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ShoreBank Direct Online Savings Account Rate Increased to 2.15%


ShoreBank Direct has just done something that has been rare this year for banks. It increased the rate of its online savings account. The rate increased from 2.05% to 2.15% APY. There have been a few other rate increases this year at other banks, but in many cases the rates had been uncompetitive before the rate increase.

Refer to my account review for details of this savings account. I also have a rate history at the bottom of that post. Since 2007, they've maintained very competitive rates.

Unfortunately, the rate increase may be due to its financial condition rather than a change in the interest rate environment. It was reported in this Chicago Tribune article that state and US banking regulators have told ShoreBank to "boost its capital levels, improve its asset quality and earnings, and develop a liquidity plan." The bank has "said it was well-capitalized by regulatory standards as of June 30, but is trying to raise an additional $10 million to $30 million in capital."

ShoreBank's ratings for safety and soundness are consistent with the news. BauerFinancial gives the bank one star (troubled) and Bankrate.com also gives the bank one star (lowest). Both ratings are based on 3/31/09 financial data. The deposits in the savings account are insured by the FDIC (FDIC Certificate # 15640).

Thanks to the reader who mentioned this rate change in the Daily News & Deals Post.

For other high-yield savings accounts available nationwide, refer to my weekly rate summary.

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Shane (anonymous)   |     |   Comment #1
Wow! I joined Shorebank on April 1 and its ratings were much better. Basically 4 mos later and they are the worst! Teaches me a good lesson, I figured banks didn't change so much in such a short period of time, but I was wrong. So I moved all money out of Shorebank and into 1st Constitution Bank. Getting a higher interest rate and with a much stronger bank. Thanks!
Anonymous   |     |   Comment #2
Shorebank (Chicago, IL) has been issued a Cease & Desist Notice dated July 14, 2009.
Shane (anonymous)   |     |   Comment #3
Shorebank is lowering their rate effective 11/4 to 1.95%. That coupled with their cease & desist is enough for me. I'm out.
Shane (anonymous)   |     |   Comment #4
Just got a notice that on 12/31 they are lowering their rate to 1.7%. I left a while ago (still have a few bucks in the acct - so I still get email).
Anonymous   |     |   Comment #5