Review Of WT Direct Bank High Interest Online Savings Account

Published 1/29/09 (Modified 3/22/11)
By MoneyBlueBook

If I had to place a bet, I'd wager that chances are, you probably have never heard of WT Direct savings bank before. Compared to more popular online banks like ING Direct or HSBC, WT Direct is a relative unknown in the world of high yield savings accounts. However, its comparative obscurity shouldn't necessarily prevent the bank from becoming the perfect fit for those looking for the best online savings account available. Oftentimes, it's the smaller financial institutions without the gigantic advertising budgets or over-hyped marketing departments that truly offer consumers the best savings account profiles and highest interest rates for their money. While I'm not exactly raising WT Direct up to the status of the absolute best online bank, the company's flagship banking product certainly deserves a bona-fide chance at a fair evaluation. For those holding onto a savings stash that is less than minimal, the WT Direct high yield savings account offers a pretty competitive banking package.

While WT Direct Bank���� and the WT Direct high yield savings account are relatively new creations, they are both the online product extensions of Wilmington Trust FSB, a major financial services corporation publicly traded on the New York Stock Exchange, with more than a century worth of banking experience under its belt. Though the Wilmington Trust parent company is headquartered in Wilmington, Delaware with numerous brick and mortar offices and domestic branches spread throughout major cities in the United States, its new online division of WT Direct is actually based in Baltimore, Maryland. While the actual physical business location of such cyberbanks as WT Direct should be of little concern to most online bank account holders, the fact WT Direct actually has an accessible one and the fact the online company has divisional ties to an established and relatively stable parent bank in Wilmington Trust FSB should offer prospective online customers a more reassuring sense of confidence in this new Internet startup. But of course, before plunking your hard earned money into any deposit institution, it's important to thoroughly dissect the bank's features and verify that the company is solidly legitimate.

WT Direct Offers A Competitively High Interest Rate For Higher Deposit Balances

Glancing at WT Direct and the individual features of its high yield savings account offer, it's clear the bank account caters to account holders looking for a banking option that provides above average customer service attention with the flexibility to manage larger deposits. While the bank has all the traits of your typical online-only Direct bank with its high interest yields, no fees, no minimum balance requirements, and the ability to link up an unlimited number of multiple bank accounts for quick balance transfers, it also provides a complete array of customer service options via e-mail, postal service, fax, and 7 days a week telephone customer support. But as a trade off for the higher level of customer support and online banking attention, the WT Direct high yield savings account calls for a higher deposit balance (compared to other top online banks) to garner the highest interest rate payout.

While it is true that WT Direct does indeed offer a fairly impressively high interest rate yield on its savings account deposits, its interest rate is based on a tiered system. Here is how WT Direct's interest rate offer works. For the first 2 months (60 days) that a new WT Direct savings account is opened, the account holder will automatically earn the top interest rate on his or her deposits regardless of the balance. While there are absolutely no hidden account fees or minimum balance maintenance penalties to worry about, after the 2 month initial activation period, the interest rate is adjusted according to your account balance. After 60 days, the savings account balance must be above $10,000 in order for the entire balance to continue receiving the top interest rate, otherwise, the rate will drop to .50% APY until the account balance is increased past $10,000. It's all or nothing after the 60 day trial period - either the entire balance exceeds $10,000 and the entire balance earns the highest interest rate, or it's below $10,000 and the entire balance earns the lower rate. While this lower interest rate is much lower than WT Direct's top rate, it probably is still better than that offered by most traditional brick and mortar retail savings accounts at places like Citibank, Bank of America, and Wells Fargo.

Why Open A WTDirect Savings Account?

Perhaps the WT Direct savings account's greatest feature is its tandem of great bank rates and commendable customer service support. While national interest rates have ebbed and flowed with great fluctuations due to the economy, WT Direct's top interest rate has historically and consistently ranked in the top 5% of all banks in the U.S., and the hassle free experience and fairly extensive customer support have been well touted by editorial commentators. While the tiered interest rate system of the WT Direct savings account after the initial 2 month trial period may appear as a downside to many smaller deposit holders, the bank account offers numerous benefits, features, and promotional bonus perks that still merit serious consideration.

In my opinion, WT Direct's 60 day trial period is actually a pretty appropriate way for new account holders to get introduced to the WT Direct high yield savings account and decide for themselves whether they want to remain a customer for the long term. The 2 month trial period affords ample opportunity to slowly fund your way to the $10,000 level to continue enjoying the highest rate after the introductory period. Unlike some other premium savings accounts that require large initial upfront deposits, WTDirect gives you at least 60 days to reach the magical balance of $10,000 or more. Even if you don't reach that amount for some time, you will still earn interest income until you do, albeit at a lower rate. You can easily add to your account balance online at any time, and in the interim still enjoy all of WT Direct's other banking perks.

1) No Minimum Balance Requirements, and No Service Or Maintenance Fees

Along with the usual FDIC insurance protection for all bank deposit accounts, WT Direct offers its customers a genuine hassle free banking experience free of hidden fees, extraneous charges, or annoying account minimum penalties. WT Direct Bank also does not require savings account holders to open a new checking account as some other banks do or demand that customers fund their new accounts with a minimum deposit. However, do keep in mind that while there is no minimum balance required to earn the basic interest rate at all times (.50% APY), to get the highest tiered interest rate yield after the expiration of the initial 2 month trial period requires a steady balance in excess of $10,000.

2) Great Customer Support Online and 7 Days A Week Assistance Via Telephone

When I opened my new WT Direct savings account, I immediately received an automatic telephone call from a live WT Direct customer support representative who wished to verify my identity for fraud protection purposes. She was also able to answer a few questions I had about WT Direct such as the type of credit inquiry the company made for new accounts.

A quick browse through WT Direct's online website reveals a fairly extensive customer and technical support system in place to help and guide new and existing customers through the world of online banking. While savvy banking consumers such as myself will probably be content with just using WT Direct's secure online customer support messaging system, WT Direct also offers a 7 days a week toll free customer service phone number for those who prefer talking to a live bank employee. While I don't anticipate utilizing the phone support line too often, I can see how this feature can prove to be an invaluable and extremely convenient feature during a hypothetical banking emergency, particularly in a scenario where the account customer finds him or herself without a working Internet connection.

3) Unlimited External Accounts and Efficient Electronic Fund Transfers

As is the case with opening any new high yield savings account online, there is no need to switch banks completely to take advantage of the high interest rates of WT Direct. By setting and linking up external bank accounts to WT Direct, you can keep accounts at other financial institutions and transfer money between those accounts and WTDirect as needed. By electronically linking bank accounts with your WT Direct account and establishing an electronic funds transfer connection, the link enables transfers between accounts within 3-5 business days. While all high interest savings account fund transfers seem to take a few days to execute (with WT Direct being no exception), WT Direct sets itself apart by offering a nice bonus feature - the ability to continue earning interest income on the transfer amount until and including the day the funds leave the bank. Unlike many other banks that stop paying interest as soon as your transfer request is made, WT Direct continues to pay interest on your transfer amount for as long as possible.

In terms of the maximum number of external accounts you may set up, the nice aspect about WT Direct is that you may link up as many as you like. WT Direct does not limit the number of checking or savings accounts you can link to your WT Direct account, unlike some other financial institutions that may permit only 2 or 3 external accounts such as ING Direct, Emigrant Direct, FNBO Direct, and E-Loan Bank.

4) Easy Online Savings Account Set Up With WT Direct

Like most well run online-only high yield savings accounts, the WT Direct new account opening process is relatively speedy, efficient, and quick. The WT Direct online application form took me less than 10-15 minutes to fill out and submit for approval. Another positive aspect to note is that WT Direct does not perform hard credit checks for new accounts that can potentially hurt your FICO credit score, but rather initiates a simple benign soft credit check - and only for personal identity verification purposes.

Signing up for WT Direct involves the usual online application steps - you will need to provide personal information such as your name, address, phone number, and social security number. You will also need to verify your identity and select a funding source for your new account. The minimum deposit required to open a new WT Direct savings account is just $1.00. Customers can always start with that amount and slowly transfer in additional funds as needed once they get comfortable with using WT Direct.

Those who select an existing checking account as their funding source will need to complete the additional step of verifying ownership of the checking account via a series of automated test deposits to properly link it to the new WTDirect savings account. A few days after you've filled out the online application and selected a funding source, two small bank deposits (less than $1.00 each) will be automatically made to the external bank account that you designated to help WT Direct confirm ownership of the account. Once you've receive the two small deposits, simply return to WTDirect.com and click on the "Verify Trial Deposits" button, and submit the two amounts for final online account activation and setup. During that period, you will also likely receive an automatic courtesy phone call from a live WT Direct agent to make sure your new account opening experience went smoothly. I did, and it was much appreciated as they answered several pressing questions about WT Direct that I had and alleviated any identity theft or fraud protection concerns I may have had. However, the vast majority of questions can easily be answered by reading WT Direct's exceptionally thorough online help pages and list of frequently asked questions and responsive answers.

Is Your Savings Account Money Safe and Secure With WT Direct Bank?

Because of WT Direct's less well known brand name recognition in the marketplace and its less aggressive online marketing approach (compared to popular online banks like ING Direct) and less extensive television advertising presence (compared to bigger names like HSBC Direct and E-Trade), there persists latent concerns about the safety and security of WT Direct online accounts. However, after examining the worrisome rhetoric and comparing them to WT Direct's actual financial specifics and available rating reviews, I must conclude that WT Direct bank passes the stability test and its financial condition appears otherwise free of the problematic credit loans and worrisome subprime mortgage assets that have doomed other major banks such as Washington Mutual.

As many online readers seem to place much authority into���� Bankrate's proprietary Safe and Sound rating system that assesses the financial strength and stability of various financial institutions in terms of capitalization, asset quality, profitability, and liquidity, it's worth mentioning that Bankrate has issued a fairly respectable assessment and Safe and Sound review of Wilmington Trust. Currently, Bankrate rates Wilmington Trust as exhibiting a generally satisfactory condition with good asset quality free of toxic assets with strong capitalization and seemingly ample liquidity. As it appears Wilmington Trust Bank and WT Direct did not participate in the whole subprime mortgage lending debacle that has hammered many of the other big name banks in the marketplace, both seem positioned to weather the worldwide economic recession and credit crisis with less hidden risk to account holders.

Full FDIC Insurance Protection Up To $250,000 For All WT Direct Deposit Accounts

In this day and age, FDIC insurance is an absolutely vital and and important must-have when evaluating any high yield savings account option. Backed by the full faith and credit of the United States government, very few other financial guarantees in life are as rock solid. You should never sign up for a new bank account that isn't fully FDIC insured up to the maximum coverage limit.

Fortunately, WT Direct is fully FDIC insured and a quick browse through the FDIC website reveals that WT Direct is insured and operates under the same FDIC insurance certificate that protects its parent company Wilmington Trust FSB. WT Direct customers who place their deposit savings with WT Direct can rest easy. With some exceptions for different account categories, so long as the deposit holder's entire combined account balance (checking, savings, and CD accounts) remain below the current FDIC limit of $250,000, the entire aggregate balance is fully protected from any type of catastrophic bank loss or failure.

Extra Information and Resource:

• WT Direct ABA/Routing Number for direct deposits and ACH transfers: 052173464