HM Bradley - is it safe - FDIC response

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nisiprius
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Re: HM Bradley - is it safe - FDIC response

Post by nisiprius »

ball241 wrote: Wed May 26, 2021 7:03 am...Yes I just was not clear that they got a FDIC insured bank routing number on that account with an account in their name
That to me is the big difference...
Yes, it's a big difference. So now, in hindsight, we all know one more thing to put on our checklist of items to verify before opening an account at a fintech pseudobank.

It's kind of like money market mutual funds, although nowadays the rates are so low the whole point is moot. They are pretty safe, except for the one time incident when one of them wasn't, but they aren't banks.
Last edited by nisiprius on Wed May 26, 2021 7:13 am, edited 3 times in total.
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ball241
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Joined: Sun May 24, 2020 6:38 am

Re: HM Bradley - is it safe - FDIC response

Post by ball241 »

nisiprius wrote: Wed May 26, 2021 7:06 am
ball241 wrote: Wed May 26, 2021 7:03 am...Yes I just was not clear that they got a FDIC insured bank routing number on that account with an account in their name
That to me is the big difference...
Yes, it's a big difference. So now, in hindsight, we all know one more thing to put on our checklist of items to verify before opening an account at a fintech pseudobank.
Yea, very true. Thanks
JBTX
Posts: 8364
Joined: Wed Jul 26, 2017 12:46 pm

Re: HM Bradley - is it safe - FDIC response

Post by JBTX »

nisiprius wrote: Wed May 26, 2021 6:32 am In the wake of the collapse of fintech pseudo-bank Beam Financial, Ken Tumin of DepositAccountsopined:
Ken Tumin wrote:My Take - Safety of banking at any non-bank fintech?

The problems at Beam highlight the risks of banking at a fintech that uses a sweep account arrangement.
I think that applies to Beam but not HM Bradley. But...
Ken Tumin wrote:It also suggests risks of banking at any fintech that’s not a bank. Even with fintechs that partner with just one bank, there may be more risk than we think. If the fintech doesn’t act responsibly, your money may be at risk.

As this Beam case showed, it was the FTC and not the FDIC that helped Beam customers. If you’re dealing directly with a bank that doesn’t act in a safe and sound manner, the FDIC can force changes or shut down the bank to prevent loss of your insured funds. If you’re banking at a fintech that doesn’t act in a safe and sound manner, you’ll need to wait for the FTC to settle with the fintech or win in court.
It seems pretty clear. HM Bradley cannot be as safe as a bank, because HM Bradley is an intermediary between you and the bank. Say you put an IRS refund check in a deposit envelope and ask a trusted friend to take it to the bank for you. It's almost certainly OK, but it is not the same as depositing it yourself. You can verify that it was deposited--but if it wasn't, it will be a major nuisance.

With a fintech that is not a bank, there is more to look at than the initials "FDIC." You do need to look behind the reassuring language it says on the website. You do need to deal with reputational issues. You do need to verify. And you (somehow) need to keep verifying because if anything goes wrong, by the time it becomes evident as a glitch or delay in withdrawal it may be late to avoid a major nuisance.

HM Bradley is not like Beam Financial, and postings in various forum threads have pointed out key differences. But the point I'm making is that none of the problems with Beam were obvious except in hindsight. The key detail in the Beam fiasco that their depositor's money was not safe even though they really were putting it into an FDIC-insured bank. It is a story about mishandling customers' money, not stealing it.

Nov. 4, 2020: Beam chief says there’s another side to story of deposit mishandling.
...according to [Beam Ceo] Du, [there] was a problem with the account Beam had opened at Huntington Bank. “When we first onboarded, they did not tell us that this account only goes one way, which means that basically the pool account can only go in deposit, it cannot withdraw,” Du said. “They're not able to do a net withdrawal from that pool account. If we knew it was going to be a one-way thing, we wouldn’t have worked with Huntington.” ... Du said this feature blocked Beam from withdrawing money from the Huntington account to return it to customers.
This is beyond grotesque. But the question is: how could a Beam depositor have known? They would have had to review the business contract Beam had with the Huntington Bank, and spot a seemingly obvious problem which Beam itself claims to have overlooked!

Another wrinkle is that the ability of a startup business to keep all the promises, answer the phones, and track all the money is dependent on it being a reasonably healthy business. So the business health of your fintech is something else that needs to be monitored.

It's probably not a crazy risk. It's probably not a big reward. Gotta strike the balance for yourself. But don't go thinking of HM Bradley as "a bank."

You agree HMBRADLEY is not the same as Beam, but then turn around and compare it to Beam.

As mentioned by somebody else, perhaps a more applicable comparison is this.

https://www.nerdwallet.com/article/bank ... ent-review
The Fidelity Cash Management account is technically a brokerage account, which means it’s not a bank account and doesn’t have the same regulations or offerings (like a savings account) that a bank would have. The FDIC insurance that it offers comes from the partner banks that Fidelity works with. As is the case with most cash management accounts, Fidelity “sweeps” its customers’ deposits into these banks and the deposits are given FDIC insurance by extension. It also has consumer-friendly overdraft policies and earns interest.
index2max
Posts: 474
Joined: Mon Jan 21, 2019 11:01 pm

Re: HM Bradley - is it safe - FDIC response

Post by index2max »

dogagility wrote: Wed May 26, 2021 4:09 am
index2max wrote: Mon May 17, 2021 12:04 pm This is why I recommend people take advantage of 3%+ accounts at credit unions offering nationwide signup. To sweeten the deals, have your spouse sign up for their own accounts too (you can be joint on those too). This way you're dealing directly with the financial institution.

Checking (with debit transactions):

1. Evansville CU

3.3% up to $20,000

2. Lake Michigan CU

3% up to $15,000

Savings (no debit transactions required)

3. Service CU

5% up to $500 in primary savings

3% up to $3000 in holiday club savings

4. Digital CU

6.17% up to $1000 in primary savings

5. Blue FCU

5% up to $1000 in accelerated savings
Open all these accounts to the max for maybe $700 more in my pocket over a years time span? Eh. I'll pass.
Laugh all you want, but I am getting a better pre-tax, pre-inflation yield in these deposit accounts than I would with putting my money into VTSAX right now. Soon I’ll be getting $300/month or $3600/year. Not terrible in this low interest, high-priced asset market.

Then I’ll have dry powder ready for the next big market crash. :beer
SnowBog
Posts: 1521
Joined: Fri Dec 21, 2018 11:21 pm

Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

index2max wrote: Fri May 28, 2021 12:30 pm
dogagility wrote: Wed May 26, 2021 4:09 am
index2max wrote: Mon May 17, 2021 12:04 pm This is why I recommend people take advantage of 3%+ accounts at credit unions offering nationwide signup. To sweeten the deals, have your spouse sign up for their own accounts too (you can be joint on those too). This way you're dealing directly with the financial institution.
Open all these accounts to the max for maybe $700 more in my pocket over a years time span? Eh. I'll pass.
Laugh all you want, but I am getting a better pre-tax, pre-inflation yield in these deposit accounts than I would with putting my money into VTSAX right now. Soon I’ll be getting $300/month or $3600/year. Not terrible in this low interest, high-priced asset market.

Then I’ll have dry powder ready for the next big market crash. :beer
Your numbers seem way off... Assuming you max out these accounts, that's $120.42 in interest a month. Even if you have 2x the accounts (for a spouse), you are still only at $241/month...

And I think your comparison to VTSAX is equally off...

Assuming you had these accounts maxed in January ($40,500) to get the full amount of interest rate (and I'll even give bonus credit and let interest grow on the amount over the limit). That's roughly $607 in interest for 5 months, with an estimated total of $41,107. For reference, that's $98.24 more than a 3% rate would have paid you at HMBradley... I prefer simplicity, so the extra gain isn't worth the effort for me... But to each their own...

But if you compare that against the same $40,500 invested in VTSAX in January (same amount, same starting period), you missed out on "extra" gains of $4,210 over the same time period, with an ending balance of $45,317.

Even if you had gone to 60/40 VTSAX/BND (and BND hasn't done well YTD - currently at a loss), you'd still have had "extra" gains of $1,829, with an ending balance of $42,936.

Granted, that's highly dependent on stop/start dates... And I'm sure you can cherry pick dates which show a positive return (like February 2020) for "savings" accounts, but generally speaking your cash is losing out to other investment options each month... https://www.portfoliovisualizer.com/bac ... tion2_3=40

And unless your crystal ball is better than mine - no one knows when the next market crash will happen - or for how long. So I just keep my money invested the same, and if/when a market crash happens, I have bonds and can rebalance... And if I have losses in taxable, I can Tax Loss Harvest to lower my taxes on other gains I've had (dividends/etc.) for short term benefits, and overtime (by the time I need these funds) its highly likely they'll be at even higher all time highs.

For clarity, we do keep roughly 12 months expenses in cash, just to make managing cash flow easier [as we have some lumpy income and expenses]. The rest we keep invested...
hudson
Posts: 4150
Joined: Fri Apr 06, 2007 9:15 am

Re: HM Bradley - is it safe - FDIC response

Post by hudson »

nisiprius wrote: Wed May 26, 2021 7:01 am
ball241 wrote: Wed May 26, 2021 6:52 am...All of this makes sense, but
the account is opened through Hatch, you get a routing number that is clearly Hatch, which is FDIC insured
. The money when deposited goes through this routing number to Hatch account in your name...
Yeah. The broad outlines are clear. As I said, "it's probably not a crazy risk and it's probably not a big reward." You can point to very clear differences between HM Bradley and Beam. It's still true that the Beam customers' money went into an FDIC-insured bank just as Beam said, and yet they had problems anyway.

So if you are looking at some other fintech pseudobank, it still isn't a bank, and it isn't automatically bad because Beam was bad, nor is it automatically OK because HM Bradley is OK. You can't say fintech pseudobanks are bad, you can't say they'r OK, all you can say is that they are not banks and the level of due diligence needed is higher than with an FDIC-insured bank account.
I agree that money deposited directly into Hatch Bank is FDIC insured because Hatch bank is on the FDIC list.
Is Hatch bank generating enough gain on the deposits to pay those attractive interest payments?
HM Bradley is promising higher interest payments than most or all FDIC banks.
I speculate that most if not all FDIC banks are not making enough money on deposits to pay HM Bradley type rates.
How does HM Bradley and Hatch Bank make enough money to pay the interest?
Bottom Line: Hatch deposits are likely FDIC safe. What about the interest?
index2max
Posts: 474
Joined: Mon Jan 21, 2019 11:01 pm

Re: HM Bradley - is it safe - FDIC response

Post by index2max »

SnowBog wrote: Fri May 28, 2021 3:26 pm
index2max wrote: Fri May 28, 2021 12:30 pm
dogagility wrote: Wed May 26, 2021 4:09 am
index2max wrote: Mon May 17, 2021 12:04 pm This is why I recommend people take advantage of 3%+ accounts at credit unions offering nationwide signup. To sweeten the deals, have your spouse sign up for their own accounts too (you can be joint on those too). This way you're dealing directly with the financial institution.
Open all these accounts to the max for maybe $700 more in my pocket over a years time span? Eh. I'll pass.
Laugh all you want, but I am getting a better pre-tax, pre-inflation yield in these deposit accounts than I would with putting my money into VTSAX right now. Soon I’ll be getting $300/month or $3600/year. Not terrible in this low interest, high-priced asset market.

Then I’ll have dry powder ready for the next big market crash. :beer
Your numbers seem way off... Assuming you max out these accounts, that's $120.42 in interest a month. Even if you have 2x the accounts (for a spouse), you are still only at $241/month...

And I think your comparison to VTSAX is equally off...
...
Yes, my post was misleading. Let me include all accounts as of now:

Here’s what I am using now to get $300/month

2X Evansville vertical checking = $40k
2X LMCU max checking = $30k
2X Sharepoint CU = $30k

Sharepoint for each person has two accounts: premier checking (1-year promotions 5% up to $5k) and eSavings (2-year promotion 3% up to $10k).

2X Service CU = $7k
1X Blue FCU accelerated savings =$1k

So for one year, DW and I get $3600 out of all these accounts. Once the new-member promotional deals at Sharepoint expire, we’ll use something else, but it’s yielding us 3.6% annually for now. Unfortunately Sharepoint CU doesn’t offer nationwide membership.

Everyone please keep in mind stock market returns include price appreciation. Banking on that alone to get you to retirement is gambling. I am talking about pre-tax income here with my CU deposit-account approach.
JBTX
Posts: 8364
Joined: Wed Jul 26, 2017 12:46 pm

Re: HM Bradley - is it safe - FDIC response

Post by JBTX »

hudson wrote: Fri May 28, 2021 7:04 pm
nisiprius wrote: Wed May 26, 2021 7:01 am
ball241 wrote: Wed May 26, 2021 6:52 am...All of this makes sense, but
the account is opened through Hatch, you get a routing number that is clearly Hatch, which is FDIC insured
. The money when deposited goes through this routing number to Hatch account in your name...
Yeah. The broad outlines are clear. As I said, "it's probably not a crazy risk and it's probably not a big reward." You can point to very clear differences between HM Bradley and Beam. It's still true that the Beam customers' money went into an FDIC-insured bank just as Beam said, and yet they had problems anyway.

So if you are looking at some other fintech pseudobank, it still isn't a bank, and it isn't automatically bad because Beam was bad, nor is it automatically OK because HM Bradley is OK. You can't say fintech pseudobanks are bad, you can't say they'r OK, all you can say is that they are not banks and the level of due diligence needed is higher than with an FDIC-insured bank account.
I agree that money deposited directly into Hatch Bank is FDIC insured because Hatch bank is on the FDIC list.
Is Hatch bank generating enough gain on the deposits to pay those attractive interest payments?
HM Bradley is promising higher interest payments than most or all FDIC banks.
I speculate that most if not all FDIC banks are not making enough money on deposits to pay HM Bradley type rates.
How does HM Bradley and Hatch Bank make enough money to pay the interest?
Bottom Line: Hatch deposits are likely FDIC safe. What about the interest?
The interest is in the bank account too. I'm not sure how it would be less FDIC safe.

I think the big issue for people is " 3.0% is too go to be true, thus it must not be safe"

While I have no direct insight into their business model, I suspect it works something like this.

Companies spend significant amounts of money on customer acquisition. For somebody that puts in $20,000, that would be $600 in a year. Companies routinely spend that much. Look at bank and credit card bonuses. $100k would be $3k. Plus there would be some interest earned that may be offsetting that.

Not everybody gets the 3%. There are some hoops you have to jump through.

I've seen companies, and investors throw a lot of money at customer acquisition, with the goal of growing it, and eventually leading to a sustainable critical mass, or else a marketable glob of customers they flip to a bigger bank or entity.

The experiment may or may not work, but the account holders money are the account holders in Hatch bank, regardless of whether or not the business model is successful.
SnowBog
Posts: 1521
Joined: Fri Dec 21, 2018 11:21 pm

Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

JBTX wrote: Tue May 25, 2021 8:09 pm
SnowBog wrote: Tue May 25, 2021 3:36 pm ETA - I'm not sure if this is universal, or only applies to the "boost" from having the credit card (which could raise the rate from 3.0% -> 3.5%)...
Edit 2 - I'm pretty sure this reflects the extra 0.5% "boost" with their credit card... They use your DD amount to estimate your income, and I'd heard $2500/month was usually the minimum to qualify for the CC... So it maybe makes sense that you'd need to sustain a $2500/monthly DD to get the boost... But curious if others got the same message and/or understand it differently...

Just an FYI, I got an email earlier today, sounds like starting in Q4 (Oct.) to qualify for the higher savings you'll need at least $2500 per month in direct deposits.
To qualify for the Savings Tier Boost in the fourth calendar quarter of 2021 (beginning October 1, 2021) and onwards, you’ll need to have recurring direct deposits totaling at least $2,500 into your HMBradley Deposit Account each month during the previous calendar quarter. Also, you will continue to need to spend at least $100 on your HMBradley Credit Card each billing period.
That's going to make this far less attractive for people, as you'll need to have DD of $2500/month, which essentially is forcing this to be your primary bank account (or you get a really large paycheck).
I went online and chatted with a rep, and I think it applies to the boost. She said she is not aware of any planned interest rate change.

I asked her about credit cards and to qualify you have to demonstrate at least $35k gross income per year to qualify for the card. You demonstrate income via your direct deposits, which are assumed to be net of taxes. So $2500 per month may demonstrate approximately $35k of income.

I have seen no offers for me for the credit card, but I only DD $25 per week.

This seems to be the case now, so not sure where the Q4 comes from.

As to the OP, I asked are my deposits FDIC insured and she said yes, accounts are provided by Hatch bank that is FDIC insured.
I finally stumbled across the updated policy. It is specific to the "boost" of an extra 0.5% with the credit card, but as previously mentioned to get the "boost" you need to a) have $100 minimum CC spend [unchanged] b) have $2500 minimum direct deposit [this is new as of May]. https://www.hmbradley.com/tier-boost-terms
tj
Posts: 4666
Joined: Thu Dec 24, 2009 12:10 am

Re: HM Bradley - is it safe - FDIC response

Post by tj »

dogagility wrote: Wed May 26, 2021 4:09 am
index2max wrote: Mon May 17, 2021 12:04 pm This is why I recommend people take advantage of 3%+ accounts at credit unions offering nationwide signup. To sweeten the deals, have your spouse sign up for their own accounts too (you can be joint on those too). This way you're dealing directly with the financial institution.

Checking (with debit transactions):

1. Evansville CU

3.3% up to $20,000

2. Lake Michigan CU

3% up to $15,000

Savings (no debit transactions required)

3. Service CU

5% up to $500 in primary savings

3% up to $3000 in holiday club savings

4. Digital CU

6.17% up to $1000 in primary savings

5. Blue FCU

5% up to $1000 in accelerated savings
Open all these accounts to the max for maybe $700 more in my pocket over a years time span? Eh. I'll pass.
I get what you're saying, but for me, there's really no effort in keeping the latter ones. I have both Digital CU and Service CU. I just view them as cash accounts that hold deductibles for my various insurance policies. Of course, if I needed cash, I would deplete them rather than selling stock.
criticalmass
Posts: 1984
Joined: Wed Feb 12, 2014 10:58 pm

Re: HM Bradley - is it safe - FDIC response

Post by criticalmass »

ball241 wrote: Wed May 26, 2021 7:03 am
nisiprius wrote: Wed May 26, 2021 7:01 am
ball241 wrote: Wed May 26, 2021 6:52 am...All of this makes sense, but the account is opened through Hatch, you get a routing number that is clearly Hatch, which is FDIC insured. The money when deposited goes through this routing number to Hatch account in your name...
Yeah. The broad outlines are clear. As I said, "it's probably not a crazy risk and it's probably not a big reward." You can point to very clear differences between HM Bradley and Beam. It's still true that the Beam customers' money went into an FDIC-insured bank just as Beam said, and yet they had problems anyway.
Yes I just was not clear that they got a FDIC insured bank routing number on that account with an account in their name
That to me is the big difference.
Did others have to take photos of their ID's (not scanned but photo) and take a selfie too in order to open an account? Seems a bit strange, but maybe the whole thing is run by "digital natives." :)
nolesrule
Posts: 2016
Joined: Thu Feb 26, 2015 10:59 am

Re: HM Bradley - is it safe - FDIC response

Post by nolesrule »

criticalmass wrote: Thu Jun 24, 2021 10:14 pm
ball241 wrote: Wed May 26, 2021 7:03 am
nisiprius wrote: Wed May 26, 2021 7:01 am
ball241 wrote: Wed May 26, 2021 6:52 am...All of this makes sense, but the account is opened through Hatch, you get a routing number that is clearly Hatch, which is FDIC insured. The money when deposited goes through this routing number to Hatch account in your name...
Yeah. The broad outlines are clear. As I said, "it's probably not a crazy risk and it's probably not a big reward." You can point to very clear differences between HM Bradley and Beam. It's still true that the Beam customers' money went into an FDIC-insured bank just as Beam said, and yet they had problems anyway.
Yes I just was not clear that they got a FDIC insured bank routing number on that account with an account in their name
That to me is the big difference.
Did others have to take photos of their ID's (not scanned but photo) and take a selfie too in order to open an account? Seems a bit strange, but maybe the whole thing is run by "digital natives." :)
No. This only happens if something in your credit report soft pull does not match the information in the application or you answer one of the identity verification questions incorrectly.
criticalmass
Posts: 1984
Joined: Wed Feb 12, 2014 10:58 pm

Re: HM Bradley - is it safe - FDIC response

Post by criticalmass »

nolesrule wrote: Fri Jun 25, 2021 7:02 am
criticalmass wrote: Thu Jun 24, 2021 10:14 pm
ball241 wrote: Wed May 26, 2021 7:03 am
nisiprius wrote: Wed May 26, 2021 7:01 am
ball241 wrote: Wed May 26, 2021 6:52 am...All of this makes sense, but the account is opened through Hatch, you get a routing number that is clearly Hatch, which is FDIC insured. The money when deposited goes through this routing number to Hatch account in your name...
Yeah. The broad outlines are clear. As I said, "it's probably not a crazy risk and it's probably not a big reward." You can point to very clear differences between HM Bradley and Beam. It's still true that the Beam customers' money went into an FDIC-insured bank just as Beam said, and yet they had problems anyway.
Yes I just was not clear that they got a FDIC insured bank routing number on that account with an account in their name
That to me is the big difference.
Did others have to take photos of their ID's (not scanned but photo) and take a selfie too in order to open an account? Seems a bit strange, but maybe the whole thing is run by "digital natives." :)
No. This only happens if something in your credit report soft pull does not match the information in the application or you answer one of the identity verification questions incorrectly.
I don't know what happened for me, no id questions to answer, and I'm sure I typed my own personal details correctly.
SnowBog
Posts: 1521
Joined: Fri Dec 21, 2018 11:21 pm

Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

SnowBog wrote: Thu Jun 24, 2021 7:05 pm
JBTX wrote: Tue May 25, 2021 8:09 pm
SnowBog wrote: Tue May 25, 2021 3:36 pm ETA - I'm not sure if this is universal, or only applies to the "boost" from having the credit card (which could raise the rate from 3.0% -> 3.5%)...
Edit 2 - I'm pretty sure this reflects the extra 0.5% "boost" with their credit card... They use your DD amount to estimate your income, and I'd heard $2500/month was usually the minimum to qualify for the CC... So it maybe makes sense that you'd need to sustain a $2500/monthly DD to get the boost... But curious if others got the same message and/or understand it differently...

Just an FYI, I got an email earlier today, sounds like starting in Q4 (Oct.) to qualify for the higher savings you'll need at least $2500 per month in direct deposits.
To qualify for the Savings Tier Boost in the fourth calendar quarter of 2021 (beginning October 1, 2021) and onwards, you’ll need to have recurring direct deposits totaling at least $2,500 into your HMBradley Deposit Account each month during the previous calendar quarter. Also, you will continue to need to spend at least $100 on your HMBradley Credit Card each billing period.
That's going to make this far less attractive for people, as you'll need to have DD of $2500/month, which essentially is forcing this to be your primary bank account (or you get a really large paycheck).
I went online and chatted with a rep, and I think it applies to the boost. She said she is not aware of any planned interest rate change.

I asked her about credit cards and to qualify you have to demonstrate at least $35k gross income per year to qualify for the card. You demonstrate income via your direct deposits, which are assumed to be net of taxes. So $2500 per month may demonstrate approximately $35k of income.

I have seen no offers for me for the credit card, but I only DD $25 per week.

This seems to be the case now, so not sure where the Q4 comes from.

As to the OP, I asked are my deposits FDIC insured and she said yes, accounts are provided by Hatch bank that is FDIC insured.
I finally stumbled across the updated policy. It is specific to the "boost" of an extra 0.5% with the credit card, but as previously mentioned to get the "boost" you need to a) have $100 minimum CC spend [unchanged] b) have $2500 minimum direct deposit [this is new as of May]. https://www.hmbradley.com/tier-boost-terms
Another interesting update for those with the HMBradley Credit Card... While (per the change quoted above) you now have to maintain a minimum $2500/month DD to qualify for the extra 0.5% boost (from the CC)...

Apparently, they no longer count Credit Card Payments made from your HMBradley account against your "savings tier".

So if you deposit $2500/month - charge $2500/month on your CC and pay it off each month (from your HMBradley Account) - while there is $0 net added to your account - you'll still get the max savings tier for saving > 20% (since the CC payment isn't counted if pulled from your HMB account).
corpgator
Posts: 49
Joined: Wed Jul 22, 2015 12:00 pm

Re: HM Bradley - is it safe - FDIC response

Post by corpgator »

index2max wrote: Fri May 28, 2021 9:43 pm
SnowBog wrote: Fri May 28, 2021 3:26 pm
index2max wrote: Fri May 28, 2021 12:30 pm
dogagility wrote: Wed May 26, 2021 4:09 am
index2max wrote: Mon May 17, 2021 12:04 pm This is why I recommend people take advantage of 3%+ accounts at credit unions offering nationwide signup. To sweeten the deals, have your spouse sign up for their own accounts too (you can be joint on those too). This way you're dealing directly with the financial institution.
Open all these accounts to the max for maybe $700 more in my pocket over a years time span? Eh. I'll pass.
Laugh all you want, but I am getting a better pre-tax, pre-inflation yield in these deposit accounts than I would with putting my money into VTSAX right now. Soon I’ll be getting $300/month or $3600/year. Not terrible in this low interest, high-priced asset market.

Then I’ll have dry powder ready for the next big market crash. :beer
Your numbers seem way off... Assuming you max out these accounts, that's $120.42 in interest a month. Even if you have 2x the accounts (for a spouse), you are still only at $241/month...

And I think your comparison to VTSAX is equally off...
...
Yes, my post was misleading. Let me include all accounts as of now:

Here’s what I am using now to get $300/month

2X Evansville vertical checking = $40k
2X LMCU max checking = $30k
2X Sharepoint CU = $30k

Sharepoint for each person has two accounts: premier checking (1-year promotions 5% up to $5k) and eSavings (2-year promotion 3% up to $10k).

2X Service CU = $7k
1X Blue FCU accelerated savings =$1k

So for one year, DW and I get $3600 out of all these accounts. Once the new-member promotional deals at Sharepoint expire, we’ll use something else, but it’s yielding us 3.6% annually for now. Unfortunately Sharepoint CU doesn’t offer nationwide membership.

Everyone please keep in mind stock market returns include price appreciation. Banking on that alone to get you to retirement is gambling. I am talking about pre-tax income here with my CU deposit-account approach.
Those first 2 are absolutely, 100% not worth the hassle for a whopping $200 per month:
Evensville - 15 debit card purchses, DD once per month, and 1 login each month all x2 because you're have to do it for your spouse.
LMCU - 15 debit card purchses, DD once per month, and 4! (not factorial, just an interjection) logins each month all x2
tj
Posts: 4666
Joined: Thu Dec 24, 2009 12:10 am

Re: HM Bradley - is it safe - FDIC response

Post by tj »

^ Yeah, i don't bother with rewards checking.

I have the Service Credit Union - 3k @ 3% and $500 @ 5%. I also have Digital Credit Union 1000 @ 6%

I tried Blue FCU, but I guess they didn't like my ChexSystems.
Ron Ronnerson
Posts: 2252
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: HM Bradley - is it safe - FDIC response

Post by Ron Ronnerson »

tj wrote: Thu Jul 08, 2021 11:38 am ^ Yeah, i don't bother with rewards checking.

I have the Service Credit Union - 3k @ 3% and $500 @ 5%. I also have Digital Credit Union 1000 @ 6%

I tried Blue FCU, but I guess they didn't like my ChexSystems.
My wife and I each have the Service CU and Digital CU accounts you mentioned above. I managed to open Blue Federal CU after a fair bit of effort. It was a lot of hassle (several long phone calls and sending in all sorts of documents over the course of a month). So much so that we’re not going to bother having my wife apply for an account too.

I put $5k into the account. The first $1k is earning 5% and the next $4k earns 1.34% for a blended APY of 2.08%. While the rate is decent by today’s standards, the process was too much trouble for $100/year. I think you’re probably better off without them.
index2max
Posts: 474
Joined: Mon Jan 21, 2019 11:01 pm

Re: HM Bradley - is it safe - FDIC response

Post by index2max »

corpgator wrote: Thu Jul 08, 2021 2:24 am
index2max wrote: Fri May 28, 2021 9:43 pm
SnowBog wrote: Fri May 28, 2021 3:26 pm
index2max wrote: Fri May 28, 2021 12:30 pm
dogagility wrote: Wed May 26, 2021 4:09 am
Open all these accounts to the max for maybe $700 more in my pocket over a years time span? Eh. I'll pass.
Laugh all you want, but I am getting a better pre-tax, pre-inflation yield in these deposit accounts than I would with putting my money into VTSAX right now. Soon I’ll be getting $300/month or $3600/year. Not terrible in this low interest, high-priced asset market.

Then I’ll have dry powder ready for the next big market crash. :beer
Your numbers seem way off... Assuming you max out these accounts, that's $120.42 in interest a month. Even if you have 2x the accounts (for a spouse), you are still only at $241/month...

And I think your comparison to VTSAX is equally off...
...
Yes, my post was misleading. Let me include all accounts as of now:

Here’s what I am using now to get $300/month

2X Evansville vertical checking = $40k
2X LMCU max checking = $30k
2X Sharepoint CU = $30k

Sharepoint for each person has two accounts: premier checking (1-year promotions 5% up to $5k) and eSavings (2-year promotion 3% up to $10k).

2X Service CU = $7k
1X Blue FCU accelerated savings =$1k

So for one year, DW and I get $3600 out of all these accounts. Once the new-member promotional deals at Sharepoint expire, we’ll use something else, but it’s yielding us 3.6% annually for now. Unfortunately Sharepoint CU doesn’t offer nationwide membership.

Everyone please keep in mind stock market returns include price appreciation. Banking on that alone to get you to retirement is gambling. I am talking about pre-tax income here with my CU deposit-account approach.
Those first 2 are absolutely, 100% not worth the hassle for a whopping $200 per month:
Evensville - 15 debit card purchses, DD once per month, and 1 login each month all x2 because you're have to do it for your spouse.
LMCU - 15 debit card purchses, DD once per month, and 4! (not factorial, just an interjection) logins each month all x2
The whole process of doing the gas station transactions for three cents each is getting easier and easier all the time. For example, LMCU now issues debit cards that enable tap to pay. When I tap to pay the card at the pump, the machine bills it as “credit“ instead of “debit“, which bypasses needing to type the pin code. This makes the process go a whole lot faster, plus tap to pay uses tokenization, so unlike the magnetic stripe that is used when you swipe a card, my actual card number should not be exposed during the transactions.

Not having to type the pin code means this process goes very quickly for my two LMCU debit cards since they do not prevent me from getting all 20 done in a row.

With Evansville credit Union, if I don’t want them to stop me after the third transaction and then get a call from the fraud department, what I do is call their debit card department in advance and let them know I’m going to get all 30 transactions done. This removes the hold after the 3rd transaction on each card.

The transactions I perform with those three credit unions can take less than an hour, even a half hour at most. I spend more time shuffling money from my high interest deposit accounts back to my main checking account nowadays.

For anybody else that is interested in juicing their interest rate on their cash, do not be scared of getting transactions done. It’s really not that bad. The biggest hassle is actually signing up for the accounts in the first place.
tj wrote: Thu Jul 08, 2021 11:38 am ^ Yeah, i don't bother with rewards checking.

I have the Service Credit Union - 3k @ 3% and $500 @ 5%. I also have Digital Credit Union 1000 @ 6%

I tried Blue FCU, but I guess they didn't like my ChexSystems.
Yes, that happened to me too. To get around that, just call blue FCU and ask for somebody to follow up with you.


I got called by a branch employee who offered to sign me up over the phone after I left left a voice message asking for help or an explanation why I was being denied.

Even though I was sure she was from blue credit Union, I was still not comfortable giving my info over to somebody who called me out of the blue. Itold her that I would not give my personal info over the phone since I had no proof of who she was.

So she had me go here to make an online appointment instead:

https://ebranch.bluefcu.com/Appointments/

Then she called me back and took my info. The Chexsystems score was the reason why I was being rejected by their website. Her supervisor said my recent history of opening accounts wasn’t a big deal. The employee asked why I had so many, I just said I am considering moving elsewhere in the country and trying out credit unions.

I had to use a trial account with docusign to send her my scan of my driver’s license and SS card. Unfortunately they could not offer me access to their secure email web form since I was not yet a member. Then she finally signed me up for the 5% savings account.

If you are not comfortable with that approach, I suggest waiting at least a few months until your score with ChexSystems goes back to normal and the recent inquiries number falls off.
nws
Posts: 1
Joined: Thu Jul 08, 2021 4:19 pm

Re: HM Bradley - is it safe - FDIC response

Post by nws »

Hi all,

I thought I'd chime in about my experience today, which is relevant to the conversation. I am in the process of transferring a chunk of money from another savings account to HMBradley, and my current bank needed to verify account ownership before they would release the funds I requested to HMBradley. They were able to get ahold of Hatch Bank on the phone and the Hatch representative confirmed my account information with them. Anyway, we didn't actually deal with anyone at HMBradley, so this further suggests that the money is really held at Hatch, as has been said.
peke9898
Posts: 79
Joined: Thu Mar 05, 2020 1:19 pm

Re: HM Bradley - is it safe - FDIC response

Post by peke9898 »

HM Bradley is moving deposit accounts to invite-only for the time being. They are not closing the door completely, but referrals are the only way to get an invite from HMBradley to open an account.
ChiKid24
Posts: 436
Joined: Fri Aug 09, 2019 3:43 pm

Re: HM Bradley - is it safe - FDIC response

Post by ChiKid24 »

peke9898 wrote: Tue Jul 20, 2021 9:25 am HM Bradley is moving deposit accounts to invite-only for the time being. They are not closing the door completely, but referrals are the only way to get an invite from HMBradley to open an account.
I got the email this morning too. In it they said no changes to interest rates, withdrawal or funding limits. I take this as a positive sign for existing accounts. I am at the 3% tier and recently opened the credit card to get to 3.5% next quarter. They've probably seen a spike in demand and need to limit new accounts in order to manage their costs.
vbdoug
Posts: 227
Joined: Mon Feb 26, 2007 12:44 pm
Location: Palos Verdes, Cal‹

Re: HM Bradley - is it safe - FDIC response

Post by vbdoug »

In the email I received today HM Bradley stated: "As a result of our explosive growth, we’ve decided to shift to an invite-only model for the time being, in order to allow us to focus on building the best possible experience for our current customer base". Blah, blah blah.
I think I am typical of their customer base. I want 3% interest and that is all. Would anyone care to speculate as to what other reasons they might have that would cause them to switch to an invite-only model?
soxfan10
Posts: 100
Joined: Wed Jan 21, 2015 10:38 pm

Re: HM Bradley - is it safe - FDIC response

Post by soxfan10 »

vbdoug wrote: Tue Jul 20, 2021 10:24 pm In the email I received today HM Bradley stated: "As a result of our explosive growth, we’ve decided to shift to an invite-only model for the time being, in order to allow us to focus on building the best possible experience for our current customer base". Blah, blah blah.
I think I am typical of their customer base. I want 3% interest and that is all. Would anyone care to speculate as to what other reasons they might have that would cause them to switch to an invite-only model?
This has always been about getting a deposit base - it is working as intended and they are probably running up the amount of capital they can reasonably use. Instead of yanking rates down and risking the deposits fleeing, they are going to limit new depositors until their business grows enough to want more deposits.
SnowBog
Posts: 1521
Joined: Fri Dec 21, 2018 11:21 pm

Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

Note - I'm not assuming they'll keep the 3% rate "forever" - but presumably their model is a "higher than others" rate...

And now the "test" begins...

If they have hit (or are nearing) their deposit targets... Was this "too good to be true" high interest rate simply a "teaser rate" to get people to join?

Or will they sustain it for the long run - as its part of what makes them unique?

We'll see...

Either way - I'll enjoy my 3.5% for as long as I can!
ChiKid24
Posts: 436
Joined: Fri Aug 09, 2019 3:43 pm

Re: HM Bradley - is it safe - FDIC response

Post by ChiKid24 »

SnowBog wrote: Tue Jul 20, 2021 10:50 pm Note - I'm not assuming they'll keep the 3% rate "forever" - but presumably their model is a "higher than others" rate...

And now the "test" begins...

If they have hit (or are nearing) their deposit targets... Was this "too good to be true" high interest rate simply a "teaser rate" to get people to join?

Or will they sustain it for the long run - as its part of what makes them unique?

We'll see...

Either way - I'll enjoy my 3.5% for as long as I can!
Have you been actually getting the 3.5%? I opened the credit card this month and am not sure if I need three full billing cycles of $100 spend to qualify for it in q3. I don't think the cc was around long enough for you to qualify with 3 full billing cycles in q2 in order to qualify in July. So if you have been getting it, that means it's not required. Can you post your timeline if so? When did you open the cc, when did your first billing cycle end, when did your savings interest rate bump to 3.5%. Thanks in advance!
SnowBog
Posts: 1521
Joined: Fri Dec 21, 2018 11:21 pm

Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

ChiKid24 wrote: Wed Jul 21, 2021 12:42 am
SnowBog wrote: Tue Jul 20, 2021 10:50 pm Note - I'm not assuming they'll keep the 3% rate "forever" - but presumably their model is a "higher than others" rate...

And now the "test" begins...

If they have hit (or are nearing) their deposit targets... Was this "too good to be true" high interest rate simply a "teaser rate" to get people to join?

Or will they sustain it for the long run - as its part of what makes them unique?

We'll see...

Either way - I'll enjoy my 3.5% for as long as I can!
Have you been actually getting the 3.5%? I opened the credit card this month and am not sure if I need three full billing cycles of $100 spend to qualify for it in q3. I don't think the cc was around long enough for you to qualify with 3 full billing cycles in q2 in order to qualify in July. So if you have been getting it, that means it's not required. Can you post your timeline if so? When did you open the cc, when did your first billing cycle end, when did your savings interest rate bump to 3.5%. Thanks in advance!
I don't think 3 full month's are required. But the quarterly cutoffs are very relevant. As I understand it, they only change rates at the change of quarters.

So if you just opened it this month (in Q3), my understanding is the "boost" won't take effect for you until Q4 (at the next quarter change).

Also pay attention to the "new" requirement (see my post up thread) that you have to maintain a direct deposit of at least $2500/month for the CC boost to be eligible (in the next quarter).
MrJedi
Posts: 788
Joined: Wed May 06, 2020 11:42 am

Re: HM Bradley - is it safe - FDIC response

Post by MrJedi »

There is an article that says they need to find more banking partners before going public again.

https://web.archive.org/web/20210720110 ... ?r=US&IR=T
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