Update 3/2/09: The new 3-month intro rate is 2.51%.
Update 2/2/09: The new 3-month intro rate is 3.51%.
EverBank reduced its rates today. The 3-month promotional APY was reduced from 4.76% to 4.01%. Note, EverBank only lists the promo interest rate of 3.93%. The APY they list for the Money Market Account is 3.41% for $50K and less. Note this is the first-year APY. It combines the 3-month bonus rate of 3.93% and assumes the rate for the next 9 months will be the current ongoing rate of 3.16%. This averages out to a rate of 3.35% and an APY of 3.41%. Below is a summary which will should help clarify these rates:
New APYs and rates as of 11/01/2008
- first 3 months: 4.01% APY, 3.93% rate (rate is guaranteed for first 3 months)
- second 9 months: 3.21% APY, 3.16% rate (Current ongoing rate, not guaranteed)
- average over 12 months: 3.41% APY, 3.35% rate (assuming last 9 months of current ongoing rate)
- first 3 months: 4.76% APY, 4.65% rate (rate is guaranteed for first 3 months)
- second 9 months: 3.51% APY, 3.45% rate (Current ongoing rate, not guaranteed)
- average over 12 months: 3.82% APY, 3.75% rate (assuming last 9 months of current ongoing rate)
EverBank used to list the 3-month bonus in terms of APY. This had been 4.76% APY (4.65% rate). A couple of months ago they changed from advertising a 3-month promotional APY of 4.76% to a 3-month promotional interest rate of 4.65%. I kept 4.76% APY in my weekly summaries since I use APY to compare account yields. APY is typically used to compare accounts since it factors in compounding.
It had appeared that EverBank reduced its promo yield from 4.76% to 4.65%, but it just changed how it reported the rates. This confusing change had many readers think the rate had dropped, and they kept posting this in the comments. So I did this post to describe this detail so I can just point people to this post when they think my posted rate is old.
I think EverBank changed due to how regulations require banks to report APY of savings accounts. An APY of 4.01% would imply that if you put $1,000 into an account, it would grow to $1,040 after one year. However, since 4.01% APY applies only for the first 3 months, the balance after one year will be less. Assuming the ongoing rate will be 3.16% for the last 9 months, the balance after one year will be only $1,034.
In my opinion, the new way EverBank reports the 3-month promo APY is confusing. Listing the first-year APY doesn't make it easy to compare it with other promos and other ongoing APY's. So I'm going to keep converting this to the current APY when I list it in my weekly summaries. Savings accounts are variable rate accounts, and it's well known that rates will likely change during a year. So listing a first-year APY for a savings account is not useful in my opinion.
Note, EverBank's checking and money market accounts compound daily (see Truth-in-Savings disclosures). To derive the APY from interest rates with different compounding, please refer to BankRate.com's Compound Interest Calculator.
An important point for EverBank's intro rates is that there are balance caps. Balances over this cap don't qualify for the intro rate. The caps are:
- $50K for the Yield Pledge Money Market Account
- $100K for the FreeNet Checking Account
- Slow ACH transfers. Readers have reported a transfer time from 4 to 6 days with at least 2 days of lost interest.
- Limits on EverBank initiated ACH transfers: $10K/day and $50K/month
- No blocks on ACH transfers initiated on your non-EverBank accounts
- no limit on number of ACH links to your external bank accounts
- Free incoming wire transfers
- $25 outgoing wire transfers (domestic)
To review more details of these accounts, please refer to my EverBank account reviews.
EverBank has been FDIC insured since 1998 (Certificate # 34775). It's one of the larger internet banks with $6.02 billion in assets. The bank has a 4 star rating (sound) at Bankrate.com based on 6/30/08 data. This is up from 3 stars from 12/31/07 data. BauerFinancial continues to give them 3.5 stars (good) based on 6/30/08 data.