History of State Farm Bank

The State Farm Bank review offers an overview of State Farm’s 3 cd account types, jumbo money markets, and traditional savings account. State Farm Bank was chartered in 1998 as an extension of State Farm Insurance Company.  The bank does not have branches in its insurance offices, but agents are available to help answer product questions. Customer service is provided through the internet and the call center.  You can access a wealth of information on their website www.statefarm.com/bank. State Farm Bank offers all the accounts and services you would expect from any bank direct to your home or office computer through online banking.  Many of State Farm Bank’s online services are also available in Spanish. In our State Farm Bank review, we found State Farm bank to be a strong bank with good rates; however, pay attention to fees that some of our best banks would not think of charging.

Three Types of Certificates of Deposit to Meet Your Long-Term Goals

Perhaps the best online account State Farm Bank offers is its cd accounts.  These high rate cds are easy to open and carefree to maintain.  The Fixed Rate Certificate of Deposit is available in terms from three to 60 months.  The Roth and Traditional IRA CD account offers higher, tax-deferred interest and terms of 12 to 60 months.  For education planning, you can chose the Coverdell Education Savings Account CD in terms of one to five years.  These State Farm Certificate of Deposit accounts can be established for any child under 18 years old and for special-needs beneficiaries of any age.  The funds must be dispersed before the beneficiary is 30 years old except in the case of special-needs beneficiaries.  Earnings on the education cds can be tax-free,  if used for qualifying education expenses.  All State Farm Bank high yield CDs have an opening balance requirement of $500, offer higher interest rates for deposits greater than $100,000 and are automatically renewed at maturity.

Money Market Accounts—Savings and Checking Combined

A State Farm Bank money market account combines the interest earning potential of a savings account with the access and flexibility of a checking account.  There is a minimum opening balance of $1000 and a minimum daily balance of $100.  The highest money market interest rates are reserved for balances over $100,000.  The money market account can be used for overdraft protection for a variety of other accounts and for the State Farm Visa® Credit Card. When looking into high yield money market accounts it is always a good idea to do some research to find the best money market account to fit your specific needs.

Traditional Savings Accounts by State Farm Bank

One of the benefits of a State Farm Bank savings account is the ability to find the exact interest rates for your zip code.  Most other online banks list general rates which may or may not be available in your area.  The rate sheet lists interest rates for all account types so it is very easy to compare rates on different products.  One disadvantage to a State Farm Bank savings account is the interest rates are tiered according to your account balance.  There is an opening and daily balance requirement of $100, but interest is compounded daily to maximize your return.  State Farm Bank does refund ATM fees, but the high rate savings account does have fees for certain services like going below the daily balance and for overnight deposits less than $100.  State Farm Bank does not offer high yield savings accounts.

Health Savings Account—High Interest, Lower Medical Expenses

If you have a qualifying high deductible health insurance plan you may be eligible to offset some of those expenses with a health savings account.  All contributions and earnings are tax free; withdrawals are tax free as long as they are used for qualifying medical expenses such as deductibles, co-pays and even dental or vision care.  There is a minimum opening balance of $100, but there is no minimum balance fee assessed to this account.  However there is an annual enrollment fee of $25.  Balances can be made by your or your employer and unused balances carryover each year.  The first box of basic checks is free with this account.

Summing Up State Farm Bank Review

Though State Farm is one of the most recognizable and trusted names in the insurance industry,  State Farm Bank does not offer accounts comparable to the online bank units of other insurance companies or other online banks. If you would like to compare products and rates offered by several online banks please see our page of bank reviews.  All their accounts are FDIC insured which does create confidence in knowing that all accounts are insured up to $250,000. They also offer the Coverdell Education Savings Account CD, a tax free way to fund your child’s education and the Health Savings Account, a tax free way to offset a high deductible. While these two accounts distinguish them, their other accounts are lacking the high yield rates of their competitors and State Farm Bank seems to have more restrictions and fees than the competition. If you would like to compare cd rates, take a look at our reviews of the best cds rates that are being offered by online banks.