A lot of different online savings banks start out with high introductory rates, but as soon as they get a decent amount of business, they lower their rates to be less competitive. For the longest time, this was not the case with Presidential Bank. They had consistently remained near the top of the interest rate ladder, but have  recently dropped down to a very undesirable 2.60%. This is at a time when ING Direct, which is often considered to be slightly lower than the average, is running at 3.00% APY.

There are some additional down-sides that you need to be aware of. the 2.60% APY figure is only for balances up to $24,000. Any dollar amount after that only earns an interest rate of 2.40% APY. There’s also a very high minimum opening deposit to create a new account. You have to at least have $5,000 to start with the bank, which can be quite daunting for many. If you’re a first time saver, you’re better off going with one of Presidential Bank’s competitors.

If you open up a Presidential Bank interest checking account there are some additional features that can be had. You can transfer money back and forth between your checking and savings accounts instantly. So if you need to pay a bill right away, you could transfer the money to your Presidential Bank checking account, and then write a check or pay with your debit card right away. You do get an ATM card with the savings account, which is a nice perk for those who need to take money out quickly. There are some limitations to daily withdraw amounts through your ATM card. You cannot use your ATM card for point of sale purchases though, only withdraws, so you’ll need to use a Presidential Checking account to do that.

Presidential Bank is a pretty solid bank overall. It has been FDIC insured since 1985, and Bank Rate gives it an excellent rating at four out of five stars.

Should one open an account with Presidential Bank? The answer is probably not. They used to have some of the best rates out there, but not anymore. There are other banks that we have reviewed with fewer restrictions that offer better interest rates. If you have a very high balance, Presidential Bank is definitely not the place to go because of their $35,000 cap on the 2.60% APY. If you don’t have $5,000 to put in right away, Presidential Bank is out of the question for you as well.

There is one situation where Presidential Bank might be a good place to put some money, and that would be for an emergency fund. You can get to your money instantly if need be since you can link it to a checking account with them, which would definitely be a winner for that situation. In most cases it’s probably better to go with other online savings accounts with less confusing ACH transfer limitations, opening deposit requirements and interest caps.

This entry was posted on Monday, August 11th, 2008 at 7:25 am and is filed under reviews. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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