State Farm Bank is an offshoot of the familiar State Farm insurance brand. The bank itself began operations in March 1999 and is headquartered in Bloomington, Illinois. The bank’s offerings are largely consumer-focused and designed to complement its insurance solutions. As a result, State Farm Bank defines itself as “nontraditional” — most customer interactions are handled through State Farm agents or via the bank’s call center and online web portals.
State Farm Bank offers checking, savings and money market accounts along with fixed-rate certificates of deposit (CDs) and credit cards. Its interest rates are average — slightly below typical offerings for online institutions and above those for brick-and-mortar banks.
As a consumer-focused bank, State Farm offers the advantage of no-minimum balance, no-fee checking accounts. Also worth noting, the bank reimburses ATM fees outside the State Farm network so long as clients make at least one direct deposit during their statement cycle.
State Farm Bank at a glance
- Out-of-network ATM reimbursements
- No fees or deposit minimums for checking or savings
- No physical banking branches
- Lower than average interest rates
What’s interesting about State Farm Bank
State Farm Bank prides itself on straightforward banking solutions for consumers. The company participates in “deposit sharing,” which allows clients to make deposits at ATMs owned by other participating institutions. The bank also reimburses customers for any “foreign” (out-of-network) ATM fees if they make at least one account deposit per statement cycle. Customers can also call the company directly to have international ATM fees reimbursed. Clients using State Farm Bank credit cards can earn Loyalty Rewards Points which may be used for checking, interest checking, savings and money market offerings. Introductory CD rates are above average for special term 30-month agreements, and rates also push past the median for online banks in 60-month terms. In addition, the mobile banking applications offered by State Farm Bank are well-reviewed on both iOS and Android.
Things to consider
State Farm Bank offers lower than average interest rates across consumer products — with the exception of fixed-term introductory offers — and it may frustrate some consumers. In addition, the lack of physical branches can make contacting bank representatives somewhat challenging. Clients must either speak to a State Farm insurance advisor or contact support through call centers and online web portals. While State Farm Bank’s customer support enjoys largely positive reviews, lacking a clearly defined primary channel can make it difficult for customers to determine the best contact method for their specific needs.
Checking and savings accounts
State Farm Bank checking accounts can be opened online and include options for ATM fee rebates. Your first order of checks comes at no cost, and all accounts include overdraft protection. Standard checking accounts require no minimum opening deposit, no minimum balance and charge no monthly fees. Interest checking accounts have no minimum opening deposit but do require a monthly balance of $2,500 to earn interest, which is slightly lower than comparable bank interest rates.
Savings accounts require no minimum opening deposit and offer to $10 in reimbursement per statement cycle for out-of-network ATM fees. Interest rates are below average but increase slightly when your balance reaches $5,000.
Money market accounts
State Farm Bank offers both consumer and business money market accounts. These accounts earn slightly higher interest rates than checking or savings accounts, and this interest is compounded daily. While standard rates are below average, “relationship rates” — which require you to open both a consumer checking and consumer money market savings account — are closer to the industry average. Money market accounts can be linked to other accounts as a form of overdraft protection and offer 100% reimbursement for out-of-network ATM fees.
Certificates of deposit at State Farm Bank require an initial deposit of at least $500 with fixed terms between one and five years. When CDs mature at the end of your term, they are automatically renewed. A 10-day grace period after the maturity date lets you change term options, withdraw funds or increase your total CD amount without penalty. Interest rates on 12- and 24-month terms are below the industry average at 1.73% and 1.78%, while 36-, 48- and 60-month terms are slightly above. Special Term interest rates are the highest offered for State Farm Bank CDs — after 30 months, they automatically renew into the next highest term.
State Farm Bank offers four Visa credit cards.
- State FarmRewards Visa®: This Visa earns reward points — three points for every $1 spent on State Farm insurance premiums up to $4,000 per year, and one point per for every $1 spent on eligible purchases. The card has no annual fee and includes a 12-month, 0% introductory rate. Standard interest rates for this card are slightly higher than average.
- State Farm® Good Neighbor Visa®: This card has no annual fee, and existing State Farm customers can apply for this Visa online. Interest rates are slightly lower than the Rewards Visa but slightly higher than the industry average.
- State Farm® Student Visa®: The State Farm Student Visa allows post-secondary students to establish credit ratings and accrue points — three points per $1 on insurance premiums and one point for every $2 spent on eligible purchases. This card has the highest variable rate of all four types and varies based on the market Prime Rate.
- State Farm Bank® Business Visa®: Along with insurance premium and eligible purchase points, this card earns two points for every $1 spent on travel and office supplies. In addition, business owners may qualify for six months of 0% APR followed by a standard rate slightly above the industry average. All cards leverage chip technology for enhanced security and allow users to enroll with Visa Checkout’s online payment service.
State Farm Bank does not offer personal loans for customers to consolidate debt, cover moving costs, pay for a wedding and more. If you are searching for a personal loan to meet your financial needs, try SoFi. SoFi is an online lender that provides not just personal loans, but also credit health tools and other member perks like networking and money management advice.
State Farm Bank does not directly offer mortgage loans to customers. Instead, State Farm agents originate mortgage loans through Rocket Mortgage by Quicken Loans, as of July 2019. Before this, State Farm Bank did issue its own mortgage loans to customers but now has the opportunity to provide better customer service and rates with this recent partnership.
State Farm offers mortgage refinancing through their partnership with Quicken Loans, which means that all mortgage products offered by State Farm will actually be Quicken Loans products. Not all State Farm agents are licensed to offer home mortgages, though, so it can be a coin toss when you call your agent looking for information on home refinancing. It would be easier to just visit Quicken Loans’ website to see what options they offer rather than taking the extra step of going through State Farm. Quicken Loans is the largest mortgage provider in the country, and it has a ton of different products to choose from, all of which can be applied for online.
Home equity loans and HELOCs
As with its other mortgage products, State Farm offers home equity loans and HELOCs through Quicken Loans. All new loan applications originated by State Farm agents will be for Quicken Loans products, so as with refinancing, it may be easier to just visit Quicken Loans directly to get the process started. It’s all online and terms vary depending on your situation, so the best way to see what this bank offers is to either call your State Farm agent or go through Quicken Loans instead.
Customers can finance vehicles with loans between $5,000 and $250,000 that have rates starting at 3.39% for vehicles models 2018 and newer and 3.89% for vehicles 2017 and older. Every vehicle loan also comes attached with Payoff Protector by State Farm Bank. This product gives customers financial protection if their vehicles are stolen or totaled and the insurance payout doesn’t cover the remaining balance on the loan. This is extremely helpful, as customers will not have to roll the remaining balance of the damaged or stolen car loan into a new auto loan — the rest is simply gone into the ether.
The final word
State Farm Bank offers standard banking services with interest rates slightly below average for savings and slightly above average for credit cards. No-fee accounts and refunded ATM fees make this an ideal bank for customers who primarily conduct business online and often use out-of-branch ATMs. Clients who prefer high-interest checking and savings accounts or easy access to in-person assistance may be best served by another financial institution.