Cost of Wells Fargo Business Checking vs EverBank

For those that don’t know, I’ve been a customer of Wells Fargo ever since I was introduced to the company.  Their products work fine and I have never had any problems with them.  Naturally, when I wanted to open a business checking account, I gave them my business.

Unfortunately, I was misled by the representative in thinking that there are no maintenance fees.  When I asked them about it, they told me that the easiest way for me to qualify is to have a $6,000 average balance.  I just said, “No thanks.  Even if I have all the money in the world, it doesn’t make financial sense to put $6,000 in a non-interest bearing checking account.”  Why?  Let’s take a look at how another company, EverBank that offers a high yield on theirs compare.

Going with EverBank Interest Checking Instead of Wells Fargo

Currently, EverBank is offering yields from 1.39% to 1.84% (depending on your balance).  To top it off, their introductory rate is 2.51% for the first three months!  There is a $3,000 minimum balance fee for its business account to qualify for no fees ($1,500 in the personal account) but if they are paying me interest to have money there, then I’m fine with that.

So let’s calculate the opportunity cost of putting $6,000 in Wells Fargo.  With an approximate calculation, what I’m giving up in interest for a $6,000 minimum balance is (2.51% / 4 + 1.39% * 3 / 4) * 6000 = ~ $100 the first year.  So even when interest rates are at historic lows, I’m still giving up $100 for staying with Wells Fargo.  If I don’t have $6,000 but have more than $3,000, I give up even more because I have to pay for the monthly fee at $12 per month.

Yikes!  I really like you Wells, but it doesn’t make sense for me to stay with you.

Note that this is an example with business accounts.  Personal accounts’ perks are even better because the yield is better and the math is better.  I highly recommend getting an account with EverBank.

Tagged as: Banks, Review