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Profile: Colorado Federal Savings Bank

Colorado Federal Savings Bank is an FDIC-insured online bank based in Greenwood Village, Colo.

It’s a pretty simple operation that offers certificates of deposit and savings accounts along with fixed- and variable-rate mortgages.

It operates with fewer than 30 employees serving 185,000 deposit accounts that hold just under $600 million.

It usually offers competitive returns on CDs ranging from 6 months to 5 years, with a $5,000 minimum deposit. Click here to see Colorado Federal’s latest CD rates.

Savings accounts feature no monthly maintenance fees and free ACH transfers with no daily limit amounts. Click here to find Colorado Federal’s latest savings rates.

The downsides are that you must fund accounts through an ACH (automated clearing house) transfer — Colorado Federal won’t process paper checks.

You can only link your Colorado Federal account to only one external account at another bank and are limited to 6 ACH transfers per month.

Perhaps the biggest drawback for some customers is that no beneficiaries are listed on any accounts. This can cause major problems if the account holder dies.

The bank’s website doesn’t have many bells and whistles. In fact, there’s not even a phone number to call for questions regarding savings accounts (although you can speak to a loan officer).

The bank enjoys a good A- rating from the Better Business Bureau.

It also earns a solid four out of five stars from Bankrate’s “Safe & Sound” system, which evaluates banks on such things as asset quality, profitability and liquidity.

That wasn’t always the case.

After it was created in 1990, the bank sought to expand by opening “net branches,” mortgage offices that were franchised through local brokers. By 2004, it had a network of net branches in eight states.

But when the housing market crashed, so too did the bank’s business model.

In 2008, bad loans landed Colorado Federal on a list of troubled banks that was being circulated on Wall Street. The bank’s radio of assets to reserves in its non-performing loans put it in high danger of failing.

It was saved when a new owner stepped in and injected more than $10 million in capital.

Colorado Federal closed all of its net branches and now only offers mortgages in Dallas and Denver.

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