bank rates

Flagstar Offers 4-Month Rate Guarantee

It will pay 1.15% APY for four months.The top nationally available savings account rate was just cut, so it’s nice to find at least a little glimmer, even if it comes with some caveats.

If you open a new savings account or money market account at Flagstar Bank (www.flagstar.com), it will guarantee the promotional rate for four months.

And that rate: 1.15% APY.

In this savings environment, that yield beats the best nationally available savings account and all short-term CDs.

There’s no minimum deposit required to open an account, nor is there a minimum balance requirement to earn that rate.

Although Flagstar Bank is based in Troy, Mich., and has 113 branches in that state, the bank says anyone can open an account online at www.flagstar.com.

Now come the caveats.

The top balance on which that rate applies depends on where you live.

Within the bank’s Michigan footprint, the rate is good on balances of up to $10 million.

Outside the footprint, the rate is good on balances of up to $250,000, according to the website.

Any balance above the top amount earns 0.30% APY.

And at the end of four months, your account will begin earning the standard yield of Flagstar’s savings or money market accounts, depending on where you live.

For savers outside Michigan, you’ll earn the standard Express Savings Account yield, currently offered at 0.80% APY (it may change between now and the end of the four-month guarantee). That’s about a third of a percentage point less than the best nationally available deals.

There is no monthly fee associated with this account.

Inside the Michigan footprint, you’ll revert to either a SimplySavings, SimplyMoneyMarket or SimplyMax Savings account. Those tiered accounts currently earn between 0.05% APY and 0.75% APY and charge monthly fees if you don’t meet certain conditions.

This isn’t the first time savers who live near a Flagstar branch get a lesser deal. This has been going on for years.

Flagstar’s 1.15% APY rate tops the best nationally available savings account rate of 1.10% APY offered by UFB Direct and ties the best nationally available money market account rate of 1.15% APY offered by AmTrust Direct (www.amtrustdirect.com) and My Banking Direct (www.mybankingdirect.com), which are both divisions of New York Community Bank.

However, a $5,000 minimum deposit is needed to open an account with either AmTrust Direct or My Banking Direct. Balances of $5,000 or more earn 1.15% APY. Balances below that earn 0.25% APY.

Because this is a special promotion from Flagstar, and the deal isn’t identical everywhere, we’re not putting this in our rankings.

You can see how these deals compare to the best savings and money market account rates from scores of banks in our database.

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