In October, EBSB Direct introduced its Money Market Special 3 (MMS3), the successor to its Money Market Special 2, which had been added to the product line in May. In the beginning of December, EBSB Direct stopped accepting applications for the MMS3. As of this week, the MMS3 is available again, with the same rate tiers offered in October.
- 0.00% APY – Less than $10 balance
- 0.25% APY – $10-$9,999.99 balance
- 1.25% APY – $10,000 -$1,999,999.99 balance
- 0.58% APY – $2,000,000 and above balance
|1.25*%||$10k||$2m||EBSB Direct||Money Market Special 3|
|OTHER TIERS: 0.25% → $10 - $10k | 0.58% → $2mm+|
Note: the MMS3’s fine print states "New money only," yet there is no mention of new money in the Agreements and Disclosure brochure. According to CSR, MMS3 does require new money, but existing EBSB Direct customers are “not prohibited from opening a Money Market Special 3 account.”
Having established the pattern of MMS2 and MMS3, I was curious why this new offering wasn’t called Money Market Special 4. CSR stated that since the rate tiers were the same as offered on the original MMS3, this really isn’t a new product, just an older product made available again. Fair enough.
I then asked if owners of the “older model” MMS3 could open the latest version; CSR said that it was possible, and “would be determined on a case-by-case basis.” I asked because of the recent trend of lowering rates on products which are no longer available to new customers, and then offering a new similar product with competitive rates to bring in new customers. When asked if the rate on MMS3s opened prior to December had dropped, CSR stated, “I can’t answer that question.” That information is only available to MMS3 account holders.
EBSB Direct’s Agreements and Disclosure brochure provides a great deal of information about the MMS3 account, including,
COMPOUNDING AND CREDITING – Interest will be compounded monthly and will be credited to your account monthly. If you close your account before interest is credited, you will receive the accrued interest.
MINIMUM BALANCE REQUIREMENTS – You must deposit $2,500.00 to open this account. If you maintain a $2,500.00 minimum daily balance during the statement cycle, the $8.00 monthly maintenance fee will not be assessed. You must maintain a minimum daily balance of $10.00 in the account each day to obtain the disclosed annual percentage yield.
FEES AND CHARGES - $15.00 fee for each transfer in excess of six during statement cycle.
Nationally Available CD
EBSB Direct is currently offering a 19-month CD, earning 1.61% APY. I say “currently” as EBSB Direct has a history of unveiling limited-time CDs, which last for a few months and then are withdrawn. The 19-month CD requires $1k of new money to open, and is limited to personal accounts.
As stated in the Agreements and Disclosures document, the Early Withdrawal Penalty reads as follows:
A penalty will be imposed if you withdraw any of the principal before the maturity date as follows: terms over 12 months to 36 months the penalty will equal 6 months interest on the amount withdrawn.
DIF Deposit Insurance
For those with large savings, EBSB Direct offers more protection 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 is an subsidiary of East Boston Savings Bank, and as such, has no brick-and-mortar branches. While U.S. resident aliens were able to open an account online in the past, the first page of the online application now states,
If you are not an existing customer of East Boston Savings Bank,
you must be a U.S. Citizen to open an account with us.
Opening and funding the MMS3 and/or the CD must be done online. In the last year, EBSB Direct began to offer its product line nationwide; prior to that change, its market area had been limited to the Northeast.
As an internet subsidiary of East Boston Savings Bank, EBSB Direct operates under the Bank’s FDIC Certificate (# 33510) 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 2.46% (excellent) based on March 31, 2017 data. In the past year, the Bank has increased its total non-brokered deposits by $313.81 million, an excellent annual growth rate of 11.38%. Please refer to our financial overview of EBSB Direct/East Boston Savings Bank for more details.
While EBSB Direct was established in 2009, East Boston Savings Bank (established 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 $2,999.00 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.
168 years later, following growth in size and scope (including a merger with Mt. Washington Cooperative Bank), East Boston Savings Bank is the eighth largest bank in Massachusetts, holding assets in excess of $4.5 billion.
How the Money Market Special 3 Compares
When compared to the 176 Money Market Accounts tracked by DepositAccounts.com that require a similar minimum balance and are nationally available, EBSB Direct's Money Market Special 3 APY currently ranks fourth
How the CD Compares
When compared to the 147 similar length-of-term CDs tracked by DepositAccounts.com that required a similar deposit and are available nationwide, EBSB Direct's 19-Month CD APY currently ranks second.
The above rates are accurate as of 6/30/2017.