E-Loan is one of dozens of different online savings accounts that consumers can use to earn much higher interest than if they were to put their money with a traditional large bank. E-Loan currently offers one of the higher interest rates among the many different electronic savings banks, but is it where you should put your money? Let’s find out if E-Loan is right for you.
E-Loan it self was founded a decade ago by Chris Larsen. Originally the company’s business plan was to provide mortgage loans over the internet. It was the first company to provide consumers their credit score for free in the year 2000. In 2006 it expanded and added certificates of deposit and savings accounts to its lineup of financial products. It’s certainly not one of those banks that have been around for two centuries, it does however have a lot of experience with new banking technologies that some of the smaller online savings banks that are branches of regional banks may not.
Currently E-Loan offers an annual percentage yield of 5.25%. This is one of the better rates among the online savings world. Right now accounts range anywhere from 4.5% to 5.35%. It might not be the absolute highest, but it’s certainly near the top. In addition the account features no minimums and no fees; however it does require a rather large minimum opening deposit of $5000, which may eliminate it as an option for savers starting out with not a lot of money. The account it self has no fees to speak of, which is par for the course for most online savings accounts.
The opening process is very straight forward and easy compared to a lot of online savings accounts which use third party systems to handle their transactions. You can fill out an application online which asks for pretty standard information, nothing too bad. You’ll then have to provide account information for your initial ACH deposit which has to be at least $5000. You’ll be able to instantly log into your account, but you won’t be able to make any changes until you verify the two small deposits that they place in your checking account. After that your savings account is ready to go. There’s no waiting for a letter in the mail to arrive, confusing questionnaires, or having to call customer service. It just works.
Overall the interface is very clean in simple. Transferring funds is a very streamlined process, but you might need to answer a security question before doing so. E-Loan will deliver your statements electronically, and the interested is compounded daily. E-Loan does not perform a hard credit pull so that your credit score will not be affected. Bankrate.com gives E-Loan a 3 star rating, which is more than sufficient.
There are a couple of minor downsides to the account. If you use the Yodlee Money center, you won’t be able to view your account information from that service. In addition, you can only have one external account that can only be changed four times a year. There’s also the $5000 minimum opening deposit which can be a bit much for some people.
Overall it’s a very good savings product with an extremely competitive rate from a company that knows what it’s doing when it comes to online financial products. If you can spot the $5000 opening deposit and don’t mind the couple of minor inconveniences with the account, it’s a very good place to put your money.