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Another Hot Deal is Restricted - Doral Bank Direct

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Doral Direct
Doral Bank Direct has just started to restrict new applications to only 3 states (NY, NJ and CT). It appears their 3.50% CD and savings account promotion may have been too hot. I first reported on this promotion two weeks ago. Just recently a reader noted that a new popup in the application states the following: Currently offered to the following Tri-State areas only: New York, New Jersey and Connecticut.

This comes only days after a similar move by Chesapeake Bank with their new internet accounts at Clear Sky (see post). In that case, they halted all new applications and restricted existing customers of the savings account promotion from making additional deposits.

For Doral's case, at least residents of New York, New Jersey and Connecticut can still get in on this offer: a 3.50% APY 11-month CD and 3.50% APY on the savings account guaranteed for 3 months (see post).

As I had mentioned, this kind of news doesn't bode well for savers. There is a lot of money going into bank accounts. In many cases the deposits are coming in much faster than banks can put the money to good use with loans. Unfortunately, this will put downward pressure on bank rates.

  Tags: Doral Direct, CD rates, savings account

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Comments
10 comments.
Comment #1 by Anonymous posted on
Anonymous
I Disagree that this puts downward pressure on bank rates.
Banks are competing for all the deposits they can get.
With people shopping around for rates.
Moving money from one bank to another so easily now, I believe this will make the banks now having to fight for a depositors money even more competitive!

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Comment #2 by Tsunami Cid (anonymous) posted on
Tsunami Cid
In my opinion, this is good news. People are taking their money out of risky markets and into FDIC insured accounts. It shows the country is growing up a little.

Then again, who am I kidding? It's probably just the same flood of rate chasers taking their money out of Chesapeake and into Doral.

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Comment #3 by JCE (anonymous) posted on
JCE
I was going to move some of my money from DollarSavingsDirect to the 11 Mo CD at DoralBankDirect but unfortunately I live in FL. They should put the tri-state restriction on their main page, it doesn't show up until you actually try to open an account. It seems whenever a good deal is offered you have to jump on it right away before it vanishes.

I believe interest rates will be trending downward for a while because banks are not loaning money out as fast as they are taking it in. Remember banks make money primarily by lending money out (mortgages, home quity loans, car loans, etc) at a higher interest rate then what they pay out in interest on the money they take in (savings, CD's, etc). Since home and car sales are way down the banks don't want to have to pay interest on money they can't lend out. Since many people have taken money out of the stock market and put it into safe savings accounts and CD's there is a surplus of cash being deposited. Simple supply and demand rules then kick in, banks don't need to compete, money is being thrown at them faster than they know what to do with it.

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Comment #4 by Anonymous posted on
Anonymous
Interesting argument JCE, but say you have money in one bank cause they were offering good interest rates, they get flooded with money, they drop or stop cause they have too much money, then people will bail on them faster then they came in, thus leaving said bank right back too were they were before but now they have lent out some of that money.

While another bank-banks may need more CASH, so I believe it goes both ways.

Remember WE hold the power with our hard earned money/savings. WE are the supplier, they are in demand.

Banks always need to compete.

It's like a store, you see a deal for a shirt at one store, you are sure going to look for that same shirt at another and another store for a better deal.

That is supply and demand.

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Comment #5 by JCE (anonymous) posted on
JCE
Anonymous, I have a different understanding of supply and demand. Whoever or whatever is in demand always has the upper hand, and as you stated "WE are the supplier, they are in demand".
This means we are the supplier with too much supply and banks are in demand. They have the upper hand and do not need to raise interest rates to attract new customers. Two years ago 5% APY on savings was common because banks were writing mortgages like crazy and they needed to attract more deposits, that was when WE were in demand because of a limited supply of cash. Banks had to pay premium interest rates to compete for our deposits, now people are jumping at 3.25% and to make it worse banks are getting cash from the federal government.
As far as people bailing out when banks lower rates, the problem is there aren't many better places to move money to, and to move from one bank to another for a minor increase in interest is not something most people will bother to do. Unfortunately I think rates will remain low until the mortgage crisis improves.

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Comment #6 by Anonymous posted on
Anonymous
They are a bad institution & do not return calls or open the accounts as I live in NJ and sent in an application 2 weeks ago. They emailed twice a confirming but never sent the small deposits to allow the ACH. Not one person answers the phones at Doral Bank or it's parent company. No calls or emails are returned!

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Comment #7 by jwbodnar (anonymous) posted on
jwbodnar
I've written the OTS for clarification about this, but my father is a former federal bank regulator (OCC), and he says that the FDIC usually does not allow a bank it insures to limit deposits to only those from a specific geographic region. It can, for example, require a branch visit for a specific product, but an online bank really isn't subject to geographic restrictions other than limiting itself to deposits only from people who live in the country where the bank is chartered. Anyway, I'll provide the OTS response once I hear from them.

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Comment #8 by Amy (anonymous) posted on
Amy
Why they do not answer the phone? I called their customer service several times and held the line for about half an hour each time, no one picked up the phone. Their voice mailbox is full, I can't leave any message. And they don't reply emails. What a bad service this is. I have a CD matured and I mailed them the signature card and it's been more than 10 days, I haven't received the check yet. Is there an institution that I can call to complaint about this?

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Comment #9 by Anonymous posted on
Anonymous
Beware! Very bad customer service. I applied on-line and they completed the ACH with little pain..then a week went buy with no welcome kit, account info etc. I tried calling customer service and waited over 40 mins with no answer so I left a message. I called again three days later and again no answer. Luckily, I work in Manhattan so I marched right into company HQ (623 Fith Ave. 13th floor, next to Saks) and confronted them. The woman was very apologetic & said agreed that they are overwhelmed by the demand. They opened up the account on the spot.

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Comment #10 by Anonymous posted on
Anonymous
If you have been experiencing the same difficulty as other users with this bank, I suggest promptly filing a complaint with the Office of Thrift Supervision. The complaint form can be found at:

http://www.ots.treas.gov/?p=ConsumerComplaintsInquiries

Select OTS Consumer Complaint Form

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