Background of Nexity Bank

Nexity Bank incorporated in March of 1999, and eight months later acquired all of the outstanding common stock of Peoples State Bank in Grant, Alabama. Nexity Bank received approval from the FDIC to begin internet banking operations in January of 2005. They offer a very wide range of banking products that are described in detail on their website www.nexitybank.com. “Banking Where You Are”, is the Motto of Nexity Bank’s online banking center. Their impressive list of products and services are divided into three areas: banking, lending, and investments. They list a customer base of 21,000 who reside not only in the United States, but in 20 other countries as well.

Products and Services offered by Nexity

Checking Accounts

There are two options when it comes to Nexity Bank checking accounts. With $100 you can open a personal checking account that has no monthly service fee and no balance requirements. The bill pay option on this account will cost you $4.95 a month. The other checking account option at Nexity bank is high interest checking. You do need to maintain a minimum daily balance in order to avoid a monthly service charge, but online bill pay is free with the high yeild checking account. Be aware that if your balance falls under $500 you will not only be charged a monthly service fee you will also not be earning any interest. Both accounts offer free online access, telephone banking, and unlimited check writing. Nexity Bank also offers customer service hours every day except Sundays.

Business owners please note, the high interest checking account is not available for business accounts. Nexity Bank does offer a small business checking account that has no monthly service charge if you maintain an average daily balance of $2,000 for the monthly cycle. Falling below this minimum will result in a $10 charge. If your particular business requires you to write a high number of checks per month you need to be aware that if you write over 50 checks in a month you will be charged $.20 for every check over your limit.

Loans

Home equity credit lines and home equity loans are available through Nexity Bank. Credit lines are available from $10,000 to $250,000 for each. They also boast no annual fees and no closing costs in most states. In the case of home equity loans, the repayment time ranges from 5 to 15 years. Nexity Bank does offer a variety of terms and interest rates. For home equity lines of credit, they offer up to 15 years for repayment with interest only payments possible for the first ten years. If your primary residence is located in Alaska, Hawaii, or Texas, home equity products are not available.

Investments at Nexity Bank

Online Savings

Nexity Bank online savings accounts are attractive since you only need an initial deposit of $50. Also, there is no average monthly balance to maintain and no monthly service charge for a savings account at Nexity Bank. They allow up to six transactions per month. Exceeding the maximum transactions will cost you $10. On the subject of fees, you also will be charged $10 if there is no activity for your online savings account for 24 months. You can also get zinged, a hefty $25 fee, if you close your account within 90 days of opening.

Certificates of Deposit

High CD rates are available for traditional IRA, roth IRA, personal, and non-personal Certitifcate of Deposits. The traditional and roth IRA Certitifcates of Deposits are available with 12, 24 and 36 month terms. Personal and non-personal Certitifcates of Deposit are offered for 30 day, 90 day, 6 months, 9 months, 12 months, and 24 months. The month Certitifcate of Deposit interest rates are the lowest of the bunch, as is expected, and the longer the terms get the higher the interest rate. The personal and non-personal certificates of deposit only require a minimum deposit of $1,000. Interest payments from personal cds are only available annually if the term is for more than one year. All of Nexity Bank’s high interest rate CDs renew automatically.

Money Market Accounts

Nexity Bank also offers three different money market accounts. They have a money market account, money market advantage account, and a business money market account. The high yeild money market account requires $1,000 to open and you must maintain a minimum balance of $1,000 to avoid a service charge of $10. You will also be charged $10 if you have over 6 transactions in a month. The Money Market Advantage account requires a $50,000 minimum to open. If at any time the account balance falls below $50,000 you will not be charged a service fee, but your interest rate will be drastically reduced. Business owners have not been left out at Nexity Bank! The minimums for the business money market account are the same as the regular nexity money market account; however, they do give you the option of maintaining a minimum average daily balance of $5,000 for the monthly statement cycle or a minimum daily balance of $1,000. The business money market accounts are still limited to 6 transactions in a month.

Summary of Nexity Bank Review

From our review of Nexity Bank, we leanred that they offer a wide variety of products and services, but be careful in your selection of what account you choose to open. For instance, if you open a Money Market Advantage account, only to have your balance fall below the $50,000 minimum, you will loose the “advantage” and actually be earning less than you would in the regular money market account. Be aware that higher deposits, when it comes to Certitifcates of Deposit, will not increase your earning rate. The rate is the same whether you have $1,000 invested or $50,000+. One more disclaimer, is that the interest checking account is touted by the website to have tiered interest rates. But, when you look at the numbers listed, they are not. You are either earning interest or you are not because you did not maintain the minimum daily balance. Higher balances, again do not result in higher interest rates. This is great for those who are just starting out in the investment world because you get a high interest rate without a high deposit requirement. If you have a large amount to invest, make sure to compare rates with other banks that do offer higher APY’s for higher deposits.

Honestly, I loved the variety available through Nexity Bank. The website has tons of information that is well organized, but somewhat overwhelming and not really visually appealing. The CDs and money market accounts seemed to be where Nexity Bank was really impressive.

At Bank Truth, we do report on the good and the bad so that you can make the best decision. Nexity Bank’s parent company is filing for bankruptcy. Nexity is assuring its customers that this will not affect them, but it does make you question whether now is a good time to start a banking relationship with Nexity Bank.