Flagstar Bank Review: Savings & Checking Account, CDs and MMAs

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Flagstar Bank Review

About Flagstar Bank

Flagstar Bank would be popular with many households not because of their deposit products but because of their home loans. The bank’s real strength lies in the area of loans, or more specifically, home financing.

Many borrowers encounter Flagstar because they become the payment address for their home loans. This happens many times because home lenders sell their loans to Flagstar.

The bank received its charter in 1987 and has since grown to 160 branches located across Michigan, Indiana, California, Wisconsin, and Ohio.

The bank currently has some $23.3 Billion in assets. This makes them one of the biggest banks in their service area. Their loan offices are present in 50 states for loan servicing and they are present in more than half for retail servicing.

Across the country, they employ more than 2,000 brokers. They are making their presence felt.

Employing more than 3,500 employees, the bank is still a traditional brick-and-mortar bank. However, it also adapted innovations in banking such that they also offer online and mobile banking plus ATM services.

flagstar-bank-logo-square

On Flagstar Secure Website

Account Types

Minimum Deposit

PROS

CONS

Although the bank started out as a mortgage lender, it has successfully developed its community banking business – with a lot of synergy going on with its loan products. Customers can get a discount off their loan rates if they open a deposit account and use that to pay for their loans.

The deposit rates are not really over the top, but they are competitive enough especially for the higher tiers. Depositors who keep significant amounts in their accounts can enjoy waived monthly fees.

Most deposit accounts do not need a minimum amount to open – and if they do, they are very affordable.

For example, there’s a $1 minimum amount to open an account if you’re doing it online. For some accounts, just walk into a branch and open an account and you don’t have to worry about shelling out a hundred bucks to get your savings journey on track.

Flagstar does not charge its customers for ATM withdrawals that customers make through any of the Allpoint ATM, which has around 55,000 machines all over the world.

Depositors can access their money in ATMs in many CVS and Walgreen pharmacies also without any charge.

Another good feature of their deposit accounts is that they have several overdraft protection options.

Customers have time to make a catch-up deposit to cover accidental overdrafts on their accounts. The bank will only assess charges after 9:00 pm ET on each business day – which means that there’s plenty of time for customers to make a Qualifying Overdraft Deposit.

And if the overdrawn amount is just $5.00 or less, the bank does not charge anything.

Here are the main products Flagstar bank offers for savers:

Savings Account

$0 (Branch) $1 (Online)

Initial Deposit

None

Minimum Balance

0.03 - 1.4%

APY

FeaturesSimplySavingsHigh Yield SavingsHealth SavingsSimplyKids Savings
Minimum to openNone or $1 onlineNone or $1 online$50None
Minimum combined account balances to avail of preferred CD rates$5,000$5,000No information$5,000
Loan rate discount when linked to loan account0.25% to 0.50%0.25% to 0.50%Not availableNot available
APY0.01%0.05% to 0.13%0.04% to 0.13%For $500 and up
Monthly service fee (waived if the customer meets requirements)$3$35 None
Online & Mobile BankingAvailableAvailableAvailableAvailable
Visa Debit/ATM CardFreeFreeFreeFree
Access to AllPoint and Presto ATMs worldwideFreeFreeFreeFree

The savings accounts are quite common-place with several types to choose from. Two notable products are available.

First, the SimplyKids for children and adults up to 21 years old. Second,  the Health Savings Account that help customers plan for healthcare cost. The features of the different savings account are nearly identical except for the APYs.

Obviously, if you are after the deposit interest rate, the High Yield Savings account would be your best bet.

But if you review the rates, there’s another account that comes very close to it, the SimplyMax Savings account.

The bank can do a better job explaining the difference since there’s very little information about this on their website.

Checking Account

$50

Initial Deposit

None

Minimum Balance

0.01 - 0.04%

APY

FeaturesSimply Access CheckingSimply Select CheckingSimply Max CheckingSimply One Checking
Minimum deposit to open$50$50$50None
Minimum combined account balances to avail of preferred CD rates$5,000$5,000$5,000Not available
Monthly service fee (none if the customer meets requirements)$10$15$25$5 (mandatory)
Loan rate discount when linked to loan account0.25% to 0.50%0.25% to 0.50%0.25% to 0.50%0.25% to 0.50%
APYnone0.01%0.01% to 0.03%none
Free customer checkbookNot availableNot availableAvailableNot available
Online & Mobile BankingAvailableAvailableAvailableAvailable
Visa Debit/ATM CardFreeFreeFreeFree
Access to AllPoint and Presto ATMs worldwideFreeFreeFreeFree
Overdraft protection optionsAvailableAvailableAvailableAvailable
Bounce protectionAvailableAvailableAvailableNot available

The checking accounts come with standard features that other banks also offer such as online and mobile banking access, free ATM/debit card, free access to ATMs, and overdraft protection.

What puts them ahead of their competitors is that the linked accounts give customers a small reduction in their loan rates.

Since Flagstar has a very robust loan account portfolio, this feature is something that would appeal to many customers.

The variety of checking accounts offers features that would appeal to customers with specific needs.

While many product features and benefits identically appear in different types, there are certain characteristics that set each type apart from each other.

It starts with the very basic SimplyOne, which is a “checkless” checking account. It is the starter checking account with no minimum amount required to open and comes with a very low mandatory monthly service fee.

For the more affluent clients, they have the SimplyMax Checking Account which gives a better APY. Although the rates aren’t by any means grand, they are better than zero.

CDs

$500

Initial Deposit

30 days - 120 months

CDs Terms

0.05 - 0.4%

APY

FeaturesCDs
Minimum to open$500
Minimum combined account balances to avail of preferred CD rates$5,000
Terms7 days to 10 years
APY0.05% to 0.80%
Automatic renewalOn fixed certificates
Automatic monthly or annual transfer of interestAvailable

Right off the bat, you can see that the APY isn’t stunning. In fact, the rates for each tier don’t even come close to the national averages.

You get the feeling that this product is here just for the sake of having one and not really to generate the numbers for the bank.

The good news is that you can start with $500 to have a CD account when many banks will ask for more. And if you’re looking for a place to park your money productively just for one week, they will welcome your funds as their CD minimum term starts at 7 days.

Money Market Account

$0 (Branch) $1 (Online)

Initial Deposit

None

Minimum Balance

$0.01 - $0.03

APY

FeaturesSimply Money Market
Minimum to openNone or $1 online
Monthly service fee (waived if customer meets requirements)$10
Minimum combined account balances to avail of preferred CD rates$5,000
APY0.04%
Loan rate discount when linked to loan account0.25% to 0.50%
CheckbookAvailable
Online & Mobile BankingAvailable
Visa Debit/ATM CardFree
Access to AllPoint and Presto ATMS worldwideFree

Their money market account is a good way to start your foray into the money market arena because they don’t require a substantial amount to open one, unlike other banks.

As you can see, all it takes is a dollar to open one online. The features are standard and it lets you get a discount on your loan rate.

However, you have to contend with a fixed rate that’s half of the national average rate for money market accounts.

If you’re just in the money market to get a feel of it, this is a good option. But if you’re after a good rate, many banks have better offers.

Pros

Cons

Flagstar Bank Pros & Cons

Like any other bank, Flagstar has some great features – but they are not perfect. Here are the main benefits and drawbacks you should know before applying:

Variety Of Deposit Products

Perhaps the biggest advantage of this bank is their expertise in the lending side of banking.

As a company that started out in home financing, they have also developed a good selection of deposit products. This is great for people who need a full-service bank that can take care of their deposit, investment and financing needs.

The fact that customers can also do their banking transactions face-to-face, online or through their mobile app is also very convenient.

No-Fee ATMs And Waivable Monthly Fees

Anything that’s free is good news in the financial industry.

It’s good service to customers not to charge anything for using the ATM and for making ways not to pay monthly fees (if the bank can’t or won’t waive them at all).

So, as a customer, if you have access to a wide ATM network and don’t have to pay for using it, this is a big plus.

24/7 Customer Service Access

Customers will run into some problems or concerns about their accounts at some point during the life span of the product.

It’s good that this bank has 24/7 customer service access which is becoming rarer and rarer these days among banks.

Mediocre APYs

Let’s face it: customers want decent returns for their money whether for deposits, investments, or money market. The bank isn’t very notable in this area.

But perhaps if you have a loan with the bank, you have no choice but to open a deposit account as well just for the convenience of your loan payments.

If that is the case, deposit interest would not be the primary consideration.

Branches Are Mostly In The Michigan Area

Yes, the bank does have more than 150 branches but they exclude a lot of areas. This means that they have limited access just to customers who live in their service areas.

If you don’t live in Michigan, Indiana, Wisconsin, Ohio, and California, chances are, the bank won’t have a nearby branch for you.

Low Customer Satisfaction Ratings

Many banks receive an A+ rating on BBB and many positive reviews on different websites.

This bank has a BBB rating of A- and there are many dissatisfied customers airing out their frustrations on the Internet.

Banking is primarily about service so customer satisfaction is important – but somehow, the bank falls short in this aspect.

Alternatives Banks For Consideration

Here are our alternatives to Flagstar Bank:

Credit one is a card-issuing bank in the US that only offers credit card services.

Credit one Bank offers several card types like the Bank Visa Credit Card, Platinum Visa, Platinum Rewards Visa, and the American Express Card. The benefits of using a credit one card include; a 1% cashback on transactions, a readily available credit score, retail protection on purchased goods, cashback rewards up to 5% and zero liability protection against fraud. Credit one cards are focused on rebuilding customers’ credit scores by submitting annual reports. There is a minimum credit limit of $300 to ensure that credit is always available.  Also, clients may customize and manage their accounts effectively with the Bank’s mobile application.

You may need to provide some personal and public details to qualify for a credit one card. It may include; name, date of birth, email, residential address, phone number, social security number, and monthly income.

Credit one cards may attract high annual charges up to $75, overseas transaction fees, and high-interest rates. There is an extended processing period up to seven days before payment is approved, and you may need to pay to increase your credit limit.

Better Business Bureau awards Credit one bank an A- for customer service and support.

Banking is essentially a service industry that caters to demanding customers because after all,  it’s their money that’s on the line. So, it’s not very often that one comes across a bank that gets a high score in customer satisfaction. This is where MidFirst Bank separates itself from the rest of the pack.

MidFirst Bank holds the record of getting the highest overall score in all of the United States in the J.D. Power US Retail Banking Satisfaction Survey. Its index score of 877 is the highest ever score of any bank in the nation. But MidFirst didn’t stop there. The bank received the highest score once more in the same survey in 2019. This solidifies that the bank’s commitment to service is not merely lip service but a real commitment.

MidFirst Bank is one of the largest private financialinstitutions in the US. This is a bank that has more than $20 billion in assets and about $1 billion in regulatory capital. This stability is perhaps one reason why more than 625,000 customers trust them.

But big as they are, the banking operations serve mainly the southwest region. Their primary markets include Oklahoma City, Denver, Phoenix, Tulsa, Dallas, and Western Oklahoma. You will also find their full-service banking centers in Boulder and Edwards, CO, and commercial lending offices in Atlanta, Boston, Chicago, Cleveland, Houston, New York City, St. Louis, and Southern California.

They have more than 80 locations where customers can access their services through banking centers, ATMs, online and mobile banking, telephone banking, and drive-thru services. They have 100 MidFirst ATMs all over which customers can use for their banking needs for free.

Summary

The bank has a focus on loans so it has a lot of appeal to a customer looking for a bank to finance or refinance his home.

The lending relationship is the driving factor rather than the deposit products’ attractiveness. If you fit that profile, this could be a good choice for a bank.

It’s also convenient provided that you live in the North-Central United States.

Although they have many loan offices scattered all over the 50 states, there’s nothing like access to a full branch for your banking needs.

If you live elsewhere and need a bank that has a presence in your area, it’s better to go to a more local bank.

This bank has good potentials. Loans are what give banks the big bucks. Flagstar has cemented its place in the lending market and is now developing its deposit market.

If they can channel some of their income to give more returns to depositors, this bank will continue to gain more following in the years to come.