4.00% Online Savings Account Guaranteed For 3 Months at 1st Constitution Direct read and submit comments for this post

Update 6/13/09: Standard APY for balance over $10K has increased from 2.05% to 2.25%. Refer to the rate history at the bottom of the post.

1st Constitution Bank has an internet branch called 1st Constitution Direct with a promotion that beats the ones from HSBC and E-LOAN. It's called the Direct Super Savings Internet Special, and it's guaranteeing 4.00% APY for 3 months from the date of account opening. After the 3 months, the rate returns to the standard tiered rates (currently 3.25% APY for balances $10,000+ and 1.60% APY for balances under $10,000).

Below is a summary of this savings account and promotion based on the bank's FAQs, the savings account overview page and my conversation with the bank's customer service representative (CSR):

• Available to people in any state (CSR)
• 4.00% APY applies for 3 months starting on date of account opening (overview)
• 4.00% APY applies to all balances even under $10K during the 3-month promo (CSR)
• After the promo, standard yield applies. Currently 3.25% APY ($10K+), 1.60% APY (under $10K)
• Minimum initial deposit of $100 (overview)
• No monthly service charges regardless of balance (overview)
• No checks or ATM card (CSR)
• Joint accounts are allowed (overview)
• POD beneficiaries are not allowed (CSR)
• Initial deposit done by ACH electronic funds transfer (FAQ)
• Two trial deposits and one debit are done as part of the account verification (FAQ)
• ACH electronic funds transfers are free (CSR)
• No limit on the number of links to external bank accounts (CSR)
• Additional links added by sending them instructions via their secure online mail (CSR)
• No limits to the number of ACH transfers except the 6 withdrawal limit that's required by law. (CSR)
• No limits to the amount of the ACH transfers (CSR)
• Credit pull is done in the application. CSR was not able to say if it's a hard or soft.

For those with less than $10,000, they also have the Direct Savings Account. This also has a 3-month promotional yield, but it's only 3.20% APY. After 3-months, the standard tiered rates apply (currently 3.05% APY for balances $3,000+ and 1.00% APY for balances under $3,000). Everything else seems to be the same as the Super Direct Savings Account.

Update 9/06/08: A reader mentioned that he received a 3-month extension on the this 4% promotion. If your promo period is coming to an end, you may want to ask for an extension.

1st Constitution has branches in several New Jersey cities. The bank has been FDIC insured since 1989 (FDIC Certificate # 27552). It has $475.3 million in assets and $378.8 million in deposits based on 3/31/08 data, and it has a 4 star rating (sound) at Bankrate based on 12/31/07 data.

Thanks to the reader who emailed me info on this special.

[Update 6/6/08: Added "4% for all balances" bullet in the list.]

Rate History:
06/13/09: 3mo promo 2.50% APY, standard $10K+ 2.25% APY
04/28/09: 3mo promo 2.50% APY, standard $10K+ 2.05% APY
04/01/09: 3mo promo 2.75% APY, standard $10K+ 2.50% APY
03/18/09: 3mo promo 2.95% APY, standard $10K+ 2.50% APY
02/19/09: 3mo promo 3.00% APY
01/30/09: 3mo promo 3.50% APY
01/06/09: 3mo promo 3.75% APY
06/05/08: 3mo promo 4.00% APY, standard $10K+ 3.25% APY, 1.60% APY under $10K