E*TRADE Bank just increased the yield on its Complete Savings Acocunt from 4.70% to 5.05% APY. I've seen cases where banks make mistakes on their websites, so I called and confirmed that this new rate is correct. As is typical, there's no guaranteed period of time in which this will last.
E*TRADE Bank also raised yields on their CDs for the 3, 6 and 12 month terms. The top yield is now 5.25% APY on the 6-month term. As you can see below, this is a big jump in the rates:
Term Old APY New APY
3-month 4.60% 5.10%
6-month 4.75% 5.25%
12-month 4.55% 5.15%
These rate increases remind me of what Countrywide Bank did in August after news came out about its mortgage problems. Earlier this month, similar news came out about E*TRADE (see post).
I think it's always a good idea to stay below the FDIC limits regardless of the bank. Bank deposits held at E*TRADE Bank are FDIC insured (E*TRADE Bank's FDIC page). There are many ways to extend FDIC coverage past $100K such as with POD beneficiaries. Note, to add beneficiaries you're required to mail or fax a signed letter of instructions to E*TRADE. This can't be done online. If these beneficiaries are being used to qualify for additional FDIC coverage, make sure E*TRADE Bank adds these beneficiaries in the account title. For more info, please refer to this post.
As we learned with the closure of Netbank (see post), there's not much to worry about if you keep under the FDIC limits. For more facts about FDIC deposit insurance, please refer to this FDIC article .
ETRADE Sign-Up Bonus
Update 1/7/08: There's a new $25 bonus. Please see this post for more details.
There is still a $25 sign-up bonus for the Complete Savings Account. The expiration date is 12/31/07. For more details on this promotion, please see my April ETrade post. I received this $25 bonus without any problems in March. However, several commenters have mentioned that they had to call before the bonus was credited. So be sure to track when you sign up, keep a copy of the promo page and if you don't receive the bonus in 30 days after funding the account, be sure to call. The last commenter to mention receiving this bonus was in October.
Complete Savings Account Review
E*TRADE started the Complete Savings Account in November 2006 (see post). The yield when it started was 5.05% APY, and this held until last month when it went down to 4.70% APY. The rate is lower than Countrywide Savingslink's rate, but unlike the Savingslink account the yield applies to all balances, not just balances over $10K.
Below is a list of features of the Complete Savings account based on E*TRADE's website, my experience, information from the CSR and from other references.
- $1 minimum deposit to open account
- No minimums or account fees
- No hard credit inquiry (I didn't receive one)
- Free online ACH transfer system (Quick Transfer)
- Typical 6 withdrawal limits per month
- $100K per day limit on outgoing and incoming ACH transfers
- ACH transfers complete in one business day from my experience
- Limits to the number of external links have been reported (see FW thread). The CSR wasn't aware of this.
- 9 day hold time for initial deposit (ACH or check). No hold for wire transfers.
- Holds on additional deposits are lifted on the 5th business day after the deposit
Thanks to the reader who emailed me info on the rate change.
Update: It was just reported today that E*TRADE will be getting a $2.55 billion cash infusion from Citadel Investment Group (see NYT article). According to the article "the move allows E-Trade to get the troubled asset-backed securities off its books entirely."]