EverBank introduced a new CD this month. It’s a step-up CD that EverBank calls the Bump Rate CD. It has a term of 3.5 years (42 months). The Bump Rate CD gives the customer the option of a one-time rate increase to the rate of a current Bump Rate CD. Minimum deposit is $1,500. Maximum deposit is $250k, and you may only hold one Bump Rate CD at a time.
This Bump Rate CD looks similar to Ally Bank’s Raise Your Rate CDs. However, Ally’s 4-year Raise Your Rate CD has 2 options to bump-up the rate. With interest rates likely to rise in the coming years, a step-up CD can look appealing. You might want to review a discussion of step-up CDs in Charles Rechlin’s article “Personal CD Investing: Step-Up and Step-Rate CDs.” Step-up CDs are often not as good of a deal as they seem.
EverBank has a lot of small print for their Bump Rate CD on their Rate Bump CD page. Most of it describes the rate that will apply when a customer chooses to request a rate bump-up. The small print includes all the possible cases including the possibility that EverBank only offers Bump Rate CDs with different terms and the possibility that EverBank no longer offers any Bump Rate CDs. For these cases, the customer will have to choose “a term closest to (but shorter)” your Bump Rate CD.
Another important thing mentioned in the small print is that EverBank will not provide any notice to you when their interest rates change. It’s the responsibility of the customer to monitor rate changes and to decide when it makes sense to request the rate bump-up. DepositAccounts.com can help with that. In our Bank Alerts page, you can set up rate alerts for any bank or credit union, including EverBank.
EverBank Increases CD Rates - Top Rates for Several Terms
EverBank often changes rates, and the rate changes often come on Fridays, and that was the case today. Several of EverBank’s CDs, including the Bump Rate CD, had rate increases. Below is a list of the noteworthy CDs and rate changes:
- 3.5-year Bump Rate CD: 1.65% apy (was 1.62%)
- 5-year Yield Pledge CD: 2.05% apy (was 2.00%)
- 3-year Yield Pledge CD: 1.65% apy (was 1.62%)
- 2-year Yield Pledge CD: 1.52% apy (was 1.51%)
- 1.5-year Yield Pledge CD: 1.40% apy (was 1.35%)
- 1-year Yield Pledge CD: 1.31% apy (was 1.26%)
The minimum opening deposit for any of the Yield Pledge CDs is $5K (used to be $1.5K), with no maximum balance cap. The Yield Pledge CDs and Bump Rate CD are also available as IRAs (Traditional and Roth) earning the same APYs, with the same funding requirements.
EverBank has issued a new document for its “Personal Account Terms, Disclosures & Agreements” dated October 2016. This is available on EverBank’s Terms and Conditions page. There has been a change in the early withdrawal penalty (EWP), however, it appears to be essentially the same as before. The old disclosure specified a 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. The new disclosure simplifies this by specifying the number of days of interest for each CD term. The number of days is close to one-fourth of the term for each of the CDs. For a 5-year term the EWP is “456 days of simple interest.” Below is the excerpt from the disclosure describing the EWP for the Bump Rate CD:
This penalty will be equal to 318 days of simple interest that would have been earned on the principal balance of the account, using the interest rate that applied to the account on the first day of its term, if funds had not been withdrawn prior to the maturity date.
Headquartered in Jacksonville, Florida, EverBank is an internet bank that does have some brick-and-mortar branches that were part of the 2010 acquisition of Bank of Florida. Those ten Florida branches are located on both coasts in Boca Raton, Clearwater, Coral Gables, Fort Lauderdale, Fort Myers, Jacksonville (4), and Naples.
The Bump Rate CD and the Yield Pledge CDs can be opened by using EverBank’s online application or at any of the above mentioned branch locations.
EverBank (FDIC Certificate # 34775) has an overall health grade of “C+" at DepositAccounts.com, with a Texas Ratio of 29.52% (average), based on June 30, 2016 data. In the past year, EverBank has increased its total deposits by $2.33 billion, an excellent annual growth rate of 14.05%. Please refer to our financial overview of EverBank for more details.
Publicly traded on the NYSE, EverBank was founded as the First Alliance Bank in 1998, and shortly afterwards acquired the Marine National Bank of Jacksonville. Within a year, EverBank acquired the world currency division from St. Louis’ Mercantile Bank. Currently, EverBank is one of the largest internet banks in the U.S., with assets in excess of $26 billion, and over 500,000 customers.
On August 8, 2016, EverBank announced that it had entered into a formal agreement to be acquired by TIAA. The acquisition is expected to close in the first half of 2017. According to TIAA's press release, "the combination of TIAA’s existing banking operations and EverBank will significantly bolster TIAA’s banking capabilities and form a full-service banking company."
How the Bump Rate CD Compares
There aren’t many nationally available step-up CDs. The two most prominent internet banks with step-up CDs are Ally Bank and CIT Bank. Their step-up CDs with similar terms are compared below with EverBank’s 3.5-year Bump Rate CD.
|Interest Rate||CD Term / Options (min deposit)||Bank|
|1.65% APY||3.5-Year Bump Rate CD / 1 bump-up ($1.5k)||EverBank|
|1.40% APY||4-Year Raise Your Rate CD / 2 bump-ups (no min)||Ally Bank|
|1.38% APY||4-Year RampUp CD / 1 bump-up ($50k)||CIT Bank|
|1.20% APY||3-Year RampUp CD / 1 bump-up ($25k)||CIT Bank|
The above rates are accurate as of 11/18/2016.