Dedicated to Deposits: Deals, Data, and Discussion

New High Yield Online Savings Account at Provident Direct

POSTED ON BY

Update 8/23/08: The yield has risen from 3.50% to 3.75% APY.
Update 5/21/08: The yield has fallen from 3.75% to 3.50% APY.
Update 3/29/08: The yield has fallen from 4.50% to 3.75% APY.

Provident Bank has started a new online bank called Provident Direct. The current yield is 4.50% APY. It has no minimum balance requirements or monthly fees.

I called Provident Bank yesterday and the CSR said that they actually started this in November 2007 with a 4.50% APY. She didn't know how long the 4.50% APY would last. As is typical it could change any day. New online banks do tend to keep rates high a little longer.

Provident Direct still has some mistakes on its website documentation regarding its savings account features. After 3 months, you would think these mistakes would be fixed. In the learn more page, it states that you can write checks. According to the CSR, this is not correct. It's only a savings account with no checking writing privileges.

Another problem with this online savings account is that there's no ACH transfer system to initiate electronic transfers to and from your external accounts. However, you can fund it with an ACH transfer during the application. According to the CSR, they're working on adding an ACH system.

Below is a list of features from the website and from my conversation with the CSR:
  • No minimum balance
  • No monthly fees
  • No checks (CSR)
  • ATM card available
  • No hard credit inquiry. Only ChexSystem is used during application. (CSR)
  • Initial funding can be done by ACH, but no ACH capability after it's opened. (CSR)
  • Interest is posted monthly
  • Allowed to opt for online statements instead of paper statements

The 4.50% APY is now near the top for online savings accounts, but unless there's some guarantee that a new online bank is going to maintain the yield, it doesn't seem worthwhile to open an account especially one with limited online banking features.

When I called, I did confirm that provident-direct.com is owned by Provident Bank. I used the same contact number listed at this Provident Bank page. Provident Bank is FDIC insured (Certificate # 15951).

  Tags: savings account

Related Posts

Comments
24 Comments.
Comment #1 by Alan (anonymous) posted on
Alan
I'm a long-time Provident Bank customer. I have a checking account and I can instantly transfer funds between checking and the Provident Direct account. I do ACH transfers to and from other institutions through my checking account.

If you are dealing with it in this manner, it's perfect. It was set up mainly to be accessed by people with Provident accounts, not outside people, so it's not set up to cater to the larger public, but if you open a checking account it works well.

Of course, there's a good chance the rate will be dropping but it has held steady for some time.

1
Comment #2 by Anonymous posted on
Anonymous
Would you explain what ChexSystem is, have run across this twice in last few days. Thanks
Norm

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
ChexSystem is basically a system that keeps records of people's bank account usage. Many banks will do an inquiry into ChexSystem when a new customer applies for an account to make sure that new customer has a clean ChexSystem record (no unpaid overdrafts, fees, etc.)

This website has more details on ChexSystem.

1
Comment #4 by Anonymous posted on
Anonymous
I started an app after seeing 4.5%. Then I stopped mid-way when I saw the last time they updated their rates was November 2007.
With all the online banks dropping below 4% Provident will no doubt drop their rates ver soon! Buyer beware..!

1
Comment #5 by Alan (anonymous) posted on
Alan
"We designed this account for Provident checking customers who prefer to do most of their banking online."

1
Comment #6 by Anonymous posted on
Anonymous
I applied for an account online early on 02/15/2008. The initial interest rate displayed (prominently) was 4.50%. Hyperlinks to Internet savings rates were not functional. On the page that verified my completed account application, the interest rate displayed was 4.40%! I could not reach CSR, so will have to wait to verify which interest rate is correct.

1
Comment #7 by Alan (anonymous) posted on
Alan
4.40% is the APR, 4.50% is the APY, as it says on the home page.

1
Comment #8 by Anonymous posted on
Anonymous
In response to Alan's comment:

I opened both the Provident high yield savings account and a checking account. How did you set up ACH from an outside bank to move funds into Provident checking and then to the online savings? Called Provident and they said I can wire money but no outside bank ACH. Thanks.

1
Comment #9 by Anonymous posted on
Anonymous
They have added outside ACH to the web site but it is a max of $5,000 per transaction in or out. More than $5,000 you have to do multiples.

After 6 transactions out there is a $5.00 charge as per customer service.

1
Comment #10 by Alan (anonymous) posted on
Alan
I have ACH set up from other institutions. The request goes through them.

In other words, I have Amboy, Emigrant, Alliant, and other institutions linked to my Provident checking account and I initiate the ACH transfers through those other institutions, not Provident.

Within Provident the transfer between checking and savings is instantaneous during business hours.

Just a note on the APY: Provident has a major interest in keeping the rate up since they just started this account in November. However, I can't see them maintaining this rate in the face of continuing rate cuts, so, given how high they've kept it, one can only hope they maintain it higher than the average online savings even with the likely rate cuts.

1
Comment #11 by Anonymous posted on
Anonymous
PLEASE post the ABA routing # for ACH for Provident Bank (provbank.com)

1
Comment #12 by Banking Guy (anonymous) posted on
Banking Guy
I used the service at Federal Reserve Financial Services and got the following results:
Bank Name PROVIDENT BANK OF MARYLAND
Location BALTIMORE, Maryland
Routing Number 2520-7301-8

1
Comment #13 by Anonymous posted on
Anonymous
Changed to 3.75%

1
Comment #14 by Anonymous posted on
Anonymous
Still No min balance after account if opened & funded (& no fees, correct)?

1
Comment #15 by Anonymous posted on
Anonymous
Thx for your posts on the Provident-direct discussion thread. Also no fees from Provident for Provident initiated out going transfers that are now possible& 6 out are allowed fee free per statement cycle? Thx again

1
Comment #16 by Anonymous posted on
Anonymous
I opened an account roughly 2 weeks ago for the high yield savings and a fee free checking account. The online access worked great then suddenly yesterday I can't even access my account, my login id doesn't work. I have called their customer service today at 8am and still they have not been able to resolve this issue. Just a FYI, I think Provident is still trying to work out the quirks as they are new to the online high yield account game. I will let you guys know once this issue has been resolved.

1
Comment #17 by Anonymous posted on
Anonymous
my account issue was resolved on friday.

1
Comment #18 by Anonymous posted on
Anonymous
Best way to get anything done with Provident is to email their customer service or send a message to them via the online banking site. Calling their customer service line is worthless. Literally the employees just want to transfer you around and some even say they can't transfer you, thus making you to call back. Not sure how to say this while being politically correct, but majority of the reps I have spoken with are very "urban" in how they act over the phone and are just plain old lazy.

1
Comment #19 by Anonymous posted on
Anonymous
Once you are (finally) setup with Provident-Direct, stay away from telephone CS *and* non-secure email CS (i.e., use ONLY online banking's CS) -- and it will be smooth sailing (including flexible and FAST ACH system, no-minmum and an excellent APY). I definitely have NOT perceived any similarity in the telephone CSR's other than an tendency toward cluelessness and/or a lack of interest in helping.

1
Comment #20 by Anonymous posted on
Anonymous
Left out a word in the last sentence... meant to say "an unfortunate tendency..."

1
Comment #21 by Anonymous posted on
Anonymous
nothing new, but like most other banks, Provident has faced some losses on real estate investment. There is an article in the Baltimore Sun and Washington Post. I know such factors effect where some people put their money, so I just wanted to mention this. Also Provident is FDIC insured.

1
Comment #22 by Anonymous posted on
Anonymous
Hell, I'll say it - The CSR's are all nasty ghetto black women. Every time I've called, I'm doubtful that my request actually went through correctly. I always expect f' ups, typos, no follow-ups, etc.

1
Comment #23 by Anonymous posted on
Anonymous
Tried to open an account online. Said they would need to verify some info. Never heard from them lol.

1
Comment #24 by Christine Washington (anonymous) posted on
Christine Washington
A lot has changed since this blog post was started. Rates are down, considerably from what you reported. I went with venturebankdirect.com and signed up for both their online savings and high yield online checking.

1