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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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Comments
16 comments.
Comment #1 by "" (anonymous) posted on
DW received a hard inquiry in September 2008 with her application.

Her Experian credit report details follow:

CUSTOMER ONE FIN/EVERBAN

Address:
11 OVAL DR STE 107
ISLANDIA NY 11749
No phone number available

Date of Request:
09/10/2008
Address Identification Number:
0123456789

Comments:
Checking account. This inquiry is scheduled to continue on record until Oct 2010.

1
Comment #2 by Angelo_Frank (anonymous) posted on
Angelo_Frank
I closed my account at EverBank and moved my funds to Ally Bank. I grew tired of the slow ACH transactions and the interest rate game at EverBank...promo rates, first year average, introduction of fees, etc. If one deals heavily in foreign currency accounts or precious metals I guess EverBank may be convenient. If not, I'd rather have straight-forward rates and no fees.

1
Comment #3 by Brian F (anonymous) posted on
Brian F
I agree with Angelo...I have all my savings at Ally and have been a customer of GMAC bank in the past. Ally has only gotten better since changing from GMAC. I love the 24/7 service. I don't see anything great about EverBank....

1
Comment #4 by Anonymous posted on
Anonymous
Anyone know if there is a penalty if one closes the money market account after the first 3 months?

1
Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
According to page 56 of the disclosure, there's a $25 fee if an account is closed within 30 days. Based on this, I would think there would not be a fee if the account is closed after 30 days.

1
Comment #6 by Anonymous posted on
Anonymous
Thanks, Banking Guy. Much appreciated!

1
Comment #7 by Anonymous posted on
Anonymous
I complained about the way Everbank presents their "blended" rates and closed my account.

1
Comment #8 by Anonymous posted on
Anonymous
My AAA credit check system sent me an alert saying that "it is a hard pull from everbank" after I filled in all the online application.

You should updated your false statement about its "no hard inquiry" fact.

1
Comment #9 by Anonymous posted on
Anonymous
I don't know the technical difference between a hard pull and a soft pull. But I do know that when I applied, EverBank informed me that the birth date I reported differed from the one on my credit report, and they therefore asked for a photo ID with birth date. (I checked, and they were correct - Experian was listing me as 102 years old.) So they are at least using credit reports to check birth date for some applicants.

1
Comment #10 by Anonymous posted on
Anonymous
EverBank's transfer times for incoming ACH deposits are horrendous. I applied for the 3-month yield plege promo on 7/16 and my application was immediately accepted. Microdesposits between EverBank and Alliant Credit Union didn't show up until 7/20. Alliant quickly transferred the requested funds into Everbank within a day. These funds are posted on my Everbank page showing a "successful" transfer date of 7/21. It is now Friday, 7/24, and my balance in Everbank is still $0 even though another Everbank transfer page shows a current balance of $10,000. Which means I am not earning any interest on this promo even though my money is in their bank. I spoke to CSR who says Everbank knows it has a problem which they plan to fix in the next several months. In the meantime, I will have lost a full week's interest on this 3-mo. promo--even though Everbank confirms it has my money! Nice of them to use my funds and not have to pay any interest on it. They should change the rules and have the promo start from the date they accept and post the funds, not from the time of application.

Will this happen every time I do an ACH transfer into Everbank? Has anyone had experience with this--and is there a way around these outrageous waiting times? Just on principle, I will not spend the money to wire funds.

1
Comment #11 by ichaelm (anonymous) posted on
ichaelm
Money Market and Checking standard rates dropped from 1.85 to 1.75

1
Comment #12 by Anonymous posted on
Anonymous
I also had a bad experience with Everbank. It took a week to receive the "welcome Kit". Then I had to wait 2 days for them to put a small deposit into my checking bank account. Then they only allow no more than a $50,000 noney transfer per day. You can wire more but your bank charges. They go out of their way to prolong the application process so that your money is tied up and not getting the 3% interest.

1
Comment #13 by ichaelm (anonymous) posted on
ichaelm
Bad news, folks. Promo rate down to 2.51% Standard rate down to 1.51%

1
Comment #14 by Anonymous posted on
Anonymous
Everbank's not so hot...

I recently applied for a savings account with EverBank. With an opening fund of $5k, soon to triple, I was /turned down/ for a money market savings account. It first took them a week and four phone calls to even acknowledge they had my paperwork (despite my having a tracking number proving they had it from the first day I called), at which point they said "Sorry, you've been declined, but I can't tell you why", although in all fairness the guy was really polite about it, and did apologize for the problems.

A week later I got a letter saying I'd been turned down for credit problems. I've had a few hiccups, but there were no details or explanations, just the usual "call the credit bureau for a report, but we still won't tell you why" letter.

They're obviously doing so well they don't need additional depositors. I can't say I'm inclined to attempt to do business with them again.

I will say ING had no problem giving me an account...

1
Comment #15 by Anonymous posted on
Anonymous
Just want to chime in here and say that my promo account opening with this bank went really well. I opened a checking account online in minutes, and my account was funded quickly via a mailed in check. They kept in touch with every step of the way letting me know when they got my sig-card and deposit, and they let me know when I would receive my debit card and my free checks. This was all completed in less than two weeks - holidays and all. I called them when I received my checks because I only got 25, and I thought there should be 50. A CSR answered quickly and let me know that 25 was the correct amount. She was friendly, and the whole call took less than a minute. Well, this seems to be in contrast to the negative reviews for this bank that I've been reading here, so perhaps this bank got themselves together recently, or perhaps they are selective on who they deal with - not that I'm anyone special, but I have a squeaky clean record. Based on my initial experience with this bank, I'd say go ahead and take advantage of the promo.

1
Comment #16 by ichaelm (anonymous) posted on
ichaelm
bonus rate is now 2.25%

1