This was going to be my first post for today, but WaMu's new 4.50% 12-month CD caused me to go with that first (see post). For those who may already be maxed out at WaMu or may prefer to stay away from them, a VirtualBank CD is another reasonable choice. With these two recent CD rate hikes, it's clear that banks are in need of deposits.
Some of the CD features that are listed in their disclosures and the eCD page include:
- CD can be funded by ACH transfer from an external checking account
- Trial deposits are used to verify the checking account
- Wire transfers and mail in deposits are not available
- Joint and Trust accounts can be selected
- One beneficiary can be included in the online application
- Early withdrawal penalty equals: 1 month interest for 3 month term, 3 months interest for 6 and 9 month term, and 6 months interest for one year or longer terms. Penalties applied whether interest has been earned or not.
- Grace period at maturity is 14 calendar days
I've had a VirtualBank eMoney Market account since 2005, and in early 2006 I opened a 6-month VirtualBank CD. Both the opening and closing process went okay for me. There were a few small complications with the application. Things may have improved since then. I was able to fund the CD with money from my eMoney Market account. Note, at top of their CD application page, there's a button that says "Existing Clients Click Here to Apply". From here, you'll have to log in to your VirtualBank account to complete the CD application. At maturity, I instructed them via secure email to close the CD and transfer the money back into the eMoney Market account. The money was transfered without problems.
eMoney Market Account
The eMoney Market Account doesn't have a history of consistent high rates. The rates have become more competitive lately, but the competitive rates now require a balance of at least $50K. The yield for balances under $10,000 remains low (currently 2.53% APY). The other downside to this account is that it can only be linked to checking accounts. They do allow up to 4 links, but they require you to mail in a voided check to set up the link. Below are some other important features:
- $100 minimum to open
- There are no monthly fees if you go under $100. It seems from their disclosure that you can go as low as $0.01 in balance without account closure or monthly fees.
- It really should be called a savings account since it doesn't have check writing.
- After the first account linkage, you do need to send in a check to create an additional link. They allow up to 4 linked checking accounts.
- There's a $50 fee if you close the account within 90 days. There doesn't seem to be any closure fee after that.
- VirtualBank places a 10 business day hold on deposits made in the first 30 days. So you cannot withdraw during this time. After these 30 days, the hold is 3 business days.
- After 12 months of inactivity, VirtualBank starts charging a $5/month fee.
- Refer-a-friend bonus system