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
- 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