VirtualBank 1.87% APY eMoney Market Account (Guaranteed For 1 Year)

Update 12/22/19: Rate lowered to 1.87%.

Offer at a glance

• Interest Rate: 2.01% APY
• Minimum Balance: $100 to open
• Maximum Balance: None listed
• Availability: Nationwide. However, you must be a U.S. citizen with a valid social security number
• Hard/soft pull: Unknown
• ChexSystems: Unknown
• Credit card funding: Yes, unknown limit. Can fund at least $2,000 No longer allowing funding with a credit card
• Monthly fees: $5
• Insured: FDIC

The Offer

Direct link to offer

• VirtualBank is offering a 2.01% APY rate for the first year on the eMoney Market account.

The Fine Print

• A fixed, 1 year introductory APY is available to clients opening a new VirtualBank eMoney Market account with new money not currently held by VirtualBank. Accounts opened and initially funded with money transferred from an existing VirtualBank account are not eligible for the 1-year introductory period APY
• All bank account bonuses are treated as income/interest and as such you have to pay taxes on them

Avoiding Fees

This account comes with a $5 monthly fee, this is waived with a minimum daily balance of $100. There is also a $15 charge for excessive withdrawals (more than six per month).

Our Verdict

VirtualBank is a division of IBERIABANK. 2.01% APY is the new rate leader for basic savings account rates. That being said I don’t think this account is as good as the 2% APY currently being offered by Popular Bank. Here’s why

• This is really a teaser rate, I imagine the APY after twelve months will drop significantly. Even if the rate is locked for 12 months and they plan to continue to offer a high rate that’s probably not a good thing as interest rates are expected to continue rising (having locked rates for 12 months would be better in a market with falling rates).
• This is only 0.01% better. I hate products that offer a tiny increase over the rate leader just to be advertised as the #1 option. If you want to be the #1 option, at least give an increase of 0.05%.

Personally I think most people are best off with a rewards checking account/card offering up to 5% APY such as the Insight card anyway.

Hat tip to reader Eduardo Baez