EBSB Direct has unveiled the latest addition to its product line: a High-Yield Statement Savings (HYSS) account, which earns 2.50% APY on balances between $5k and $1m. Balances greater than $1m earn 0.25% APY, with balances below $5k earning no interest.
According to the promotion page, new money is required to open an HYSS and “existing customers must deposit additional money from another financial institution.” In regards to the myriad of Money Market accounts offered by EBSB Direct in the past, existing customers had to deposit a minimum of $10k of new funds to qualify for the stated APY. Neither the promotion page or the Agreements and Disclosure mentions a minimum dollar amount for new funds for the HYSS, but both documents state the minimum opening deposit is only $50.
Here’s a scenario I thought of: if I have $100k in an EBSB Direct 15-month CD (currently earning 2.50% APY) that is maturing in the near future, I could open an HYSS with $50 of new money, and then transfer the CD funds upon maturity into the HYSS. Rather clever, if I say so myself, but I ran it by CSR to see what the reaction would be. CSR agreed with me that the wording about the new money requirement is vague at best, and without specific dollar limitations spelled out, my scenario would work.
That exchange with CSR made me wonder how EBSB Direct enforces new money requirements when they aren't spelled out. To quote Captain Barbossa in The Pirates of the Caribbean,
The code is more what you’d call “guidelines” than actual rules.
Thanks to DA reader, scottj, for his Forum post about this new product at EBSB Direct.
DIF Deposit Insurance
EBSB Direct offers more protection for large deposits through its Depositors Insurance Fund (DIF) membership. The DIF is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at Massachusetts-chartered savings banks. The DIF has been insuring deposits since 1934.
As stated on EBSB Direct's About Us page,
As a member of both the Federal Deposit Insurance Corporation (FDIC) and the Deposit
Insurance Fund of Massachusetts (DIF), all of your deposits are insured in full. That means that every dollar you have on deposit with East Boston Savings Bank is fully insured without limit.
Headquartered in Boston, EBSB Direct (a subsidiary of East Boston Savings Bank) has no brick-and-mortar branches and operates only as an internet bank. While U.S. resident aliens were able to open an account online in the past, the promotion page reads,
You must be a U.S. Citizen to open this account.
Opening and funding a High-Yield Statement Savings account must be done online.
The brick-and-mortar East Boston Savings Bank is also offering the High-Yield Statement Savings, earning the same 2.50% APY. According to the first page of the Bank’s online application,
If you are not an existing customer of East Boston Savings Bank you must be a U.S. Citizen and reside in Massachusetts, New Hampshire or Rhode Island to open an account with us.
Note: when you click on the “Open Account” button on the EBSB Direct High-Yield Statement Savings promotion page, it goes to an online application that displays the East Boston Savings Bank logo. This has been an issue in the past and, in my opinion, EBSB Direct and East Boston Savings Bank are doing themselves a disservice by not delineating the two online applications and dispelling any confusion.
Based on comments made by DA readers in the Forum yesterday, I’m not the only one with concerns.
RZ – Application rejected based on product not offered in my state (WA)
RZ – The bank just called me to inform that the reason my application was rejected because I entered via their main web portal as opposed to ebsbdirect.com. If you click on that way there should be no problems setting up the account.
RZ – May be a simple application but I was just rejected again despite having an old account which still allows me to log in! Will have to straighten it out with a CSR tomorrow but it is often frustrating to say the least in dealing with these online banks.
FYI – RZ’s three comments were made within a six-hour window.
unmesh – I’m in CA and already have an account with them but I too got the “product is not offered in your state” message while applying.
One of my staff contacted the Bank in hopes of making sense of the online application situation, but nothing was actually resolved. The conversation ended with a Bank employee yelling at the staffer, “I’m having a problem with you,” because the staffer continued to press for a better explanation as to why a supposedly nationwide online application was rejecting applications with “product not offered in your state.”
As an internet division of East Boston Savings Bank, EBSB Direct operates under the Bank’s FDIC Certificate and shares its financial history.
EBSB Direct/East Boston Savings Bank has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 1.15% (excellent) based on June 30, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $885.4 million, an excellent annual growth rate of 28.66%. Please refer to our financial overview of EBSB Direct/East Boston Savings Bank (FDIC Certificate # 33510) for more details.
While EBSB Direct was established in 2009, East Boston Savings Bank (founded in 1849) can trace its beginning to the Noddle’s Island area, a center of commerce highlighted by shipbuilding, carpentry, sugar-refining and iron foundries. Those early merchants and world-famous shipbuilders were the leaders in the formation of East Boston Savings Bank.
On January 17, 1849, the first official business day of the Bank, 57 people deposited $2,999 at the Bank’s Maverick Square Office. The next day, the Bank’s Board of Investment voted to purchase 15 shares of stock in the Merchant’s Bank of Boston and so began over 16 decades of growth, prosperity and prudent asset management for the merchants and residents of East Boston.
169 years later, following growth in size and scope (including a merger with Mt. Washington Cooperative Bank in 2010 and Meetinghouse Bank in late 2017), East Boston Savings Bank is the sixth largest bank in Massachusetts, holding assets in excess of $5.6 billion.
How the High-Yield Statement Savings Compares
When compared to the 215 Savings Accounts tracked by DepositAccounts.com that are nationally available, EBSB Direct's High-Yield Statement Savings APY currently ranks first, regardless of minimum balance requirements.
The above rates are accurate as of 10/5/2018.
Looking for the best Savings Account rates, both nationwide and state specific? Please refer to our Savings Account Rates page.