HMBradley Bank Review: 3% APY After Saving 20% Of Your Deposits

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Update July 2021: HM Bradley has stopped accepting new customers temporarily due to overwhelming demand, unless you get a referral from an existing customer (each existing customer has 3 invites). You may share your invite link in the comments below if you wish.

Original post:

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 July 2021, 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 other fine print. 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 had to ask them to manually review it. After that, they usually marked it as a direct deposit within 24-48 hours after arrive. (Due to the delay, I believe they still check manually.) 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 invite-only and based on their estimate of your income (which is in turn based on the size of your deposits, although you can attempt to self-report). See my HM Bradley credit card review. 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.

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 a simple online savings account, but if the rates hold steady it can be a very competitive offer for motivated savers.

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  1. I am a bit confused.
    Would you need to save a percentage from your direct deposit? Or from your pay?
    Let’s say I get 1000 a week from work and am saving 75% in my 401k and 250 a week in direct deposit. I am also able to save 20% of that. Why do your 401k contributions count as you say and qualify me as a low/tier one saver?
    I believe it’s probably just 20% of your direct deposit that you need to save, no?

    • Their savings rate is calculated based on all deposits and withdrawals into/out of the account.

      I’m just saying that in general, most people are not going to both save a large percentage in their 401k and also 20% of their remaining take home pay. If you’re doing that, I would consider you a high saver! 🙂

      • Thanks Jonathan. Sorry for duplicate comment below. I agree that going through hoops for something that will probably be cut not worth it. Marcus, Purepoint, Simple…all cutting. Probably won’t chase these on line bank deals anymore. Seems like it’s dying.
        I was lucky to open a add anytime 17 month cd at Navy in January for 2.25 with just $50 with plans to add to it after taxes were figured. Will probably just stick with that.

  2. I am confused.
    Let’s say I make 1000$ a week and save 75% of it in a 401k. My direct deposit is 250$ and I am able to save 25% of that.
    That would qualify me for tier 1, correct? How do they know what I get paid. Surely it’s based off your direct deposit and not pre-tax amount? Why do you think I would be tier one/low saver. I understand this to mean 25% of your direct deposit saved. No?

  3. So if I park, say, 25% of my bimonthly paycheck there, and then transfer up to a total of 100k,
    Would that work? Could I transfer the 25% DD out monthly to maintain a balance of 100K?
    Or would I have to DD the entire check?

    • They don’t say anything about size, they just require at least one direct deposit per month. The savings rate is determined by total deposits/withdrawals of any type.

      • I think you may have answered a question I have. If I made a minimal direct deposit each month, but transfer excess cash, the savings rate is based on both direct deposit and extra deposits vs withdrawals. Using it as a secondary savings account would be easy to get a >20% savings rate.

        But yes, it would be more work than just getting a run-of-the-mill savings at a normal bank.

        • Yes, but remember that your savings account balance essentially always has to keep going up. If you take money out via transfer to external savings account, it counts as spending and thus will lower your savings rate for the next quarter.

  4. So to be clear, for every $1000 you add to the account (whether by direct deposit or other incoming transfer), you could only use $800 of it for paying bills or external transfers out. For every $1000 that comes in, your balance at the end of the period needs to be $200 higher than before those funds came in.

    Sounds like the way to game the system (err, make the most advantage of this offer) is if you have another checking account you use as a primary, but can split your direct deposit so only part of your paycheck goes into this account. Or for a dual income household, only one partner deposits their paychecks here.

    Suppose you have $50k in cash you want to earn 3% on. Right now, you could open the account with just $1k, and direct $1k/mo of your paycheck into this account as a direct deposit. Closer to July 1, you could transfer more of the balance in. Then on an ongoing basis, you could transfer in $1000/mo and spend up to $800 of it, so you’re saving 20% of your $1000/mo but earning 3% on the whole $50k balance.

    You can transfer more in the account at any time and earn 3% on that balance, but if you transfer a big chunk out to another account, you would lose your tier status for that quarter. In that way, it functions a little like a CD with a penalty. Although suppose you transferred out $10k of your $50k balance, that would cost you 3% for the whole quarter (or $375), where if you’re buying CDs you could buy them in $10k chunks. So this account is really designed to be your only/main savings account, and penalizes you for ever spending it. If you used this account to save up for a car, when you actually withdrew the money to pay for the car, your interest rate would plummet for that quarter.

    Overall, not worth it to me.

    • I think you have it right. If you take out too much money during a certain quarter, you will get penalized for it the next quarter, like an interest time-out. But at least it wouldn’t be retroactive and you could just take out all/most of the money when you know a zero interest quarter is coming ahead.

  5. The routing number for HMBradley for Direct Deposit is for RANCHO SANTA FE THRIFT & LOAN ASSN.
    This doesnt match with the bank’s name, is that a concern?

  6. Thanks, that makes sense. I will try what Brad F suggested above.

  7. Jason Boxman says

    This sounds like a good deal in a declining interest rate environment, where by December it’s likely rates elsewhere will be even worse, and 1% will look quite good. If the top rate is at least 1% for Q1 2021, that’ll be even better relative to alternatives! (Grabbing the $500 bonus from Simple was my high water mark this year; how times have changed!)

  8. Jason Boxman says

    If you have an Alliant CU account, it looks like you can’t link to your account. It doesn’t show up in the list of accounts. I don’t see any way to enter a routing # directly instead as is usually possible. I guess I’ll have to bounce funds through my Ally account. The FAQ provides no additional information about supplying a routing # and account # manually. It might not be possible.

    They’ll supply a digital voided check, and even email your employer to help with a direct deposit, if you’d like.

    This’ll be interesting.

    I’m currently told: “You’re not earning interest this quarter.” I’ll have to fund and see if that changes for this quarter or not. It also says “Set up a direct deposit to be eligible for Savings Tier.” So that must be the magic required. So I’ll know by the end of this month.

    Routing and account # are easily provided for direct deposit, no hunting around for it as in decades past.

    Good luck!

  9. Because of your article, I am interested in an HMBradley Bank NOW account. I sent a few questions to the bank and got the response quoted below back. I thought I would share because some of the information is different or was not in your article.
    “ 1. We do not have a bill pay feature available at this time, but our development team is working on it
    2. We do not have checks available
    3. Inbound transfers that are originated from your HMBradley account are limited to $2,500 per day. There are no limits on transfers out of your HMBradley account. We also have no limits on incoming transfers originated from other institutions.
    4. We do allow direct debits. These can be set up with your debit card, or set up with the account & routing numbers where the payment interface enables it.”
    Your article says: “You can probably work around most things using the online Billpay feature.” Note that item 1 from the bank says currently no bill pay feature. However, because direct debits are allowed (item 4), then it appears that one could use a third party bill pay. For example, Bank of America allows you to specify multiple “pay from” accounts, including accounts at other banks.
    Thank you for continuing to provide me with new ideas and products in your articles.

  10. Washerdreyer says

    Where’s the info about needing a high direct deposit to get the credit card? Data points on how high? I purposely have only a small DD going in since it’s a hassle to withdraw it, but it’d be worthwhile to briefly increase it on order to get up to 3.5%

    • Here are their terms:

      My only data point is that they told me my direct deposit “suggested” an income under about $36,000 which was too low to be considered for their credit card. Therefore, you would want to have a direct deposit total of probably at least $3,000 after tax to qualify for the credit card. There is no public application, you must wait until it shows up in your account, presumably after a month at least of having the minimum direct deposit.

  11. FWIW, you have to spend at least $100/mo on the credit card in order to get the 0.5% boost.

  12. Vlad Gurovich says

    Could you clarify the following:
    1) Is it possible to transfer money into HMBradley in addition to direct deposit
    2) Is the 3% interest only earned on the direct-deposited funds or on all funds(including those that you potentially transfer in via ACH)?

  13. I had a virtual chat with this bank & said if I do the DD & deposit 100K if I would get 3% on
    the whole wad. Nina said yes. Asked what about $ over 100K & she said nothing, zero.
    Wishing I had opened an account 3/30/20 when they launched. Uncertain about now.
    Hassle to move money & then rates drop. Never fails.
    The FAQs say only $2500 a day can be added to the account. Nothing mentioned
    re a wire transfer of a large sum. May return to the chat & ask.

    • I am also concerned about a rate drop, but they are experiencing explosive growth right now and also have lots of venture capital (see above link to article about $18m of new funding), so there is some hope that they will keep the rate attractive.

  14. Should have opened account when you first mentioned it!
    Appears I can wire in what I want.

  15. Good to know!
    Thanks so much.

  16. When do we know what the rates will be for the next quarter? Are we sure they’ll be 3/2/1 now for Q1 of 2021?

  17. Wait for it! The rates will drop & drop & drop. I have been chasing interest rates for years and it never fails. My hope is when HMB begins the descent, they will remain higher than others. Which I predict they will for a while & then not.

  18. Are you saying HMB is dropping the rate 3/21? Any idea how low?
    Opened and funded account the other day.

    • Jason Boxman says

      So they seem to update their rates quarterly; There’s no way to know in advance what it will be, but I don’t think it will be worse than elsewhere and quite possibly better. I’m moving more money over this week!

  19. So obviously it’s too late to earn the top tier for Jan-March. But if I open an account, is anytime before the end of March good for the April-June quarter? If I open in March with one DD and no withdrawals would that put me in the top tier?

    • I don’t know, but they are easy to chat with. You can also request a phone call. They call immediately & are pleasant & helpful. I usually get someone named Meg.

    • I opened my account a few days ago. Let me know what she says.

  20. Jon, why do you say the rate is 3% to 3/21? Have they indicated it will be dropped then?
    I fully expect it will be soon.
    I have dropped my cash savings to 250K and everything else is in stocks. I love QQQ. Up nearly 50% last year and going strong.

  21. I created account but got tier 0. How do I reach to tier 3? If I do direct deposit, and save it for 3 months without any withdrawl, do I reach to tier 3 in next quarter?

    • “All customers that set up and receive a direct deposit at least once per calendar month will start in Savings Tier 3. You will remain in this Savings Tier until the next calendar quarter when we update the Savings Tiers for all customers. All new accounts with confirmed direct deposit will earn a tier no lower than Savings Tier 3 for the first full calendar quarter.”

      Make a direct deposit and you’ll get Tier 3 right away (1% APY currently). The earliest you can get to Tier 1 (3% APY currently) if you join in February is April 1st, if you save 20% of your direct deposits.

  22. Does anyone know if you can set up a beneficiary or POD for this account?

  23. It might have been answered yet like to be clear.
    if my direct deposit is $1000/month, so for 3 months = $3000.
    And I transfer in $50,000 after 1st DD.

    Is the 3% only for the DD Or entire balance $51,000 1st month, and $52,000 2nd month,…

    • It’s on the entire amount. I have close to 100K there
      I wish they would let my husband open an account
      But they are really being weird about it

      • Jenny,
        How are you maximizing this account with your direct deposits and getting close to the $100k balance limit?

        Are you doing minimal direct deposits (ex. less than $250)?

        Are you doing any withdrawals or are you just letting the money sit there with minimal direct deposit amounts?

        Frankly, I don’t care if I go over the $100k top a bit – getting that 3.5% on the first $100k is what I’m looking for…for just cash reserves not doing anything else.

        • You will not get the bump to 3.5% without using the CC for a minimum spend of $100 a month. This spend can be used against the 20% required savings. You need to have a minimum DD of $2500 to get the CC. I put a wad$$ into the account early on, so am rapidly approaching 100K. Not certain of future actions. If I lower the $2500 monthly DD to say $50, I’ll lose the 1/2% bump & drop to 3% on the $100K. However that half percent isn’t bad, given it’s on unlimited balances. I’m not about to fuss with numerous accounts that pay higher on low balances.

  24. Need some clarification…
    Just opened an account (6/27). The earliest I can have a direct deposit posted is around the 1st of August. What date will I start earning Tier 3 (1.00APY)?
    If I understand correctly, I will not be able to earn Tier 1 (3.00APY) until the beginning of October. Is that correct?
    When would be the best time to make a large deposit to at least earn 1.00APY?

    Thanks for your reply’s.

  25. Any invites available for HMBradley? Thanks.

  26. Here’s my referral link

  27. RookieInvestor says

    Can someone share their referral link?

  28. FYI, I just created my account and want to transfer money in from another bank. I saw an initial limit of $2,500. Elsewhere I see that check deposits have a limit of $2,500 per day and $10,000 per month. I asked customer support and got this helpful response:

    Inbound transfers that are originated from your HMBradley account are limited to $2,500 per day (there is no monthly limit). We have no limits on incoming transfers originated from other institutions, so if you want to transfer more than $2,500 into your HMBradley account, you can always do so by originating the transfer from your other bank’s website.

    Alternately, if at any point you would like to increase your transfer limit for inbound transfers on the HMBradley side, we can temporarily update that for you after your first direct deposit posts. Just contact us via email or chat on the day you would like to make the transfer, and provide the amount you would like your limit updated to. Any updates revert back to $2,500 after 1 business day.

    Direct deposits do not count toward the total.

    Outbound transfers that are originated from your HMBradley account are limited to $100 until the first direct deposit posts in the account. After your first direct deposit posts to your account, there is no limit on outbound transfers originated from your HMBradley account. There are also no limits on withdrawals initiated from an external account.

    • Thanks for sharing. I can confirm that I have linked with Ally and made several large ACH transfers in and out, with no issues at all. My direct deposit is a true payroll direct deposit.

      • Yeah, I have transferred big wads off money there, tens of thousands in one fell swoop, but need to tamp down DD soon, very close to 100k and looks like zero interest thereafter.
        Anyone know if I can keep 3% with very low DD? Guessing the .5 from their CC will vanish without a 2.5 monthly DD?

        • Yes, I think you should be able to reduce your DD. I don’t see any restrictions on the size of the DD. I wouldn’t stress too much about it.. if you have $100k and then every month you deposit $1000 and withdraw $800, at the end of the year you’re at $102,400 and you’ve still gotten 3% or 3.5% interest on $100,000,

          But still, they’re pretty responsive over chat or email if you want to ask them directly.

          • Thanks.

          • Does the posted interest amount each month count in conjunction with your direct deposit amount when calulating the 80% withdrawal?

          • atc1,
            I don’t know, but I did notice that the microtransactions to confirm an external account DID count as withdrawals.
            For example, if I deposited $5k and left it in.. and they deposited two small amounts that together totaled $1.00 and then withdrew them. They counted my savings rate as $5000/5001 = 99.98%.

            I assume they would similarly count interest as a credit to your account, so if you start with $5k, earn $12.50 interest, deposit $100, you’d need to finish the month with $5000 + 20% ( $12.50 + $100) = $5022.50. In other words, you can withdraw up to 80% of your deposits and 80% of your interest.

          • My understanding is the DD amount doesn’t matter unless one wants the
            Xtra 1/2 perfect from their CC to get 3.5%

        • I’m in Tier 1 and only have a $1 DD.

  29. RookieInvestor says

    I opened an account on Sep 10th with HMB, did a DD on Sep 15th and i am on track for Tier-1 APY for next qtr starting on Oct 1st. So if you want to quickly jump from the default tier-1 (1%) to tier-3 (3%), then open the a/c before Sep 30th and have at-least one DD.

    “Based on $XXXX.XX in deposits and $YYY.YY in withdrawals your next Savings Tier would be Tier 1.
    You have met your direct deposit requirement for September. Percentages update nightly. Your next tier will begin on October 1st.”

  30. I’d love a referral, the ones above aren’t good anymore…

  31. Any referrals available? All of the above are no longer active.

  32. Any referrals available? Missed the one above

  33. Any more referrals available? Missed the one above.

  34. Does anyone have a referral to provide?

    Thank-You in advance!

  35. Disregard my request for a referral link – I rcvd a referral on another website!

  36. Ok…Now that I’m all set up with an account…what is the BEST way to maximize this account with up to $100k?
    If I get the credit card and spend a minimum of $100 a month, I can get 3.5%
    3.5% of $100k should be roughly $3,569 a year in interest?

    The 20% savings a month/quarter seems to be the confusing part in maximizing the most amount of interest?

    Should one fund this account with $95k and have a $250/month direct deposit and not pull anything out of it?

    At some point, the balance with go above $100k – money over $100k won’t earn interest but that’s ok if you’re earning $3,500 a year in interest on the 1st $100k.

    The issue becomes when you want to have a major withdrawal – say $10k withdrawal one time during a quarter. If I have nothing of a Direct Deposit going in ($250/month) and withdraw $10k, I’ll far exceed any savings percentage that quarter and will get dinged in interest?

    Do I understand this correctly?

    Has someone come up with a perfect formula to maximize this account for maximum interest payment?

    I’ll go back and re-read everything but I didn’t see a full maximization plan listed (or did I)

  37. Here is my strategy, I think I have this correct. Please correct me if not.

    Add up your deposits and interest earned near the end of the quarter. Then withdraw 80% of the deposits and interest earned prior to the quarter ending in order to preserve your Tear One status. At the beginning of the next quarter, redeposit funds up to or close to the $100,000 limit. Repeat this process for each new quarter.

    • That is pretty much my basic strategy: The HMB interface does a pretty good job telling you exactly how many deposit have been made so far and your current savings rate. Interest counts as a new deposit. So if you want, you can sweep away up to 80% of all new deposits each quarter and still maintain the top tier. In addition, as mentioned, HMB credit card payments also reduce your balance without affecting your savings rate. This might still create a gradually increasing balance.

      It’s true that with this model you can’t take out a huge chunk of money without losing tier status for one quarter (unless you have a Tier Rewind from back when they offered them for referrals). I don’t know of a way around that one, but that is one of the quirks of HMB. This is more of a bond replacement in my case, so I’m not looking to move it.

  38. This bank and their website is somewhat of a joke…it needs a lot of work!

    And here’s the best part of setting up an account – They’re asking me for a “Selfie” along with a copy of my drivers license, Passport, or other form of official ID.

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