DollarSavingsDirect Savings Account Is New Rate Leader

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Deal Summary: Dollar Savings Account 3.00% APY, $1 minimum initial deposit.

Availability: Nationwide (internet bank)

Emigrant Bank’s second online division, DollarSavingsDirect (DSD), increased the rate of its Dollar Savings Account from 2.00% to 3.00% APY yesterday. For those who followed online banks back in 2005, this should remind you of EmigrantDirect, which was the first to have a 3% APY during the 2004-2006 rate hiking cycle. EmigrantDirect was the first online division of Emigrant Bank.

APYMINMAXINSTITUTIONPRODUCTDETAILS
3.01%--DollarSavingsDirectDollar Savings Account
Rates as of October 4, 2022.

When DSD was launched in 2008, its rate was very competitive, and that lasted for a couple of years, but from 2011 through early 2017, it was uncompetitive compared to other online banks. During these years, Emigrant Bank launched its third online bank, MySavingsDirect (MYD). From its launch in late 2013 through most of 2016, MYD remained competitive. DYD became the competitive online division in April 2017 as the Fed was just ramping up rate hikes in its 2015-2018 rate hike cycle. DYD and MYD flipped again in 2018 with DYD becoming uncompetitive as MYD became the competitive one. MYD’s competitive streak ended in early 2020.

As you can see in DSD and Emigrant Bank’s history, Emigrant Bank uses one of its online divisions to attract deposits while existing customers at its other online divisions remain in low-rate accounts. This makes it less costly for Emigrant Bank to offer competitive rates. Those customers who don’t move their money when rates become uncompetitive lose out.

Based on this history, DSD may remain a good deal for a year or two before it loses its competitiveness. This is unlikely to be a good long-term deal, but if you can make sure to move your money once rates fall, it can be a good short-term deal.

Dollar Savings Account Features

DSD’s Dollar Savings Account has no minimum balance, and all balances earn the stated APY. There are no monthly maintenance fees.

In the initial online application, you must establish a link to an existing checking account which will serve as the funding account. Initial funding can be done with ACH transfer from this checking account or by mailing in a check. The check can only be from this checking account. Future deposits must be done by ACH transfers.

A single beneficiary can be designated during the online application. You will need the beneficiary’s address, social security number and the phone number.

DSD allows customers to open multiple savings accounts. DSD’s online account management software makes it easy to transfer between the savings accounts. The software also allows customers to designate a separate beneficiary for each savings account. These features make insuring deposits over $250k fairly simple, with this DollarSavingsDirect document illustrating how this can be accomplished.

If you want to ensure the vast majority of your savings goes to just one beneficiary and still insure over $250k, this can also easily be done. Please refer to my blog post Maximizing Your FDIC Coverage with Beneficiaries.

ACH Transfer System

An important downside with Emigrant Bank’s online divisions has been that they don’t allow ACH withdrawals that are initiated from other banks. If you open a DSD account, you’ll have to depend on its ACH service to make ACH withdrawals.

After speaking with an DSD CSR and reviewing my earlier blog posts on Emigrant Bank and its online divisions, I was surprised to see that not much has changed over the past 17 years. The ACH details are the same as when I first wrote about DSD in 2008. And if memory serves me right, I think EmigrantDirect listed the same features when it began in 2005. Below is the list of the important ACH features:

  • No ACH withdrawals initiated by another bank. External ACH deposits are allowed (CSR).
  • Maximum of 2 linked accounts which includes the initial funding account (Q&A).
  • Linked accounts can only be personal checking accounts (Q&A).
  • No sooner than 60 days after the establishment of your DSD savings account, a second external account can be added (Q&A).
  • Establishing second linked account requires mailing in a voided check and form (Q&A).
  • Maximum amount that can be transferred via ACH (in/out) is $500,000 (CSR).

Here’s some good ACH news - transfers are fast, with customers reporting ACH transfers that only take one business day to complete. On the other hand, there is a five business day hold time for ACH deposits.

Availability

As an online division of New York City's Emigrant Bank, DSD has no brick-and-mortar branches and any account with DSD must be opened online.

As stated on the FAQ page, opening a DSD Account “is quick, easy and convenient.”

Just click on the Open Now button on our home page. The only requirements are that you are at least 18 years old, have a valid tax identification number, a legal address and a personal checking account in a US bank. If you still have questions, please call Customer Service at 866-395-8693.

Bank Overview

DollarSavingsDirect (along with EmigrantDirect and MySavingsDirect) is an online division of Emigrant Bank, and operates under Emigrant Bank’s FDIC Certificate and shares its financial history.

DollarSavingsDirect/Emigrant Bank has an overall health rating of "B" at DepositAccounts.com, with a Texas Ratio of 16.67% (above average), based on June 30, 2022 data. Deposit growth has been weak in the past year with a loss of $268.61 million (-7.32%) in non-brokered deposits. This is likely an important factor in the competitive DSD rate. One positive is the Bank’s excellent capitalization level (26.03%), the result of holding $5.61 billion in assets with $1.46 billion in equity. Please refer to our financial overview of DollarSavingsDirect/Emigrant Bank (FDIC Certificate # 12054) for more details.

Launched in 2008, DollarSavingsDirect was the second online banking division created by Emigrant Bank. The first was EmigrantDirect which was launched in late 2004. The third came in 2013 with the launch of MySavingsDirect.

Emigrant Bank was founded by 18 members of the Irish Emigrant Society in 1850 as a mutual savings bank. By the 1920s, it had grown to become the largest savings bank in the nation. In support of its “hometown,” the Bank invested substantial funds into the New York City community, underwriting constructions loans for Saint Patrick’s Cathedral and a public works project that later became Central Park.

In 2013, the Milstein Family (owners of Emigrant Bank) sold 29 of its 31 branches to Apple Bank for Savings. The remaining two branches are located in New York City and Ossining (Westchester County). In addition to its online banks, Emigrant Bank retained its lending platforms and its residential mortgage, mixed-use and small business lending businesses.

Emigrant Bank is currently New York’s 24th largest bank with assets in excess of $5.6 billion, and is also the largest privately owned bank in the country.

How the DollarSavingsDirect Savings Account Compares

When compared to nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, that do not require large balances or direct deposit and do not have small balance caps, the DSD Dollar Savings Account currently ranks first.

APYAccount NameCredit Union/Bank
3.00%Dollar Savings Account (no min/no max)DollarSavingsDirect
2.75%High Yield Savings Account ($1 min/no max)Axiom Bank via SaveBetter
2.75%Money Market Deposit Account ($1 min/no max)mph.bank via SaveBetter
2.75%Money Market Deposit Account ($1 min/no max)SkyOne FCU via SaveBetter
2.65%Connection Plus Savings Account ($2.5k min/no max)ConnectOne Bank
2.61%UFB Rewards Money Market Account (no min/no max)UFB Direct
2.61%UFB Rewards Savings Account (no min/no max)UFB Direct

The above information and rates are accurate as of 9/21/2022.

To look for the best rates on liquid bank accounts, both nationwide and state specific, please refer to our Money Market Accounts Table and Savings Accounts Table.

Related Pages: savings accounts, nationwide deals, Internet banks

Comments
payitforward
  |     |   Comment #1
Too risky for me. Shouldn't be too long before one of the more stable fi matches or exceeds DSA's savings account rate.
Nonchalance
  |     |   Comment #2
I applied for an account yesterday, and was declined. Never happened to me before and I checked my credit report and everything is in order, as always. They blamed Chex Systems and I have not followed up with Chex to see what they considered an issue. With Dollar's ACH barriers, it's just as well.
paulalmony
  |     |   Comment #5
Chex Systems hands out low scores, indicating a credit risk, if there are numerous new accounts - even if the accounts are all at the same bank (i.e., a savings, checking and money market account at the same bank). It is amazing to me that they are getting away with slandering people's credit worthiness when opening an account is not indicative of being a credit risk.
fdic
  |     |   Comment #24
same nonsense here
fdic
  |     |   Comment #25
same non sense here as well
Mikeebo1965
  |     |   Comment #35
Same thing happened to me. My credit score is over 800. No good reason to reject me.
Hojo20
  |     |   Comment #3
I figure after tomorrow's Fed announcement of a rate hike, there should be more banks close to the 3% mark.
RichReg
  |     |   Comment #4
The Fed meeting is today,...and so is the announcement.
deplorable_1
  |     |   Comment #6
Great write up as usual Ken. Thank you for the $500,000 ACH transfer confirmation.
I would be interested to know if this statement about Emigrant's right to refuse withdrawals is a non stated banking standard or something unique to Emigrant bank since it has sparked much controversy here in the comments.
Refusal to Permit Withdrawal
The Bank may refuse to permit withdrawals in cases such as, but not limited to, the following:
1. The Bank chooses to exercise its legal rights to require up to 60 days advance written notice of any intended withdrawal from this Account and the 60 days have not passed since we received the required notice from you.
deplorable_1
  |     |   Comment #7
Just logged in an can confirm the rate is now 2.96% APR which works out to 3% APY
111
  |     |   Comment #8
I have a couple bucks in my DSD Dollar Savings Account started back in 2018 but never really funded - I think because some other bank with fewer restrictions came out with a better rate at nearly the same time. I've meant to close it a few times since but never did. Guess I'll just leave it open for now and see what happens with rates overall. Yes, the website shows I'm getting an APR of 2.96% and an APY of 3.00% (without me having to call or message them).

One thing I'll say for them - they haven't charged an inactivity fee in 4.5 years!
P_D
  |     |   Comment #9
"Maximum amount that can be transferred via ACH (in/out) is $500,000 (CSR)."

Per transfer with unlimited transfers? Per Day? Per Month? Other?
deplorable_1
  |     |   Comment #11
I believe that is per day PD and would include ACH in and out on the same day.
spoofeeDotCom
  |     |   Comment #28
Geez, you guys are moving too much. FDIC only insures up to $250k correct?
fred_b
  |     |   Comment #10
Do they do a hard pull of your credit report? Do they use ChexSystems or EWS?
I'm hoping one of my existing accounts goes to 3% shortly.  I'm planning to finally ditch HMBradley.  HMBradley has been paying me 3% for quite some time, but they have a lot of activity requirements and they are about to reduce their credit card cash back.  It was worth it until now.
remmymo
  |     |   Comment #12
Sounded great until I read the fact that they have the right to deny a withdrawal request without 60-day prior notice
remmymo
  |     |   Comment #13
Sounded great until I read their policy that allows them to deny a withdrawal request without 60-day prior notice
Rickny
  |     |   Comment #14
Had an account with DD in 2018 when they were paying the highest rate on savings accounts. Never had a problem with withdrawals. Emigrant Bank is a strong bank in NYC and has been around for over a century. They also updated their website to state: "Dollar Savings Account America's Highest Rate* ". When they had this statement on their website before they did have the highest rate. (*Nationally advertised annual percentage yield for day of deposit to day of withdrawal accounts, no minimums).

I doubt they will ever use the 60 day restriction. I wouldn't be surprised if they lower the rate after awhile and change the statement on their website. They have done this before.
P_D
  |     |   Comment #15
I had an account with Emigrant probably about 100 years ago when they started.

Clearly the 60 day clause is meant for a financial crisis.  So could it happen?  If it did it wouldn't be the first time banks had a financial crisis.
P_D
  |     |   Comment #16
There are a lot of parallels between the current economy and the Carter economy of the 70s, most prominently runaway inflation. Would not be surprised if savings account rates approach or even exceed CD rates as the yield curve continues to flip signaling a severe recession in the making. This might be an early sign of what is to come.

In a high inflation economy like this you get paid to borrow money and punished to save it.  So depositors understand you don't want to lock that punishment into a long term CD.
milty
  |     |   Comment #17
There has been high inflation during other administrations as well: Nixon (6%), Ford (11%), Reagan (10%), Bush-1 (5%) . So, there are other parallels regarding inflation, but the big difference has been the Fed keeping rates at historically low rates since 2008. Even if the Fed raises rates by 1% today, they will still be historically fairly low, going back to 1955, that is.
https://www.usinflationcalculator.com/inflation/historical-inflation-rates/
P_D
  |     |   Comment #18
There are far more parallels between the Carter economy and the current administration's economy than to any of the others you mentioned. Maybe when the appropriate blog comes around I'll talk about them. Let's hope this administration has something else in common with the Carter administration. I'll leave it at that.
milty
  |     |   Comment #20
I look forward to your further discussion. In the meantime, it appears this administration, like Carter's and some others, is not interfering in allowing the Fed to focus on price stability instead of asset appreciation.

Btw, I had an account with DSD a few years back and don't recall having had any problems.
P_D
  |     |   Comment #21
"In the meantime, it appears this administration, like Carter's and some others, is not interfering in allowing the Fed to focus on price stability instead of asset appreciation."

Political discussion is allowed here as long as it's comedy?
enduser
  |     |   Comment #19
it sounded great until: "An important downside with Emigrant Bank’s online divisions has been that they don’t allow ACH withdrawals that are initiated from other banks."

no thanks not falling for this money trap.
milty
  |     |   Comment #22
#19: That does appear to be the case about allowing ACH deposits from an external FI, but only allowing withdrawals using ACH from DSD's side. Don't know why they do that, but not sure it's a problem (I suppose it might be if the transfer takes several days).  Btw, the account does allow for joint ownership and beneficiary.
payitforward
  |     |   Comment #26
Not allowing ACH transfers initiated from external banks is a huge flag. Essentially, DSD has a built-in wall; the "automated" component of ACH is one-sided.
eskimojoe
  |     |   Comment #37
I had this situation with Regions Bank. I opened checking and savings accounts to get bonuses. The checking worked as normal but when I tried to link the savings from Alliant, the trial deposit worked but the offsetting debit did not and Alliant canceled the link, I would guess most FIs would work the same.
111
  |     |   Comment #29
Ken's article above states “On the other hand, there is a five business day hold time for ACH deposits.”

For anyone who's opened this account and actually used it (I've done the first but not the second) - can you tell us: for ACH deposits, is there also a delay on when interest starts being paid on that deposit? I don't mean for the initial-funding ACH; one might expect a slight delay there. I mean later ACH deposits.

In my experience it's rare but it has happened, that FIs with a hold time on AHC deposits also fail to pay interest on the ACH during that time.
outtempster
  |     |   Comment #30
I don't have an answer, but I know it's possible for banks to hold the ACH without giving interest. BrioDirect is about 7 days.

I wonder what's the hold time on ACH for DSD.
outtempster
  |     |   Comment #32
DSD has 5 days hold time on ACH, for both initial deposit or any ACH deposit later. I would assume once it shows up in your account, it should earn interest but you can't withdraw those fund until after 5 business days, which is a full week.
111
  |     |   Comment #31
I should have mentioned earlier that this bank's "Account Disclosure" form does state, "All deposits will be credited to the Account and begin accruing interest on the business day of deposit." Still, there are enough oddities with this one (e.g., not allowing ACH withdrawals initiated from the other FI, their 5-day hold on ACH deposits, etc.), that it might be useful to know whether anyone has experienced anything different from what their policy states, regarding paying interest.
deplorable_1
  |     |   Comment #33
@111: As I recall you do earn interest on the ACH deposit as soon as it hits the account. It's very similar to the corporate debt accounts where there is a 5-6 business day hold on deposits before they become available for withdrawal but interest is earned immediately. You have to time everything just right when using them for a bill pay account vs. a typical checking account. Wise to keep a bit extra in there always available just in case.
111
  |     |   Comment #34
Thanks. I probably won't use them for billpay. Just for "liquid storage" while deciding what to do.
outtempster
  |     |   Comment #36
Anyone has experience on how fast or slow the account is opened? and when they notify you the account is opened, do they already have your initial funding in account, or not in account but withdrawn from your linked external checking account?
outtempster
  |     |   Comment #38
if people want to know, it tool 7 days for the account to be opened. there is 2 days on the weekend, so 5 business days, basically a week to have the account open, in my case.
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