Yesterday and Today drops:
Tab Bank High Yield Savings was 0.90% now 0.65%
CFG Bank High Yield Money Market was 0.86% now 0.80%
All America Bank Money Market was 0.80% now 0.60%
Redneck Bank Money Market was was 0.80% now 0.60%
Vio Bank High Yield Savings was 0.76% now 0.66%
CIT Bank Money Market was 0.60% now 0.55%
CIT Bank Savings Builder was 0.55% now 0.50%
Northfield Bank Platinum Savings was 0.45% now 0.35%
CIT is merging with First Citizens out of Raleigh, NC, which probably explains why they have been quick to drop rates.
But .55% isnt particularly uncompetitive these days, either. I saw new of this merger, and wonder if First Citizen’s will maintain CIT’s “high” yield focus. They havent ever offered anything enticing, besides local branch access for when it’s needed.
I am not personally involved with this situation so my knowledge is very, very limited. Still, this does appear to be a liquid money matter as best I’m able to discern. Apparently the FDIC insurance is “indirect”, and there is real trouble. CNBC has documented the entire matter far better than anything I can write. Here is a link to their article:
Terrible story. Good thing we didn’t have a post here. But as I read 7% on a savings, “looks to good to be true”, deal.
The Doctor has a post on this as well.
I would never, ever put any meaningful money into these “partner bank” institutions. I have a Sofi Money account which also uses these partner banks, and I opened it as a way to get the bonus and for the fee-free international ATM withdrawals. I otherwise use it as an “untrustworthy” checking account for merchants or places that require bank account information, like PayPal. I push/pull from Alliant exclusively to get money into or out of this account.
(an aside: Sofi’s security model is absolute crap. All sorts of folks on Reddit noticed they had compromised ATM cards based on bogus charges being pushed through, yet they had never used the cards at any merchant. Sofi never admitted a problem/breach.)
I strongly suspect that some of the marginal Fintech outfits will be some of the first institutions to fail due to COVID. Aside from the deposit “business”, they often market things like private student loans, car loans, and HELOCs towards millennials that do not use traditional lenders. With many of those individuals now unemployed, combined with unemployment insurance beginning to run out, I suspect it’s just a matter of time before these places close up shop. Good luck getting your FDIC insurance.
I think it’s important to note that there’s nothing fundamentally wrong with the sweep account concept. The new fintechs did not invent it, it has been used by large and small brokerages like Fidelity and Scottrade for cash balances for decades. One big difference though is that the legitimate companies tell you up front exactly which banks are part of the sweep. IIRC Scottrade had 4, wealthfront has 4 or 5.
Beam claimed “hundreds” of FDIC banks in the sweep. My best guess is they did not have direct relationships with any of those banks and instead used some kind of an intermediary. And this is all assuming it wasn’t just a ponzi scheme from the start. Even if everything they say is true, I’d be surprised if they manage to recover from the bad publicity, and it could be a long time before people see any of their money, if ever.
Except nobody could get 7% annual yield fro the entire year. First it was promised to the top 10 referrers (bloggers or spammers who refer the most new users) and for only 100 days. After that you could only get anything higher than the base 2% by referring new users and interacting with the app (by logging in for example). And I think all rate increases were temporary. So it wasn’t really too good to be true, you had to work to get that increase. And there was a limit to the amount you could deposit ($15K), therefore there was a limit to how much you could make.
I never used or signed up for it and don’t know anyone who did, btw, just summarizing what I’ve read.
I wonder if anyone has tried to withdraw from HM Bradley yet
That article seems to imply that everyone’s money is sitting at a FDIC insured bank, but Beam lost their ACH service provider so they have no way to process transfers.
I’m curious if people have made any deposits to their account over this same timeframe? If they’re processing deposits but not withdrawals, that would help clarify things (in a bad way).
Received notification today that the interest rate on HSBC Direct Savings accounts will change from 0.50% to 0.30% on November 03, 2020.
what are excessive drops? I used them when they had the bonus and a high rate. Now i use them to xfer $ to HMBradley. So far seems fine for that. I only have about 3k left there.
BTW I just checked and Bradley is FDIC up to the max 250k. Part of Hatch bank. never tried a withdrawal tho.
There might be trouble in paradise
Checked my Keesler HIMMA Plus interest rate for October this morning. It was down to 1.35% APY. My understanding was that my rate was locked at 1.4% APY for six months. It has not been six months!
In checking current HIMMA Plus rates, presumably only for those opening an account right now, I do see a rate of 1.35% APY.
Hence, insofar as I’m able to discern, they have lowered my higher and supposedly grandfathered interest rate down to the current rate.
Not good. 
Yes. Same thing here. I have the HIMMA+ that is 1.5%, & the first month it paid 1.5%. My payoff rate this time is 1.45%. I opened the acct 8/25/20 guar 6mo. Gotta check this one out tomorrow. 
Drops from Friday through today:
Salem Five Direct eOne Savings was 0.80% now 0.61%
My eBanc Super Saver Money Market was 0.70% now 0.60%
Alliant High Rate Savings was 0.65% now 0.55%
Smarty Pig Savings was 0.65% now 0.55%
Synchrony High Yield Savings was 0.65% now 0.60%
NASB High Rate Savings was 0.50% now 0.35%
I thought it was noted here that only the 1% promo bonus is “locked”, and that’s on top of the going rate of the MMA.
From back in August - it seemed to be determined then that just the 1% bonus over top of the variable rate is guaranteed for the 6 months.
Yeah, that old 20 Aug post was prior to my obtaining more information and opening an account. It took me a while to climb on board.
The information I obtained subsequently led me to think the rate was locked en toto. That take appears now to have come under question once again.
Ouch.