EmigrantDirect Now at 4.50% - Plus New 5% CDs
Mar 15, 2006 - 11:46 AM by Ken Tumin
EmigrantDirect raised the yield on its American Dream Savings Account from 4.25% to 4.50% APY today. The last rate hike by Emigrant was January 26th when it raised the savings account rate from 4.00% to 4.25% APY. These last two rate hikes have been disappointing. I was hoping for at least another 0.5% rate hike like it did last September.
Instead of making news with the highest savings rate, it looks like Emigrant is trying to make headlines with new products. In January it was the new cash back credit card. Now Emigrant has come out with certificates of deposit which can be purchased online by transfering the funds from your existing Emigrant savings account. The terms range from 18 months to 10 years. All earn 5.00% APY. The minimum opening deposit is $1,000. The penalty for early withdrawal is 180 days of interest.
The CD opening process looks easy. This would be a good deal if shorter terms were available. A 6-month 5% CD would be nice. However, a 5% 18-month term is not that good when the best 12-month CDs are up to 5.15% APY.
Instead of making news with the highest savings rate, it looks like Emigrant is trying to make headlines with new products. In January it was the new cash back credit card. Now Emigrant has come out with certificates of deposit which can be purchased online by transfering the funds from your existing Emigrant savings account. The terms range from 18 months to 10 years. All earn 5.00% APY. The minimum opening deposit is $1,000. The penalty for early withdrawal is 180 days of interest.
The CD opening process looks easy. This would be a good deal if shorter terms were available. A 6-month 5% CD would be nice. However, a 5% 18-month term is not that good when the best 12-month CDs are up to 5.15% APY.
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Anonymous - #1, Thursday, March 16, 2006 - 9:28 AM
agreed.
i have elft my short term $ in EM for awhile now, and 4.5% is decent enough to prevent me form the hassle of keep moving $ around.
but those CD's they are offering are silly.
Banking Guy (anonymous) - #2, Thursday, March 16, 2006 - 12:52 PM
That's a good point about Emigrant's strategy. Once you've grown big, your main concern is to keep members not necessarily attract new members. You don't need the highest rates to do that.
Anonymous - #3, Thursday, March 16, 2006 - 11:22 PM
on the plus side, i can say that i have never had a problem with ED
When i initiate a transfer to my bank account, i usually get it within 2 days.
and i have ED linked to fidelity and a regular checking acount at a bank.
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