Dedicated to Deposits: Deals, Data, and Discussion

Update on EverBank's Money Market and Checking Accounts

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EverBank
Update 6/2/09: The new 3-month intro rate is 3.01%.
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)
Previous APYs and rates
  • 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)
How EverBank Reports the Yields

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.

Account Overview

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
Other features that are not well described at EverBank's website are the electronic transfer features which are not the best for online banks.
  • 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)
Note, these are based on reports from last year. If you've experienced changes, please leave a comment.

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.

Related Pages: money market accounts, EverBank, checking account

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Comments
7 Comments.
Comment #1 by Anonymous posted on
Anonymous
I mailed in the app paperwork in early October and never heard from them again. I phoned and the CSR was a stereotype of the unconcerned, uncaring employee who acted like I had taken him away from watching TV or something else important. They don't want my money or my business.

1
Comment #2 by Anonymous posted on
Anonymous
If you took advantage of a previous EverBank offer or are a previous customer, you are not eligible.

1
Comment #3 by Anonymous posted on
Anonymous
I opened a CD account with them several years ago. When the CD account matured, I mailed a request to close the account out. I never heard back and finally called the bank 2 months later. The rep took my request and then closed out the account. They did not charge me an early withdrawal fee after the account automatically renewed. I guess the mail processing at the bank was a bit suspect.

1
Comment #4 by Anonymous posted on
Anonymous
Promo rate down to 3.76%.

1
Comment #5 by Anonymous posted on
Anonymous
Promo rate down to 3.51%.

1
Comment #6 by Anonymous posted on
Anonymous
Bonus rate down to 2.51%.

1
Comment #7 by ichaelm (anonymous) posted on
ichaelm
also, the 3.57% rate on your 'weekly summary' can be removed, since the account never pays higher than 2.51%

1