Does anybody know the history of rates at Provident Direct? With ING's rates being so non-competitive, I'm thinking about moving all my cash from them to Provident, but I'd like to have some idea of where their rates have been in the past, relative to other banks. I'm just not the kind of person who chases rates every month, but I haven't found any other info on PDirect besides this thread and the "mother of the daughter of the whoever liquid assets" thread.

EDIT: I think I found the answer to my question, while Provident Bank has been around for a while their "high yeild Provident Direct internet banking" has not, having only been established Sept 2007. So I guess we'll see how the rates hold up or if this is a 'loss leader'.

Here's a link to the rate-chaser-calculator which shows how many days you have to be getting your 'new rate' to make it worthwhile and also show you how much you're making by moving your money.

BankRate.com said:Provident Bank, based in Baltimore, created Provident-Direct, a micro Web site, specifically to offer online, high-yield products. Its online savings account pays 4.5 percent, has no minimum balance requirement, no monthly fees and no online transaction requirements.

"It's been a success in keeping customers," says Lillian Kilroy, managing director of emerging businesses. "We're retaining some balances, we're broadening and deepening the relationships -- and that's where the lion's share of the growth is coming from -- and we're bringing in new customers.

"We've only been offering the online high-rate savings product since September. We look at the rate regularly, but we'll definitely maintain a market leader position from a rate standpoint."

Is it worth it to use this account? And how often have they changed their rates in the past, right now they are higher than alot of CDs

The Provident-Direct savings account just opened November 2007. The bank itself has been around since 1886. I have had a checking account there since 1992.

The 6 transfers out per month limit is a Federal Transfer Limit set by Federal Reserve Regulation D for savings accounts. The purpose of this is to prevent savings accounts from being used like checking accounts.

The reason for this is because your savings account is classified as a “saving deposit” and the reserve requirement on a “saving deposit” is 0%, compared to approximately 10% on a “transaction" or checking account. The reserve requirement is how much of the balance the bank must keep in reserve and not give out in loans. So when Provident Direct gets your $1,000 in your saving account, it doesn’t need to hold any of that in its reserves, it can loan out all one thousand dollars because the reserve requirement on a savings account is 0% (hence the attractive rates). On a checking account (a transaction account) however, they must retain 10% of the balance on hand because the assumption is you will be drawing on your funds more frequently.

This limit is for all savings accounts in all banks (ING, Countrywide, Emigrant, Amboy, you name it).

I have never used 6 transfers out in a month. That's 72 per year. Somehow I have always managed with this "restriction."

Keep in mind when considering customer service and other services, the main reason for the high rate is the low maintenance for an online account. It can be run inexpensively with few employees. If they have to hire numerous CSRs, educate them just to handle this account, and ceaselessly deal on the phone with customers, expect rates to drop precipitously.

I expect the rate to drop anyway with the next Fed rate cut, but it's possible it will still remain a rate leader, because the main reason Provident started the account was to stem the outflow of funds to online savings banks. In addition, their other rates are so low or non-existent they may be able to sustain one account with high rates.

I may have had a role in this as I used to complain when I went into the branch. Their savings and CD rates were way below the online banks and I let them know why I wasn't buying Provident CDs; that I used online banks.

itsus said:gwu1986 said:]T&C seems to indicate a $5 month fee if balance goes below $300.

It doesn't appear to apply to online savings. Under "Savings Accounts" it is subdivided into "Statement & Passbook" and then "Statement, Passbook, & Online Savings." I don't see the fee under "S,P & Online." Look at MM accts for example...They are split into "Premium","Platinum" and "Health." Each has it's own fees listed under it.
Fees Schedule

There is no minimum (although no minimum actually means $1.00) I opened my account with $1.00 and had that amount for a week or so.

Argyll said:In addition, their other rates are so low or non-existent they may be able to sustain one account with high rates.

Indeed, their other rates are HORRIBLE. At first I thought this might be a sign of things to come with the Provident-Direct account and I wasn't sure about opening one for fear of this being a total loss-leader which would resulty in a huge rate drop in 3 months, but then I came to the same conclusion that you did which is that those terrible rates might actually help subsidize their online rates.

Thanks for the post, Argyll.

Has anyone been able to PULL more than 5K from this account?

Anyone else with a regular Provident checking (or savings) accout care to comment?

I mean if I were to be doing a push or pull it would most likely be to or from my regular Provident account, so I'd have to wonder if the 5K limit applies, and/or if the ACH xfer appears immediately or still after 3 days.

Ok... just got off the phone with Stacy in CS. She patched me to online banking w/Amir (800) 962-9644:

As of today 3/17, the initial deposit can be any amount. All subsequent electronic transactions (deposits or withdrawals) are limited to $5000 each, whether generated inside or outside of Provident.

The only way to get more money out is to visit the branch (none in California) or have a "housing branch" cut you a cashiers check and mail it to you.

They're working on removing these restrictions, until then, I'll wait on opening an account.

I have been banking with Provident since 1997 and I did not know they just created the Provident direct. Thanks OP. Plan to open an account to park my cash there.

Signed up, linked to UFB absolute savings. Trial deposit took two days, still waiting for funding. Going to push the rest of my funds from fidelity.

The FAQ says they accept mail deposits, but no info on where or how? Pre paid envelopes? Deposit slips?