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EverBank Increases 3-Month Promo Rate for its Money Market and Checking Account

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EverBank
Update 1/05/10: 3-month promo rate has fallen from 2.51% to 2.25% APY. Also, the Yield Pledge Money Market Account standard APY has fallen from 1.51% to 1.26%.

Update 9/02/09: 3-month promo rate has fallen from 3.01% to 2.51% APY. Also, the Yield Pledge Money Market Account standard APY has fallen from 1.75% to 1.51%.

Update 8/04/09: The Yield Pledge Money Market Account rate and the top tier rate of the Firstnet Checking has fallen from 1.85% to 1.75% APY.

Update 7/02/09: Rates have gone up! The ongoing Yield Pledge Money Market Account rate increased from 1.65% to 1.85% APY. The top rate of the Firstnet Checking also went up from 1.65% to 1.85% APY. However, rates were cut on the lower tiers: 1.10% $25K-$50K and 1.05% $10K-$25K

EverBank did something you don't see often these days. They actually raised their deposit rates. Their 3-month promo rate is now 3.01% (up from 2.51%). This is only for new customers, and it only applies to balances up to $50K for the Yield Pledge Money Market Account and up to $100K for the FreeNet Checking Account. They now allow a new customer to do the checking 3-month promo first followed by the money market 3-month promo (or vice versa). Bonus only applies to those who have never opened the account. Note, these are rates and not APY. Refer to the bottom of this post to see how EverBank computes the APY.

Their ongoing rates remain the same. As of 6/02/09, these rates include:

Yield Pledge Money Market:
  • 1.65% APY for all balances on the money market
FreeNet Checking:
  • 1.65% APY $100K+
  • 1.60% APY $50K-$100K
  • 1.25% APY $25K-$50K
  • 1.11% APY $10K-$25K
  • 1.02% APY under $10K
Another important change to note is that EverBank has raised its fees and the minimum balance required to avoid these fees. Here are the new rules that took effect in June:

Yield Pledge Money Market:
  • $8.95/month fee if average monthly balance is below $5,000
FreeNet Checking:
  • No fees unless you register for optional Online Bill Pay
  • If you choose Online Bill Pay, there's an $8.95/month fee if average monthly balance is below $5,000
Perhaps this is how EverBank plans to pay for the higher promo rate.

Account Overview

The money market account has check writing privileges with the typical 3-check per month limitation per federal regulation.

The checking accout offers unlimited check writing, and your first book of checks is free. EverBank will automatically reimburse up to $6 per month for non-EverBank charges on US ATM transactions. However, this only applies during the month that the customer maintains a minimum $5,000 average monthly balance in their account. The checking account also has a $50 satisfaction guarantee pledge (see EverBank's terms).

For both accounts, interest is compounded daily and credited monthly.

EverBank has a detailed description of their credit inquiry in the online application. I was told they do a hard credit inquiry via Experian that may temporarily ding your credit score. Readers have also mentioned this in the comments below.

Transferring Money

EverBank doesn't do a good job describing the details of their ACH transfer service. I just called, and here's what I was told:
  • ACH is now an option for initial funding. The limit is $50K.
  • Limits on EverBank initiated ACH outgoing transfers: $50K/day and $100K/month (no limit on incoming)
  • ACH transfers initiated online are free
  • No blocks on ACH transfers initiated at your non-EverBank accounts
  • No limit on number of ACH links to your external bank accounts
  • ACH links are set up online and verified with the trial deposit method
Over the last few years, readers have commented that EverBank's transfers are slow with transfer times taking 4 to 6 days with at least 2 days of lost interest. I've been told this is due to EverBank's fraud prevention process. EverBank also allows wire transfers. Incoming wire transfers are free. Outgoing ones cost $25 (domestic).

EverBank's World Currency CDs

If you're concerned that the dollar will continue to weaken, you might want to consider EverBank's WorldCurrency CDs. However, unlike the typical CD, you can lose money. Here's how EverBank describes this:
While FDIC insurance will protect you from bank failure up to $250,000 (until December 31, 2009), it's important to understand that your deposit will be susceptible to losses or gains due to currency-price fluctuations.

I have more details about these currency CDs in this March post.

EverBank's CDARS

For those who want FDIC protection for very large balances, EverBank offers a CDARS program called Insured Advantage CD which provides FDIC coverage of up to $50 million. CDARS takes care of splitting the money across FDIC-insured banks so that all balances at any one bank is under the FDIC limits. The only problem with CDARS is that the CD rates tend to be lower than what you can get by dealing directly with banks with the best CD rates. Here are the current CDARS rates listed at EverBank as of 6/02/09: 1.43% APY for 6 months, 1.92% APY for 12 months, 1.61% APY for 2 years and 2.10% APY for 3 years.

Bank Overview

EverBank has been FDIC insured since 1998 (Certificate # 34775). It's one of the larger internet banks with $7.6 billion in assets. The bank continues to have solid ratings for safety and soundness: 4 stars (sound) at Bankrate.com and 4 stars (excellent) at BauerFinancial. Both ratings are based on 12/31/08 financial data.

Details of the Promotional APY

The way EverBank reports the promo rates is a little confusing. For the money market account, it's reported as a 3.01% 3-month bonus rate and a first-year APY up to $50K of 2.00%. Here's how the rates are broken down for the money market account:
  • first 3 months: 3.01% rate up to $50K (guaranteed), 1.64% portions of balance over $50K (not guaranteed)
  • second 9 months: 1.64% rate on all balances (not guaranteed)
  • average rate over 12 months: 1.98% rate, 2.00% APY (not guaranteed)
EverBank is doing a good job at following federal regulations which define the rules about reporting APY. The last paragraph of the section "C. Variable-Rate Accounts" provides an example similar to EverBank's account:

For example, if an institution offers an account on which it pays a 7% interest rate, compounded daily, for the first three months (which, for example, contain 91 days), while the variable interest rate that would have been in effect when the account was opened was 5%, the total interest for a 365-day year for a $1,000 deposit is $56.52 (based on 91 days at 7% followed by 274 days at 5%). Using the simple formula, the annual percentage yield is 5.65%:

APY = 100 (56.52/1,000)
APY = 5.65%

So based on these rules, APY is defined based on the total interest you would receive during one year. This makes sense for CDs, but for variable-rate accounts, it doesn't make as much sense since we know the rates will likely change many times during the year. For comparison purposes, it's not very useful.

Edit 6/30/09: Updates based on new info I received from EverBank on the bonuses, ACH funding and hard pull.
Edit 6/03/09: Corrected name of checking.

  Tags: money market accounts, EverBank, checking account

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