopes that many customers won’t take the time or effort to move their money when the rates drop. Caveat emptor.
Thanks to DA reader, Philly, for his Forum post about the UFB Savings account.
Headquartered in San Diego, UFB Direct offers its product line to all U.S. citizens and resident aliens, 18 years or older, who have a valid Social Security number and valid form of identification. All accounts at UFB must be opened online.
UFB Direct (FDIC Certificate # 35546) has an overall health grade of "A" at DepositAccounts.com, with a Texas ratio of 5.39% (excellent) based on September 30, 2015 data. In the past year, UFB Direct has increased its total deposits by $1.52 Billion, an excellent annual growth rate of 46.54%. Please refer to our financial overview of UFB Direct for more details.
UFB Direct is a division of BofI Federal Bank (formerly called Bank of Internet USA). Deposits made to UFB Direct are held by BofI Federal Bank, which is the oldest pure internet bank. With a strong financial history and assets in excess of $6.2 Billion, Bofl Federal Bank is also part of the public company, Bofl Holding, Inc.
How the UFB Savings Account Compares
When compared to the 144 Savings Accounts tracked by DepositAccounts.com that are available nationally, UFB Direct’s UFB Savings APY currently ranks first, regardless of minimum balance requirement.
The above rates are accurate as of 1/29/2016.