EmigrantDirect Now Officially at 5%

EmigrantDirect increased the rate of its American Dream Savings Account today from 4.80% to 5.00% APY. The rumors about a Fourth of July rate hike turned out to be correct. The last rate hike at EmigrantDirect was on June 22 when the savings account APY went from 4.65% to 4.80%.

Unlike the last two Emigrant rate hikes, this one didn't quite equal HSBC's rate hike to 5.05% APY. I suppose if Emigrant had exactly matched HSBC's rate hike (which would have been the third time since May), Emigrant would have appeared to be just trying to keep up with HSBC. If you have your money at Emigrant, the 0.05% is probably not enough to justify a move of your money since there would be at least a two days of lost interest if you pull the money using HSBC's transfer system.

In addition to the savings account, Emigrant finally raised the rate of its My Way CDs from 5% to 5.35% APY. The shortest term now available is 6 months, up from 3 months. A 5.35% APY 6-month CD is fairly competitive. It currently matches GMAC Bank's 6-month rate. However, for longer terms, it's weak. Based on Emigrant's history on these My Way CDs, the next change we'll probably see is the minimum term drop to 3 months before another rate hike.