Online Savings Account and CDs at Silvergate Bank
Silvergate Bank has recently started offering an online savings account and online CDs on its website. They call them High Yield Online Savings and High Yield Online CDs. The rates are competitive but not great. Nevertheless, I'm always happy to see new internet accounts. The more competition, the more pressure for banks to offer higher deposit rates.
High Yield Online Savings Account
The High Yield Online Savings Account has a 0.90% APY for balances of at least $1,000 as of 1/14/2013.
There's a $10 monthly maintenance fee, but this can be waived by receiving free eStatements. One feature that's rare for savings accounts is online bill pay. They also offer Popmoney which is a personal payment service that lets pay people using just an e-mail address or cell phone number. Just like any savings account, there's a limit of 6 electronic withdrawals.
There's also a service for ACH transfers that the bank calls Account to Account Transfers. The bank's website currently has no details on this service, and when I called the bank last week, the CSR had trouble in providing the details. It appears there's a $1 fee for initiating outgoing transfers. For maximum size of the transfers, I was told this can vary on a case-by-case basis. I followed up with an email to get better answers, but I'm still waiting. I'll updated this post when I receive a reply.
Last Thursday I described the problem of new internet banks neglecting ACH transfers and the features that make for a good ACH transfer service.
High Yield Online Certificates of Deposit
Silvergate Bank currently offers only two High Yield Online CDs: a 0.98% APY 1-year CD and a 1.16% APY 2-year CD as of 1/14/2013.
Minimum deposit is $2,500, and the maximum balance to qualify for the above rates is $225,000. The CDs must be opened and funded online. I wasn't able to find additional CD details on the bank's website on things like early withdrawal penalties.
I did confirm with the bank's CSR that people in any state can apply online.
I took a quick look at the bank's online application, and I noticed two nice features. First, it allows accounts to be titled in the name of a trust. Second, the form provides an optional field for a beneficiary. Only the name and birth date are required (some banks require the social security number of the beneficiary).
Silvergate Bank is headquartered in La Jolla, California with 5 branches in Southern California.
The bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas ratio of 13.84% (above average) based on September 2012 data. Please refer to our financial overview of Silvergate Bank for more details. The bank has been a FDIC member since 1988 (FDIC Certificate # 27330).
How The Rates Compare
Since the internet banking features (like ACH transfers) are questionable, it's hard to see a reason to open an account at any new internet bank unless it offers deposit rates higher than any other internet bank. Unfortunately, both the online savings account and CD rates at Silvergate Bank are below the rates available from the best internet banks. However, they're close. Perhaps they will be on top in the future.
For non-promo rates without small balance caps, there are four internet banks offering money market accounts with a 1.05% APY, and there are two that offer savings accounts with a 1.00% APY.
For internet CD rates, the highest 1-year CD APY is 1.05% and the highest 2-year CD APY is 1.20%. The highest APYs at all-access credit unions are 1.25% for a 1-year CD and 1.60% APY for a 2-year CD. Both of these are available at Pentagon Federal Credit Union.
These rates are accurate as of 1/14/2013.
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