Dedicated to Deposits: Deals, Data, and Discussion

Update on Provident Direct - Online CDs, Savings Account

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Provident Direct is offering some competitive CD rates. There's a 4.00% APY 18-month CD and a 4.35% APY 36-month CD. The 18-month CD has a minimum deposit of $1,000, and the 36-month CD has a $10,000 minimum. The maximum allowed deposit is $500,000.

These can be opened online with an electronic funds transfer (ACH) or you can mail a check. According to the CSR, they can't do a reverse ACH when the CD matures and you don't want to renew. You can either request a check or have the money transfered into a Provident liquid account. Their online savings account would make this easy.

According to the Consumer Deposit Account Agreement, the early withdrawal penalty is equal to 6 months of interest for terms over one year.

In addition to applying online at Provident Direct, you can open by phone, and for those who live near a Provident branch, you can open the CD at a branch. Provident Bank is also advertising the 4.00% APY 18-month CD. This has a minimum deposit of only $500. However, the 36-month CD is only 4.00% APY (see rate table). Branches are located in Maryland and Virginia.

High Yield Online Savings Account

Provident Direct has offered one of the highest yield no-minimum online savings account since late 2007. The yield had been 4.50% APY until late March. It's currently 3.50% APY. I first reported on this savings account in this February post.

One thing that seems to have changed since my first report is that they now have an ACH transfer capability in which you can initiate electronic transfers to and from your other banks. A reader noted in late February that this new system restricted the amount of the transfer to $5,000 per transaction in or out. However, when I called this week, I was told this is now up to $100,000 per day. Let me know in the comments if you have recent experience with this.

Other ACH features I was told by the CSR is that there are no limits to the number of links to other banks. The ACH transfers are free. As required by federal regulation, ACH withdrawals are limited to 6 per month. After 6, they charge $5 per transfer.

Please see my Provident Direct review post for more details about the savings account.

Provident Direct is an online division of Provident Bank. Provident Bank has been FDIC insured since 1943 (FDIC Certificate # 15951). It has $6.1 billion in assets. BauerFinancial gives the bank a 3 star rating (adequate) based on 3/31/08 data.

  Tags: CD rates, savings account

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Comments
4 Comments.
Comment #1 by Caithness (anonymous) posted on
Caithness
You need to open a checking account with them in order to use the ACH service. I haven't done that yet, so I don't know how fast their transfers are.

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Comment #2 by Anonymous posted on
Anonymous
I have been using the external transfer account feature for a few months. It works well, but it is somewhat slow - takes several days for the money recieved to be available. I had to call to set up the feature and fill out a form. I am only using one external account.

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Comment #3 by Anonymous posted on
Anonymous
I think the previous posters have outdated information, or have been given incorrect info by CS. I use Provident-Direct's vastly improved ACH system, and do NOT have a checking account. The number of linked accounts is indeed unlimited, and transfers up to $100,000/day are indeed permitted. And there is NO INTEREST LOSS on pulls OR pushes in my experience. (On one of my samller pushes the deposit to the other bank was actually posted the day BEFORE it was debited from Provident-Direct.)

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Comment #4 by Anonymous posted on
Anonymous
P.S. I never had to call OR fill out any form to set up the transfer ability. They just sent me an email a couple months ago that said in effect, "we've greatly improved our ACH system, here's how to get on and use it." No call or form required. Simple as can be. I'm wondering if the previous poster actually has Provident DIRECT, or is somehow still using their old, cumbersome and restrictive system. I have seven external accounts set up. One very minor caution: Provident-Direct's initial verification for external accounts does two tiny withdrawals matching the two deposits, so make sure not to exceed any monthly withdrawal-frequency limits the external account might.

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