FNBO Direct Review – No Frills, Online High-Yield Checking Account

FNBO Direct Review – No Frills, Online High-Yield Checking Account

FNBO Direct is the online banking arm of First National Bank of Omaha, itself a subsidiary of financial conglomerate First National of Nebraska. While First National Bank of Omaha’s physical branches and account holders are confined to several states in the middle of the country, FNBO Direct accounts are available to anyone with a U.S. address.

FNBO sets itself apart with a high-yield checking account that features no minimum daily balance, no recurring fees, and a nominal opening deposit of just $1. It also has a savings account and multiple CDs, all of which have decent but not spectacular yields, and all of which come with FDIC insurance up to $250,000 per account.

Additional perks include person-to-person transfers via Popmoney, Apple Pay functionality, and a Visa-branded cash rewards credit card that’s exclusive to account holders (but is contingent on qualification).

FNBO’s online savings account yields 1.85% APY on all balances, requires a minimum opening deposit of just $1, and doesn’t require a minimum balance thereafter. There’s no monthly maintenance fee. By federal law, you’re limited to 6 savings account withdrawals per month.

The interest-bearing checking account yields 0.65% APY on all balances and comes with an ATM card. Like the savings account, its required opening deposit is just $1, and there’s no minimum balance requirement thereafter.

FNBO’s interest checking account doesn’t come with any monthly maintenance fees or ATM fees, though FNBO does not reimburse out-of-network ATM fees. The maximum balance for each account is $1 million, which should be plenty for most customers. Although the account doesn’t come with paper checks, you can use FNBO’s free billpay system to make payments between $5 and $10,000.

FNBO Direct offers 8 distinct CDs, all of which require a minimum opening deposit and ongoing balance of $500, and a maximum deposit and balance of $1 million. Terms and yields are:

CDs with terms between 6 and 12 months carry an early withdrawal penalty equivalent to 3 months’ interest, while all other CDs carry a penalty equivalent to 6 months’ interest.

At maturity, all CDs automatically renew after a 10-day grace period during which you can ask for your funds to be withdrawn.

FNBO Direct customers can invest in the Tributary Funds, a group of mutual funds managed by First National Bank subsidiary Tributary Capital Management. There are 6 available funds:

Compared with low-cost index funds used by virtual robo-advisors and fee-only financial advisors, these funds’ expense ratios are on the high side. Risk-wise, they run the gamut from conservative to moderately aggressive. You’ll want to consult a financial advisor or, at minimum, read each prospectus carefully before investing.

If you do choose to invest in the Tributary Funds, you can streamline your experience with an automatic investment option (which includes rebalancing and auto-invest) starting at $50 per month. The minimum investment amount is $1,000 for each fund. You can invest directly by opening an account with Tributary, work with a First National financial advisor as an intermediary (likely the most expensive option), or use an online brokerage platform.

All FNBO Direct account holders can apply for the bank’s ExtraEarnings Visa card, a no-fee rewards credit card, as long as they have a FNBO checking or savings account.

With the ExtraEarnings Visa, all qualifying purchases accrue points at a rate of 1 per $1 spent, with no earning caps or bonus categories, rotating or permanent. During the first 12 billing cycles (months), points accrue at double the normal rate – 2 points per $1 – also with no caps. Once you accrue 2,500 points, equivalent to $25 cash, you can redeem them as a statement credit or cash deposit to the FNBO account of your choosing.

It’s important to note that having a FNBO account doesn’t automatically entitle you to the ExtraEarnings card. To secure approval, your credit history and score need to meet FNBO’s standards, which the bank doesn’t reveal publicly.

FNBO Direct supports person-to-person payments and transfers via Popmoney, a mobile-friendly app that lets you transfer funds between your checking or savings accounts and other U.S. bank accounts. You are, however, limited by law to 6 outbound savings transfers per month.

Popmoney is similar to PayPal: You don’t need to exchange bank account information with other transferees, just an email address and phone number. The program lets you initiate outgoing transfers and request incoming transfers (payments), both of which are free. Transfers typically take 2 to 3 business days, but you can opt for next-business-day transfers for $10 per transaction.

FNBO Direct’s checking account is compatible with Apple Pay, a mobile payment system that lets you make purchases directly from your phone. To sync your FNBO account with Apple Pay, you need to open an Apple Pay account and take a picture of your FNBO debit card or manually enter your account information. You can only use Apple Pay at merchants that have signed up for the service – look for the Apple Pay logo in the storefront window or checkout area.

FNBO Direct has high-functioning Android and iOS apps available for download. However, the website itself is sorely lacking in the mobile department, so if you’re used to accessing your bank accounts from your smartphone, you’ll need to download the app.

FNBO Direct has an opt-in overdraft protection program that assesses a one-time fee of $33 per transaction, up to a maximum of 4 transactions per day (for a maximum daily overdraft charge of $132). The bank does waive this fee for your first overdraft in a given calendar year. If you choose not to opt into the program, any transactions that would normally result in an overdraft (including debit card purchases and ATM withdrawals) will simply fail.

FNBO Direct offers several different types of customer support: an extensive FAQ section, a customer support email address, and a 24-7 hotline with live representatives at the other end. Phone wait times are usually minimal, though things can get backed up during busy periods, such as weekday evenings.

True to its heartland roots, FNBO Direct is a straightforward online bank that’s built on simple, universal values: great service, convenient accounts, and above-average functionality. An easy-to-use but visually bland website epitomizes the bank’s practicality and humbleness.

However, FNBO Direct isn’t perfect – no online bank is. It’s missing several features that would be necessary for it to serve as a true one-stop shop for customers with complex needs. You won’t find a brokerage, retirement options, personal loans, or commercial financing here.

Given the above-average checking yield and surprisingly attractive Visa rewards credit card, FNBO Direct is great for your day-to-day spending and money management needs. For longer-term savings, superior options are just a click away.

FNBO Direct is a no-frills online bank that’s great for customers who want to earn an attractive yield on their checking balances without sticking to minimum deposit or balance requirements. The Visa-branded cash rewards card (ExtraEarnings) further sweetens the deal, and fringe perks like free P2P money transfers and Apple Pay functionality are nice too.

On the other hand, CD yields aren’t the best, and a lack of retirement options and account opening bonuses may alienate some prospects.

FNBO Direct gets high marks for its attractive checking account yields, solid rewards credit card, low minimum deposits and balances, and good customer service. Low CD yields, high overdraft fees, and no opening bonuses count against it. Overall, this is a fine online bank for everyday needs.

Categories: Banking, Money Management, Reviews

Brian Martucci writes about frugal living, entrepreneurship, and innovative ideas. When he’s not interviewing small business owners or investigating time- and money-saving strategies for Money Crashers readers, he’s probably out exploring a new trail or sampling a novel cuisine. Find him on Twitter @Brian_Martucci.

Comments Disclosure: The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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