Review of SaveBetter – High-Interest Savings. Most savers want to maximize their savings rate even in today’s low-interest-rate environment. Unfortunately, most national and regional banks are offering low-interest rates. For instance, the average nationwide savings account interest rate is around 0.06%. The average national 1-year Certificate of Deposit (CD) rate is not much more at about 0.13%.
These rates are not high, and most savers want a greater rate. A higher rate will let you earn more interest and meet savings goals like saving for an emergency fund.
One option is SaveBetter.com, a platform allowing savers to choose from a menu of Federal Deposit Insurance Corporation (FDIC) insured savings products. In addition, the interest rates on these products are generally more than the national average.
Review of SaveBetter – High-Interest Savings
What is SaveBetter?
The SaveBetter service lets users access multiple savings products from different community banks through a single dashboard. In addition, the platform aggregates curated FDIC-insured and other saving products in one site.
A user has one account on SaveBetter.com but can access multiple savings products from different banks. The service reduces the hassle of opening a new bank account, closing an old bank account, or maintaining numerous bank accounts. In addition, the platform reduces the number of monthly bank statements.
Overall, the SaveBetter platform is about convenience and high-interest rates in FDIC-insured products. SaveBetter does not charge users a fee and, instead, is paid a fee by its partner banks.
Is SaveBetter.com Safe?
The banks in the SaveBetter service are members of the FDIC. This fact means your money is insured up to $250,000 per depositor, per insured bank, for each ownership category according to the FDIC website. In addition, the FDIC protects depositors of insured banks if the bank fails. Since 1934, no depositor has lost money in FDIC-insured deposits.
The SaveBetter platform offers savings accounts, money market deposit accounts (MMDAs), and CDs. According to their website, these three types of accounts are insured by the FDIC.
Although the SaveBetter platform is relatively new in the US, the platform is owned by Deposit Solutions; a German fintech start-up. Deposit Solutions was founded in 2011 and has offered its platform overseas for the past nine years. Reportedly, the firm worked with 150 banks in 20 countries and surpassed $30 billion in transmitted deposits by 2020, which should provide confidence to users about SaveBetter.com.
Types of Savings Products Offered by SaveBetter
The SaveBetter platform offers consumers high-yield savings accounts, MMDAs, and CDs.
High-Yield Savings Accounts
A high-yield savings account works much the same as a traditional savings account with one primary exception. According to Investopedia, high-yield savings accounts usually have an interest rate about 20 to 25 times more than traditional savings accounts. However, the interest rate is variable and depends on market conditions.
Most high-yield savings accounts are offered through online or small banks competing with larger brick-and-mortar banks. Generally, there are minimum deposit and balance requirements. However, in some cases, the minimums are relatively low. In addition, some banks limit the number of monthly withdrawals.
Money Market Deposit Accounts
An MMDA is a type of savings account insured by the FDIC with a variable interest rate. They usually pay higher interest rates than regular savings accounts but with restrictions. Importantly, MMDAs are not the same as money market mutual funds. MMDAs are insured by the FDIC, while money market mutual funds are not. Additionally, there are other differences between the two.
Banks and credit unions can offer MMDAs with higher interest rates because they invest the deposits in short-term debt obligations. An MMDA is conceptually like CDs. However, unlike CDs, there is no minimum holding period, and thus the interest rate is usually lower.
MMDAs differ from savings accounts since they may offer check writing, but they sometimes require minimum balance requirements, withdrawal limits, and possibly fees.
Certificates of Deposit
A CD is a time deposit account. It is an account where money is deposited for a fixed time period known as the term at a fixed interest rate. In exchange for depositing the principal for a fixed period, the bank or credit union typically offers a higher interest rate.
A CD differs from savings accounts or MMDAs since there is one deposit at the start of the term. However, a savings account or MMDA allows for additional deposits.
A saver who withdraws their principal early is penalized a certain number of days of interest. However, no-penalty CDs offer early withdrawal of the principal without penalties but at a lower interest rate. In addition, there are several other types of CDs.
How Does SaveBetter Work
- Review the Savings Products – The process starts by reviewing the FDIC-insured savings products on SaveBetter.com. Once you find a product that fits your needs, you can select and apply to it.
- Create an Account – Once you select a product, you will sign-up and create an account on the SaveBetter platform.
- Add Funds to the Product – Next, you add funds to the product for an existing account. The money is transferred through the Central Bank of Kansas City, which acts as the custodian. The Central Bank of Kansas City then transfers the funds to the bank offering the product you selected.
- Add Other Products – You can select as many products as desired from the same bank or different banks through the SaveBetter dashboard.
- Review Your Account – You can review your account periodically from the dashboard on SaveBetter.com.
Partner Banks at SaveBetter.com
There are currently six partners banks at SaveBetter.com, including the Central Bank of Kansas City, Continental Bank, Patriot Bank, Ponce Bank, The State Exchange Bank, and WEX Bank.
The banks’ offerings and APY interest rates change periodically, so check the site for the latest information. You should also read the terms and conditions.
Central Bank of Kansas City
The Central Bank of Kansas City is a community bank founded in 1950 located in Kansas City, Missouri. The bank has two branches and is certified as a Community Development Financial Institution (CDFI). The primary role of this bank is acting as the custodian of funds deposited by savers. However, the bank also offers savings products.
Continental Bank
Continental Bank is a commercial bank founded in 2003 located in Salt Lake City, Utah. The bank specializes in commercial lending for small and medium-sized businesses. However, it does offer retail accounts, including checking, savings, MMDAs, and CDs.
Currently, Continental Bank offers high-yield savings accounts and fixed-term CDs on the SaveBetter platform. The fixed-term CDs are for 3, 5, or 13 months.
- High-yield Savings Account: 0.40% APY
- 3-Month CD: 0.45% APY
- 5-Month CD: 0.55% APY
- 13-Month CD: 0.65% APY
Patriot Bank
Patriot Bank is a community bank founded in 1994. The bank has branches in Southern Connecticut and one branch in Scarsdale, New York. The bank is larger than most others on the list and has nine branches. Patriot Bank offers consumer, business, and commercial products.
Currently, Patriot Bank offers an MMDA at SaveBetter.com.
- MMDA: 0.55% APY
Ponce Bank
Ponce Bank is a community bank founded in 1960. The bank operates in the New York City area with 13 branches in Bronx, Manhattan, Queens, and Union City, New Jersey. Ponce Bank offers consumer, business, and commercial products.
Currently, Ponce Bank offers high-yield savings accounts and fixed-term CDs on the SaveBetter platform. The fixed-term CDs are for 5, 13, or 48 months.
- High-yield Savings Account: 0.41% APY
- 5-Month CD: 0.25% APY
- 13-Month CD: 0.45% APY
- 48-Month CD: 0.45% APY
The State Exchange Bank
The State Exchange Bank is an independent community bank founded in 1901. The bank has one location in Lamont, Oklahoma. The bank focuses on consumer and commercial & agricultural loan products.
Currently, The State Exchange Bank offers fixed-term CDs at SaveBetter.com. The fixed-term CDs are for 4, 7, or 9 months.
- 4-Month CD: 0.40% APY
- 7-Month CD: 0.47% APY
- 9-Month CD: 0.50% APY
WEX Bank
WEX Bank is an industrial bank located in Utah. The bank is owned by WEX, a financial technology services provider for fleet, travel, and healthcare industries. WEX is located in Portland, Maine.
Pros and Cons of SaveBetter
Pros
- No fees are charged by SaveBetter.com or on the accounts.
- A simple process through one dashboard
- Multiple products to choose from and compare
- Interest rates are many times higher than the national average
- Low minimum balance
- All products are FDIC-insured
Cons
- Limited choice of banks, but the service is new and growing
- Limited range of products
Final Thoughts on Review of SaveBetter – High-Interest Savings
The SaveBetter platform offers a convenient way to save with high-yield savings products. The accounts are suitable for goals like emergency funds, house or condo down payment, car purchase, vacation fund to travel across the US, etc. The interest rate on high-yield savings accounts, MMDAs, and CDs is greater than the national average. The higher rates mean more interest income and faster compounding to meet your financial goals.
SaveBetter Review
9.3 / 10
Reviewer
Pros
– No fees charged by SaveBetter
– Simple process through on dashboard
– Multiple products to choose and compare
– Interest rate many times higher than the national average
– Low minimum balance
– All products are FDIC-insured
Cons
– Limited choice of banks but service is new and growing
– Limited ranger of products
Summary
