Since the Fed first hinted about tapering earlier this year, long-term rates have gone up. It took a little while for the banks to respond, but they did, and long-term CD rates started to rise. With the postponement of tapering and questions about the future Fed Chair and the future economy, it’s not clear if the recent rise in long-term CD rates is the start of a sustained trend.
A good example of this questionable trend is the recent rate history of EverBank’s 5-year CD. For the third time since July, EverBank’s 5-year CD yield went over 2%. It’s 5-year CD and IRA CD now have a 2.01% APY (up from 1.96%). Thanks to the DA member OldGuy who posted on this news in the forum.
We started seeing some slight rate increases on EverBank’s 5-year CD in May. Those rate increases picked up in July until the yield reached 2.05%. The rate has fluctuated since then. It dropped back down below 2% in August, and then went up to 2.01% in early September. It remained at 2.01% until late October when it fell to 1.96%. Based on this history, I’ll be surprised if this current 2.01% holds for a long time.
One important downside with EverBank’s 5-year CD is a harsh early withdrawal penalty. According to page 50 of EverBank’s Personal Account Terms, Disclosures & Agreements document (available at EverBank’s terms & conditions page), the early withdrawal penalty will be equal to 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of the total interest that would have been earned on the principal balance of the account if funds had not been withdrawn prior to the maturity date. For a 5-year CD that's 15 months of interest which is above average for early withdrawal penalties.
EverBank has some advantages over other online banks. First, its IRA CDs have the same rates as the regular CDs, and you can apply for the IRA CDs using an online application. Second, EverBank is one of the few internet banks that allows for both trust accounts and custodial accounts.
Yield Pledge Money Market and Checking Accounts
For those who don’t want to lock into a long-term CD, EverBank continues to have a good short-term deal. EverBank’s offers an attractive 6-month intro rate for its Yield Pledge Money Market and its Yield Pledge Checking. As of 11/15/2013, the 6-month intro rate is 1.10%. This applies to balances up to $50K on the money market account and $100K on the checking account. Also, the intro rate applies only to new money for first-time holders of the checking or money market accounts.
|EverBank||0.61%||$100k||$10m||Yield Pledge Checking - Ongoing Client|
|EverBank||0.61%||-||$10m||Yield Pledge Money Market - Ongoing Client|
The current ongoing rate is 0.61% for the money market account. This is also the ongoing rate for the top tier of the checking account. For more details about these promotions and account features, please refer to my review of the EverBank checking and money market accounts.
EverBank operates as an internet bank offering its products online for people in all states. However, for those in Florida who prefer to bank at a brick-and-mortar office, you may also want to consider EverBank. They have several branches throughout the state, and I confirmed with EverBank that all of its domestic banking products listed on the website are available at its branches. I have more details in this EverBank Florida review.
EverBank has an overall health grade at DepositAccounts.com of a B+ with a Texas Ratio of 22.99% (average) based on June 2013 data. It's one of the larger internet banks with over $18 billion in assets. Please refer to our financial overview of EverBank for more details. EverBank has been a FDIC member since 1998 (FDIC Certificate # 34775).