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