Update 5/04/10: The High Yield Savings Account rate has fallen from 1.30% APY to 1.10% APY. Refer to the bottom of the post for the rate history.
Online banks have begun to lower their rates in response to the Fed's historic rate cut. Bank of Internet USA is one of these. It lowered the yields by 20 basis points on both the Money Market Savings Account (down to 3.26% APY) and the High Interest Checking (down to 3.20% APY). However, the High Yield Savings Account now pays 3.51% APY as of 12/17/08.
By reviewing the rate history of this account, it appears BofI raised the yield on December 10th from 2.00% to 3.51% APY. This used to be called Regular Savings Account. Like other online banks (Capital One and GMAC), BofI appears to have decided to offer the highest rates on its savings account rather than on its money market account. The only difference between these two accounts appears to be that the savings account does not have check writing privileges. The higher rate for the savings account makes sense since the lack of checks should make the account a little less costly for the bank.
Here's a summary of the High Yield Savings Account features:
- 3.51% APY on all balances as of 12/17/08
- $100 min. initial deposit required
- No monthly maintenance fee
- No minimum daily balance required
- ATM card available
- Interest is compounded daily and credited monthly
- No ACH transfer service available
- Accepts ACH transfers initiated from another bank
Note the lack of the electronic ACH bank-to-bank transfer feature. I called yesterday to see if they might have added this. Unfortunately, they have not.
For more info on Bank of Internet and its checking and money market account, please refer to my July 2008 BofI account reviews.
BofI's ratings for soundness have remained the same since my July report: 3 stars (performing) at Bankrate.com and 4 star rating (excellent) at BauerFinancial. These ratings are based on 9/30/08 data.
The bank has been FDIC insured since 2000 (FDIC Certificate # 35546).
05/04/10: 1.10% APY
04/09/10: 1.30% APY
03/24/10: 1.40% APY
02/10/10: 1.50% APY
??/??/10: 1.60% APY
11/16/09: 1.70% APY
08/04/09: 1.75% APY
07/29/09: 1.81% APY
05/01/09: 2.06% APY
03/04/09: 2.00% APY
02/24/09: 2.50% APY
02/05/09: 3.10% APY
12/17/08: 3.51% APY