Clark: "14 Best online Savings" Western Alliance Bank? Or Raisin?

Today’s Clark’s Newsletter has WA as best online savings, but links to WA opens Raisin, and that is not a bank. I read a few pages on ‘what is Raisin’ and never did understand it.

Can anyone explain it to this old man?

From what i understand, raisin is a middleman and a “servicing type agent” for various banks and credit unions looking to increase their deposit base by offering higher rates. All customer service is via raisin and from the reviews i read, is generally poor. Your money along with others is deposited in a Lewis and Clark Bank custodial account which is then deposited at the bank/or credit union that you had selected. You receive a 1099INT from the Lewis & Clark Bank . I personally don’t have a problem with Raisin’s platform EXCEPT the reviews i read about the lack of customer service. I opened a account to see how it will work for me but have not had a need to contact customer service
Perhaps Clark will review Raisin for the community


thanks for this

Today I tried to access my account on Raisin’s mobile app. When it did not open, I attempted to download the app from the iphone app store and the only thing that showed up was the word “login”. No wonder the app has only 2 stars. I tried the website on my laptop and was successful in accessing my account.
I requested a withdrawal of $100 and my account was immediately charged instead of being placed in a “pending” status.

Yes, I would appreciate it if Clark were to do a review of Raisin. I used Raisin to open a Western Alliance Bank savings account to get 5.15%. I foolishly clicked through all of the fine print when I opened the account and didn’t realize that I don’t actually have an account at #WAL. Apparently, I have a custodial account via Raisin. This begs the question - can you ever really be certain that you’re benefitting from #WAL’s federal deposit insurance if you never actually have your own account there? What if Raisin gets hacked or there’s fraud and the money is gone and I learn that my deposit never made it from their accounts over to #WAL?

I may just close the account and open one directly with CIT to get 4.95%. I currently have most of my cash with Lending Club getting 4.25%.

I tried a couple months ago to get info on thie WAL account through Clark and they did not know anything about it. They did mention that any BBB complaints were being handled promptly.
I decided then to open up a WAL account and deposit $1000.00 into the account. A month later I decided to pull out the initial amount along with the interest that I earned. I had no problem depositing and with drawing money from WAL. My only complaint was the speed at which the money was moving back and forth from my personal account to WAL. The reason I decided not to put everything into the account was that DollarSavingsDirect went up to 5% at the time and I trust them. Not sure if I will try again because they are still new to me. I have been doing business with DollarSavingsDirect for years so I trust them.

A company partnering with a bank that is a separate entity is very common for savings accounts. In fact, this is what Fidelity, Schwab and Vanguard all do with their savings products that Clark highly recommends. Almost every fintech does this as well.
In many cases, it’s a way to provide more FDIC coverage than you’d get if you had a relationship with a single bank. (i.e. you can give Fidelity millions of dollars and it will all be covered by FDIC rather than just $250K).

Yes, it’s perfectly safe to choose a savings account solution where the company partners with a bank, and the bank is the one that provides the FDIC coverage and pays the interest.

When you give a company like that your money for a savings account, it doesn’t just sit in limbo in a non-FDIC account until the bank claims it and offers protection. You’re depositing straight into that bank even via the company (Raisin in this case).

More from the Raisin FAQs

Hope this answers your questions! :green_heart:

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I would respectfully disagree. The FDIC clearly states that they do not guarantee Raisin, but only the accounts that Raisin deposits into. You ask, “what’s the difference?” As a consumer, you have no way of knowing if your funds have moved from a Raisin account to the custodial account (shared with all Raisin customers) at the FDIC insured bank. So you’re trusting that Raisin is being properly managed and won’t be run into the ground due to fraud or incompetence.

You compare Raisin to Fidelity, Schwab and Vanguard. I would say that’s a stretch. If any of those three went under with funds that were supposed to be in insured accounts but were not, the federal government would almost certainly step in and make consumers whole. I don’t think you can say the same thing about Raisin.

In short, even if the risk is minimal, why take on any risk at all when you can deposit your funds directly with an FDIC insured institution like CIT Bank and their online savings account currently paying 5.05%?

There is no such thing as a “Raisin account.” Raisin is not a bank. Your money initially goes into a bank account, so at no point is your money not FDIC insured. The biggest risk with Raisin is customer service, not money protection.

And it does work the same as almost any other fintech (Robinhood, for example). And even Clark’s three favorites when it comes to CDs (they are not banks themselves but use a similar structure as Raisin).

As a brand, Raisin certainly isn’t as established (although it did acquire a European bank that has been around for many decades). However, there is no risk of your money being outside of FDIC protection at any time.

Posting our full review for more information here.

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@mjross @MrBob Per your requests, here’s our full review of Raisin :green_heart:

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So is Raisin essentially a consumer friendly FinTech solution for CDARs ?

I have a few comments regarding Raisin. When I opened my account, the custodial bank named in the documents was Lewis & Clark Bank. I am not sure how the Central Bank of Kansas is connected.

If you want to change your external bank account, there is a 60 day wait period after the first deposit. Raisin will only link to one external account at a time.
Also, you can only have one Raisin account.

I used the online support system and received good service. Additionally I made a small withdrawal and received the funds in a timely manner.

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Thank you for the review. After reading everything I could find about Raisin and similar FinTechs on the FDIC website, I would very much like to know how you can say with such confidence (bold typeface) that “there is no risk of your money being outside of FDIC protection at any time.” The FDIC website is pretty clear in their statements about not making any promises to consumers about such FinTechs.

Nothing I could find on Raisin’s website, or from emailing with Raisin customer service, or from the FDIC website or from emailing the bank that I chose for Raisin to make the deposit on my behalf, gave me any insight into how your money moves from your account to the insured bank, nor on how long that process takes. It also doesn’t provide any guarantees that Raisin cannot pull your funds back into their accounts from your chosen bank without your direction. At no point in time do you have your own account at the FDIC insured bank. It’s all pooled by, and in the total control of, Raisin.

Are these things likely to happen? Perhaps not. But did anyone think that Wells Fargo would open accounts for customers without their knowledge? Minimal risk is not zero risk, especially when you can get online savings accounts with similar rates directly with FDIC insured banks.

And finally, I would again say that comparing Raisin to Schwab, Vanguard and Fidelity doesn’t hold water for me. The federal government would almost certainly step in to make consumers whole if funds that they thought were in insured accounts with those massive firms were lost. I don’t think you can say the same thing about some FinTech (Raisin) that 95% of the country has never heard of.

Thank you again for your review. I have closed my account at Raisin (and should have done the research before opening it). And again, if you can explain how you can make that boldfaced statement, that would be appreciated.

So I had a few follow-up questions that some other users posted - from digging in deeper, it looks like the “Lewis & Clark Bank” is actually the custodian of everyone’s accounts where the funds are pooled - so that’s how all the funds are insured, without providing any specific account number to each individual. Hope that helps for anyone that was confused, because I definitely was lol.

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I’ve invested through Raisin for several months now, and I love it. Zero problems. I’ve withdrawn, redeposited, etc. I’ve had no need to contact customer service via telephone because the whole thing is pretty cut and dry,and it’s only CD’s and savings accounts. I have sent a few emails and got quick and satisfactory responses. Some people on here should just throw money in a shoebox under the bed if you cant get past worrying about an online account and hypertheticals that you could also apply to absolutely anything but choose to apply to Raisin only instead. The savings account on there alone is more than any CD (which locks up your money) locally I can get. Cheers

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I agree with you completely, Stephen_Allen. The information is all there if you just do your due diligence. I too have had no problems yet. Everything is very easy and, mostly, intuitive. It’s not fancy, just gives better rates than you can get if you go yourself to the banks they represent. My own credit union is on there, which I’ve been with for forty years, and I can tell you, I can’t get those rates, especially no penalty withdrawal rates at my credit union, but I can at Raisin. The no penalty CDs seem to be higher rates than the pure HYS.

Deposited 25k then applied for a saving account. Without a reason saving account request was refused. Now account is locked. I was asking reason why my accouct was locked no response yet.
STAY AWAY: Bank will come up excuses to retain YOUR money for sometime. (utill they earn intrest from YOUR money)