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5.26% Wilmington Trust Direct (WTDirect) Online Savings

WTDirect [3] is the latest online savings account to hit the streets and if you have more than $10,000 sitting around burning a hole in your pocket then they’re willing to give you a fatty 5.26% interest rate on it. So, before you plow any money into an “online savings account,” the first step is to make sure that these guys are legitimate.

Is WT Direct Legitimate?

The WT in WT Direct stands for Wilmington Trust and the brick and mortar bank that stands behind WT Direct is Wilmington Trust FSB [4], a bank headquartered in Baltimore, MD (111 South Calvert Street, Suite 2620). Wilmington Trust FSB is legitimate, it’s in the FDIC Bank Search database (FDIC Cert 33911 if you want to look for yourself) and it points to their website according to the FDIC’s records. If you want to peek into their closet, the FDIC keeps all sorts of statistics on the bank’s operations (and every other bank’s operations), so the FDIC logo on their site is legitimate.

Now, are they going to be around for a while? For that we turn to the Bankrate ratings and unfortunately BankRate gave them only one star and a Safe & Sound CAEL Rating of 5G, which isn’t very good. Here is their analysis [5], which appears to focus on “assessments of profitability, asset quality, capital adequacy and liquidity.” This isn’t really an analysis on the security measures of the business, just business operations and whether they’re sustainable. If you’re planning on putting more than the FDIC insured $100,000, then I would be concerned, otherwise this is just good information to have.

What exactly is their offer?

For the first sixty days, all accounts will earn the 5.26% APY regardless of the balance. After sixty days, those balances of $10,000 or more will earn the prevailing rate of 5.26% while those under will earn 0.60% APY. Based on my interpretation of the language, your entire balance earns either 5.26% APY or 0.60% APY, it’s not two levels of interest where the dollars under $10k get 0.60% and the dollars over $10k get 5.26% (if you read it differently, please let me know) Also, there are no minimum balances and thus no account fees.

If anyone has experience with these guys, either brick and mortar or with this online product, please let me know. I think I’m going to open an account there unless I hear back that these guys are no good (which means you have to tell me!).