EmigrantDirect Press Release - 5% CD rather than 5% Savings Account

EmigrantDirect issued a press release last Friday announcing the reduced minimum maturity of their My Way CDs from 9 to 6 months and also the new 4.65% APY savings account rate. One thing I found odd was their use of the term "groundbreaking":

Responding to market conditions and high demand for its recently introduced groundbreaking "My Way" Certificate of Deposit that had guaranteed customers five percent interest for anytime between nine months to 10 years -- EmigrantDirect today has reduced the minimum maturity to six months.

Even if these CDs had an APY of 6%, I don't know if I would classify them as groundbreaking. ING Direct has long offered CDs that can be opened online. And even ING has rates higher than 5%.

Another interesting quote from this press release was Emigrant Bank CEO's remark on the 5% rate:

"Many of our customers are seeking that 'magical' 5% return," said Howard Milstein, Chairman and CEO of Emigrant Bank, the parent company of EmigrantDirect.com. "Now they have the return by committing their money for a very short period of time."

A 5% CD rate isn't magical, but a 5% savings account rate is. With a credit union offering 5.25% APY on a no-minimum savings account (post), I'm not even sure 5% on a savings account should be considered magical. Friday's rate and term changes at EmigrantDirect were disappointing. I was hoping for at least a bump of 0.25% on both the savings and CDs. A 0.50% bump in both would have been very respectable.

But I guess with growing deposits, there's less of a need to be the rate leader. The press release ended with this:

EmigrantDirect's American Dream savings account has attracted more than 225,000 customers and $6 billion in deposits since opening in January 2005, making it the fastest growing and most successful Internet bank in the country.