Flagstar Bank Review

An abundance of accounts and services but low interest rates

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Flagstar

Flagstar Bank is an offshoot of Flagstar Bancorp. It was chartered in 1987 as a federal savings bank and is the third-largest savings bank in the U.S. It operates 160 branches in California, Indiana, Michigan, Ohio, and Wisconsin. Wondering if Flagstar Bank is a good bank for you?

  • Pros & Cons
  • Company Overview
Pros & Cons
Pros
  • A robust financial institution with a considerable number of options

  • Relationship bonuses

  • Vast ATM network

Cons
  • Below-average interest rates

  • Physical branches in only four states

  • Possibility of substantial overdraft fees

Company Overview
  • Year Founded 1993
  • Official Website www.flagstar.com
  • Banking Products Offered Savings, checking, CDs, MMA, credit cards
  • Customer Service Phone line: Monday–Friday, 7:30 a.m. to 9 p.m. (EST); Saturdays, 8:30 a.m. to 6 p.m. (EST): 1-888-842-6328.

Pros Explained

  • A robust financial institution with a considerable number of options Flagstar Bank’s offerings expand far beyond its deposit accounts and include everything from health savings accounts (HSAs), individual retirement accounts (IRAs), and education accounts to mortgages and wealth management services. It even offers estate planning and income tax services. 
  • Relationship bonuses You can enjoy a rate reduction on interest fees if you set up automatic payments for certain products from your checking, savings, or money market account. For instance, you can snag higher certificate of deposit (CD) rates by keeping $5,000 or more in combined deposit accounts. You’re eligible for a 0.50% reduced rate on home equity lines of credit (HELOCs) if you set up automatic payments. You also could get a 0.25% bump down in your rate on personal loans, personal lines of credit, and home equity loans.  
  • Vast ATM network If you like the option of withdrawing money from ATMs while on the go, Flagstar Bank is synced up with both the Presto and Allpoint ATM networks, which boast a double whammy of 56,000 ATMs in the U.S.

Cons Explained 

  • Below-average interest rates Flagstar Bank’s annual percentage yields (APYs) on its checking and savings accounts are below the current national average. As far as APY rates on its savings accounts go, you would have a minimum of $100,000 or $500,000 to earn a rate slightly above average. Your best bet is the Foundation Savings Plus account, which features a decent interest rate on balances $10,000 or higher. 
  • Physical branches in only four states – While Flagstar Bank does have brick-and-mortar locations, they are only located in four states: Michigan, Indiana, Ohio, and Wisconsin. The majority are in Michigan and Indiana. If you prefer to set foot inside a physical location and don’t live in one of those states, you’re out of luck. 
  • Possibility of substantial overdraft fees If you are not careful, Flagstar Bank’s overdraft fees can feel like a triple whammy. For one, each overdraft or nonsufficient funds fee is $36, and you can be hit with up to five a day. And if you end up being overdrawn from your account for a consecutive number of days, you’re looking at another $6 fee.

Due to COVID-19, some Flagstar branches are currently drive-thru only.

Who Is Flagstar Bank Best For?

In general Flagstar Bank is best for those who want a financial institution where they can do their banking and have access to everything from wealth management services and mortgages to estate planning and tax preparation. It’s a particularly strong fit for those who:

  • Want a one-stop shop for all their banking needs
  • Like access to an impressive ATM network 
  • Aren’t looking for deposit accounts with competitive interest rates

What Does Flagstar Bank Offer?

As one might expect from a large financial institution with a large array of accounts, products, and services, Flagstar Bank offers: 

  • Checking accounts
  • Savings accounts
  • Money Market accounts
  • CDs
  • Credit cards

Accounts, rates, and availability can vary by location.

Checking Accounts

Flagstar Bank’s SimplyChecking account is its no-interest, starter account. It requires a $50 minimum deposit to open, but there is no monthly service fee and no minimum balance requirement. It comes with a free debit/ATM card. Also, as mentioned, you can snag one of Flagstar’s relationship bonuses if you set up automatic payments for some of its loans or keep a minimum balance across your deposit accounts.

Should you run a negative balance, beware of the fees. There’s a $36 fee for each instance of an overdraft or nonsufficient funds, and the maximum combined number of overdraft and nonsufficient funds fees is five in a given day. That’s a total of $180 in fees when you’re already low on cash. And it doesn’t end there. Should your balance be overdrawn for more than a day, there’s something called a $6 consecutive days overdrawn fee. Flagstar also charges a $2.50 out-of-network ATM fee, which is on top of any ATM operator surcharge fees.

Flagstar Bank’s SimplyOne Checking account is a no-interest “checkless” account that eliminates the possibility of overdrafts due to forgotten checks and never charges nonsufficient fund fees. It allows for online banking and bill pay, has a mobile app, and comes with a free debit/ATM card. There’s a $5 monthly maintenance fee that can’t be waived.

Flagstar Bank’s SimplySelect Checking account currently offers a 0.01% APY for balances under $10,000 and a 0.02% APY for $10,000 and above. It’s not much, given that you have a $10 monthly maintenance fee, which can be dropped if you meet one of the following criteria:

  • Maintain a $1,000 average daily balance
  • Keep a combined $5,000 average daily balance in personal checking, savings, money market, and CD accounts
  • Are 50 years old or older

There is a $50 minimum opening deposit amount. When it comes to ATM fees, Flagstar Bank charges a $2.50 out-of-network ATM fee. The first two non-network ATM fees will be waived for each billing cycle. It comes with a free debit/ATM card, and account holders who are 50 and older get one box of free checks per year. It also doesn’t charge you for paper statements.

SimplyMax Checking is Flagstar’s checking account with the most perks. The $2.50 ATM fee is dropped entirely, plus you’ll get up to $20 a month reimbursed on out-of-network ATM fees. Another perk is that you receive a free box of checks a month. There is a $50 minimum opening deposit. The interest rates aren’t anything to write home about: 0.01% APY for balances under $5,000, 0.03% APY for balances $5,000 to $24,999, and 0.4% for $25,000 and higher.

However, more perks mean higher monthly account fees. The SimplyMax Checking comes with a $25 monthly maintenance fee, which can be waived if you do one of the following:

  • Keep a $5,000 average daily collected balance
  • Maintain a combined $25,000 average daily balance in personal checking, savings, money market, and CD accounts
Flagstar Bank Checking Accounts
Account Name Minimum Opening Deposit  Monthly Fee  Annual Percentage Yield (APY)
SimplyOne $1 if opening online; $0 if opening at a physical location  $5 None
Simply $50 $10 None
SimplyPlus $50 $10 0.01% if under $10,000
0.02% if $10,000 or more
SimplyMax $50 $25 0.01% if under $5,000 
0.03% if between $5,000 and $24,999
0.04% if $50,000 or more
(As of July 21, 2020)

Savings Accounts

Flagstar’s SimplySavings account is its base-level, no-frills account. The good thing about it is that there’s a $1 minimum deposit to open an account online and no minimum requirement to open an account at a branch. It has a 0.03% interest rate no matter how much you put in it, and there is a $3 monthly service fee that can be waived if you do one of the following:

  • Maintain an average daily balance of $300
  • Have a Flagstar personal checking account 

Flagstar’s High-Yield Savings is a bare-bones high-yield savings account that offers a wee bit of interest and currently starts at 0.02%. The monthly maintenance fee is $3, which can be waived if you either maintain an average monthly balance of $300 or have a personal checking account through Flagstar. There’s a $1 minimum to open an account online, and there’s no minimum deposit requirement to open an account at a branch. 

Flagstar Bank High-Yield Savings Rates
Balance Annual Percentage Yield (APY)
$0 to $49,999.99 0.02%
$50,000 to $99,999.99 0.15%
$100,000 to $249,999.99 0.25%
$250,000 to $499,999.99 0.35%
$500,000 to $999,999.99 0.45%
$1,000,000 to $999,999,999.99 0.55%
(As of July 21, 2020)

Flagstar’s Foundation Savings Plus account is for those with at least $10,000 to save. The interest rates are higher than the national average but hardly competitive with savings rates from some other financial institutions. The current rates are as follows: 

Flagstar Bank’s Foundation Savings
Balance Annual Percentage Yield (APY)
$0 to $9,999.99 0.03%
$10,000 to $24,999.99 0.50%
$25,000 to $49,999.99 0.50%
$50,000 to $99,999.99 0.50%
$100,000 to $499,999.99 0.50%
$500,000 to $999,999,999.99 0.50%
(As of July 21, 2020)

There’s a $15 monthly maintenance fee, which would be dropped if you either have a personal checking account or keep at least a minimum of $10,000 average daily collected balance. 

Flagstar’s custodial account, SimplyKids Savings, gives minors the chance to learn how banking works and teaches them how to manage their money. Anyone age 22 or younger can open an account. There’s a free debit/ATM card for kids who are 13 and older, and parents or guardians can shuffle money between parental and minor checking accounts for free. There’s no monthly maintenance account fee, and you only need a $1 deposit to open an account online.  

Money market accounts typically have a lot of the same features as savings and checking accounts but with higher interest rates. While Flagstar’s APY for its SimplyMoney Market account is slightly higher than its checking, it’s lower than the national average. The rates are as follows: 

Flagstar Bank SimplyMoneyMarket Rates
Balance Annual Percentage Yield (APY)
$0 to $4,999.99 0.01%
$5,000 to $9,999.99 0.03%
$10,000 to $24,999.99 0.03%
$25,000 to $49,999.99 0.03%
$50,000 to $99,999.99 0.03%
$100,000 to $999,999,999.99 0.03%
(As of July 21, 2020)

There’s a $1 minimum deposit to open an account online, and there’s none at all if you open one at a physical branch. However, note the $10 monthly account fee. This ongoing fee could be dropped if you have a Flagstar personal checking account or keep a $5,000 daily average in the account. 

CDs

If you have a chunk of cash that you can afford to keep stashed away for a set period of time, you might want to consider a CD. It can be a good way to earn a little more interest. 

Flagstar offers two groups of rates: standard and preferred. To get preferred rates you’ll need to keep a combined $5,000 or more in checking, savings, and money market accounts. The CD terms with the most attractive rates are 13 months and 49 months.

A neat feature of Flagstar’s CDs is that you have the option to automatically transfer the interest earned to your checking, savings, or money market accounts. The flip side of doing this is that you won’t enjoy the growth of compound interest. 

Should you need to pull money from a CD before it matures, you’ll get pegged with an early withdrawal penalty, which varies.

The current rates for Flagstar Bank’s CDs are as follows: 

Flagstar Bank’s CD Rates
Term Annual Percentage Yield (APY)
49 Months 1.00%
13 Months 0.45%
30 to 89 Days 0.05%
90 to 179 Days 0.05%
180 to 364 Days 0.05%
12 to 17 Months 0.15%
18 to 23 Months 0.15%
24 to 29 Months 0.20%
30 to 35 Months 0.20%
36 to 47 Months 0.20%
48 to 59 Months 0.30%
60 to 71 Months 0.40%
72 to 83 Months 0.40%
84 to 95 Months 0.40%
96 to 107 Months 0.40%
108 to 120 Months 0.40%
(As of July 21, 2020)

Credit Cards

Flagstar Bank offers a handful of credit cards, including cash-back rewards cards, a balance transfer card, and a secured credit card.

Balance Transfer Credit Card

  • Flagstar Bank Visa Platinum Card

Cash-Back Credit Cards 

  • Flagstar Bank Cash Rewards American Express Card 
  • Flagstar Bank Visa Real Rewards Card 
  • Flagstar Bank Premier Rewards American Express® Card 

Student Credit Card 

  • Flagstar Bank Visa College Real Rewards Card 

Real Secured Credit Card  

  • Flagstar Bank Visa Secured Card

Other Financial Products Offered by Flagstar Bank 

Flagstar Bank has an impressive range of banking products and services.

  • Car loans
  • Education Savings Accounts 
  • Estate planning services 
  • Purchase mortgages
  • Refinance mortgages
  • Home Equity Loans and Lines of Credit (HELOCs)
  • HSAs
  • IRAs
  • Income tax services 
  • Insurance policies 
  • Personal Money Management services
  • Managed investment portfolios
  • Financial Advisors
  • Business loans

Customer Service

Customers can get a hold of Flagstar Bank’s customer service by phone, chat, email, or going to a brick-and-mortar location. There’s 24/7 voice phone banking (1-888-842-6328), and you can talk to a human on weekdays from 7:30 a.m. to 9 p.m. EST and on Saturdays from 8:30 a.m. to 6 p.m. EST. If you prefer to email with an inquiry or a question, there’s a contact form on Flagstar’s website. 

How to Bank With Flagstar

You can open an account online or at one of its physical locations. Remember that on some accounts there’s a $1 minimum deposit to open it online but no minimum deposit to open it at a physical branch. 

Verdict

If you want access to Flagstar Bank’s extensive products and services, then it could be a good bank for your needs. Also, if you’re looking for a financial institution that offers a reduced rate on a loan because you have an existing deposit account, it could potentially save you on interest fees on that loan. However, if you’re opening a deposit account to earn interest, you’ll find more competitive rates elsewhere. In addition, the minimum balance requirements to have that monthly maintenance fee dropped might not be worthwhile.

Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of banks. We collected over 20 data points across more than 80 banks—including products available, interest rates, fees, and accessibility—to ensure that our content helps users make the right decision for their savings and banking needs.