Banking Reviews: UFB Direct's High-Yield Money Market Savings

If you've been looking for any sort of savings account, you know that there are dozens if not hundreds of different banks that would love to take your money and give you quite a decent rate of return for savings accounts. ING Direct pioneered the business in the late 1990's, and now dozens of other banks are following suit and offering their own high-yield savings accounts. One of the many competitors in this business is UFB Direct. They offer a high-yield money market savings account which currently earns 5.31% APY, which is one of the highest rates around. Is it where you should put your money? Let's find out.

If you take a visit to UFB Direct's website, you'll notice that it wasn't made by any all-star web designer. Fortunately for them, most of us don't choose our bank based on how pretty their website is! This isn't very big of a hassle, but it makes it kind of hard to gather information about them, you have to do a bit of digging to find anything.

It turns out that UFB Direct isn't really a full-fledged bank; rather it is a front for Sky Financial Bank (skyfi.com), much in the manner that Grand Yield Direct is a front for The Apple Bank. This isn't that big of a deal, but it's certainly worth mentioning. Sky Financial Bank is one of the 40 largest publicly held banks in the nation. It does most of its business in the Midwest, and has been around for quite sometime. Much like every other bank, it's an FDIC member, and offers a wider range of financial products.

Much like other online banks, the UFB Direct High-Yield Money Market Savings offers no minimum deposit to open an account, and no monthly minimum balance, which is always a good thing. Currently the bank offers an interest rate of 5.18% which after interest is calculated makes for an annual percentage yield (APY) of 5.31%, which is ver competitive in the online savings market.

There are some fees that UFB Direct has that many other banks do not have. They can really sting you if you don't watch what you're doing, so read their rates page very carefully before doing any business with them. Since it's a money market account, you'll have check-writing privileges, however if you write more than the maximum of 3 checks per month, you'll be charged $10 for each check after that!

The major drawback of UFB Direct is that they don't accept electronic fund transfers (EFT). So when you want to deposit money into the account, you'll have to do it at one of their ATMs or you a direct deposit from your paycheck! This makes it very difficult to transfer money in and out of the account. With other major banks, such as ING Direct, Emigrant Direct, and the like, you can make transfers online, which makes it so much easier.

One benefit of an account with UFB Direct is that they will give you an ATM card and refund ATM fees that other banks charge you, which is not bad at all! This means that you can take money out of any ATM or deposit money at ATM, regardless of who's it is, and not have to pay any fees for the privilege of doing so.

In the end, I wouldn't use UFB Direct as my primary savings account because it would be very difficult to send money to on a regular basis, but it would make for a very good place to put your emergency fund, because you can get to it with your debit/ATM card readily and you won't have to deposit much into it too often.