There’s a new national online bank in town, with yields competitive enough to land multiple spots on our CD Rates Leaderboard.
But in truth, it’s not a new bank at all.
The new contender is Popular Direct, which was unveiled three weeks ago. It offers only a menu of CDs and a simple savings account.
Popular Direct is the new offspring of Banco Popular North America, which is the U.S. subsidiary of Puerto Rican bank Popular Inc.
Popular Inc.’s bricks-and-mortar U.S. presence is Popular Community Bank, which operates almost 50 branches in New York, New Jersey and south Florida.
If that rings any bells, it’s because Banco Popular also owns E-Loan, and we wrote about both of them extensively last summer when E-Loan dramatically raised its rates at the same time that Puerto Rico defaulted on its debt (the two events were unrelated, as you can read here).
The CD returns you’ll see on the new Popular Direct website may also seem familiar.
That’s because they exactly mirror E-Loan’s — same terms, same APYs and same minimum deposit of $10,000.
So the obvious question is why Banco Popular birthed a new online bank that is essentially a twin of E-Loan, just in different window dressing.
To find out, I spoke yesterday with Popular Community Bank’s chief operating officer, Manuel Chinea, as I did last summer to ask about E-Loan’s dramatic new CD strategy.
Chinea told me this is all about market testing. As was true a year ago, Popular Community Bank is still experiencing robust growth in its commercial lending and is in need of increasing deposits to fund those loans.
Popular Direct was started to experiment with a new online avenue for attracting consumer deposits that would better align with its corporate brand identity.
E-Loan, in contrast, bears little resemblance to Popular Community Bank, due to the fact that it was acquired, rather than created, by Banco Popular.
I also asked Chinea how long we can expect Popular Direct and E-Loan to offer parallel products and yields.
“We plan to run it for at least two more months, and depending on how clear the outcomes are, we might decide that’s fine, two months is enough. Or we might decide we want to run it a little longer, to gather more data,” reported Chinea. “If the data is clear enough that we can make some strategic decisions, then we’ll proceed accordingly.”
So for the time being, expect to see Popular Direct on our Leaderboard everywhere you see E-Loan, which is currently in the 12-, 24-, 48- and 60-month terms.