Review of ShoreBank's New Direct High Yield Savings Account
Update 8/30/10: ShoreBank was closed by regulators. However, a new bank, Urban Partnership Bank, assumed all deposits and is continuing the Shore Direct savings account. In addition, the rates have gone up: 1.25% APY $100K+ and 1.20% APY for under $100K. Refer to the bottom of the post for the rate history.
ShoreBank has a new Direct High-Yield Savings Account with a yield of 5.00% APY. It looks like the typical online savings account. Only $1 is needed to open the account and earn the top yield. The 5% APY yield makes this very competitive in today's rate environment, but since it's a new account, the high rate is likely due to the account being so new.
One thing different about ShoreBank is its emphasis on social responsibility:
Unlike conventional banks, ShoreBank strives to meet three objectives simultaneously: to build wealth for all in economically integrated communities; to promote a healthier environment; and to operate profitably.
This aspect may be important for some in choosing an online savings account.
Below are the features of this online savings account. The bank has a decent FAQ page. I've also contacted the customer service rep (CSR) for some additional details:
- $1 minimum to open account and earn the top yield
- Interest is accrued daily and compounded monthly
- If you close your account before interest is credited, you will lose the accrued interest
- No ATM cards or checks
- Application process is all online
- Allows up to 6 linked accounts
- CSR wasn't sure if the credit check was hard or soft. ChexSystem is also used in the application process.
- Beneficiaries cannot be added (according to CSR)
- Your initial deposit will be available for withdrawal within 3-4 days after you confirm the two trial deposits to verify ownership of the linked account
- Subsequent deposits from your linked account will be available for withdrawal the day we receive your deposit (generally 2-4 days after the transfer was initiated)
- Funds transfered to a linked account will appear in 2-4 days (according on FAQ)
- Online statements are the default. Paper statements available with a fee.
Here is the list of fees. If you're careful, you shouldn't have to worry about these.
One unique feature I noticed in the FAQ is the "Pay People" option of the account. According to the FAQ you can e-mail up to $500 to another individual. Here is how it's described in the FAQ:
You will need to provide the person's first and last names and e-mail address, and to specify a secret word (which you should give to the person you are sending money). The recipient will receive an e-mail containing a link to a secure website. Using the secret word you have provided separately, he or she will then be able to provide additional information and specify an account into which the funds you are sending can be deposited.
This seems similar to ING Direct's Electric Check feature that's available on its Electric Orange account. One advantage over ING seems to be that you don't need to know the other person's account or routing number. The only potential problem with this ShoreBank pay-people service is that the person receiving the email may not trust clicking on the link and providing their account number at the website.
ShoreBank is based in Chicago, Illinois. It is FDIC insured (Certificate # 15640). The social responsibility aspect of the bank doesn't seem to be helping it maintain a strong financial condition. It has a rating of 2 out of 5 stars (below peer group) at Bankrate. BauerFinancial has a little higher rating for this bank of 3.5 out of 5 stars. Both of these ratings are based on 6/30/07 data.
Thanks to the reader who mentioned this new savings account in the finding deals post.
Financial Health Update 9/26/09:
- FDIC's Cease and Desist Order (pdf) dated 7/06/09
- 0 star (lowest) at BauerFinancial based on 6/30/09 data
- 1 star (lowest) at Bankrate.com based on 3/31/09 data
Update 8/30/2010: ShoreBank was closed by regulators on 8/20/2010. All deposits were assumed by Urban Partnership Bank (FDIC Certificate # 59051).
Rate History:
- 08/27/10: 1.20% APY under $100K; 1.25% APY $100K+
- ??/??/10: 1.03% APY under $100K; 1.19% APY $100K+
- 01/14/10: 1.09% APY under $100K; 1.25% APY $100K+
- 12/30/09: 1.70% APY
- 11/03/09: 1.95% APY
- 07/28/09: 2.15% APY
- 05/21/09: 2.05% APY
- 04/08/09: 2.45% APY
- 03/09/09: 2.80% APY
- 01/22/09: 3.15% APY
- 06/04/08: 3.50% APY
- 03/29/08: 3.30% APY
- 12/12/07: Had been offering a $25 new-account bonus. Offer ended on 3/29/08.
- 11/12/07: 5.00% APY
Johnskyn Kantilever (anonymous) - #1, Tuesday, November 20, 2007 - 12:32 PM
ShoreBank ruelz!
Anonymous - #2, Tuesday, November 27, 2007 - 5:44 PM
The FAQ states that you can link up to 6 external accounts, not 3.
Banking Guy (anonymous) - #3, Wednesday, December 12, 2007 - 10:26 AM
Thanks I've updated the link number to 6 in the post.
Anonymous - #4, Wednesday, December 12, 2007 - 12:50 PM
Can anyone confirm on hard or soft pull?
Tim Archer (anonymous) - #5, Saturday, January 26, 2008 - 6:33 PM
I think I'm still gonna stick with HSBC Direct. I've been using them for over a year now. Started off getting 5.05% in January 2007, and now with the rate cuts I'm at 4.25%. I just did a reality check to ensure I'm still getting a good rate and for the most part I am. I posted the sites I looked at here:
http://themoneykings.com/blog/comparison_of_high_interest_savings_account_rates
W (anonymous) - #6, Sunday, June 22, 2008 - 2:25 PM
Shorebank has a community development and environmental mission. I'm happy to put money on deposit with them. however, their ACH transfer speed sucks. thanks, though, for pointing them (and the bonus) out!
NRP (anonymous) - #7, Thursday, August 28, 2008 - 8:50 AM
I opened a Shorebank account and closed it a month later - the online interface is terrible, each of the 8 or so steps take 3 days EACH and the customer service isn't very good. I opened an HSBC account instead and it seems much faster and smoother. I understand that Shorebank is a small bank with a good community focus, but they are a nightmare for the online customer.
Anonymous - #8, Saturday, January 17, 2009 - 5:50 PM
Been an online customer of ShoreBank for about a year, and aside from some confusion over the $25 opening bonus, they've been pretty reliable.
My experience with customer service is good.
Hard to find 3.5% liquidity these days.
Dollar Savings Direct looks interesting...
Anonymous - #9, Friday, January 23, 2009 - 4:01 AM
Shorebank rate dropped to 3.15%. Dollar Savings Direct is still 4%, so I expect more money to flow their way as rates drop with other banks.
Recovering Intellectual (anonymous) - #10, Sunday, January 25, 2009 - 3:43 PM
Bankrate.com gives ShoreBank two stars out of five for soundness, predicted to decline over the next year. Bummer.
ask330 (anonymous) - #11, Saturday, February 21, 2009 - 9:36 AM
you CAN add a beneficiary or POD after you open your savings account simply by providing Shorebank with the Name, SS# and Relationship by calling or emailing them (i recommend calling since there would be a SS# involved). I called on a Sat. and their CS answered promptly was very helpful.
Anonymous - #12, Sunday, February 22, 2009 - 11:48 PM
Can someone tell me how long does it take for deposit to appear in the account after it leaves the linked external account? Is there a daily or monthly dollar limits on transfer?
Anonymous - #13, Wednesday, March 4, 2009 - 11:12 AM
I opened an account w/ ShoreBank recently, after doing a lot of research. Some of the other banks' websites turned me off because they emphasized flashiness and marketing over straightforwardness and disclosure.
You have to go through a lot of procedure to get your account approved, funded and linked to an external account. However, I think this is understandable because of the stricter laws we have since 9/11 and a healthy concern for internet security. All I can say is that ShoreBank was always prompt whenever they needed to do test deposits or withdrawals or any other action to get my account up.
I am yet to do an actual transfer now that I'm linked to my external account, but I am nevertheless confident that they will be quick.
Once you log in you can use their secure e-mail feature ( I used it to inform them that they had spelled my name wrong, which they responded to and fixed quickly ). The one time I called them I was given fast service, as well.
ichaelm (anonymous) - #14, Monday, March 9, 2009 - 5:23 PM
hot off the presses: the rate drops to 2.80% APY effective at midnight tonight.
Anonymous - #15, Monday, March 9, 2009 - 5:32 PM
Effective March 10, 2009, ShoreBank will lower the rate on your account to 2.80% APY* (2.77% Interest Rate) from the previous 3.15% APY rate.
TheArthur (anonymous) - #16, Friday, March 27, 2009 - 7:37 PM
The User interface is truly terrible. as an example on the preferences page they have a submit button next to each preference, and when you click it is clears all the other preferences.
The transfer money link takes you to a page containing only a link to another page where you can register for a SEPARATE ACCOUNT with a money transfer service.
The list goes on and on.
I have never seen such shoddy web work. Such poor design does not inspire confidence about the security of the code that underlies it.
Anonymous - #17, Monday, March 30, 2009 - 12:31 PM
I have applied online for their savings account today. My application was declined. Unbelievable! I have excellent credit rating. I immediately check my credit report and there is nothing wrong. I have never, never been denied of any credit nor bank account applications. There must be something wrong with their online screening process. Anyone with the same problem?
Anonymous - #18, Wednesday, April 8, 2009 - 9:10 PM
effective April 9, 2009, ShoreBank will lower its interest rate on your High-Yield Savings Account to 2.45% APY* (2.42% Interest Rate)
Yet Another Rate Cut (YARC)
Anonymous - #19, Tuesday, April 14, 2009 - 8:34 PM
Hi, I heard that ShoreBank does NOT permit ACH debits initiated from other banks (though they naturally allow credits). Has anyone tried to withdraw funds by external 'pulls' and got rejected?
RichReg (anonymous) - #20, Wednesday, May 13, 2009 - 8:19 AM
Just an F.Y.I., I opened up a Money Market Savings ( different from the Hi-Yield Savings)account with Shore Bank last Tuesday..they guaranteed me a rate of 2.72 (yielding 2.75) for 6 months. And it comes with free checks!
Anonymous - #21, Wednesday, May 20, 2009 - 6:49 PM
ShoreBank will lower the interest rate on your High-Yield Savings Account to 2.05% APY* (2.03% Interest Rate), effective Thursday, May 21, 2009.
This is my third rate cut with them and their website is pretty bad. Time to switch.
Anonymous - #22, Wednesday, May 20, 2009 - 7:12 PM
The rate just dropped to 2.05% from 2.45% effective May 21, 2009.
BOO!
Jeremy (anonymous) - #23, Thursday, May 21, 2009 - 5:08 AM
Just opened this account a week ago... well, actually finished the, in total, 2 week account opening process (ridiculously terrible). Now they drop the rate to 2.05%. That was enough for me to transfer all funds to a better bank. Short lived with a garbage bank.
Also, as others have said, the online banking setup is terrible. Transfers take forever (3 days+).
Would never recommend this bank to anyone.
Anonymous - #24, Thursday, June 18, 2009 - 12:21 PM
I'm closing my Shorebank account asap. I just discovered a horrible security hole with this bank. You're leaving yourself wide open to identity theft if you have an online account here. Stay away. Far away.
Anonymous - #25, Monday, July 27, 2009 - 9:45 PM
Rate increased to 2.15%
Anonymous - #26, Tuesday, August 18, 2009 - 6:44 AM
what is the security issue that you discovered?it seems that you are more intent for people not open an account with this bank...(are u working for chase,BAC or citi? or any of the big greedy pigs?)
Anonymous - #27, Saturday, September 19, 2009 - 9:23 AM
This bank has a Cease & Desist Order issued on 6th July, 2009.
More information available at
http://www.fdic.gov/bank/individual/enforcement/2009-07-07.pdf
Anonymous - #28, Saturday, October 3, 2009 - 8:34 PM
I have no problem whatsoever with this bank. 6 linked external account feature is nice. Only drawback is the 3 day hold for ACH but that is pretty standard now.
Thinking about moving money over from Darby Direct for the extra 15 bps, not sure worth the hassle.
Anonymous - #29, Wednesday, October 7, 2009 - 10:18 AM
ShoreBankDirect's User Interface is clunky at best compared to most bank's UI; horrible compared to INGDirect. The UI appears to be the same one as OneUnited. You set up a link between your bank and ShoreBankDirect for your initial deposit, but then have to set up another one, and provide even more personal information and verify trial deposits. Any time you transfer funds or send them an email you have to get a code emailed to you. In brief, it is a hassle. I'm trying to close my account that I just opened which is becomming a hassle as well. It looks like they are charging me $5 to get my initial deposit back
afruscione (anonymous) - #30, Tuesday, November 3, 2009 - 3:03 PM
ShoreBank is cutting interest rates as of tomorrow
"Your ShoreBank Direct Online Savings Account deposits support work that is stabilizing and revitalizing our communities. To most effectively support this mission in the current economic environment, ShoreBank will lower the interest rate on your Online Savings Account to 1.95% APY* (1.93% Interest Rate), effective Wednesday, November 4, 2009. "
Anonymous - #31, Tuesday, November 3, 2009 - 6:00 PM
ShoreBank dropped thier rate to 1.93% (1.95 APR) as of 11/4/2009
Anonymous - #32, Wednesday, December 30, 2009 - 2:32 PM
ShoreBank dropped thier rate to 1.70% APY as of 12/30/2009
Sam (anonymous) - #33, Sunday, March 7, 2010 - 11:26 AM
Hello, for Shorebank direct, how do I view my Tax form 1099 for the year 2009 for interest received ? Is it possible online ? I could not find it when I login online.
Anonymous - #34, Sunday, March 7, 2010 - 11:26 AM
Hello, for shorebank direct, how do I view my Tax form 1099 for the year 2009 for interest received ? Is it possible online ? I could not find it when I login online.
Sarah (anonymous) - #35, Thursday, June 17, 2010 - 3:41 PM
Just a heads up, the URL for ShoreBank Direct has changed to www.sbk.coms/shorebankdirect.
Sarah (anonymous) - #36, Thursday, June 17, 2010 - 3:43 PM
Oops! Sorry. The link update for ShoreBank Direct Online Savings is www.sbk.com/shorebankdirect
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