Criteria of a Good Bank: Stability, Rates, Full Service (including Online Banking), FDIC Insured
My criteria (as I frequently state on here) is the bank should be based in the US (or at least FDIC Insured and compliant with US Banking Laws), it should offer high interest rate products across a broad selection of deposit classes, and most importantly – IT MUST BE FINANCIALLY STABLE.
Financial Stability Is the Most Important Quality in a Banking Institution
I’m going to start with the last point: financial stability – as I regard that as the most important criteria for any bank offering online banking / checking / savings accounts – or any other financial products for that matter. We have much to be suspicious of of financial institutions – and regional banks in particular. We know this because the Federal Reserve System has taken over and shut down 124 banks in 2009. Is EverBank at risk of such a failure? Not likely.
EverBank Showing Every Sign of Stability
A coursory examination of the recent press releases from EverBank indicate that they are likely to earn profits exceeding 2008′s performance. I know what you’re saying to yourself, “Yeah, but that is compared with a down year in 2008, right?” WRONG! According to 2008 financials, EverBank earned record profits in 2008 – in arguably the most challenging economic environment in 40 years! It is no wonder then, that deposit accounts grew a staggering 29% in 2009 over 2008 (through Q3 ’09). Everbank’s deposits have swelled to approximately $5 billion from their humble beginnings some 50 years ago.
No one can pretend to predict the future, and short of a personal audit of EverBank’s financial statements there is no way to guarantee the stability of any bank. However in this era of increased Federal Reserve System scrutiny EverBank is reporting record earnings. One would have to believe those numbers are legit given the Fed is monitoring banks closer than ever in history.
Next Criteria: High Interest Rates
When we talk about high interest rates and online banking services, we are saying we expect the deposit accounts to pay competitive rates relative to the rest of the market, preferably across a wide spectrum of products. Upon review of EverBank’s present rate structure, their money market and checking accounts pay very competitive rates.
author’s note: as of this writing in Dec 2009 money market is paying 1.77% – very attractive. Likewise their high interest checking account rates presently stand at 1.72% yield. Although EverBank does not offer ‘by name’ a savings account their money market account and checking accounts pay higher interest than any other currently quoted savings account I could find as of this writing – although some restrictions apply – a fee on the money market on balances less than $5000 (no fee on checking account).
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