Dedicated to Deposits: Deals, Data, and Discussion

Review of EverBank's CDs, Money Market and Checking Accounts

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EverBank

EverBank continues to offer a very competitive rate on a 5-year CD. The rate has fallen a little this week, but it remains one of the top for a nationwide 5-year CD. The 5-year rate is currently 3.36% APY. The shorter-term rates are not quite as competitive. The better ones include a 2.02% APY 24-month CD and a 1.55% APY 12-month CD. These rates are listed in EverBank's Yield Pledge CD page as of 2/13/2010. Minimum deposit is $1,500.

One positive aspect of EverBank is that they offer several types of accounts in addition to just individual and joint accounts. These include custodial, trust and IRAs. In addition, the application allows you to designate POD beneficiaries. Not too many internet banks offer all of these options.

One downside with EverBank Yield Pledge CDs is a harsh early withdrawal penalty. According to the Truth in Savings disclosure, the early withdrawal penalty is "one-fourth of the total interest that would have been earned on the principal balance of the account if funds had not been withdrawn prior to the maturity date." However, interest can be withdrawn penalty free (which is common for all banks). I don't see any limitation in the disclosure about EverBank having the right to refuse an early withdrawal. The only thing I see is this:

As authorized by federal law, we reserve the right at any time to require not less than seven-days’ notice in writing before each withdrawal from this account.

If you are worried about inflation forcing rates much higher over the next couple of years, a CD's early withdrawal policy and penalty are important factors to consider. The bank with the best early withdrawal policy is currently Ally Bank which only has a 60-day interest penalty (see my Ally Bank review).

EverBank CDARS

One important note about the disclosure is that the first half of the CD disclosure is specific to EverBank's CDARS which they call Insured Advantage CD. The early withdrawal penalty for the 5-year Insured Advantage CD is 900 days of interest. CDARS can be convenient for those with savings way over the FDIC limits. CDARS allows you to get FDIC insurance coverage on deposits up to $50 million. The downside is lower rates. As of 2/13/2010, the CDARS rates range from 0.75% for the 1-year term to 1.83% for the 3-year term.

EverBank's World Currency CDs

For those who are very worried about inflation and the weakening dollar, you may want to look into EverBank's World Currency CDs. Note, you can lose money in these due to risks associated with currency fluctuations. I described what happen to EverBank's Iceland CDs in this post. For more details on these World Currency CDs, please refer to my World Currency CD post.

EverBank's Checking and Money Market Account Promotion

EverBank continues to have a nice 3-month intro rate for both its checking and money market account. The 3-month bonus rate is 2.25% as of 2/13/2010. For the FreeNet Checking account the 3-month bonus rate applies to balances up to $100K. For the Yield Pledge Money Market account the 3-month bonus rate applies to balances up to $50K.

The nice thing about the FreeNet Checking is that it has no monthly fees regardless of balance unless you have the optional Online Bill Pay. In that case you have to maintain a minimum average monthly balance of at least $5,000. Otherwise a $8.95 monthly fee is assessed for Online Bill Pay.

The downside with the money market account is a monthly fee if your balance is under $5,000.

After the 3-month intro, the standard rates will apply. The standard money market rate as of 2/13/2010 is 1.26% APY. To see how EverBank comes up with a first-year APY of 1.51%, refer to the bottom of my June EverBank review. It's a little complicated.

I have more details about EverBank accounts in my June 2009 EverBank review post.

One thing that has recently changed is that the intro-rate promotion is no longer limited to new customers. According to the CSR, the only limitation is the one per household limit. So you could open the checking first with the 3-mo intro rate followed by the money market account with another 3-mo intro rate. Also, if you already had CDs with EverBank, that doesn't affect your qualification for the intro rate.

Account Application

According to the CSR, you'll need to print out the signature card when you complete the online application. You can fund a new account with a check or wire transfer. An ACH transfer is a potential option, but according to the CSR, not everyone may qualify for this option (not sure of the details). For CDs, I was told that the CD rate locks at the time you submit the application. You then have 30 days for them to receive your funds to guarantee the rate when you applied. When CDs mature, they require written instructions to close the CD, but they allow this to be done via secure email.

In the past, readers have warned about a slow new-account opening process. So for the liquid accounts, it may be wise to avoid funding the account with a large initial deposit.

Another downside in the application is a hard credit inquiry. 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.

Bank Overview

EverBank has been a FDIC member since 1998 (FDIC Certificate # 34775). It's one of the larger internet banks with $7.7 billion in assets. EverBank's Bankrate rating is down one star since my June post. It's now 3 stars (performing). It continues to be 4 stars (excellent) at BauerFinancial. Both ratings are based on 9/30/09 financial data.


  Tags: EverBank, CD rates, IRA rates, money market accounts, checking account

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