Northern Bank Direct review July 2024: money market, CDs, and more

Founded in 1960, Northern Bank has experienced significant growth over the last 10 years, with assets growing from $1.09 billion in 2013 to $3.11 billion at the end of 2023. While Northern Bank is a full-service bank for its local, in-person customers, its online counterpart Northern Bank Direct offers a money market account, CDs, a 1031 exchange, and a health savings account (HSA).

All rates and fees are current as of July 23, 2024, and are subject to change.

Northern Bank Direct

MMAs:	Open with $5000
CD rates:	Earn up to 5.00% annual percentage yield (APY)

Pros and Cons

Pros

• Strong rate of return for bank’s MMA and CDs.
• Bank offers unique additional accounts, including 1031 exchange and HSAs.
• Online bank backed by a traditional bank that has been in business for over 60 years.
• No limit to the number of deposits and ATM withdrawals each month.

Cons

• $5000 minimum opening deposit for MMA is very high.
• Bank does not offer an online checking account.
• Branch access is not available unless you live in or around Massachusetts.
• High-interest yield for MMA is only available if your daily balance is less than $250,000.

Who is Northern Bank Direct good for?

Northern Bank Direct could be an excellent choice for people who already have personal checking at another bank but are looking for an MMA or CD with a high rate of return. It’s also a decent choice for customers interested in an HSA. Unlike some banks, Northern Bank Direct doesn’t limit the number of transactions or ATM withdrawals from your MMA each month. Finally, it is best for people who don’t need branch access and want online-only interest-bearing accounts.

Who shouldn’t use Northern Bank Direct?

While it offers great high-yield MMA and CD accounts, Northern Bank Direct doesn’t offer online checking accounts. Customers looking for checking and savings at the same provider should consider an alternative. Unless you live in or near Massachusetts, you won’t be able to visit a branch location. If branch access is important, most people should consider a local bank instead. Finally, the minimum deposit for the bank’s MMA is very high compared to other providers.

Northern Bank Direct rates and products

Customers seeking a free checking account must choose an alternative, as Northern Bank Direct does not offer any checking products. The only deposit accounts available are an MMA and CDs. 

Money market accounts

While Northern Bank Direct doesn’t offer a checking or high-yield savings account, it does offer an MMA with a solid interest yield. It is a solid MMA if your daily balance is less than $250,000. As long as your balance remains below $250,000, you will earn 4.95% APY on your entire balance.

However, if your balance exceeds $250,000, you will only earn 0.25% APY on the entire balance. In addition, you will need an opening deposit of at least $5000. This MMA is best for customers looking to earn interest on balances between $5,000 and $250,000. Customers with higher balances should consider an alternative.

The maximum amount you can initially deposit into your account is $250,000. While this account can only be opened online, if you live near a branch location in Massachusetts, you can make transactions in person. You can withdraw funds from a SUM-designated ATM for free, with no monthly limits on deposits and ATM withdrawals each month.

Certificates of deposit

Northern Bank Direct offers CDs from six to 60 months in length, ranging from 4.00% APY to 5.00% APY. The minimum opening deposit for all CDs is $500. You can open up to three CDs simultaneously, making setting up a CD ladder very easy.

The early withdrawal penalties vary depending on the length of the CD. For CDs less than 12 months, you will pay a six-month interest penalty. For CDs of 48 months or more, the penalty is 36 months of interest.  Check out our guide to CDs for more information.

Other services Northern Bank Direct offers 

Northern Bank Direct offers two other products in addition to its money market and CD accounts:

• HSA: Northern Bank Direct is an excellent option for customers who get an HSA from their employer but can choose where to open the account. An HSA allows you to save for health-related expenses and can provide tax savings and interest earnings.
• 1031 exchange: Northern Bank Direct also offers a 1031 exchange. People planning to sell property may be looking for a 1031 exchange to invest profits from a sale to defer capital gains tax. 

Online banking

As you would expect from an online-only banking provider, Northern Bank Direct has a full range of online banking services. The bank uses test deposits to link your Northern Bank Direct money market account with accounts at other banking institutions. You won’t be able to open your new account until you verify those test deposits.

You can check account balances, transfer funds, and use People Pay to pay friends and family. You can deposit checks through the mobile app.

Funds sent to other Northern Bank Direct customers are processed immediately. However, transferring money to a non-Northern Bank Direct customer may take up to three business days. You can send wire transfers from your account by calling the bank at (844) 348-8996.

The Northern Bank Direct platform and customer support 

You can access your Northern Bank Direct account information via the mobile app or the company’s website. The mobile app is poorly rated but only has a small amount of reviews. It has been rated 1.5 stars out of 5 on the Apple App Store based on nearly 30 ratings. On the Google Play Store, it is rated 2.7 stars out of 5 based on around 50 reviews.

You can reach Northern Bank Direct customer service by phone Monday through Friday from 8 a.m. to 6 p.m. Eastern time and Saturday from 8:30 a.m. to 12:30 p.m. ET. You can also email the bank at nbdirect@nbtc.com. If you are near one of the bank’s Massachusetts branch locations, you can also stop in during banking hours for customer service.

Is Northern Bank Direct secure?

Northern Bank Direct has linked a page on the Northern Bank website with a series of articles on how you can remain secure when banking online. The bank doesn’t appear to have had any major security issues in the past.

Comments on the Google Play mobile app page state that the bank uses two-factor authentication (2FA). However, some commenters state that they had issues enabling it. Some users have also complained about problems with the app using a fingerprint reader.

Northern Bank Direct deposits are considered held by Northern Bank and are Federal Deposit Insurance Corp. (FDIC)-insured for up to $250,000.

Northern Bank Direct user reviews

Reviews of Northern Bank Direct are mixed. On Deposit Accounts, the bank is rated 2 stars out of 5 based on around 20 reviews. While many of the positive comments were pleased with the APYs on the accounts, some had issues with the bank’s customer service. One user stated they were turned down for an account but were not told why.

Compare Northern Bank Direct alternatives

Northern Bank Direct	Ally Bank	SoFi Bank
Top savings APY	Top savings APY	Top savings APY
4.95%	4.20%	4.60%
Top checking APY	Top checking APY	Top checking APY
N/A	0.25%	0.50%
Top CD APY	Top CD APY	Top CD APY
5.00%	4.50%	N/A
Other services	Other services	Other services
Health savings accounts 1031 exchange	Credit cards Investment accounts and services Home loans Auto loans Personal loans	Online banking Investments Student loans Personal loans Mortgage loans Auto loans Credit cards Insurance products
Learn more	Learn more	Learn more
Read more online bank alternatives	View offer at Fiona	View offer at SoFi

Is Northern Bank Direct right for you?

If you are looking to open an online MMA or CD, Northern Bank Direct may be the right bank for you. Consider an alternative if you want to have your high-yield deposit accounts at the same bank as your checking. Also, this isn't the right option if you prefer in-person banking and don’t live near the bank’s branch locations in Massachusetts. However, Northern Bank Direct could be a great choice if you’re looking for solid interest yield on excess funds.

Frequently asked questions