Allstate Bank History

As an offshoot of Allstate Financial (think life insurance) Allstate Bank has certainly had an interesting history to this point.  Allstate Bank first received its thrift charter in 1998, and began offering retail banking services in the year 2001.  For nearly ten years Allstate Bank gradually accumulated deposits to the tune of $1 billion.  On February 8, 2011 however, Allstate Financial decided to get out of the business of retail banking and sold all of its deposits to Discover Financial Services (think credit cards).  The transformation of Allstate Bank into the newly renamed Discover bank will near completion by the middle of this year.  So in essence, this bank review will still be on Allstate Bank, but keep in mind of the change that will be occurring soon to Discover Bank.

What makes Allstate Bank different than the rest?

What differentiates Allstate Bank from other banks lies mostly in its name brand recognition.  If you know Allstate Life Insurance and are satisfied with what they offer in that realm, you can also set up a bank account with them.  It allows you to organize life insurance, car insurance, and banking all under one roof, and very few others have the capability of doing so.

Products and Services offered by Allstate

Allstate Bank offers three main services: high yield Savings, CDs and IRA CDs, and insured money market accounts. All savings accounts are insured by the FDIC for up to $250,000 just like any other bank.

When you set up a savings account with Allstate Bank, you get a free ATM card, up to $6 per month allowance for ATM fees from other banks, as well as 24 hour access via phone, internet, and ATM.  Allstate Bank also offers an Automatic Savings program, in which you determine how often and how much money to transfer from another account into a High Yield Savings Account.  All of these features are very similar to what you would find at a major bank such as Wells Fargo.

Concerning CDs and IRA CDs, Allstate Bank offers six different CD maturities: 90 days, 6 months, as well as 1, 2, 3 and 5 years.  In order to set up a CD, one needs to have a $1,000 minimum deposit for personal accounts, while business accounts need to have at least $10,000.  An interesting feature offered regarding the CDs is that you can withdraw monthly interest without having to incur any type of penalty.  Of course, Allstate Bank does penalize you for taking out principle early.  IRA CDs are the same as regular CDs, except for the fact that it grows tax free instead of tax deferred, and is a unique option that separates itself from other smaller banks.

Lastly, Allstate Bank’s insured money market accounts have similar features to their savings account, such as a free ATM card, $6 dollar ATM allowance, and unlimited ATM withdrawals.  To set up a money market account, you need to have a $500 minimum deposit, as well as keeping at least $250 in the account each month without having to face an $8 penalty.  Interests on these accounts are given in a tiered rate structure.  In other words, the greater your balance the higher the Annual Percentage Yield (APY) will be.

What about checking?  Allstate Bank no longer offers checking accounts.  This may be due in large part to their acquisition by Discover Financial Services, but it is not fully known.

Conclusion of Allstate Bank Review

One word that sticks out when discussing Allstate Bank is similarity.  It doesn’t really offer anything that a major bank doesn’t already offer.  Again, the only real feature separating Allstate Bank from the rest is that one can combine insurance and banking under one roof.  With Allstate Bank’s recent acquisition, it should give added stability as well as improved features.  In any case though, I would wait it out until the changeover is completed before trying to open any type of account.

Get more information via bank ratings.