State Farm Bank Savings Account – Contender or wannabe?

Since State Farm has branched into the online banking industry, this post will determine whether or not they can be contenders in the high interest savings account category.

What features does State Farm offer?

Basic features include: minimum opening deposit of $100 with a variable, tiered interest rates. This deposit is higher than some but still much lower than many. The tiered interest is nice because as your money grows, you will get better returns on your balance. More and more, banks are going to compounding interest daily and crediting it on your monthly statement date. Here, State Farm Bank is no different.  State Farm bank is FDIC insured so no worries there. As they are online, you can access your account 24-hours. You can open an account online and they have several easy methods to make deposits: direct deposit forms can be requested, bank transfer, wire transfer or Electronic Funds Transfer – $5000 max limit on deposit for EFT. You can also fund your new Savings Account by electronic transfer (ACH). You can use this savings account as overdraft protection for State Farm Bank® Checking or Interest Checking Accounts

What are the rates and fees on the State Farm’s Savings Account?

On the not so positive side, you will need to deposit more than $50k in order to come close to the national average for APY rate. For any balance under $25K, the interest rate, at .12%, is barely above that of big name banks like Chase Bank or Bank of America, and well below the national average of .67%. If you deposit more than $100K, you will get the slightly better rate of .81%. The monthly fee for this account is only $3.00 and it can be waived if the account received a direct deposit via an ACH (automated clearing house) during the statement cycle.

Transactions and statement information for State Farm Savings Account

You can have unlimited withdrawals if you go to the ATM, make a request by mail or telephone (via check payable to you). You can only have a maximum of 6 transfers per month by pre-authorized or automatic transfer, or electronic banking due to regulatory limits. Statements online are free and can be combined with other State Farm Bank Deposit accounts. They are also available in Spanish if needed.

Summary of State Farm Savings Account

All in all, I would not recommend a State Farm Savings Account. They have a lot going for them, however, their interest rates pale in comparison to the best interest rates out there. If you would like see the full review of State Farm online services offered, you can check out our website. You can also compare the best interest rates for savings accounts and much more. Then, you can make an up-to-date, informed decision as to what is the best fit for your banking dollars.