Friday, July 30, 2021

Live Oak Bank review: High rates on savings and CDs, and no monthly service fees

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  • Live Oak Bank (Member FDIC) is an online bank with a high-yield savings account and CDs.
  • Live Oak pays competitive rates, but you may be able to find better rates at other online banks.
  • You don’t need a minimum opening deposit for the savings account, but you need $2,500 to open a CD.
  • See Insider’s picks for the best high-yield savings accounts »

This post was last reviewed and updated on July 22, 2021. 

Overall bank rating

Pros and cons

Savings

Annual Percentage Yield (APY)

0.50% APY

Min Deposit


None

Editor’s Rating

  • Pros & Cons
  • Details
  • Pros
    • High APY
    • No monthly service fees
    • No minimum opening deposit
    • Mobile check deposit
    Cons
    • $19 outgoing wire transfer fee
    • $15 incoming wire transfer fee
    • $10 excess transaction fee
    • No way to deposit cash
    • To access savings, transfer funds to external bank account
    • Interest compounded daily, paid monthly
    • FDIC insured

    The Live Oak Bank Online Savings Account doesn’t require a minimum opening deposit or charge monthly fees, and it pays a competitive APY.

    Depositing and receiving cash are the tricky parts. Although you can transfer funds into your account and deposit checks digitally, there’s no way to deposit cash. Because Live Oak Bank doesn’t have a checking account, you can’t simply transfer funds from savings into checking and access the money immediately. You’ll have to transfer funds to an external bank account, which can take a couple of business days.

    CDs

    Annual Percentage Yield (APY)

    0.25% to 0.70% APY

    Min Deposit


    $2,500

    Editor’s Rating

  • Pros & Cons
  • Details
  • Pros
    • Competitive APY
    • Low-to-standard early withdrawal penalties
    Cons
    • No terms under 6 months or over 5 years
    • $2,500 minimum deposit
    • Terms ranging from 6 months to 5 years
    • Early withdrawal penalties: 90 days simple interest for terms under 24 months, 180 days simple interest for terms of 24 months or more
    • Interest compounded daily, paid monthly
    • FDIC insured

    Read Our ReviewRead Our Review A looong arrow, pointing right

    Live Oak’s minimum deposit of $2,500 is pretty steep. If you don’t have $2,500 on hand, you can open a CD with less at another online bank.

    Live Oak pays competitive rates on CDs, but depending on the term, you may be able to find better rates at other online banks . The bank charges a relatively low early withdrawal penalty if you withdraw funds before your CD matures, especially for longer terms.

    How Live Oak Bank works

    Live Oak is an online bank with a savings account and CDs. Not many customers have reviewed the mobile app in the Apple or Google Play stores, but the average review ratings so far are mediocre.

    Speak to a customer service representative over the phone Monday through Friday, 8:00 a.m. to 8:00 p.m. ET. There’s no customer support available on weekends. There’s no live online chat feature, but you can fill out an online form and wait for a response.


    Your deposits are FDIC insured for $250,000, or $500,000 for a joint account.

    Is Live Oak Bank trustworthy?

    The Better Business grades companies’ trustworthiness, but its current grade for Live Oak Bank is NR, or No Rating. The BBB claims it doesn’t have enough information to give a reliable score.

    A good BBB rating won’t guarantee that a bank will be right for you. If you want to get a better picture of whether a bank may be good for you, make sure to get perspectives from friends, family, or online reviews. 

    As of March 2021, there are allegations that Live Oak, nCino, and Apiture agreed to not hire employees from other companies in Wilmington, North Carolina. As a result, the three banking companies could avoid offering people competitive salaries. The lawsuit is ongoing, but if the scandal worries you, you may decide you’d rather bank elsewhere.

    How Live Oak Bank compares to similar banks

    We compared Live Oak with two other online banks that pay high yields: Marcus by Goldman Sachs and Ally.


    Live Oak Bank review vs. Marcus review

    Live Oak Bank and Marcus have a lot of similarities. They both just have savings accounts and CDs, not checking accounts . This means you’ll have to transfer savings funds to an external bank account and wait a couple of days to access your money with Marcus, just as you would with Live Oak Bank.

    Marcus does have a couple of advantages when it comes to CDs, though. The mandatory opening deposit is only $500, making it the better option if you don’t have the $2,500 Live Oak requires. Marcus also offers both regular term CDs and no-penalty CDs. With a no-penalty CD, you can withdraw funds before your CD matures without paying a fee. If you like the idea of a no-penalty CD, then you’ll probably prefer Marcus.

    Otherwise, your choice could come down to which bank is paying the better rate for the account you want to open, or for the CD term you’re considering.

    Live Oak Bank review vs. Ally review

    Unlike Live Oak, Ally has a checking account. Ally could be the better option if you want to be able to access your savings quickly. You can transfer money from Ally savings to checking and spend the money almost immediately.

    You might like Ally’s CD options, too. Like Marcus, it has a no-penalty CD. Ally also has a Raise Your Rate CD, which gives you the option to increase your rate during the term if Ally’s rates go up.

    Source: Business Insider


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