Dedicated to Deposits: Deals, Data, and Discussion

2.81% Savings Account Guaranteed to 9/30 at EBSB Direct

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EBSB Direct

Update 10/04/10: The top rate has fallen to 1.30% APY for balances of $50K+. This is guaranteed to last until January 1, 2011. Refer to the bottom of the post for the rate history.

EBSB Direct is a new online division of East Boston Savings Bank, and they're offering a good deal on their online savings account. As of 5/14/09, they're guaranteeing a 2.81% APY on balances over $50,000 through 9/30/2009. The rate is 2.00% APY for balances from $5,000 to $50,000. Minimum balance to open is $5,000. Maximum balance is $1 million.

The high rate along with the rate guarantee makes this a good deal for those with a large enough balance. Besides the rate, another nice feature appears to be a solid ACH bank-to-bank transfer service. According to the bank's FAQ, they allow unlimited number of links to external accounts, and the links are set up online via trial deposits. One feature that's not mentioned in the FAQ is the limit on the size of the transfers. Banks often have small limits that make it difficult to transfer money. I called this morning, and according to the CSR, the limit is a respectable $150,000 per transfer (in or out). One negative is a $5,000 minimum balance requirement to earn interest and to avoid a monthly fee.

Below are some of the important features of the account as described at the website documentation, at the bank's FAQ and from info I received from the bank's CSR:

  • Account Opening:
  • Available nationwide (CSR)
  • $5,000 minimum opening deposit (Doc)
  • Can be opened online and funded with ACH transfer from an existing account (Doc)
  • Credit report will not be accessed (FAQ)
  • Do not allow beneficiaries or living trusts (CSR)
  • Account Fees/Features:
  • $5,000 minimum to earn interest (Doc)
  • $15 monthly fee if balance falls below $5,000 (CSR)
  • Visa Debit card is available (Doc)
  • No check writing (CSR)
  • Limit of 6 withdrawals per month as typical from a savings account (FAQ)
  • No limits on the number of deposits (FAQ)
  • Interest is compounded and credited monthly (CSR)
  • Only paper statements are mailed once a month or once a quarter if no activity (FAQ)
  • ACH Bank-to-Bank Transfer Service:
  • Initial funding source info is kept so you can initiate future transfers without having to relink account (FAQ)
  • Trial deposits are used to verify linked accounts (FAQ)
  • Allows unlimited number of links to your accounts at other financial instutitions (FAQ)
  • Transfers are limited to $150,000 per transfer for both inbound and outbound (CSR)

Update 10/04/10: The account is no longer available nationwide. According to the bank CSR, they only accept new customers from New England and New York State.

East Boston Savings Bank has strong ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate. Both ratings are based on 12/31/08 financial data. The bank has over $1 billion in assets and $812 million in deposit. It has been FDIC insured since 1991 (FDIC Certificate # 33510). Deposits over the FDIC limits are insured by the private Depositors Insurance Fund (DIF). According to the DIF website: "The combination of FDIC and DIF insurance provides customers of Massachusetts-chartered savings banks with full deposit insurance on all their deposit accounts. No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF." Note, readers have mentioned several issues with DIF, so it's important to know that it is not the same as the FDIC guarantee.

With any new online bank, I always try to be extra careful to make sure it's legitimate. I was a little concerned since there's no clear connection between EBSBdirect.com and the bank's main website, EBSB.com that's listed at the FDIC. However, both EBSBdirect.com and EBSB.com link to the same service, ibanking-services.com, for the online application. So EBSBdirect.com appears legit.

Credit for this find goes to BestCashCow.

For other high-yield savings accounts, refer to my weekly rate summary

Edit: Added info on beneficiaries/living trusts

Account History:

  • 10/01/10: 1.30% APY $50K+, 0.75% APY $5K-$50K
  • 12/08/09: 1.67% APY $50K+ (can't find rates for other tiers)
  • 10/03/09: 1.77% APY $50K+, 1.25% APY $5K-$50K
  • 07/21/09: 1.55% APY $50K+, 1.25% APY $5K-$50K
  • 07/01/09: 1.75% APY $50K+, 1.25% APY $5K-$50K
  • 06/19/09: 2.02% APY $50K+, 1.50% APY $5K-$50K
  • 06/02/09: 2.22% APY $50K+ no more guarantee period
  • 05/26/09: 2.62% APY $50K+ guaranteed to 9/30/09
  • 05/14/09: 2.81% APY $50K+ guaranteed to 9/30/09, 2.00% APY $5K to $50K

  Tags: EBSB Direct, savings account

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Comments
37 Comments.
Comment #1 by Anonymous posted on
Anonymous
There are 3 components to an ACH system.
1-Most important is speed of transfer.
2-Limit of amounts per transfer per day or month.
3-Number of linked accounts.

If one of the above is slow or inferior, the whole ACH transfer system is useless. What we don't know from the above is the speed (the most important one).
Anyone has dealt with this bank before?

1
Comment #2 by Anonymous posted on
Anonymous
I just opened an account online...very easy. Next step verifying the trial deposits.

BTW: There is confirmation that EBSB is connected to its homebank on the site now.

Thanks so much for this new bank!

1
Comment #3 by Anonymous posted on
Anonymous
I, also have concerns of the speed and terms of the ACH.
If it is like iGo, where you need 3-5 business days to pull the money and then wait 3-5 business days to use the money (out of quarantine) hold period, then it will be useless account.

1
Comment #4 by Anonymous posted on
Anonymous
The above concerns regarding the ACh transfers are well taken. One discrepancy I noted was that the disclosures state that only a $2,500 balance is needed to avoid the monthly service fee. The CSR with whom I spoke thought that that was an error and that it should be $5,000. This is all very new and maybe there are some bugs to be worked out of the system.

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Comment #5 by Anonymous posted on
Anonymous
I stopped trusting CSRs long time ago.
Many times they make up new rules or wrongly implement the existing rules or they don't want to admit they are incompetent and do not know the answer to your questions.
Concerning the ACH hold after transfer, I can not find any info on their web site.

Only thing that is mentioned is for new accounts there is hold of 12 business days on all funds deposited for the first month.

1
Comment #6 by Anonymous posted on
Anonymous
If you have 55,000 deposited, does it earn 2.81% on 55,000 or 5,000 (and 2% on 50000)?

1
Comment #7 by Anonymous posted on
Anonymous
Many times the online disclosure is not the same with the one I received in the mail after the account was opened. So be careful with CSR statements or verbal disclosures, it could be an innocent or malicious trap (intend).

1
Comment #8 by Anonymous posted on
Anonymous
RE: Account Vestings Allowed

Just called CS and found out that the only allowable account vestings for this on-line direct Savings Account are-Individual or Joint. They do NOT allow any beneficiaries to be added and also, NO living trust vestings.

I did also ask about if the account was originally set up as individual or joint, could you later do a vesting change form to add a beneficiary or place the account in the name of a Living Trust, and was told no (after they checked with CS Supervisor).

I suggested they should add this inquiry to their FAQ list.

OC Steve

1
Comment #9 by Anonymous posted on
Anonymous
To Anonymous at 11:43 AM, May 14, 2009.

It earns 2,81% on all balances above $50K

1
Comment #10 by Anonymous posted on
Anonymous
If I make my EBSB account joint, can I transfer money out into individual accounts or only joints with the same names on them?

1
Comment #11 by Anonymous posted on
Anonymous
2 things stike me as a bit unusual - 1) in my experience it's somewhat common for these types of accounts to lack the capability of checkwriting, but it's less common for them to refuse to accept any paper DEPOSITS of paper checks written on other banks (according to their FAQ). 2) Yet, on the statement side, they insist that you receive paper - there seems to be option to receive electronic statements. Strange.

1
Comment #12 by Anonymous posted on
Anonymous
Question - Let's say a person has enough money to deposit that if they were starting this kind of account (at a bank without any “extra” or above-FDIC insurance protection), they would normally make it a joint account with, say, 3 owners for the FDIC protection. (I'm being conservative and assuming that the FIDC might return to $100K per owner, although I don't think it will.)

For anyone starting an EBSN Direct account, are you still establishing it as joint, or are you totally trusting in the DIF thing from Massachusetts? Thanks in advance.

1
Comment #13 by Anonymous posted on
Anonymous
I just called the bank and they don't offer 2.8% for out of town clients. the best offered is 1.09 on passbook savings for 50,000 plus. Are we getting misinformation?

1
Comment #14 by Banking Guy (anonymous) posted on
Banking Guy
I just called again at 800-657-3272, and the CSR said this 2.81% promo is avaialable to anyone in the U.S. Make sure they connect you to the EBSB Direct staff. The reps associated with the main bank may not be familiar with EBSB Direct and this promo.

1
Comment #15 by Anonymous posted on
Anonymous
I just called 800-657-3272 twice to see if I can get more info about their ACH system and I got to different answers from two different CSR.
One said, incoming ACH initiated ay EBSB takes 1-3 days and the other said 2-4 business days.
About the hold after transfer, both of them said they are not sure if there is one or how long is the hold,

It is new to them and, I would not trust any verbal inputs from any CSRs at EBSB.

1
Comment #16 by Open Your Mind (anonymous) posted on
Open Your Mind
hi, i thought it was a savings account, but if you go their website, it states it is a money market account?

1
Comment #17 by Anonymous posted on
Anonymous
The APY, according to the web site, is 2.81% for balances of $50,000 or greater, not for balances over $50,000. It is 2.00% for balances of $5,000 to $49,999.

Although my initial deposit was set at $50,000, the interest rate printed on my confirmation page was 1.980%. I will need to speak to customer service about this.

1
Comment #18 by Anonymous posted on
Anonymous
F/U on comment of 5/17: CSR told me there's a glitch in the system that has affected others as well but they're working on correcting it. Guess that kind of thing is expected with a new system.

1
Comment #19 by Anonymous posted on
Anonymous
Just tried opening an account and was notified it couldn't be opened at this time. Anyone else had problems?

1
Comment #20 by Anonymous posted on
Anonymous
Just wanted to add that there is a nine business day hold on funds when you do an ACh tranfer of funds from an external linked account to your EBSB Direct money market account. This is stated in the disclosures and was confirmed by a CSR.

1
Comment #21 by Anonymous posted on
Anonymous
So is this a Savings account protected by FDIC, or Money Market account (not protected by FDIC 250k?)

1
Comment #22 by Banking Guy (anonymous) posted on
Banking Guy
Note, bank savings accounts and money market accounts are both FDIC insured. However, money market funds are not. For more info, refer to this Bankrate article.

1
Comment #23 by Anonymous posted on
Anonymous
I applied for an account tonight and the process was pretty simple. There were no stupid questions like the Darby Direct application process. Since Darby bank reduced their rate and restricted any new accounts to GA, I am glad my initial application was rejected after all. I did not see an interest rate display on the confirmation page at the end like an earlier post had mentioned. I wasn't issued an account number, but I did get a confirmation number and secret code for verifying the electronic transfer information from my other bank account to fund the new account. If I get the guaranteed rate until 9/30/09 and if the EFT process goes pretty smoothly, then I will shift my business over to this bank and away from the plummeting rates of my other accounts.

Thanks for the information on this new bank offering.

1
Comment #24 by Anonymous posted on
Anonymous
I also did notice that the information entered for the EBSB Direct application was exactly the same as for Provident Direct, so both banks uses the same application server for processing the applications. The only difference is that the rate offered is very much different (0.5% versus 2.81%).

1
Comment #25 by Anonymous posted on
Anonymous
Looks like they lowered their rate to 2.62% APY :( Was going to sign up too.

1
Comment #26 by Anonymous posted on
Anonymous
I got the trial deposits to my other linked bank account and verified my new account at EBSB Direct. The web interface and application process were exactly the same as Provident Direct's website. So, the two banks are using the same "third party" vendor for their online websites. Other than the interest rate difference, everything is same between those two accounts.

One thing to note - when Provident merged with M&T Bank on Saturday this past weekend, the online account information was taken down off the Provident Direct website at 8 PM on 05/22/09. Provident does send paper statements monthly, so I will still have a copy of my account history. But, if they did not, then I would have no audit trail of my account at this point. Of course, if I needed it, they would have probably charged me for the research effort.

1
Comment #27 by Anonymous posted on
Anonymous
I verified that the EFT request was processed by both banks this evening. It was odd that I could not sign on into both online accounts at around 6 PM ET today as the request was being processed simultaneously.

1
Comment #28 by Anonymous posted on
Anonymous
Customer service was prompt when responding to emails and I got a welcome letter in the mail. Meg Zorzonello (Deposit specialist) is very helpful (1-800-657-3272).

1
Comment #29 by Anonymous posted on
Anonymous
Be aware! - there is a NINE DAY HOLD on ACH deposits made to these accounts. I made a deposit on 5/22 and it won't become available until 6/5.

1
Comment #30 by Matthew (anonymous) posted on
Matthew
down to 2.22%, no longer guaranteed

1
Comment #31 by Anonymous posted on
Anonymous
I'm not very impressed with this bank or its customer service. I filled out the online application for the ebsbDirect account when the rate was posted at 2.81% on May 25th. I never received any response or acknowledgement. After waiting more than a week I contacted them via their online interface and received no response. Finally I called them and spoke to a CSR. The CSR found my application and all the information and didn't know why it wasn't processed. She said they would handle it manually and call me back later in the day. That was several days ago and I have not heard from them. These people obviously don't want my business and it is pretty clear that they will not honor their 2.81% deposit rate "guarantee". Very unimpressive customer service at EBSB! CAVEAT EMPTOR...

1
Comment #32 by Anonymous posted on
Anonymous
For what it's worth, the ACH system is very fast for incoming transfers. Money transferred from an external account appears to be credited on the day the external account is debited. The hold time, however, is extremely long at nine or twelve business days. If your goal is to park cash in this account and take advantage of a relatively high rate (even at 2.22% APY, though that is not guaranteed), though, I don't think the hold time should be a serious disincentive.

My only beef is with the fact that the test deposits are paired with test withdrawals; it's a little annoying that you lose two of your six monthly electronic/telephone transfers at your external bank over less than a dollar in test deposits.

I opened an account when the rate guarantee was 2.62% -- but I funded with only $5000 (the minimum) since I didn't know initially what the speed of inbound ACH pulls would be. After verifying the test deposits/withdrawals, my funding account was debited the next day. The following day, the account funding transaction showed up with the same date the external account was debited.

I've done a couple of incoming ACH pulls since then and again, no delay on the transactions being posted to my account, though all the funds are subject to the lengthy nine-day or twelve-day hold.

Additionally, once I topped up the account above $50K, the account information did indicate the rate that had been promised -- 2.59% (which I presume is 2.62% APY).

The online banking system is easy and fast, so I'm reasonably satisfied so far. I just wish I'd opened my account when they were guaranteeing 2.81%

1
Comment #33 by Anonymous posted on
Anonymous
Rate has fallen again:

2.02% APY for $50,000-$1,000,000
1.50% APY for $5,000-$49,999

I imagine they've hit their targets for attracting deposits.

1
Comment #34 by Anonymous posted on
Anonymous
I'm glad that I got the 2.81% guarantee when it was still available. EFT transfer was very easy. They do have a somewhat long hold period on transferred funds, but if you are the kind who moves money in a short notice and needs immediate access to the moved money, (such as for buying and selling stocks), then your money needs to be in a brokerage account and not in a bank.

1
Comment #35 by Anonymous posted on
Anonymous
APY on $50G+ down to 1.75%.

1
Comment #36 by Anonymous posted on
Anonymous
Bauer Financial lists this bank with four stars (unchanged), but Bankrate's site has the at two stars.  Very odd.

1
Comment #37 by Anonymous posted on
Anonymous
Regarding the rather wide rating variance between Bauer Financial and Bankrate.  I have noticed that too.  I have found several banks that have a much lower rating on Bankrate versus what is shown on Bauer Financial.  Bankrate must be using a more rigorous criteria in rating banks than Bauer.

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