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4.34% 12-Month / 4.13% 9-Month CD at VirtualBank


VirtualBank increased yields on several of its certificates of deposit. The 12-month CD now has a yield of 4.34% APY. The 9-month CD is also very competitive with a yield of 4.13% APY. The minimum deposit is $10,000.

This was going to be my first post for today, but WaMu's new 4.50% 12-month CD caused me to go with that first (see post). For those who may already be maxed out at WaMu or may prefer to stay away from them, a VirtualBank CD is another reasonable choice. With these two recent CD rate hikes, it's clear that banks are in need of deposits.

Some of the CD features that are listed in their disclosures and the eCD page include:
  • CD can be funded by ACH transfer from an external checking account
  • Trial deposits are used to verify the checking account
  • Wire transfers and mail in deposits are not available
  • Joint and Trust accounts can be selected
  • One beneficiary can be included in the online application
  • Early withdrawal penalty equals: 1 month interest for 3 month term, 3 months interest for 6 and 9 month term, and 6 months interest for one year or longer terms. Penalties applied whether interest has been earned or not.
  • Grace period at maturity is 14 calendar days
I called VirtualBank this morning for some more details, but after being on hold for 20 minutes, I gave up. Perhaps this high rate is causing a flood of calls.

I've had a VirtualBank eMoney Market account since 2005, and in early 2006 I opened a 6-month VirtualBank CD. Both the opening and closing process went okay for me. There were a few small complications with the application. Things may have improved since then. I was able to fund the CD with money from my eMoney Market account. Note, at top of their CD application page, there's a button that says "Existing Clients Click Here to Apply". From here, you'll have to log in to your VirtualBank account to complete the CD application. At maturity, I instructed them via secure email to close the CD and transfer the money back into the eMoney Market account. The money was transfered without problems.

eMoney Market Account

The eMoney Market Account doesn't have a history of consistent high rates. The rates have become more competitive lately, but the competitive rates now require a balance of at least $50K. The yield for balances under $10,000 remains low (currently 2.53% APY). The other downside to this account is that it can only be linked to checking accounts. They do allow up to 4 links, but they require you to mail in a voided check to set up the link. Below are some other important features:
  • $100 minimum to open
  • There are no monthly fees if you go under $100. It seems from their disclosure that you can go as low as $0.01 in balance without account closure or monthly fees.
  • It really should be called a savings account since it doesn't have check writing.
  • After the first account linkage, you do need to send in a check to create an additional link. They allow up to 4 linked checking accounts.
  • There's a $50 fee if you close the account within 90 days. There doesn't seem to be any closure fee after that.
  • VirtualBank places a 10 business day hold on deposits made in the first 30 days. So you cannot withdraw during this time. After these 30 days, the hold is 3 business days.
  • After 12 months of inactivity, VirtualBank starts charging a $5/month fee.
  • Refer-a-friend bonus system
VirtualBank is a division of Lydian Private Bank which is based in Florida. Lydian Private Bank has been FDIC insured since 2000 (FDIC Certificate # 35356). The bank has a 2-star rating (below peer group) at Bankrate.com based on 3/31/08 data. This is down from 3 stars a year ago. BauerFinancial gives the bank 3 stars (adequate) based on 3/31/08 data.

Related Pages: Virtual Bank, Miami, CD rates, savings account

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scott (anonymous)   |     |   Comment #1
Just a heads up, I just did the application and unlike most banks rate is not locked when you submit application. Rate is not locked until you verify trial deposits which could take up to 3 days to show up in your account

"Congratulations! Your application is complete and has been submitted.

After your application is reviewed, these simple steps will occur.
Within three business days after your application is approved, VirtualBank will send two small deposits to your personal checking account which you will need to verify in order to validate account ownership.
To verify the amounts of the two deposits you will need to review your transaction history at xx
To let us know that you verified the two deposits, you will need to confirm the amounts by going to Review Application on the VirtualBank homepage and entering the amounts of the two deposits.
Your eCD will be opened within 2 business days after you complete the above steps.
The interest rate and Annual Percentage Yield in effect on the day you confirm the deposits is the interest rate and APY that will apply to your eCD.

Please keep in mind that rates are subject to change. Your interest rate is not guaranteed until your account has been fully funded. It is important that you confirm your two small deposits as soon as possible.
Thank you for applying with VirtualBank."