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Review of Live Oak Bank’s Deposit Rates

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Review of Live Oak Bank
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Chances are you haven’t heard of Live Oak Bank. After all, this lender, based mostly on the web, has only been around since 2008, and it mostly focuses on giving out small business loans to businesses in specific industries, such as veterinary practices or craft breweries.

That’s no reason to pass it up for your personal banking needs, however. In fact, this little gem of a bank has one of the best-kept secrets in the personal banking world: it has one of the highest savings account interest rates you’ll find from an online bank. (More on that below.) And, most of its other personal deposit accounts offer relatively high rates as well.

Let’s take a more in-depth look at its deposit accounts to see if they’re right for you.

How Live Oak Bank rates compare

Live Oak Bank is right on par with the current highest CD rates.

This bank’s minimum deposit requirements also seem to be right on par with other bank’s minimum deposit requirements. The current best CDs out there have minimum deposit requirements both above and below Live Oak Bank’s $2,500 benchmark.

Term

APY

Minimum Deposit

6-month CD

1.25%

$2,500

1-year CD

1.70%

$2,500

18-month CD

1.75%

$2,500

2-year CD

1.85%

$2,500

3-year CD

2.00%

$2,500

4-year CD

2.05%

$2,500

5-year CD

2.30%

$2,500

Rates current as of Dec. 5, 2017.

What else do I need to know about Live Oak Bank’s CDs?

Only U.S. citizens and permanent residents are eligible to open these accounts. It’s a relatively straightforward process to open a CD: Simply complete the forms online, provide any needed documentation (such as your current bank account details), and wait for an account approval. Once your account is open, you can transfer over your deposit, where it will be held for five days before officially launching your CD.

If you need to take out your deposit early, bad news: As with many CDs, you’ll face an early-withdrawal penalty at Live Oak Bank. If your original CD term was for six months, one year or 18 months, you’ll be charged 90 days’ worth of interest. If your original CD term was for longer than that, you’ll be charged a higher rate of 180 days’ worth of interest.

If you are able to resist the urge to withdraw your money early, congratulations! Your CD will automatically renew into a second CD with the same term length. However, don’t panic if that’s not what you want: You have up to 10 days after the CD has matured to withdraw your money penalty-free and park it in your own bank account (whether it’s with Live Oak Bank or not).

APY

Minimum Deposit

1.45%

Up to $5 million

(but only up to $250,000 is FDIC-insured)

Rates current as of Dec. 5, 2017.

How do Live Oak Bank’s savings accounts compare?

When it comes to the best savings accounts with high interest rates, Live Oak Bank is right up there. This means that Live Oak Bank is lowering the bar and allowing anyone to take advantage of these high interest rates, no matter how much is in his or her pocket right now.

What else do I need to know about Live Oak Bank’s savings account?

Live Oak Bank wants you to use your savings account, and use it often, which is one reason why it has no monthly maintenance fee. If there is no activity on your account for 24 months and your balance is less than $10.01, Live Oak Bank will take the remainder of your balance as a Dormant Account Fee and close your account.

Getting money into a Live Oak Bank savings account from an external bank account can take a little bit of time depending on how you do it. If you request the money through Live Oak Bank’s online portal, the funds won’t be available for up to five or six business days. But if you opt instead to send the money to Live Oak Bank from your current bank, the money will be available as soon as it’s received. Your Live Oak Bank savings account will start earning interest as soon as the money posts to your account.

You can easily withdraw your money at any time via ACH transfer. Simply log into your Live Oak Bank savings account and electronically transfer it to whichever bank account you wish. It’ll be available in two to three business days.

You are limited to making just six transactions (deposits or withdrawals) per month with this savings account. That’s not a Live Oak Bank thing; that’s a federal regulation imposed upon savings accounts in the U.S. If you absolutely can’t wait until next month to make another deposit or withdrawal past your allotted six per month, you’ll be charged a $10 transaction fee for each additional action.

Overall review of Live Oak Bank

It’s easy to overlook Live Oak Bank for other larger, more established consumer banks like Ally or Discover Bank. But Live Oak has some of the best CD rates around, and the best savings account available on the market today.

Lest you be scared away by its smaller name, consider this: This tiny-but-growing bank is getting rave reviews from customers and employees alike. It carries an “A” health rating, and has a top-notch online banking portal. About the only thing missing is a checking account to let you seamlessly do all of your daily banking with this great company.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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