No-Minimum High Yield Savings Account Small Print

Feb 1, 2006 - 8:30 AM by Ken Tumin

If you're chasing rates, be sure to leave at least $1 in an no-minimum savings account. Since ING Direct, EmigrantDirect and others claim no minimum, there has been cases where people have had their accounts closed when the balance fell below $1. This example is from fatwallet. The guy transferred all but 50 cents from EmigrantDirect to ING Direct on January 26. EmigrantDirect transferred all the money and closed the account without paying him interest for January.

Others on the thread pointed to EmigrantDirect's fine print which states:

If you close your Account before interest is credited, you will not receive the accrued interest.

Also, the fine print says:

EmigrantDirect is authorized in its sole discretion to close your account with or without cause.

The important point is to make sure you leave no less than $1 in a no-minimum account. Even if you left $10 in the account, you would lose only $0.10/year if that money were making 1% more in interest somewhere else.

Another important point is if you decide to close your account, it's best to close it at the start of the month so you don't lose much interest.

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In order of date posted. - Sort by votes

Loi Tran (anonymous) - #1, Wednesday, February 1, 2006 - 11:00 AM

Some people had their account closed because they did not have any money in their account. Others didn't have any money in their accounts, and did not have their accounts closed, but I'd be safe and leave 1$ too.

Anonymous - #2, Wednesday, February 1, 2006 - 11:13 AM

No point leaving an Emigrant account open. Are they going to lap ING, HSBC or GMAC any time soon? I transferred the remainder of my money out last week, then waited for the 1/31 interest credit, before transferring that out today. I won't even wait for them to close my account automatically. I will just send them a message requesting a closure. Emigrant is dead. Long live the King.

Banking Guy (anonymous) - #3, Wednesday, February 1, 2006 - 11:40 AM

Are they going to lap ING, HSBC or GMAC any time soon?

Before Emigrant did the 0.5% rate jump to 4.0% last September, it looked like they had given up on being the leader. So it's hard to predict.

Anonymous - #4, Wednesday, February 1, 2006 - 4:25 PM

Emigrant could catch up. People that left 1$ in their ING account (even though it was at 3.75% while everyone else was at least 4.5%) were able to quickly take advantage of their 4.75% special recently.

If Emigrant has a special, it's nice to have the account open and ready to receive funds immediately. I'd say the loss of interest on a single dollar would be worth that cost.
Joseph Elwell.

Anonymous - #5, Wednesday, February 1, 2006 - 4:54 PM

Wall Street Journal / Banks dangle high teaser rates

Excerpt:

HSBC Holdings PLC, this week rolled out a promotional rate paying 4.8 percent on its savings accounts until April 30, after which the yield drops to the regular rate, currently 4.25 percent.

http://www.azcentral.com/business/articles/0201wsj-teaser-rates01-ON.html

Banking Guy (anonymous) - #6, Wednesday, February 1, 2006 - 6:49 PM

Joseph, that's a good point about leaving the Emigrant account open. 5% interest on $1 for one year is only 5 cents.

Anonymous, thanks for posting info on that WSJ article. It's a very good article. I plan on posting about it tomorrow.

Anonymous - #7, Thursday, February 2, 2006 - 1:23 AM

Trouble with the higher 'promotional' rates is that, apparently, they only apply to new accounts, so if I already have an account at the bank with the higher rate, I'm not eligible.

No-Minimum High Yield Savings Account Small Print

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