Evantage Bank and its two sister banks, AmericaNet Bank and Redneck Bank have announced that they will be raising their Mega Money Market Account rate from 1.00% to 1.10% APY effective November 22, 2012. There's no change in the balance cap. The 1.10% APY will continue to apply to balances up to $35,000. The 3 banks posted this news on their Mega Money Market Account pages. Here's the rate notification on the AmericaNet Mega Money Market page:
Effective November 22, 2012, we are changing the rates of this account. The new rate will be 1.10% APY on daily balances less than or equal to $35,000 and .50% APY on daily balances greater than $35,000.
And here's the current description of the rate tiers:
Earns interest of 1.00% APY calculated on your daily balance of up to $35,000. Amounts over $35,000 earn .50% APY
I was concerned that this change might affect how the portion of the balance over $35K is treated. The notification sounds like they would no longer use blended APY in calculating interest. So if you go over $35K, the entire balance would earn the lower rate instead of just the portion over $35K. This is what SmartyPig did in 2010.
I just called AmericaNet, and according to the CSR the blended APY will continue. Only the portion over $35K will earn 0.50%. So you should not have to worry about keeping your balance under $35K. If you hear something different, please leave a comment.
Mega Money Market Account Overview
The Mega Money Market account has no minimum balance requirement and no monthly fee. There is one potential gotcha. There's a $10 per month inactivity fee if you account is inactive for a year or more. Some readers reported being hit with this. Another downside about these accounts is that there's no ACH bank-to-bank transfer service. The easiest way to transfer money into or out of these accounts is to use the ACH transfer service of another bank.
Mega Money Market Account History
Before August these Mega Money Market accounts had been closed to new customers. Redneck Bank became the most popular one, and it was the first one of the 3 to stop accepting new customers in 2009. The other 2 stopped accepting new customers in early 2011. Then in August of this year all 3 opened up these accounts to new customers. However, the reward checking accounts continue to be closed to new customers.
Evantage Bank and its 2 sister banks, AmericaNet Bank and Redneck Bank, first launched these money market and rewards checking accounts in 2008. Evantage Bank is the internet division of Southwest State Bank. AmericaNet Bank is the internet division of All America Bank, and Redneck Bank is the internet division of Bank of the Wichitas. All 3 of these banks are owned by the Huckabay family as was described in a 2009 Oklahoman news article. This explains why all 3 offer very similar products.
How This Rate Compares
If you did not open the TIAA Direct savings or money market account earlier this year, you may be on the lookout for another account. TIAA Direct is still paying 1.25% APY on its accounts, but it stopped accepting new customers in July.
Bank of Internet USA continues to offer 1.25% APY on its Rewards Checking account. This rate has held since July 2011. This rate is low compared to other reward checking accounts, but it applies to all balances (there's no balance cap). Now that the rate is higher than any non-promo savings account rate, this rewards checking account is looking more appealing. My last review of this account was on its one-year anniversary.
Connexus Credit Union has a tiered-rate money market account that pays 1.15% APY for balances of at least $100K. However, this requires an active checking account.
You can still get a non-promo yield of 1.05% from 5 other internet banks. I reviewed these in my last weekly summary. Out of these 5 only Incredible Bank has a balance cap, but it's a large balance cap of $250K.
For large balances, these other money market and savings accounts that offer 1.05% APY would be a better choice than Evantage Bank and its 2 sister banks.
The above rates are accurate as of 11/2/2012.
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