There seems to be a new fintech app every day, but that’s also where higher interest rates on FDIC-insured funds still live (after doing your due diligence). I’m genuinely curious to see what each one comes up as a differentiator. One Finance offers up to 3% APY on select balances and replaces overdraft fees with a line-of-credit. Thanks to reader Matt for the tip. New sign-ups can earn a $20 bonus via referral link (Matt’s link) and $5 after their first debit card purchase. FDIC insurance is provided by their partner bank, Coastal Community Bank.

Let’s cut straight to what earns the 3% APY in their “Auto-Save Pocket”:

• Paycheck Auto-Save. Add your paycheck direct deposit and contribute up to 10% of each paycheck. Up to $1,000/month.
• Debit card automated round-ups. Round up every One card purchase to the next dollar and deposit the difference.

If you have any sort of Direct Deposit, you can earn 1% APY on up to another $25,000 (“Save Pocket”). If you don’t have Direct Deposit, you earn 1% APY on up to $5,000.

This structure is rather clever, as it directly incentives real-world savings while inherently limiting the balance on which they pay 3% APY. Even if you made 100 debit card purchases a month, you’d only average $50 a month in savings via roundups. Most people would also have to move over their entire direct deposit to take full advantage of the paycheck deferral portion. It would take $10,000 in monthly direct deposits to max it out.

(There is also no cash back or round-up matching on those debit card purchases, so you’d be giving up potentially valuable cashback/points/miles rewards to get that 3% APY. I’d prefer the 2% cash back, personally.)

Another somewhat unique feature is the no-fee line-of-credit for overdraft protection (charges 12% APY). There is no interest at all if you repay any negative balance by the end of the same month. Even at 12% APY, this can be a lot less painful than a $35 flat fee if you only overdraft by a few dollars for a few days. For example, overdrafting by $500 for a week would cost nothing if you went back up by the end of the month, or about $1.15 if you didn’t. However, if you’re joining this for the 3% APY, this shouldn’t be an issue.

Finally, they promise “World-Class Live Customer Service”. That is a bold claim coming from a crowd of startups with the bare minimum of customer service. It’s truly refreshing whenever I speak to a knowledgeable, caring customer service rep these days. They did have some app glitches back around November 12th based on a quick scan on Twitter, which honestly seems more in line with the crowd. It would take me a while to trust an app as my primary bank.

The other features are pretty much standard “fintech banking app” fare:

• No monthly fees, no minimum balances.
• Fee-free access to Allpoint ATM network.
• Free debit Mastercard.
• Person-to-person payment system.

If you have the ability to move over some direct deposit and save part of it, you should compare with the structure of HM Bradley. It’s easier to earn 3% APY on a big balance with HM Bradley (and with a smaller direct deposit), but it may be harder to maintain the top rate over the long run as you can’t take out net money without hurting your savings rate. One Finance appears better at encouraging steady savings over the long-run, even if your spending varies.

Bottom line. One Finance is a new fintech app that offers up to 3% APY that incentivizes savings from your paycheck and rounding up your debit card purchases. This might be a good fit for people that want a simple, high-interest savings system.

Capital One is running a $400 bonus for new 360 Checking accountholders. Note that if you have or had an open 360 Checking product on or after January 1, 2018, you’re ineligible for the bonus. Here are the details:

• Open a 360 Checking account by January 26, 2021, using promo code BONUS400.
• Receive at least 2 direct deposits totaling $1,000 or more within 60 days of account opening.
• Capital One will deposit the bonus depending on your opening month. If you open in November 2020 and complete the direct deposit requirement within 60 days, and you’ll get your bonus by the end of March 2021. Opening a month later pushes the bonus date a month back, etc.

Selected fine print:

If you have or had an open 360 Checking account as a primary or secondary account holder with Capital One on or after January 1, 2018, you will be ineligible for the bonus. If your account is in default, closed or suspended, or otherwise not in good standing, you will not receive the bonus.

(I should probably close my idle account now, so I can pick up another one of these bonuses in a couple years.)

Their definition of direct deposit sounds broad, but I don’t know what exactly will work. I would try a transfer from a brokerage account if possible, as opposed to another online bank.

A qualifying direct deposit is an Automated Clearing House (ACH) credit, which may include payroll, pension or government payments (such as Social Security) by your employer or an outside institution.

The 360 Checking account is similar to many other online checking options, solid but nothing extraordinary. Highlights:

• No monthly fees, no minimum balance required.
• 0.10% APY on all balance tiers, as of 11/15/2020.
• Remote check deposit via app.
• In addition to their own ATMs, Capital One uses the Allpoint ATM network for fee-free ATM access.
• You can use your 360 Savings as the overdraft backup source of funds.

Bottom line. Capital One 360 Bank has a pretty solid promo for new checking accounts, but you’ll have to switch over your direct deposit at least temporarily, or at least simulate it with a transfer.

Update: BlockFi now supports ACH to transfer funds electronically from your bank account to the BlockFi Interest Account. Both deposits and withdrawals are fee-free. There is currently a daily transfer limit of $500. Linking is done via the Plaid platform. Please see full post for details, but ACH transfers make this bonus much easier to complete and exit.

New promo, similar but slightly different. BlockFi is a cryptocurrency platform that both pays interest on deposits and earns interest via cryptocurrency-backed loans. Right now, they are offering an up to $250 in bonus Bitcoin for new clients that sign up and fund a new BlockFi Interest Account. Here are the bonus tiers:

• Deposit $25 to $249, Get $15 in BTC.
• Deposit $250 to $999, Get $20 in BTC.
• Deposit $1,000 to $4,999, Get $40 in BTC.
• Deposit $5,000 to $9,999, Get $75 in BTC.
• Deposit $10,000 to $19,999, Get $150 in BTC.
• Deposit $20,000+, Get $250 in BTC.

This must be your first deposit, and you must make the qualifying deposits within 30 days of account opening. The required holding period is roughly 3 months. For example, if you participate in the promo anytime in December, your bonus will be paid out March 15th. This one is an affiliate offer and you should see the promo code partner250 auto-filled on your application.

New BlockFi clients who sign up with a specific partner referral code and fund their account during the promotion period (current calendar month ending at 23:59:59 UTC on the last day of the month) are eligible to receive a tiered bonus paid in BTC. To be eligible for the promotion, this must be your first ever deposit in the BlockFi Interest Account, and you must maintain a $25+ crypto balance through the 14th of the month at 23:59:59 UTC two and a half months from the month of eligibility in order to remain eligible. Eligible payouts occur on the 15th of every month on a rolling basis. If the 15th falls on a weekend, then the payout will occur by the end of the next business day (ex. If you participate in the promo in December, your bonus will be paid out March 15th). This offer is not valid in conjunction with any other current or past promotions and the promo code on the account will be used to determine promo eligibility for new accounts. The bonus will be paid in BTC based on the prevailing market price at the time of payment. Payout will be based on your average daily balance (USD equivalent) maintained through 23:59:59 UTC on the 14th on the month you are eligible to be paid on. Any withdrawals made before 23:59:59 UTC on the 14th of the month you are eligible to be paid out on may affect your tier. BlockFi Interest Accounts are available in most countries worldwide and all U.S. states other than NY. There is a maximum of one bonus per client. This offer is not valid in conjunction. Terms subject to change.

Update 11/12/20: BlockFi now supports ACH transfers direct from your bank account with a $500 daily transfer limit, which is much less hassle than wire transfers. Now this promo is as easy as the $25 BTC Voyager promo. You just might have to initiate multiple transfers over days or weeks.

The BlockFi Interest Account (BIA) currently pays 6% APY on up to 2.5 Bitcoin (BTC) and 8.6% APY on USDC/GUSD stablecoins (subject to change on a monthly basis). There are no trade requirements, but when you deposit USD it will be converted to the GUSD (Gemini stablecoin) by default. (You can buy USDC or something else if you wish.) You could simply hold the stablecoin and earn interest until the bonus posts. Their overall business model is to earn a spread on the difference between lending out money and paying interest.

To earn interest on crypto, we lend assets to highly vetted and audited institutional counterparties. The interest we are able to pay is based on the yield that we are able to generate from lending, which directly correlates to the market demand in the space (I.e. what rate institutions are willing to pay to borrow specific crypto assets, as it varies from asset to asset).

BIA is available in 49 of 50 U.S. states (excluding New York). One free crypto withdrawal per calendar month and one free stablecoin withdrawal per month. After that, additional stablecoin withdrawals are $0.25 each.

BlockFi is definitely one of the more well-established crypto sites, but you should do your own due diligence as it is not an FDIC-insured bank account nor a SIPC-insured brokerage account. I found that they were backed by some reputable firms including Fidelity Investments and Coinbase, with over $100 million raised so far. They use Gemini as their primary custodian, which is a licensed custodian and regulated by the New York State Department of Financial Services. As such, they will still require your name, address, and Social Security Number to verify the identity of all accountholders.

Bonus increased to $75 + 1.00% APY savings account. With rates drops everywhere and no end in sight, I’ve been picking up various cash bonuses instead. Chime is a popular fintech bank app with a $75 cash bonus (up from $50) after a payroll direct deposit of $200+ within the first 45 days of new account opening. To get this offer, you must be referred by an existing user. Here is my Chime $75 referral link. Thanks if you use it! It’s a very simple bonus. Here is a screenshot of my bonus (when it was only $50) appearing nine minutes after my direct deposit:

Here is the fine print:

In order for both the referred individual and the referring Chime member to each qualify for and receive the $75.00 referral reward, the following conditions must be met: the referred individual may not have previously opened a Chime Spending Account (“Account”); they must open a new Account between October 5, 2020 and December 31, 2020; they must open the new account using the referring Chime member’s unique referral link; and they must receive in the new Account a qualifying direct deposit of $200.00 or more within 45 days of opening. The qualifying direct deposit must be made by the referred individual’s employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Friends transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.

Why is Chime so popular? Chime is the second-most popular online-only bank in the US (only behind Ally) with over 3 million customers and a recent valuation of $5.8 billion. Yet, it pays no interest on checking and only a tiny interest on savings (thus my previous lack of interest). I learned that Chime is very attractive to those who are “unbanked” or underbanked”, those people who don’t like traditional banks due to their monthly fees and $35-a-pop overdraft charges. Instead, Chime offers:

• No monthly fees. No minimum balance. No minimum opening deposit.
• No credit check. No Chexsystems check.
• Access to paycheck 2 days early. If you usually get paid on Friday, you can spend the money on Wednesday.
• No overdraft fees, and they may even “spot” you up to $100 until you pay them back.
• Free ATM withdrawals at 38,000+ MoneyPass and Visa Plus Alliance ATMs.
• No foreign transaction fees.

For many folks that have a lot of activity but maintain a low balance, this fee structure is better getting 4% APY or even 10% APY. The key is avoiding those crazy overdraft charges from the big banks and also the various $2 fees hidden inside many prepaid cards. Chime’s only major fee is a $2.50 fee if you make a cash withdrawal at an out-of-network ATM. Chime earns revenue via interchange fees when you buy things on your debit card.

As I opened an account, I noticed that Chime treats you like have never had a checking account before. The sign-up is easily done completely on your phone in a few minutes. You don’t need to deposit a single cent to open. They send basic “Chime 101” emails explaining the effect of bank holidays and how to set up direct deposit.

There is no credit check, so you can have bad credit and even a bad Chexsystems record (meaning you probably left another bank with a negative balance). Nearly every major bank uses Chexsystems to screen new customers. Otherwise, they are referred to as a “second chance” bank account. Chime might have the lowest fees of all such “second chance” banks.

Savings account at 1.00% APY. Once you open the main Chime checking account, you can also open a separate savings account that pays a competitive 1% APY. No minimum balance and no monthly fees on the savings account, either. This used to be a so-so rate, but as of November 2020 it is a top rate for a 100% liquid online savings account with no minimum balance.

Chime has the most of other bank stuff as well. Debit card. Paper check deposit via mobile app. FDIC-insured via partner banks, either Stride Bank or The Bancorp Bank. The only major thing missing besides bank branches is that they don’t provide paper checks. Depositing cash is available, but the third-party physical stores may charge a fee.

Added: I am able to deposit and withdraw fund via Ally Bank push/pull. Your routing number and account number is available openly in the app under “Move Money > Direct Deposit”. My routing number is 103100195, which ABA.com confirms as Stride Bank, NA. based in Enid, Oklahoma.

Bottom line. Chime is an interesting bank startup that targets the underbanked and unbanked by offering a much better fee structure to those with access to direct deposit. No overdraft fees, no credit checks, no Chexsystems. Currently, there is a $75 bonus available only via referral and a no-minimum savings account paying 1.00% APY.

Promo is back. In the current low interest rate world, easy bank bonuses have become more attractive way to boost your safe interest income. BBVA has brought back their popular $250 bonus promotion for a limited-time, with a $200 bonus for opening an Online Checking account and receiving a qualifying direct deposit of $500+ by January 15, 2021. Get an additional $50 bonus by adding an Online Savings account and having a savings balance of at least $1,000 on December 31, 2020. If you want the entire $250 bonus, be sure to check the boxes for both offers on the promotion landing page. Offer good for checking and savings accounts opened between November 9th – November 27, 2020. Thanks to reader Robert for the tip. Checking account bonus details:

For accounts opened online, eligible accounts include BBVA Online Checking and BBVA Easy Checking. For accounts opened in branch or by calling 1-844-BBVA USA, eligible accounts include BBVA Premium Checking, BBVA Convenience Checking (only available in Florida and California), BBVA Free Checking and BBVA Easy Checking, BBVA Free Checking and Easy Checking are only available in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas.

Online Checking account details:

• No monthly service charge. No ongoing minimum balance.
• Minimum opening deposit is $25.
• No ATM fees nationwide at more than 64,000 AllPoint®, participating 7-Eleven® and BBVA USA ATMs.
• You will automatically receive a paper account statement by mail for a fee of $3 per month. However, you can opt for free electronic account statements and eliminate the $3 Paper Statement Fee when you turn off paper statements through Online Banking. Don’t forget to opt out!

Savings account bonus details:

You must first meet stipulations for the $200 Checking Bonus to be eligible for the $50 Savings Bonus. The savings account must be opened at the same time as the checking account through this landing page using the “Open Bundle Now Button”.

Online Savings account details:

• No monthly service charge. No ongoing minimum balance.
• Minimum opening deposit is $25.
• Currently interest rate is 0.05% APY.
• You will automatically receive a paper account statement by mail for a fee of $3 per month. However, you can opt for free electronic account statements and eliminate the $3 Paper Statement Fee when you turn off paper statements through Online Banking. Don’t forget to opt out!

Additional bonus details:

• If qualifications are met, you will receive your bonus by March 31, 2021.
• We reserve the right to deduct the bonus amount if the account is closed within 12 months of opening.
• You must be a new BBVA savings customer who has not had a BBVA consumer savings account in the past 12 months or closed due to negative balance.
• Accounts must be open and in good standing with a balance greater than or equal to $0.00 at the time of payment in order to receive the new account bonus(es).
• These bonuses are not combinable with other BBVA Direct Deposit or Savings Account cash bonus promotions, and you may not have received a Direct Deposit or Savings Account Bonus in the past 24 months.

This is a relatively easy bonus as long as you can switch over a direct deposit of $500+ by mid-January 2021 and move over $1,000 in the savings account by the end of December. There are no ongoing monthly fees to worry about, the timeline is reasonable, and the amounts you have to commit are relatively low. For comparison, you’d have to keep $50,000 at 0.50% APY for an entire 12 months to get $250 in interest.

Beam Financial was yet another fintech app that promised a high interest rate along with (what they think are) clever hurdles to get it. They’ve had various hiccups since their delayed launch in 2019, but most recently many customers found themselves unable to withdraw their own funds. This certainly sounds like a nightmare! As more news has slowly trickled out, important details of the story have emerged – see CNBC, American Banker #1 (paywall?), American Banker #2 (paywall?), Google app complaints, and BBB complaints.

To be blunt, it seems that Beam simply didn’t know how to run a bank properly. Here are the highlights:

• Beam opened some sort of commercial custody account with Huntington Bank (a real FDIC-insured bank), but that account didn’t allow withdrawals (!). Beam apparently didn’t know that before they opened the account (!!).
• Beam then added Dwolla as their ACH provider (to provide transfers, not to hold any money), but Dwolla terminated their agreement as of October 1st, 2020 with a (disputed) one month of notice for violating their agreement.
• Dwolla was supposed to manage transfers between Huntington and another deposit network provider R&T (which also provides FDIC insurance). R&T also terminated their relationship with Beam at the end of October 2020 for violating their agreement.
• Beam used to list Wells Fargo, Citigroup, Morgan Stanley, and US Bank as examples of banks they work with on their website. When contacted, none of those banks stated they had a relationship with Beam. Those names are now gone.
• Beam lost up to $300,000 due to a deposit chargeback scam that seemed easily avoidable (details below).
• BBB complaints about account access started as early as December 2019. They were officially investigated by the Federal Trade Commission (FTC) for the second time by May 2020.
• Beam says the money is all just stuck somewhere now, with no way to get it back to their rightful owners. They have given no date as to when this will be fixed.

Within its first 3 months of existence, Beam was apparently defrauded out of about $300,000 by the modern version of check kiting. A malicious customer would initiate an ACH transfer of funds to Beam, and then Beam would let them withdraw it to another account before it fully cleared. Meanwhile, the malicious customer would cancel their initial ACH transfer. Net result: No money in, just money out! I guess they never saw the movie Catch Me If You Can. This is why most banks have clear funds availability policies to protect themselves.

Why didn’t I open an account with Beam? After searching my emails, I found that I did submit my email for the Beam waitlist in August 2017. They invited me to their private beta in April 2018. I declined. I didn’t know any of this would happen, but I do remember that they were vague about the name of their partner bank that would provide FDIC-insurance, despite so many loud emails with emojis and a very aggressive referral program. So much hype, but so many delays. I thought they’d be “vaporware” forever. When it did finallly arrive, I didn’t like their confusing model of offering 7% interest for a single day if I jumped through their hoops. How was I supposed to track that? I usually only like to share offers that I’d take advantage of myself, so I never mentioned it here (thankfully).

I would have found more red flags if I did open an account…

What are some quick checks to perform before depositing substantial amount of money? Here are some steps that I take when dealing with a new financial account. My most recent account opening was HM Bradley, so let’s run through them as an example.

If they are a banking app, what financial institution is providing the FDIC insurance? What is the certificate number and what is the name on it? These days, many banks have multiple names or they offer deposit services to other financial companies.

The HMBradley website claims says that “All deposit accounts are provided by Hatch Bank, Member FDIC.” The FDIC BankFind website shows certificate #25803 for Hatch Bank in San Marcos, CA. There is one location, which per Google Maps is a strip mall with the name “Rancho Santa Fe Thrift & Loan” as of April 2019. According to this announcement:

Rancho Santa Fe Thrift & Loan Association changed its name to Hatch Bank, effective April 12, according to the California Department of Business Oversight’s monthly bulletin.

The San Marcos, Calif.-based bank is a subsidiary of Conshohocken, Pa.-based Firstrust Savings Bank, and Semperverde Holding Co. is the ultimate parent of both.

Fun fact: Firstrust Bank was started in 1934 and is the largest family-owned bank in the Philadelphia region and the official bank of the Philadelphia Eagles.

Beam would not provide an FDIC certificate and just stated that they use a “network” of banks including US Bank, Citibank and Wells Fargo (all of which denied any relationship with Beam when contacted).

Does that named financial institution actually acknowledge the named fintech app somewhere? Either verify via phone call, website link, press release, something to confirm this claim from both directions.

On the Hatch Bank website, HM Bradley is clearly mentioned and linked to on the front page.

After signing up for the account, does the routing number match up with the promised bank?

The routing number provided was 322286188. According to the official site of ABA routing numbers, ABA.com, this matches up with Hatch Bank.

Based on my research, Beam would NOT provide a routing number, ostensibly so they could maintain their overall $15,000 deposit limit and $5,000 maximum deposit per day.

If I link the account to another savings account (ex. Ally Bank), can I push/pull funds without issue?

Ally Bank allows a high number of linked banks, and it is free to simply push and pull $1 to/from an external account. HMBradley lets me push and pull from Ally and other external banks with no issue.

Beam would NOT give you a routing number and account number, so you couldn’t link it other accounts and push/pull. You can only initiate transfers within the Beam app itself. This is a HUGE red flag and instant deal-breaker in my opinion.

Does the bank have a working customer service phone number? If not, how responsive are they to email or Live Chat?

If they have a phone number, just call it and ask for something mundane, like verifying your account balance. Phone customer service is expensive, but it’s still very nice to have. HM Bradley does not have a phone number that I can find, but it does have Live Chat from 9-5pm Pacific, Monday through Friday. I have contacted them via both Live Chat and e-mail support (support@hmbradley.com) multiple times and have gotten satisfactory support. Mostly, I bug them to mark my direct deposit as such to qualify for the higher savings tiers.

Beam had no phone number or live chat, only an e-mail address.

How much venture capital have they received? When? From whom?

These banks may have various business models with fancy projections, but honestly, in the beginning your interest is being paid out of venture capital. HM Bradley apparently got $3.5 million from 6 VC firms in a seed round in November 2019. PayPal founder Max Levchin is an investor through his HVF Labs.

I could not find any evidence that Beam Financial received any substantial venture capital at all. Note that there is a startup called Beam Solutions that raised $9M of venture capital before recently being acquired, but that is not Beam Financial.

A high interest rate doesn’t automatically mean danger. There are definitely many different sources of revenue in the banking world, and I have (and continue to) receive much higher interest in my bank accounts than if I just kept it in Bank of America or Chase, earning nothing. ING Direct was a young start-up once, and it changed the entire industry. Banks have paid me over ten thousand dollars to switch to them. Rewards checking accounts come and go, oftentimes with very high rates. Prepaid debit cards gave me 5% to 6% APY for a long time. Credit unions offered me long-term CDs at interest rates double or triple the national average, all because they have unique funding needs. I have literally earned tens of thousands of dollars in extra interest by taking advantage of offers that are only available to individuals (not huge institutions) and for a limited-time. This is not a highly “efficient” market, not least because most people hate changing banks.

There is always some risk involved. Doing all of the above doesn’t mean that HM Bradley or any financial institution won’t have problems in the future. In the end, there is always some risk of bad actors at least delaying access to your money. Don’t put all your eggs in one basket. While the “smell” test is important, I focus on making sure that my funds are landing in an FDIC-insured account. It remains to be seen if Beam will make all of their customers whole without government intervention. I certainly hope so. I hope this added publicity brings more attention to their plight.

* Beam’s website at MeetBeam(dot)com still says nothing about their issues. They are still gathering e-mail addresses for new sign-ups. That is not right, and so I’m not linking to their site.

** I have no financial interest in Beam or HMBradley, in terms of you opening an account. My only “skin in the game” is that I have my own cash at HMBradley. Please do your own due diligence.

Updated October 2020. HMBradley is a fintech bank startup that differs by offering customers a variable interest rate based on their savings rate. Deposits are FDIC-insured through Hatch Bank. As of October 2020, the top rate is 3% APY, which is over 2% higher than the popular online savings accounts like Ally Bank, Capital One, or Marcus. Is there a catch? What’s the fine print? Here’s my review of HMBradley after opening an account and reading their FAQ, fee schedule, and deposit agreement. Thanks to reader Guarav for the tip.

Rate tiers. Interest is earned on balances up to $100,000 and is set each calendar quarter. The interest rate updates for all customers at the beginning of each calendar quarter: January 1st, April 1st, July 1st, and October 1st. In order to qualify for a “Savings Tier”, you must receive a direct deposit at least once every month and save at least 5% of your quarterly deposits.

New customers start in Tier 3 and stay there as long as they maintain at least one direct deposit per month. For example, if you open in October, the next reset date would be January 1st and your interest earned for the next 3 months is based on your activity in the previous 3 months. Here are the current rates for each tier:

Requires a “real” direct deposit every month. You must receive some sort of direct deposit each month, as defined below:

For our accounts, we define direct deposits as those deposits made by the customer’s employer or a federal or state government agency or retirement benefits administrator. These generally include payments made by corporations and other organizations. We do not consider deposits to an account that are made by an individual using online banking or other payment provider such as PayPal or Venmo as direct deposits.

They appear to be relatively strict on receiving a “real” direct deposit and not a person-to-person transfer. Based on my experience, they have a system for detecting incoming deposits and marking them automatically as “real”, but it is not 100% accurate and your direct deposit may have to be reviewed manually. Their online account interface clearly tells you if you have made the required direct deposit for the current month (see screenshot below). If not, you should contact them in order for them to manually check and mark your transfer as a direct deposit. I have a legit employer direct deposit and still had to do this every month. Having it marked properly is required to get the top rate.

Savings rate is based on ALL deposits and withdrawals. For the calculation of “savings rate”, all deposits are considered including incoming transfers from another personal bank account. At the same time, your “spending” will also include any transfer out of your account, even if it’s just to another bank account that you own.

Basically, money has to keep coming into HMBradley and not go back out, if you maintain a positive savings rate. That’s rather clever. They just have to maintain the high interest rates to keep reinforcing this cycle.

NOW account? No paper checks. It should be noted that HM Bradley’s account is actually a lesser-known form called a “negotiable order of withdrawal (NOW) account”, which per the CFPB which gives the bank the right to require at least seven days written notice of a withdrawal. Supposedly, this is rarely done in practice. Like a checking account, there are no limits on the number of withdrawals each month. However, unlike a checking account… there are no checks! I suspect that not having to deal with paper checks saves them a good chunk of money. I’m personally fine with that as long that equates to a higher interest rate.

The Bank offers Negotiable Order of Withdrawal transaction checking accounts, which allows you to make deposits by check, ACH payment, transfer from another account at the Bank, or wire transfer. NOW accounts only are available to consumers for personal, family, or household purposes. The Bank does not offer business accounts and you agree not to use your HMBradley Account for business purposes. The Bank may request 7 days’ advance notice of a withdrawal or transfer of funds from the NOW account.

Credit card adds 0.50% APY. They recently added a credit card, but it is only open to those that have sizable payroll direct deposits as that is part of their creditworthiness criteria. If you do get it, you can earn another additional 0.50% APY, for a total of up to 3.5% APY.

Additional features. No minimum balance, no monthly fees. $100 minimum to open. Interest is compounded daily and credited monthly. No paper checks. There is fee-free ATM access via your Debit Mastercard at over 55,000 ATMs in the STAR and MoneyPass networks (or at any store that allows for cash back on debit purchases). There is no online billpay (“coming soon”) and there is no ability to deposit checks (remote deposit also “coming soon”). They may close your account without notice if you maintain a zero balance.

My thoughts. In the current rate environment, the ability to earn 3% APY on up to $100,000 is exceptional. I don’t know of any “rewards checking” account has a balance limit of $100,000. This can be a good opportunity if you understand the rules and the top interest rate stays higher than the competition.

All new customers that open now will earn a maximum of 1% APY until the next quarter starts (January 1st, 2021 as of this last update). This is actually a good rate in the current rate environment. If your savings rate is determined to be above 20% as of December 31st and you had a “verified” direct deposit each month, then you will reach Tier 1, but will Tier 1 still be 3% APY then? There is no rate guarantee and they don’t promise to provide any set amount of advance notice. I was happy that they maintained their 3% APY rate for October-December 2020, but it should also be noted that some of their lower rate tiers have already dropped from when they first starting taking deposits.

The idea of incentivized higher savings rates is good, but it may be a tough hurdle for those living paycheck-to-paycheck. On the other hand, as long as you can switch over a partial direct deposit, adding some consistent amount each month with minimal withdrawals would also work.

Bottom line. HMBradley is a digital bank startup that differs by offering customers a high rate (currently up to 3% APY) based on the percentage of their deposits that they save. They require moving over a monthly direct deposit, and the rules are a bit more complex than I’d like, but if the rates hold steady it can be a very competitive offer for motivated savers.

Added 11/16/20: HMB added a new referral program. If you sign up via my referral link, I will get a free “Tier Rewind” if my savings rate drops later on. You can refer others for the same benefit. Thanks if you use it! Also here is an interesting interview with the CEO, which thankfully shows a good respect for anti-fraud vigilance.