EmigrantDirect Savings Now 4.00%


Update: EmigrantDirect Savings Account rate as of 9/10/09 is 1.30% APY. A higher rate is available at Emigrant Bank's other internet bank, DollarSavingsDirect (see post).

EmigrantDirect increased the APY on its AmericanDream Savings Account from 3.5% to 4.0% today. It comes on the same day that the Fed raised the funds rate a quarter-percent to 3.75%.

I had thought ED might make the big jump from 3.5% to 4.0%. Early in the year its 3.0% rate was way ahead of most other banks for several months. At the time, ING Direct's savings rate was only 2.35%. This allowed ED to gain the reputation as America's highest rate. However, for the last few months, it started to lag many other banks like HSBC which also had a savings account without a minimum balance requirement.

As can be seen from this chart, ED has made fewer rate increases this year compared to ING or HSBC. Instead of incrementally increasing the rate, it just made a quarter-percent increase in March and in July. So I would guess it's likely ED will stick with this 4.0% rate for the rest of the year.

Now the question is how will the other banks respond? My guess is that ING Direct will raise its rate this week to 3.5%. I don't know about HSBC. During most of this year, HSBC has lagged ED. So I don't think HSBC feels compelled to be even or ahead of ED. Its no-minimum 3.75% is still very competitive.

Information on EmigrantDirect

Here are some of my EmigrantDirect related posts which may be useful if you're deciding whether to join.

  |     |   Comment #1
i got an email from E.D. stating a
new credit card? looks interesting.

Additionally, we are also pleased to announce the upcoming launch of a no-fee credit card from EmigrantDirect offering the highest cash back rebate in the country on all your purchases – from the first dollar spent on your card to the very last. This revolutionary credit card featuring platinum-level benefits will be offered only to EmigrantDirect customers and be available before yearend. Cash back amounts will be deposited into your American Dream Savings Account automatically not once, but twice a year for added convenience. If you would like to be sent a priority invitation to apply for the card once it becomes available, please send a quick email with your name and email address to [email protected] We hope that you will become a cardholder and discover yet another way that EmigrantDirect serves and rewards its customers with outstanding value
Banking Guy
  |     |   Comment #2
Thanks for the info. I also got the email. I wonder how much the rebate will be.
  |     |   Comment #3
Emigrant CD rates went down to 5.10% (for all terms).
  |     |   Comment #4
Just got an email from Emigrant. They're offering 3.75% APR on their Dollar Savings Direct acount
  |     |   Comment #5
That email from Emigrant was actually for an account at DollarSavingsDirect.com and the account is not really connected to current Emigrant accounts. One cannot get to the account from Emigrant sessions nor will the DollarSavingsDirect.com account accept Emigrant credentials.
  |     |   Comment #6
rate drop to 1.80
Emigrant Direct Lowers Savings Account Rate
EmigrantDirect has just lowered the yield on its American Dream Savings Account to 4.55% APY (was 4.65%). Emigrant's online bank targeting the Hispanic community, BancoFortuna, also lowered the rate to 4.55% APY. BancoFortuna had maintained the 5.05% for several months after EmigrantDirect first started lowering its rates (see post). I guess the only good news is that there's now parity.

Thanks to all those providing comments on the rate updates.

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Emigrant Direct Lowers Savings Account Rate - Spanish Version Remains at 5.05%
Emigrant Direct lowered the yield on its online savings account from 4.75% to 4.65% APY. They had been offering 4.75% since late September.

Emigrant Bank's online bank targeting the Hispanic market, BancoFortuna, is still offering 5.05% APY. This is the same rate that EmigrantDirect had been offering for over a year before the Fed started cutting rates.

I first reported on BancoFortuna in May after this CNN article. As the article stated, Emigrant is targeting the Hispanic market. Perhaps it hasn't been as successful as they had planned so they're keeping the...

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5.05% Savings Account at Emigrant Direct's Spanish Equavilent - BancoFortuna
Emigrant Direct's online bank targeting the Hispanic market, BancoFortuna.com continues to offer a yield of 5.05% APY on its online savings account. Emigrant Direct lowered the yield on its savings account from 5.05% to 4.75% at end of September.

I first reported on BancoFortuna in May after this CNN article. As the article stated, Emigrant is targeting the Hispanic market. Perhaps they're keeping the yield at 5.05% to continue this targeting.

BancoFortuna also provides an English equivalent page. I suppose this savings account is open to anyone in the US just like...

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New Ways Emigrant Direct is Trying to Grow
There had been some rumors in the last couple months that Emigrant Direct may bump up their savings account rate. I thought there could have been a chance this week after HSBC's 6% promo ended. Don't hold your breath for Emigrant's next rate promo. They've decided to grow in another way. They just launched a clone of Emigrant Direct at BancoFortuna.com which targets Spanish speaking people in the US. As this CNN article explains, growth at Emigrant Direct and in the online savings account market has slowed, so Emigrant is...
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Emigrant Bank's Rating Up from 2 to 4 Stars
Emigrant Bank (the parent of EmigrantDirect) is now rated by Bankrate.com as 4 out of 5 stars (sound). Last July they had been listed as 2 out of 5 stars (below industry average). Here's what Bankrate states in its memorandum:

Six months prior when Emigrant was rated as only 2 stars, Bankrate stated the following:

Things have been quiet over at EmigrantDirect. Perhaps they've been concentrating on their financials rather than new offerings. It has been over 3 months since their last rate change when the savings account rate dropped from 5.15%...

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