Virtual Bank: 2.6% APY on balances below 10K and 2.4% on the entire balance if it is above 10K

I just got this in an email from Virtual Bank:

Dear Valued Client,

At VirtualBank, we value your business. It is important to us that we provide you with timely information regarding your bank account.

Periodically, we may change the terms and conditions associated with your bank account. The purpose of this letter is to notify you that we are making a change to the Rate and Fee Schedule (Including Truth in Savings Disclosures) of your eMoney Market account. The revised Rate and Fee Schedule will be effective January 10, 2005.

The changes to the eMoney Market account are highlighted in red below. To view the entire Rate and Fee Schedule (Including Truth in Savings Disclosure) please click on the following link: Rate and Fee Schedule.

Summary of Changes: The eMoney Market account will now have five tiers. The interest rate and annual percentage yield paid on your account will be based upon your daily balance in the account.

Effective January 10, 2005 the following changes will be made to the Rate and Fee Schedule (Including Truth in Savings Disclosure):

Rate Information - This account is an interest bearing account. The interest rate on this account is as indicated on the Bank's "Current Rates and Yields" which reflect the current interest rates and annual percentage yields. These APYs can be found on the Bank's website at www.virtualbank.com.

There are five rate tiers on this account.

If the daily balance is less than $10,000.00, the interest rate paid on the entire balance in the account will be as indicated for that rate tier on the Bank's "Current Rates and Yields".

If the daily balance is more than $9,999.99 but less than $25,000.00 the interest rate paid on the account will be as indicated for that rate tier on the Bank's "Current Rates and Yields".

If the daily balance is more than $24,999.99 but less than $50,000.00, the interest rate paid on the account will be as indicated for that rate tier on the Bank's "Current Rates and Yields".

If the daily balance is more than $49,999.99, but less than $100,000.00, the interest rate paid on the entire balance in the account will be as indicated for that rate tier on the Bank's "Current Rates and Yields."

If the daily balance is more than $99,999.99 the interest rate paid on the entire balance in the account will be as indicated for that rate tier on the Bank's "Current Rates and Yields."


Thank you for your business. It is our pleasure to serve you.

Sincerely,

VirtualBank Client Services


Update: I did not notice it posted in this thread a day earlier.

i been looking for a reason to close this account since most of my cash is in ING anyway. lets hope they give me one fairly soon.

If the max balance you can keep in the account is $100,000, then why is there a "100,000 and up" tier? seems odd...

mikeres said:
Why would you want to put more than $100K into an account, since FDIC will only insure up to $100K per account? If you have more than $100K in cash, I would split it into two different accounts at the same bank, or put some into a second bank.

Insurance is not $100K per account. It is $100K per depositor per type of account (joint, individual, retirement, qualified trust). A two-person joint account could have $200K of insurance if neither owner had any other joint accounts at the institution. You cannot get additional insurance by splitting your deposit into additional accounts of the same type at the same bank.

To clarify for myself, my understanding of the tiers is that if you have 25K, 9,999 of it will earn 2.60% and 15,001 will earn 2.30%?. So discounting other 3% options, VB still earn about 17.50 more than current 2.35 ING. Ofcourse, the higher the balance, the difference will be less and at some point ING will be a few dollars more. That is, if my understanding of how the tiers work is correct.

O.K. Thanks. CSR also confirmed it. I always thought that banks would want a larger deposits from customers so this seems to encourage people with large cash reserve to move their money out and leave only under 10K in. Kind of weird but I'll do that.

Just called in--

The max amount of accounts an individual can open: 2.

So put in less than 10k in each account to maximize this deal, and drop the rest in ING.

(I'll probably put in $9,975 into each, to allow room for interst without going over the 10k threshold. Then set up a $25 monthly auto-transfer to my bank account.)

vakman said: Just called in--

The max amount of accounts an individual can open: 2.

So put in less than 10k in each account to maximize this deal, and drop the rest in ING.

(I'll probably put in $9,975 into each, to allow room for interst without going over the 10k threshold. Then set up a $25 monthly auto-transfer to my bank account.)


Before opening that 2nd VB account, get $20 + $20 if you can refer someone else in your family.

https://www.virtualbank.com/banking/ma_rf.asp

thanks op, i did not catch this before. next month's cash saving goes to virtual bank!