E-LOAN's Savings Account Rate Drops to 5.38%
Dec 6, 2006 - 7:52 AM by Ken Tumin
Today E-LOAN lowered the rate of its online savings account from 5.50% to 5.38% APY. At least E-LOAN didn't start a tier structure like their CD rates. The 5.38% APY is good for all balances. E-LOAN's savings account rate had been at 5.50% since its launch back in late September. E-LOAN's CD rates held steady this week with no drops. For the last month, their CD rates had major reductions. The 3-year to 5-year rates had been as high as 5.75% APY before November. Now they're at 5.00% for balances under $50K.
I've read that E-LOAN may have based the savings account rate on the LIBOR rate. The LIBOR rate has been in decline over the last few months. Also, E-LOAN's savings account has been very successful in attracting deposits. E-LOAN had reported that the first 5 weeks after the launch, it had received more than $754 million in online deposits with 18,132 accounts. That was above E-LOAN's goal for this year. This has to be a factor in their rates.
For those disappointed in E-LOAN due their rate drops or recent issues or those who are not yet E-LOAN customers, you may want to consider other savings account options:
There's still a 5.50% savings account available at Superior Savings (see post). It requires a $10K balance, but it has advantages over E-LOAN's savings account such as limited check writing.
You may also want to consider Amboy Direct's Premimum Savings Account (see post) or the Grand Yield Direct savings account (see post). Both are no minimum savings accounts without fees and have rates between 5.25% and 5.35% APY. Also, both have a $25 sign-up bonus.
Another good choice is Zion's Deseret Money Market Account which currently has a 5.30% APY good for balances over $1K (see post). Like Superior Savings' money market, it has limited check writing. The only problem with both Zions and Superior Savings is a lack of an ACH system that allows easy bank-to-bank transfers.
I've read that E-LOAN may have based the savings account rate on the LIBOR rate. The LIBOR rate has been in decline over the last few months. Also, E-LOAN's savings account has been very successful in attracting deposits. E-LOAN had reported that the first 5 weeks after the launch, it had received more than $754 million in online deposits with 18,132 accounts. That was above E-LOAN's goal for this year. This has to be a factor in their rates.
For those disappointed in E-LOAN due their rate drops or recent issues or those who are not yet E-LOAN customers, you may want to consider other savings account options:
There's still a 5.50% savings account available at Superior Savings (see post). It requires a $10K balance, but it has advantages over E-LOAN's savings account such as limited check writing.
You may also want to consider Amboy Direct's Premimum Savings Account (see post) or the Grand Yield Direct savings account (see post). Both are no minimum savings accounts without fees and have rates between 5.25% and 5.35% APY. Also, both have a $25 sign-up bonus.
Another good choice is Zion's Deseret Money Market Account which currently has a 5.30% APY good for balances over $1K (see post). Like Superior Savings' money market, it has limited check writing. The only problem with both Zions and Superior Savings is a lack of an ACH system that allows easy bank-to-bank transfers.
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Brian (anonymous) - #1, Wednesday, December 6, 2006 - 2:35 PM
Wow...two months...that was quick.
John (anonymous) - #2, Wednesday, December 6, 2006 - 3:32 PM
Aw crap. I just opened an e-loan account last month. Oh well, at least I received a months worth of 5.50 apy interest...
Anonymous - #3, Wednesday, December 6, 2006 - 3:54 PM
I just logged into my account and it still said 5.50% APY.
Anonymous - #4, Wednesday, December 6, 2006 - 4:20 PM
somewhat off-topic to eloan...
A few weeks ago Countrywide decided that you could NOT link SavingsLink accounts to more than 1 external bank. Bummer. Luckily, I had 2 active and they won't "unlink" those.
Today they said that you can no longer do any internal transfers! I have a Countrywide MMA account that I would transfer funds into when I would do limited check writing (usually large-ish amounts). I'm going to miss earning 4.5% waiting for my checks to clear.
The SavingsLink account just got really difficult to access if you can only link to 1 external bank. If it weren't paying 5.30%APY and didn't have 2 accounts linked, I'd probably shut it down.
Any 5.3%+ MMA accounts with good ACH accessiblity around?
Anonymous - #5, Wednesday, December 6, 2006 - 5:02 PM
If you live in California, another option to consider is Vanguard California Tax-Exempt Money Market Fund (VCTXX). The current 7-day yield is 3.31% which is approx taxable 5.28% if you are in the 28% federal and 9.3% california tax brackets. This compares favorably with the current ELOAN rate of 5.24% (APY 5.38%).
Anonymous - #6, Wednesday, December 6, 2006 - 5:43 PM
I would not trust their web site but my account also shows interest rate of 5.5%
Anonymous - #7, Wednesday, December 6, 2006 - 7:55 PM
Actually even their web-site is showing that interest is still 5.50%
https://www.eloan.com/savings
Also my account is showing that it is earning 5.50%
Anonymous - #8, Thursday, December 7, 2006 - 7:24 AM
I just checked my account and the rate has decreased from 5.5% to 5.38%.
Anonymous - #9, Thursday, December 7, 2006 - 8:39 AM
5.38% here as of Thursday. It's still very a competitive rate (being above GMAC's).
Credit Card SEE (anonymous) - #10, Monday, December 11, 2006 - 10:05 PM
Check your rates... it's changed again...
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