December 5, 2018 12:00 PM PT

Popular Direct Bank Review

Read more about Popular Direct
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Tired of low interest rates at your local bank? Consider an online savings accounts with Popular Direct Bank. Read on to learn about the benefits and drawbacks before opening an account.

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Popular Direct Bank provides higher interest rates on savings accounts and CDs than you may find at your neighborhood bank.

A division of Popular Bank, they have 122 years of history, which gives them an advantage over newer, online-only startup banks. But is it the right place for your money?

FYI: Popular Direct is FDIC-insured. In the very unlikely event the bank closes, you'll receive up to $250,000 of your deposited funds back.

Savings

The Popular Direct Plus Savings Account offers a high-yield APR with interest compounded daily. You'll need a minimum of $5,000 to open this account.

They do charge a monthly service fee, which can be waived by maintaining at least a $500 average daily balance.

Popular Direct also charges a "dormancy fee" if you don't conduct any activity in this account in 12 consecutive months.

NOTE: Per federal law, you can only make up to six withdrawals per cycle with this account. Any withdrawals beyond that will incur an excessive withdrawal fee.

CDs

If you have money set aside that you don't currently need, earn a higher interest rate with Popular Direct CDs. You'll need $10,000 to open one.

Choose from a 3-month, 6-month, 12-month, 18-month, and 2-year through 5-year term. The longer the term, the higher the interest rate Popular Direct offers.

But don't pick a term you can't stick to or you'll pay a hefty penalty for early withdrawal.

Interest compounds daily on the Popular Direct CDs. They don't offer tiered interest rates so you'll earn the same rate regardless of your balance. There is no minimum balance requirement.

Interest Deposits:
Popular Direct deposits interest directly to your CD balance at the end of each month. You cannot withdraw the interest until CD maturity.

This is different from CDs at other banks, which allow you to have the interest credited to a checking or savings account. Keep this in mind if you want access to that money right away.

You have a 10-day grace period upon maturity to either withdraw the funds or roll them into another CD. If you miss that window, they automatically roll over.

Reasons We Like Popular Direct

  • Customer service reps are available 24/7. This is a nice feature, especially since you can't visit a bank branch to ask questions.

    Contacting Popular Direct Customer Service:

    Phone: 1-800-274-5696

    Routing Number: 113007835.

  • No fee for overdrafts of $5 or less. Overdraft fees can add up quickly if you aren't careful. It's nice to know that a small overdraft won't affect your finances.

  • Make deposits with your mobile phone. Download the Popular Direct Bank app to deposit your checks with just a picture of the front and back.

    Once you follow the prompts in the app, you deposit your check from the comfort of your own home.

  • You can sign up for account alerts. This can help you keep track of your balance while on the go. You'll also know when something is amiss with your account, such as fraudulent activity.

  • Daily compounded interest. While you won't see a major difference, you will earn a little more since your interest earns interest throughout the month.

  • You earn interest on all balances. Popular Bank Direct doesn't require a minimum average balance in order to earn interest on your account.

    You just need a $0.01 balance to earn interest. You may want to exercise caution, though, as there could be a penalty for low balances (see below).

  • Open an account from any state. Since Popular Bank Direct is online-only, you can open an account from anywhere in the United States. Just make sure you are comfortable conducting your bank transactions online.

  • The CD and savings rates are competitive. Popular Direct Bank is only online so they are able to pass their overhead savings on in the form of higher interest rates. You lose the ability to go into a physical branch, but you earn more money for doing so.

  • You can get up to five years of e-statements. If you opt-in to receive e-statements, Popular Direct provides access to the last five years' worth of statements.

    If you come across a situation where you need past statements, this can save you money since many banks charge a fee to get copies of old statements.

Reasons to Look Elsewhere

  • High minimum opening balances. You need at least $5,000 to open a savings account and $10,000 to open a CD. That's not easy for the beginning saver.

    Other banks have much lower minimum requirements. Some banks have no minimum opening balance requirements at all.

  • There are hidden fees. Popular Direct advertises that they don't charge any monthly fees, but there are plenty of hidden costs.

    In addition to the low balance fee, there is an early account closure fee, an excessive withdrawal fee, and the dormancy fee.

  • No ATMs for deposits or withdrawals. This can be frustrating when you have cash to deposit or you want to make a quick withdrawal.

    All transactions occur online only via external transfers (transfers to an existing account at another bank).

How It Compares

  • Capital One 360: Like Popular Direct, Capital One 360 offers competitive interest rates on savings and CDs.

    Capital One 360 also offer checking accounts too. And they don't charge monthly service fees or have minimum balance requirements. You'll also get ATM access, which makes it easier to access your funds.

  • Marcus by Goldman Sachs: Marcus by Goldman Sachs offers a high-yield savings account and two high-yield CD options.

    You can open an account online in a matter of minutes, but you may only access your funds via electronic transfer to an external account.

Bottom Line

Popular Direct Bank may be a good option if you have a large sum of money that is just gathering dust (and low interest) at a brick and mortar bank.

You'll get higher than average interest rates and minimal fees. But if you don't meet the minimum opening requirement or you'll need frequent access to your funds, you may want to look elsewhere.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

Disclaimer: This content was first published on December 5, 2018. Information including rates, fees, terms and benefits may vary, be out of date, or not applicable to you. Information is provided without warranty. Please check the bank's website for updated information.

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