Check out these intriguing ways to invest in high yield savings accounts. Here is how you can use CDs to diversify your investments!
If you’re on the lookout for innovative bank products (like I am) then you may want to turn your attention to EverBank. I’ve had my eye on them for a while now because they are one of the few resources I’d found that offered interesting financial products that I couldn’t find anywhere else and which handily addressed some requirements I’ve had.
Here’s the quick scoop. While EverBank provides many financial services from mortgage banking to investing, they’re actually quite well known for their online banking and consumer products, from high yield checking and high interest savings accounts to money market accounts and CDs that are denominated in both U.S. and foreign currencies. Considered as one of the largest online banks in the U.S., EverBank has received the Forbes “Best of The Web” recognition from 2000 to 2005.
EverBank’s High Yield Investment Accounts
Here’s a quick summary of their product offerings, which are mostly safe savings accounts with a few intriguing exceptions:
1. FreeNet Checking Account
For a no monthly fee high interest checking account, you can take a look at EverBank’s FreeNet Checking Account. They do require an opening minimum balance of $1,500, but if you can afford it, you may want to check out this account for the following features:
- Free unlimited check writing.
- The yield is expected to be in the “top 5% of competitive accounts” across leading banks.
- There’s a 3 month bonus rate of 2.51% but your first year APY depends on the balance you maintain (it ranges from 1.20% to 1.72%) based on your balance amount.
- They are of course, covered by the FDIC.
- Online bill pay is free if you maintain at least $5,000 in the account.
- They’ll pay you $50 if you decide to take your business elsewhere ($50 satisfaction guarantee!).
- Numerous awards including Money Magazine’s “Best of Breed” and Kiplinger’s “Best Checking Account”.
2. Yield Pledge Certificate of Deposit
The EverBank Yield Pledge CD is true to its word — it’s a high yielding certificate of deposit (relatively speaking) that is covered by EverBank’s “yield pledge”, which simply means that the bank ensures that their yields will always be at the top 5% of competitive accounts. Their rates range from 1.05% APY for a 3 month CD all the way to 3.00% APY for a 5 year CD. Accounts are FDIC insured. The only downside is that they require a minimum opening balance of $1,500. Here are more details about this product, including how to apply CD laddering to your accounts.
3. Yield Pledge Money Market Account
Another FDIC insured product, the EverBank Yield Pledge Money Market Account has a 2.51% APY 3 month bonus rate when you start and a first year APY of 1.51% for balances up to $50,000 (if you include the bonus rate). Again, they require an opening balance of at least $1,500. Also, it’s only free if you maintain at least $5,000 in your account, otherwise it’ll cost you $8.95 a month to keep your money here.
4. MarketSafe CD
Okay now we come to the fun part! This is what I particularly appreciate about EverBank — they have a series of “WorldCurrency” products which I look upon as great diversifiers for any investment portfolio. Here’s what I mean: for foreign exposure, most of us own foreign equity mutual funds. But if you’re nervous about the volatility that stocks and currency exchange rates bring, then here’s the perfect product for you: the EverBank MarketSafe CD. What’s interesting is that this offering only comes around once in a while based on current market conditions, so you’ll need to apply for an account prior to a particular deadline (the next application deadline is October 8, 2009) in order to participate in it.
The MarketSafe BRIC CD has a term of 3 years and gives you exposure to the 4 BRIC currencies: the Brazilian real, Russian ruble, Indian rupee and Chinese renminbi. Basically, you’ll make money if the BRIC currencies gain against the dollar upon the CD’s maturity at the end of its 3 year term. If your investment does not increase or goes down in value, you won’t be losing any money. In this case, you’ll get 100% of your principal back after the 3 years is up. So there’s no downside (except the potential loss of interest over 3 years)! It requires a reasonable $1,500 minimum deposit.
It’s something I’m seriously contemplating on as a great way to diversify my international holdings. You’ll need to check up on it now if you want to be part of their next offering.
5. WorldCurrency CDs
If you’re unable to invest in the BRIC CD (because it’s unavailable), then there are still other ways to invest globally with EverBank. They have a ton of other foreign currency based CDs but these carry with them the currency risk inherent in international investments. So it’s safe to say that they’re only FDIC insured for bank insolvency, not for fluctuations in the value of your investment. If you’re interested in exploring diversification through foreign currencies, then you can check out the following products:
- The EverBank WorldCurrency Single CD is a single currency certificate of deposit. Each CD allows you to invest in one of 17 foreign currencies where you’ll be earning interest at local currency rates.
- The EverBank WorldCurrency Index CD is a multi-currency CD that diversifies your funds across several foreign currencies. There are several such Index CDs available that have between 3 to 6 currencies per security, grouped together according to certain commonalities: there’s the Commodity Index CD, Debt Free Index CD, European Opportunity Index CD, Pacific Advantage Index CD… you get the picture.
- World Currency Access Deposit Account: If you don’t want to be locked into a fixed term, then there’s the WC Access Deposit Account, which sounds to me like a money market account that allows you to invest in foreign currencies. This would be a pure currency play. It looks like you’ll need some money to spare for this account, since it requires a relatively higher deposit of at least $2,500. No monthly fees here.
For more on foreign currency investments and research, check out this link!
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{ 6 comments… read them below or add one }
Sweet. I have been looking for a saving/checking account with a decent return and all I found was stuff that was less than 1 percent. Its interesting the checking account has a better return than a 3 month cd.
You’re right, the principal guarantee is the best offer out there. If you think inflation is going to be a problem in the future, then the commodity index CD would be a fantastic decision, because even if most economists get it wrong and the economy goes through a deflationary period first, your principal is protected. You get all of the upside, and none of the downside. It ends up being an FDIC insured investment.
Sad but true that 1.5 – 2.5% is considered a good return nowadays.
I would say Far Eastern and South American Sovereign bonds offer 8% + with minimal risk.
We’ve banked with Everbank since 2006. Everything works flawlessly. We didn’t choose them primarily for their products but rather for their philosophy and management style. We recognized problems in the banking industry at the time we switched and felt Everbank would weather the storm. Return OF principal was far more important to us than return ON principal, but in this case it was a win on both counts. In this day and age, trust is becoming more and more of a consideration as FDIC insurance does not have enough wherewithal to backstop the entire banking industry without destroying the dollar and Everbank’s product offerings of precious metals and alternative currencies reflects this most critical understanding of the systemic banking risk we face. Everbank is the best!
This looks on the face of it, quite good. I’ve been searching for something that offers a decent APR, without committing to much initially, and the min. $1500 makes it very attractive.