Dedicated to Deposits: Deals, Data, and Discussion

New 5.50% Online Savings Account from E-LOAN

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E-LOAN.com
Update 2/14/08: The current yield is 3.50% APY. Please check the bank's website for the latest rates.

For those newcomers who are getting into the online savings account business, this is the way to get attention. E-LOAN just launched a new online savings account that pays 5.50% APY on all balances. Based on E-LOAN's FAQ, it looks like a typical online savings account. The one downside compared to some others is a minimum opening balance requirement of $5K. However, there appears to be no monthly fees if the balance falls below $5K. Here's a summary of the FAQs:

Important general points about the savings account:
  • E-LOAN is a subsidiary of Banco Popular North America (BPNA), a New York state chartered bank insured by the FDIC (E-LOAN mentioned in annual report)
  • Minimum opening balance for a Savings Account is $5,000
  • Absolutely no fees (assume no fees for small balances or ACH transfers)
  • They only accept funds by ACH through your linked account. Deposits in the form of checks, wires or cash will be returned.
  • You can designate a beneficiary while opening your account.

Important Points about the linked account:
  • Your account can be linked to checking or savings accounts at another financial institution.
  • The typical trial deposit method is used to establish the linked account
  • For security purposes, they do not allow any withdrawals from your E-LOAN account to be made by an outside institution.
  • For your security, you may only change your linked account once every 30 days (use to be 4 times per year.)
  • Deposits and withdrawals pass between your linked funding account via the ACH, which usually takes 2-3 days to clear transfers.
  • Savings account withdrawals are limited to six per calendar month. However, you are free to make unlimited deposits into your online account from your linked account.
  • Only one link to an external account can be set up.
  • No fees for ACH withdrawals

Here are some additional points about the savings account that I received from the CSR:
  • No hard credit inquiry. The CSR said that they only use Experian to check for identity.
  • No inactivity fee or small balance fees.
  • If balance falls below $500 for 90 days, they may close your account
  • No IRA accounts for savings or CDs
  • No sign-up bonus

In addition to savings accounts, E-LOAN is also offering high yield certificates of deposits. These have a minimum deposit requirement of $10K. The 6-month CD APY is 5.60%. The one-year APY is 5.70%. All longer term CDs have an APY of 5.75%.

Bankrate.com gives Banco Popular 3 out of 5 stars for its safe and sound rating (performing). It is a major bank with over $12 billion in total assets.

It's nice to see a new major player in the online savings accounts. It's hard to say how long E-LOAN will remain on top of the interest rates. When Emigrant launched its online savings account in early 2005, the interest rate was way above its competitors at that time. But after a year, it started to lag others. I would think E-LOAN wouldn't have to stay on top too long since it already has name recognition. Building trust shouldn't be as difficult.

Even if E-LOAN doesn't stay on top, the more banks with high yield savings accounts, the better it will be for savers. It will put pressure on others to raise their rates. The only potential problem is that most people may have grown tired of opening a new savings account whenever a new rate leader comes forward. There are concerns with hard credit pulls which lowers credit scores. Also, there's concern about having your personal data in yet another financial institution which increases a chance that a mistake will be made in which your personal data will be compromised. But if we want to see rates staying competitive, we have to be willing to move. At least, these savings accounts are easy to set up and easy to move your money.

Thanks goes to Scott who mentioned this new savings account in the finding deals post.

[Edited on 6/06/07: 5.25% is current yield. Updated policy on change frequency of linked accounts.]
[Edited on 9/30/06: 5.50% now applies to all balances.]
[Edited on 9/27/06: Added details received from CSR.]

  Tags: savings account, E-LOAN.com

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Comments
31 Comments.
Comment #1 by Anonymous posted on
Anonymous
Today's Wall Street Journal's Personal Journal (D-2)had a good article on this matter.

1
Comment #2 by Brian (anonymous) posted on
Brian
One of the concerns I have is if this is just a short-term teaser rate.

If E-LOAN could guarantee the rate for a certain period of time, much like EmigrantDirect did when they first started, it would help them win more customers.

1
Comment #3 by rub1232000 (anonymous) posted on
rub1232000
Just spoke with a rep and this is what he told me:

Interest Rate - they want to be competitive and constantly pay one of the highest interest rates. The rate is not guaranteed for any time period.

Can only link to one account.

No fees

No hard credit inquity

No sign-up bonus at this time

If anyone hears anything otherwise please let me know

1
Comment #4 by rub1232000 (anonymous) posted on
rub1232000
this is the easiest account I have ever opened. it takes under 5 minutes

1
Comment #5 by scott (anonymous) posted on
scott
I think they will stay competitive, Like Countrywide they have huge lending power and can run promos to get rid of much the cash coming in better than the likes of Emigrant. Usually when I open an account I get some sort of E-Mail acknowledging the application but nothing so far from E-Loan, Did anyone get one?

1
Comment #6 by rub1232000 (anonymous) posted on
rub1232000
i didnt get an email either. opened it about an hour or so ago

1
Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
Thanks rub123200 for info from the rep. Don't see any major downsides.

1
Comment #8 by scott (anonymous) posted on
scott
Don't really need the E Mail since you can log on right after you apply and see that the account is open

1
Comment #9 by procol (anonymous) posted on
procol
Anyone know if they take IRA's in thier cd's?

1
Comment #10 by Anonymous posted on
Anonymous
The original post mentioned that no withdrawals are allowed by 'outside institutions" but also that ACHs are allowed by linked account so does this mean that only deposits are allowed via ACHs?

1
Comment #11 by Anonymous posted on
Anonymous
>does this mean that only deposits are allowed via ACHs?

No, that means that you must push from the E-Loan side of the equation in order to ACH to the linked account.

1
Comment #12 by Anonymous posted on
Anonymous
It would be nice to know if thier ACH is slow like HSBC where they pocket the lost interest....

1
Comment #13 by Anonymous posted on
Anonymous
just opened one. easy as pie. as already noted, go directly to login after completing application to see account.

1
Comment #14 by Anonymous posted on
Anonymous
Looks like the 5.50% APY applies even for balances below $5K. I don't see any mention of 5.25% APY for balances below $5K on the website today.

1
Comment #15 by Banking Guy (anonymous) posted on
Banking Guy
Yes, I see this now also. 5.50% is now for all balances at E-LOAN. That's a nice change. Perhaps they didn't want that special note next to their 5.50% rate.

1
Comment #16 by Anonymous posted on
Anonymous
how soon wil eloan withdraw the trial deposits from funding bank account?

1
Comment #17 by Bill (anonymous) posted on
Bill
Scott,
Are you saying that once you make your initial pull from Emigrant Direct, you can change your linked account to another institution?

1
Comment #18 by Anonymous posted on
Anonymous
Has anyone tracked the time in which it takes to makes a transfer to and from with e-Loan?

Are the transfers like that of Emigrant or like that of ING where it takes 2 days for the money to transfer and you lose interest in the process.

1
Comment #19 by Anonymous posted on
Anonymous
Opened an account. smooth process.
$5K transferred from link account next day. Had a query. Sent an email last week through their sercure messaging. Receive an acknowledgement saying they will get back shortly (>??)..Haven;t heard from them...Had couple of other queires...Same thing...It has been more thant 5 business days and have not received response to any of the emails query sent via secure messaging after logging into my accout. Planning to close my account if this is what their customer service is..anybody with same experience ?

1
Comment #20 by Anonymous posted on
Anonymous
I opened a joint savings account and shortly after that we both received an email welcome letter. Opening the account was easy - except for my own typo which was fairly easy to correct.

1
Comment #21 by Anonymous posted on
Anonymous
Huge problems with ELoan the last few days. They are reversing ACH transfers and creating mistaken ACH transfers. Nearly everyone who initiated a transfer on November 7 has been hit. I had a $70K transfer sent back to my bank by ELoan's mistake. Unacceptable for a bank to make errors in money transactions like this. See threads at Fatwallet:

1
Comment #22 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. This seems like a major issue at E-LOAN. I just did a post on this issue today here.

1
Comment #23 by Anonymous posted on
Anonymous
Anyone know the procedure to close a CD? Can it be done online or do they require you to mail-in your instructions?

1
Comment #24 by Anonymous posted on
Anonymous
1 year CD now down to 5.30%.

1
Comment #25 by Anonymous posted on
Anonymous
Anyone had tested the acurracy of the interests created by E-loan.
I made my own spreed sheet with around 10k balance, it looks like E-loan give me 7 cents interest less after two month.
I had another account in emigrant direct, I used the same logic in the spreedsheet, emmigrant direct show the exact same interests calculated by my spreadsheet.

1
Comment #26 by Anonymous posted on
Anonymous
I opened this account about 3 months back. Then suddenly it was disabled. I later found out that they had sent the wrong info after 3 months to the credit bureau and got returned as invalid. Without even giving me a call they disabled my account. Then when talking to the representative I found that in spite of providing information that it is a joint account, it was not listed as a joint account, so not all my funds were FDIC insured. It was the worst experience. They claimed to have fixed the issue ( I had to call 5-6 times). Later after a week (20th december) they closed my account and my funds were gone, 0 balance. They did not know what happened to my account. Then found out that someone from their chicago office closed the account. Now I dont have any access to funds until 27th december. I am trying to reason with them. They have also accepted that it was their mistake. My honest opinion is that no one should open an account with such an incompetant bank. I have dealt with ING and emigrantdirect before and though their rate is about 0.2% lower, they are much more safer and better banks. Just wanted to let everyone know my experiences. I will absolutely not recommend this bank to anyone.

1
Comment #27 by Anonymous posted on
Anonymous
I switched from ING to Eloan because of the 5.50%. From the start i had issues with Eloan. Moneytransfers that don’t show up; I deposit money on Monday, it takes Eloan more then 7 days to show it in your account (next tuesday). When i call i get a shady answer. Im switching back to ING. never had problems with them.. and ING just announced they have ING Checking accounts!

1
Comment #28 by al_r (anonymous) posted on
al_r
I noticed that E-LOAN Savings is back on the bankrate dot com 'high rate' list:

High Rates

(I guess they kissed & made up.)

1
Comment #29 by Anonymous posted on
Anonymous
Eloan lowered their interest rate on the savings account. Apy = 5.25, rate 5.12. My real issue is they did this without notice, not even an email.

1
Comment #30 by Banking Guy (anonymous) posted on
Banking Guy
Yes, E-LOAN has disappointed us. It's funny how banks will send out emails when they raise rates but never send them out when they lower them. But E-LOAN is not alone. EmigrantDirect and others have also done this.

Here's my E-LOAN rate reduction to 5.25% post.

1
Comment #31 by Z3trkrnr (anonymous) posted on
Z3trkrnr
I love my ING Direct account. It doesn’t have the highest APY but you won’t get better customer service anywhere else. Also, their online interface is just easy and awesome.
I also do still have many referral links left if anyone would like to contact me to receive a link (either for an orange savings account or the electric orange checking/savings account) to sign up for an account. You receive $25 for signing up with a min. of $250 or more. A nice little bonus for nothing! Just shoot me an e-mail @ z3trkrnr@gmail.com and I’ll send the link right back to you!

1