Dedicated to Deposits: Deals, Data, and Discussion

Update on Providentdirect's Online Savings Account and CDs

POSTED ON BY

Update 4/10/09: The APY is scheduled to fall to 1.25% APY on 4/17/09.

With the recent rate hike at Providentdirect and its new ACH transfer system, I thought it would be worthwhile to take a new look at Providentdirect. The online savings account yield was recently increased from 3.50% to 3.75% APY. It does have a history of competitive rates since it was launched in November of 2007. Below are the savings account's basic features:
  • $100 minimum opening balance
  • No minimum balance requirements
  • No monthly fees
  • Interest is paid monthly
  • Maximum allowed on deposit is $500,000
  • ATM card available
  • No checks
  • No hard credit inquiry. Only ChexSystem is used during application (per CSR)
One thing that has changed is that it has greatly improved the ACH bank-to-bank transfer system. Here's how a reader described the new system:
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.)

The only downside to the ACH system that I've read about is the initial verification of external accounts. In addition to the two small trial deposits, there are also two small matching withdrawals. So if you link to a savings account with monthly withdrawal limits, make sure you consider this.

Online CDs

Providentdirect is also offering some competitive CD rates. There's a 4.40% APY 24-month CD and a 5.15% APY 60-month CD. Both have a minimum deposit of $1,000. The maximum allowed deposit is $500,000. I have more details about these Providentdirect CDs in this June post.

Bank Overview

Providentdirect is an online division of Provident Bank which is based in Baltimore, Maryland. The latest news on Provident indicates that it's another bank hurt by the mortgage crisis. In recent months it had to write down the value of investment securities related to real estate and mortgages. The bank's financial ratings are a little weak: 2 stars (below peer group) at Bankrate.com and 3 stars (adequate) at BauerFinancial. As I recommend for any bank, it's best to stay under the FDIC limits. Provident Bank has been FDIC insured since 1943 (Certificate # 15951).

Rate History:
04/17/09: 1.25% APY
03/06/09: 2.10% APY (was 2.82% APY)
  Tags: CD rates, savings account

Related Posts

Comments
43 comments.
Comment #1 by Anonymous posted on
Anonymous
This one looks pretty good. I'm tempted to open an account if I had more free funds sitting around. :)

Thanks for posting this one Banking Guy!

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Comment #2 by Anonymous posted on
Anonymous
I've had no problems with Provident Direct and would recommend it.

The one thing that is a little different from other online accounts I've had is that interest for the month doesn't seem to post until the end of the first business day of the following month. (In the case of this Month will Labor day, the interest will apparently not show up until at least the 2nd of September). It's not really a complaint...just different.

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Comment #3 by Gaurav (anonymous) posted on
Gaurav
I have had this savings account for quite sometime and have only good things to share. The interest rate has usually been close to the best. Also as mentioned, ACH transfers are quick and effortless.

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Comment #4 by Anonymous posted on
Anonymous
Can you verify that ACH pulls post within one day of the request(same day or next) ? The faq says up to 3 days and by phone they said 2 days.

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Comment #5 by Anonymous posted on
Anonymous
I would consider opening an account if ACH is really so fast. My current bank is Alliant which also pays 3.75% rate and unlimited external links.
Does Provident also provide free ATM cards capable of deposits too?

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Comment #6 by Anonymous posted on
Anonymous
It's typical for banks with fast ACH systems to state longer transfer times just to cover themselves in case of atypical delays. E.g., E*Trade states "within three days" for a push, but for me the deposit has always been debited from E*Trade the same business day, and then posted to the destination account the next business day. I haven't done as much ACH with Provident, but have been pleasantly surprised when I have. Usually the MM/Savings accounts with the highest non-promo APY's have not-so-great ACH systems, or none at all. That's why Provident's is unusually welcome, especially given it's no-minimum account.

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Comment #7 by Anonymous posted on
Anonymous
P.S. Re the ATM card: I didn't request one, but I know they're free. And in their recent email about the rate hike (yes, they notify you of rate changes -- up or down), they said ATM transactions are now surcharge free at the national MoneyPass network.
http://www.moneypass.com/moneypasslocator/search.jsp

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Comment #8 by Correct Url (anonymous) posted on
Correct Url
Corrected url below. I notice that the incompete url goes to US Bank, which explains why US Bank ATM's all seem to be in the MoneyPass network!

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Comment #9 by Anonymous posted on
Anonymous
I give up! Just go to moneypass.com and use the ATM locator if interested :)

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Comment #10 by Anonymous posted on
Anonymous
Back once more, because I just noticed that the ATM question was specifically about deposits. Here's the full text of the Provident-Direct email I received. As you can see, it's unclear from this whether the MoneyPass ATMs will take Provident deposits.

"Great news! We wanted to let you know that we increased the online savings account yield from 3.50% APY to 3.75% APY* as of August 22, 2008. So, as you've come to expect, Provident has one of the best yields in the country, giving you the opportunity to earn even more interest. Plus, you have the added benefit of access to your money at Provident branches locally and ATMs nationally through the surcharge-free, MoneyPass® ATM network!

This also means that now is the time to think about moving money from your accounts at other institutions to your Provident online savings account. You can do that quickly and easily by making an online transfer or a deposit at any Provident branch or ATM."

BTW, speaking of Alliant (which the poster mentioned), I have found my neighborhood US Bank ATM (yes, US Bank again) a convenient place to make surcharge-free deposits to my Alliant savings, with a cap of $20,000/day. And Alliant will credit the deposit the same day AND start paying interest immediately, as long as it's done by midnight (Central time, I believe). In fact, as soon as you return from the ATM you'll see the deposit posted in Alliant's SkyBranch (online banking).

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Comment #11 by Anonymous posted on
Anonymous
Etrade does send ACH payments fast but puts a long hold on ACH deposits coming in.
I am thinking of closing Etrade account since I now have Alliant. Moreover Etrade has a limit on how many external accounts you can link and I have reached that unwritten limit.

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Comment #12 by Anonymous posted on
Anonymous
I have 9 accounts linked to my E*Trade Complete Savings, and see nothing saying I'm not allowed more. Right now I use E*Trade primarlily as great way to shift money between banks that lack an online ACH system (or have a lousy one). You will actually make money (float) on the transfers if you do it the right way. E.g., to transfer from Bank A to Bank B via E*Trade: 1. Do an E*Trade pull from Bank A on a FRIDAY before the cutoff time. The deposit will be credited to E*Trade the same day, and you will begin earning interest immediately -- even though the funds won't be debited from A until Monday. 2. The funds will become available for transfer out of E*Trade Wednesday after Midnight. Schedule a push from E*Trade to Bank B for THURSDAY before the cutoff time. The funds will show up in B on Friday. The fact that you earned interest on the funds at two institutions over the weekend will far outweigh the one-day interest-loss. This approach takes exactly 1 week to get funds from A to B using E*Trade as an intermediary, and you make money in the process. BTW, I have the E*Trade logon security gizmo, but I doubt that affects any of this. Since there's no minimum required for the E*Trade Complete Savings, why close it regardless? You never know where rates are going to head at individual institutions. For about a month last year, they had one of the very best APY's.

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Comment #13 by Anonymous posted on
Anonymous
I didn't know either that Etrade had a limit until I hit the undisclosed ceiling. I have added and deleted several links and found out that they count even the deleted links in their limit.
Anyway, I don't care since I have found Alliant.

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Comment #14 by Mr.Hengist (anonymous) posted on
Mr.Hengist
The E*Trade limit on external ACH connections is eleven, unfortunately. After I tried to add a twelfth and was denied, I called customer service. The rep spoke to his manager and confirmed it.

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Comment #15 by Anonymous posted on
Anonymous
The worst thing about it is that now you will not be able to add another link even if you deleted all of them.

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Comment #16 by Anonymous posted on
Anonymous
The http://www.provident-direct.com website says it is part of Provident Bank,
but I could not find any mention of provident-direct.com on the provident bank website http://www.provbank.com/

FDIC.gov only has information about Provident Bank, nothing about Provident-direct.

How can I know that Provident-direct is FDIC insured?

Mike

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Comment #17 by Banking Guy (anonymous) posted on
Banking Guy
When I did my first review in February, I called Provident Bank using their contact number at their website, and they confirmed that Providentdirect is their online division. Note, Provident Bank's URL (www.provbank.com) is the one listed at fdic.gov. I recommend calling Provident Bank if you have any concerns.

When banks create new websites at new URLs, I wish they would provide a link somewhare on their main page to the new website so there's no doubt about the new website. Unfortunately, many do not do this.

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Comment #18 by Anonymous posted on
Anonymous
While they should made more prominent, there are numerous links to the FDIC-listed Prvident website (www.provbank.com) on the Provident-Direct site. E.g., the About Provident-Direct" section of the FAQ says, "For more information about Provident Bank, visit www.provbank.com." And if you look any of the disclosures, you will see that they are the same as Procident Banks, and come fromn the provbank domain.

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Comment #19 by Anonymous posted on
Anonymous
Apparently, Providentdirect places a five business day hold on funds transferred into the account. I got this from their website: "After the initial 30-day period, funds transferred using this service from an account that you maintain at another financial institution will be available for withdrawal 5 business days following the date of that transaction." Could someone verify this five business day hold?

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Comment #20 by Anonymous posted on
Anonymous
Yes, and to their credit the five-day hold is explicitly spelled out when you request a pull (before you commit). This kind of hold is pretty typical for pulled deposits, e.g. Countrywide SavingsLink also has a five-day hold (and, unlike Provident, also makes you wait a day before the deposit is pulled in). At E*Trade the hold is three business days. If you want immediate availability, push the funds into Provident from another bank's ACH system if you can. Like most banks, Provident provides immediate availability for pushed-in deposits.

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Comment #21 by Anonymous posted on
Anonymous
"Like most banks, Provident provides immediate availability for pushed-in deposits": a Provident CSR has just confirmed that all ACH deposits into the High Yield Online Savings (push or pull) are subject to the 5 business days hold. Can people with actual experience on this matter share their findings?

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Comment #22 by John Burns (anonymous) posted on
John Burns
My experience has not been so great.
I apply for account online & get msg that there's a problem & someone will contact me.
3 business days later without any contact, I call them. They indicate that they couldn't verify my identify [via ChexSystems - although I have opened many accounts with banks that use it without a problem].
So, they will have to open the account manually. And they need me to fax my Driver's License to them.

After they get my DL, that's not good enough because the address on it doesn't match my current address. (My state does not require replacement of DL when address changes until the DL expires.)

Now they also need utility bill.
OK they get all that.
The account still must be opened manually - they mail me agreement and I must mail back a check to open the account - no electronic transfer.

I did all that. I am able to sign up/on for online banking. But, there is absolutely no way to set up any external accounts to tranfer to or from. I look at the entire online banking site/links and there is nothing for external accounts/ACH transfers.
The transfers screen just says - No transfer accounts found. Please contact us for assistance.

Could someone here describe more fully how you add external accounts for ACH transfers and on what part of the online banking this is handled in. The description for the transfers screen I get implies that it is only for transfers between other Provident Bank accounts.

I have a local bank that uses this same online banking service provided by METAVANTE CORP (cibng.ibanking-services.com) and in my opinion, it is one of the poorest online banking systems I've encountered.

I guess I decided to plow through because the reviews and comments here indicate an ACH transfer system that I haven't found at all....

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Comment #23 by Anonymous posted on
Anonymous
To Anon 10:45AM: When you get to the screen that says: "No transfer accounts found. Please contact us for assistance.", look on the left side of that screen for the link that says "Manage external transfer accounts". Click on that and on the next screen look for the link that says: "Do you have an external checking or savings account that is not listed here? If so, you can add an external transfer account at any time." Click on that link and life should be good.

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Comment #24 by Anonymous posted on
Anonymous
John B, I am in the same situation. Anon 1:01pm
"look on the left side of that screen for the link that says "Manage external transfer accounts".

Unfortunately, there is no Manage external transfer accounts link.
Don't have time to call them for a while, if you find out more,let me know.

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Comment #25 by Anonymous posted on
Anonymous
Sent an email to customer service and now the link is there.

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Comment #26 by Anonymous posted on
Anonymous
Hi,

Do they allow direct deposit into the online savings account

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Comment #27 by Anonymous posted on
Anonymous
To Anon 6:23 AM,

Yes, they do they allow direct deposit into the online savings account.
Below is the link to the form with their routing #, (which is 252073018)
https://web.provbank.com/Personal_Banking/Forms/direct_deposit_authorization_form.html

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Comment #28 by Anonymous posted on
Anonymous
One major irritation for me about this account which I opened a little over a month ago is the statement cycle.

For my account, the statement (and interest posting date) is the 10th BUSINESS DAY of the month. Which, of course makes the ACTUAL statement closing date variable - anywhere from the 12th to the 17th of the month! And they refuse to change it to something more convenient.

Since this account is limited to 6 withdraws PER STATEMENT PERIOD this unusual statement date method makes avoiding the $6 excessive withdraw fee very tricky: In November, the statement date is the 17th (since the month starts on a non-business day and there's a holiday in the mix), but December's will be the 12th (since the month starts on a Monday and there are no holidays). January will be the 14th..... what a bunch of nonsense!!!

If it weren't for the competitive interest rate and fast ACH transfers, I'd be finished with this bank. I'm still undecided as comments from people who have problems with this bank (check ripoffreport, etc.) reveal an extremely unfriendly attitude by their employees.....

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Comment #29 by Anonymous posted on
Anonymous
Just to illustrate how tricky this statement date thing is (or how stupid I am) - I mis-calculated January - the 1st is a holiday, so the 10th business day of January is the 15th not the 14th.

I also mis-calculated October when trying to resolve this on the phone with Provident: I thought October would be the 14th, but there's a Columbus Day Holiday in there so it's the 15th.
This is a really stupid system for an account that has limits based upon statement period.

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Comment #30 by Anonymous posted on
Anonymous
I haven't encountered the issue of tracking limited withdrawals in the face of variable statement dates because I don't make few withdrawals. But I can see how it would be a problem if you do get to (or close to) the max of 6, as I do on some other accounts. Of course, one solution is to never schedule withdrawals between the 12th and the 17th (unless you know you've had few recent withdrawals), but that isn't a terribly practical solution. I'd suggest you contact Delivery Support Manager Sherry Jones at 410-277-2690, as she was very helpful to me when I had problems (and non-responsiveness) getting the account set up initially. Now, that was back in March, so I don't know if she's still there or in the same position. But, if you can get past don't-care phone CS people, you will find that they DO seem responsive to customer concerns. The switch from one of the worst online ACH systems to one of the best was a result of customer input. Can't hurt to try. As for someone's questions about whether pushed deposits are available immediately, that sure seems to be my recollection. A pushed deposit is, by definition, "collected" because these are real funds provided by another institution rather than a promise of payment (as a pull or a check would be). Nonetheless I've just set up a small push into Provident from GMAC just to test this, and will report back. I'd be very surprised if the funds aren't shown as available as soon as they hit the account.

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Comment #31 by Anonymous posted on
Anonymous
Correction: Of course the word "don't" should be removed from the first sentence above.

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Comment #32 by Anonymous posted on
Anonymous
To confirm, my $30 push from GMAC to Provident-Direct has now shown up in Provident, and is in fact shown in the AVAILABLE balance. What surprises me a bit is that, even though GMAC debited the funds immediately after I initiated the transfer early on Thur, 11-20, it took TWO business days to get to Provident instead of showing up overnight as usual. Perhaps this is an exception to the rule, but it's surprising for a touted ACH system like GMAC's. The funds went FOUR calendar days without interest, which would have been a loss of $30 vs. the expected 1-day loss had I been transferring $100,000 instead. While I suppose it's possible the delay was Provident's, I doubt that since I've been seeing less consistency with GMAC's system lately (although certainly still better than a Cash Edge-based system!). Another reason I think the issue here is with GMAC is I've never had a push from, say, ETrade fail to show up in Provident the next day.)

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Comment #33 by Anonymous posted on
Anonymous
Anonymous @ 10:47 AM is correct about GMAC's ACH delay; so far, Provident's ACH is fast/flawless.

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Comment #34 by Anonymous posted on
Anonymous
The trend is going to go downwards with regards to interest rates. My municipal money fund dived from over 5% in October to now under 1% this month. :-( Time to move my money to Provident so that I can get a decent return before rates start to drop again.

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Comment #35 by Angelo_Frank (anonymous) posted on
Angelo_Frank
Providentdirect, effective today, 12/30/2008 lowered the APY to 3.25% on their Savings Account.

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Comment #36 by Anonymous posted on
Anonymous
I made three deposits to Provident from Capital One, SunTrust, and a mutual fund money account. The deposits from Capital One and SunTrust were available on the next day after deposit. The mutual fund money account deposit is being held for 2 weeks. The deposit is being cleared through a third party bank (in this case Wachovia based in Delaware), so I guess it was treated as a non-local institution deposit. I could have wired the funds for free (sending account does not charge a fee), but not sure if Provident would charge a fee for incoming wires.

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Comment #37 by Anonymous posted on
Anonymous
According to their fee schedule, they charge $11 for an incoming wire. At least you're earning a pretty good rate while you wait. Speaking of the rate, I knew it would go down, but I was hoping it would be to 3.50 APY instead of 3.25. (Provident-Direct rates have consistently been multiples of .25.)

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Comment #38 by Anonymous posted on
Anonymous
Provident Bank just got bought out by M & T Bank so not sure how that will impact their future savings rates. The deal is expected to be consummated in a few months. Please note that the buyer is the M & T Bank that has branch offices outside NY (such as VA, MD, WV, PA) and not M & T Bank, National Association which solely has offices in the Buffalo NY area and also has the internet based bank called "Onbank".

http://mtbna.com/about.cfm
http://www.mandtbank.com/

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Comment #39 by Anonymous posted on
Anonymous
2.82% APY now...

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Comment #40 by Anonymous posted on
Anonymous
Rate dropped to 2.1%. I got an email from the bank informing customers of this change.

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Comment #41 by Anonymous posted on
Anonymous
just got an email that the rate is going down to 1.25% as of Apr 17, 2009.

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Comment #42 by Anonymous posted on
Anonymous
I got a phone call this week from someone at M&T Bank regarding the merger of Provident and M&T Bank at the end of this week and they wanted to ask me some questions about it. I just told them I was on my way out the door and to call back later. The bank lowered their rate to 0.5% this month which is at the bottom of the rate offerings and just about the same as most checking account rates. This rate plummet is really saying "we don't need your business because we got enough money now", so with that thought I am going to terminate my association effective before the merger date of 05/23/2009.

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Comment #43 by Anonymous posted on
Anonymous
I went to a Provident Branch on Friday and closed out my account. The rep wanted to know why I was closing the account. Instead of saying the obvious (your rates are abysmal), I just lied and told her that I was moving out of the area. They had a couple of guys working on the ATM machine there close to closing time, so I guess it was to do the conversion process for the branch. By closing the account and moving it elsewhere, I increased my savings rate by 5X.

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