E-LOAN increased the rates on most of its CD terms. The largest increase was on its 60-month term. That rate increased from 4.30% to 4.60% APY.
The 60-month CD rate is much higher, but there is a question of the wisdom of locking into a long term CD when it appears we may be nearing the bottom for interest rates. One thing to consider is a CD's early withdrawal penalty. E-LOAN's early withdrawal penalty is about average at 6-months for CD terms over one year.
Below is the full list of E-LOAN's new CD yields. I also included the old yields so you can see how things have changed.
New and old CD Yields as of 4/30/08
CD TERM OLD APY NEW APY CHANGE
3 month 3.25% 3.30% 0.05
6 month 3.50% 3.50% -
12 month 3.55% 3.65% 0.10
18 month 3.60% 3.75% 0.15
24 month 3.77% 3.81% 0.04
36 month 4.01% 4.10% 0.09
48 month 4.10% 4.25% 0.15
60 month 4.30% 4.60% 0.30
Below are some of the important details of the E-LOAN certificate of deposit:
- Individual, Joint and Living Trust Accounts can be opened.
- Beneficiary can be added in the application (see note below)
- $10,000 minimum deposit
- No early withdrawal permitted during the first 90 days
- Eary withdrawal penalty: 3 months interest for 1 year or shorter term and 6 months for over 1 year term
- Grace period: 10 calendar days
- No interest is paid past the maturity date on accounts closed during the grace period
- Interest is compounded daily and credited monthly (same as savings)
- CD is opened like savings account with one linked checking/savings account which will fund the CD
- Linked account can be your E-LOAN savings account
- Option is available to transfer interest monthly by ACH from CD to linked account
- At maturity, you can instruct E-LOAN via the secure message system to close CD and transfer money back to your linked account
These details are based on information from the CSR and from E-LOAN's Savings and CDs Terms and Conditions.
A few readers have reported problems with E-LOAN CDs. One said that E-LOAN had ignored his instructions to close the CD at maturity and transfer the money back into the external account. So make sure you verify that they properly execute your instructions at maturity. You have 10 days before you'll be hit with the early withdrawal penalty. Another reader reported a problem in the application that resulted in two accounts instead of one. Instead of treating this as their mistake, E-LOAN considered this an early withdrawal and charged the reader with the penalty. If you've had good or bad experiences with E-LOAN's CDs, please leave a comment.
E-LOAN's savings account has been a little disappointing. The yield is currently at 3.01% APY (up by 1 basis point today). This is about the same as the yield on ING Direct's Orange Savings Account. When E-LOAN launched this savings account with a very high 5.50% APY, I had hopes that they would remain near the top of online savings account rate leaders. Now they're about average.
Please refer to my E-LOAN savings account overview post or my E-LOAN savings account opening post for more info.
E-LOAN is a subsidiary of Banco Popular North America (BPNA), a New York state chartered bank insured by the FDIC (FDIC Certificate # 34967).
Update 7/16/08: Note, a reader reported being advised by an E-LOAN associate that accounts opened with E-LOAN on which beneficiaries are listed are not considered trust accounts (formal or informal), and therefore one would be wise to make sure that the total of all individual accounts held with that institution stay below the $100,000 limit for FDIC coverage.