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)
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)
