Flagstar is offering customers a choice of $100 or 2% interest on balances up to $100,000 when you open a S.M.A.R.T. Interest checking account. If you choose the 2% offer then they will guarantee that rate for 12 months. It's unusual to have a rate guarantee last that long but Flagstar must assume that it's not going to go much below 2% in the next 12 months anyway.
In essence a 12-month guaranteed checking rate is like a liquid 12-month CD. The 2% is competitive with the best one year CD rates as well as the top savings rates. The $100 is also a decent bank bonus.
I called Flagstar and they said that the offer was open nationally, even if it tells you at the beginning that your zip code is not eligible. You will not have Flagstar branches and ATMs near you but you will have a debit card, checks, etc. It is Internet banking after all.
The requirements to recieve the $100 bonus or the 2% offer are as follows:
- New personal checking account customers only
- Minimum opening deposit of $50
- Direct deposit of income of at least $250 per month
- Direct deposit must be established within first 60 days of account opening
Other requirements and legalese to know include:
- Direct deposit must be established within the first 60 days of account opening.
- $100 bonus will be deposited into your account within 30 days after the first recurring direct deposit takes place.
- All accounts must remain open and active for a minimum of six months. If checking account is closed within the first six months, Flagstar reserves the right to reclaim the $100 deposit and interest bonus.
- 2% interest rate is accurate as of 10/01/2009 and is guaranteed for 12 months after account opening.
- Maximum deposit is $100,000. Funds may not currently be on deposit with Flagstar Bank.
- Offer good only when opening a Flagstar interest-bearing checking account. Account fees could reduce earnings.
- Direct deposit must be established within the first 60 days of account opening or the rate is reduced to current rate.
- Limit one $100 deposit or 2% interest rate offer per customer per account.
- Offer subject to change or cancellation at any time without notice. Flagstar reserves the right to reduce the 2% interest rate prior to the 12 month expiration date if checking balances exceed the $100,000 maximum.
That last one is interesting. You basically can't exceed the $100,000 maximum or they can cancel the 2%. Usually you'd expect the bank to just tier the interest so that the first $100,000 received the 2% and anything over that receives more. Flagstar must not have the internal systems to tier so it is imposing a $100,000 maximum.
Account Opening
Accounts can be opened online. Feedback for the online application has generally been positive. If you open an account, let us know about your experience by posting a comment below. Funding the account can be done via ACH, check, and direct deposit. In order to get the offer you need to set up some kind of recurring direct deposit.
Many thanks to a reader Archie for this.
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