Ben Todd | Apr 16, 2017 | 3
State Farm Bank Review
Most people know about State Farms insurance services, but few know that there is a State Farm Bank. State Farm offer a broad range of banking services. They do not have branches, but they offer many of the services that High Street banks offer. Their online reputation is not bad, but they are knocked quite often online for the lending division of their business. In this State Farm Bank Review, you will see reasons why you should and shouldn’t consider an account with State Farm Bank.
State Farm Bank Review – Benefits And Features
- You only need a $25 deposit to open your account
- There are no fees for using their in-network ATMs
- You can get refunds on some ATM fees if you go outside their network
- Their savings rates are good when compared to other High Street banks
- You can earn interest on a checking account balance
- Free ATM transactions with over 450,000 ATMs
- You may earn unlimited rebates on your ATM fees
- There is no minimum balance requirement
- They have over 18,000 banking agents
- Earn 0.45% APY in your savings account for balances over $25,000
There are no physical locations where you may conduct banking business. Normally, this wouldn’t be a downside, but one would expect physical branch locations from a company as large and established as State Farm.
Overdraft fees and returned item fees cost $25, which is rather expensive. They do have a cap at $75 per business day, but it is not much comfort knowing that you may earn a $25 fee for overdrawing by just one dollar.
Our State Farm Bank Review discovered there were two types of checking account. They offer a basic checking account and an interest-bearing checking account. There are no monthly fees, and you get ATM rebates of up to $10 per statement cycle. You may earn unlimited ATM rebates, within the limits of fair use, and you earn them by setting up a direct deposit as directed by the State Farm Bank. You get a Visa CheckCard, they offer mobile banking and you may use Bill Pay.
With the State Farm Bank interest checking account, you may earn interest if you maintain a balance of $2500 for a full statement cycle. A statement cycle typically means the month between one statement and the next. In the image below, you can see a comparison between the two checking accounts and their money market savings account.
There are a few savings options, so I have given a brief overview of each savings option for our State Farm Bank review. Each of them has their own fees and such. You can read all about them in our fees section.
Health Savings Account (HSA)
Save for medical expenses with tax benefits. Get flexible access and a competitive interest rate. You may pair it with a health insurance plan to pay for medical expenses. Your account will be FDIC insured.
Education Savings Account (ESA)
Invest in your child’s education and take advantage of any tax benefits that go with it. The account is FDIC insured, there are terms ranging from 12 months to 60 months, and you can open the account with as little as $500.
Individual Retirement Account (IRA)
Pick a traditional IRA or a Roth IRA. Choose a Certificate of Deposit IRA, or a Money Market Savings IRA. They are legally defined as IRAs and come with all the tax benefits.
A State Farm Savings Account
Our State Farm Bank Review has tried to focus on the accounts most people will have and open with State Farm. A savings account may be opened with just $100, and you get ATM fee rebates of $10 per statement cycle.
Money Market Savings Account
There is a minimum opening deposit of $1000, and they use a tiered system for working out your interest. You still get ATM rebates with your Money Market account, and you may still qualify for unlimited rebates with a Money Market account.
Certificates Of Deposit
The State Farm Bank offers fixed-rate CDs. Accounts are compounded daily, and you may choose terms between 12 months and 60 months. Your CDs are automatically renewed after a grace period. You need to invest $500 or more to open a CD account. It can be tricky getting your matured CD money out. It sometimes takes a few days to get your money from your CD into your checking account, and you have to be careful about them re-investing if you do not request its return within the grace period.
State Farm Bank Review – Biggest Selling Point
The compounded interest on their certificates of deposit is a pretty good selling point. The interest is compounded daily, which is always a good thing for any savings account. Maybe it is just us, but we had a hard time checking up on our CD. Maybe there is a way to see its status, but we couldn’t find it.
State Farm Bank Review – Fees And Charges
Our State Farm Bank Review tips its hat to State Farm for making its fees easy to find. They are not blatantly displayed on their products marketing pages, but they are also not hidden away on an obscure PDF, so State Farm gets a little credit for that.
$15 per hour for account research with a $10 minimum charge
$0.00 no charge to replace your card if your card was lost or stolen
$5.00 to replace your card because you changed the signer on your account
$0.00 for use of their ATMs in their network
$0.00 for bank drafts and/or official checks
$25.00 for expedited ATM card replacement
$0.00 for the first three check copies per statement cycle
$3.00 per check if you order more than three copies per statement cycle
$15.00 child support order and/or notice
$10.00 fee for a domestic collection item
$15.00 fee for a foreign collection item
$22.00 per hour for court ordered account research
$22.00 per hour for IRS ordered account research
$0.25 for a copy of a document from account research
$10.00 for returned deposit items
$5.00 for duel authorized signatures with a business account
$10.00 per statement cycle for withdrawing from your savings account more than six times
$10.00 for foreign bank drafts plus additional fees
$40.00 processing fee for a garnishment or levy
$25.00 per year for a HSA (Health Savings Account)
$25.00 per unauthorized overdraw
$3.00 per overdraft transfer from another account
$10.00 for overnight mail for Monday to Friday delivery
$35.00 for Saturday and holiday delivery
$5.00 for duplicates of paper statements and additional statements
$20.00 per item for stopped payments
$0.00 for domestic incoming wire transfers
$15.00 for outgoing wires
$35.00 for outgoing international wire transfers for less than $50,000
$15.00 for incoming wires from overseas
Things such as foreign bank drafts will cost you different fees every time. The minimum fee you will receive is $10 because that is State Farm’s handling fee. If you want foreign currency, then the fee will vary from currency to currency. Regular overnight delivery of foreign currency costs $12, and priority overnight delivery costs $15.
Whom Should Take Note Of This State Farm Bank Review?
People who are already State Farm customers may like to take a look at their banking services. People who like to keep their services under one roof may appreciate a bank account with a recognized brand name. The State Farm Bank doesn’t have branch locations, which is odd for such a large company, but they have money of the features that High Street banks have.
User Comments And Reviews
[+] They will not charge you for your annual paper statements. Sign up for e-statements and it is all free. They only charge for annual statements if you request a copy or ask for it to be sent to an alternative address.
[+] State Farm have hundreds and thousands of ATMs in their network. They have signed deals with all sorts of ATM vendors to the point where you will always find an ATM in your local area that you may use for free.
[+] If you often rest a lot of money in your checking account for long periods of time, then their interest checking account is worth a try. There are also ways that you may have your maintenance fees waived.
[-] Why are they charging for incoming wire transfers from abroad? They are not sending the money by carrier pigeon, so why are they charging their customers for receiving money? It is not fair.
[-] Some people have complained about State Farm charging people for outgoing wires. They are especially upset that the cost is so high. It costs $15 per outgoing wire.
[-] The State Farm Bank will mess you around quite a bit if you apply for a mortgage with them. They take so long to gather all the information they need that you would be better off with another bank.
Conclusion – State Farm Bank Review
It is a very beige bank. They don’t excel in any area and they don’t stink in any area. There is a lot of negative buzz about their lending facilities online, with quite a few people complaining about their auto loans and mortgages. Nevertheless, on the whole, the bank is an average bank.
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Our State Farm Bank Review discovered that they have many of the services that hybrid offline/online banks have without actually having physical branch locations, and they have many services that online banks have without the slightly higher savings interest rates that online-only banks have. Should you consider a State Farm Bank account? Sure, there is nothing devastatingly wrong with their banking services, but you may like to stay away from their lending services.