Emigrant's New Internet Bank: DollarSavingsDirect

Update 4/22/11: Dollar Savings Direct's yield has fallen from 1.00% to 0.90% APY. Emigrant Direct's yield has fallen from 0.90% to 0.80% APY.

Emigrant Bank has started a new online savings account at DollarSavingsDirect with a yield of 3.75% APY. This DollarSavingsDirect replaces the BancoFortuna website. Emigrant launched BancoFortuna last year with the same features as EmigrantDirect with the intention to target Spanish speaking people in the US. I don't even see a Spanish link at DollarSavingsDirect, so I guess Emigrant has given up with that plan.

Difference Between EmigrantDirect and DollarSavingsDirect?

DollarSavingsDirect appears to have all the same features as EmigrantDirect except one important difference. A minimum balance of $1,000 is required in order to earn the top yield (currently 3.75% APY). If the average daily balance falls below $1,000 during a statement period, the yield drops to 1.00% APY. EmigrantDirect has only one yield for all balances (currently 3.00% APY).

I asked the CSR if there's any guarantee to how long this 3.75% may last. As is typical, it can change at any time. A minimum balance requirement probably will allow Emigrant to pay a little higher rate, but the very competitive yield of 3.75% is probably intended to attract new customers. I wouldn't be surprised for DollarSavingsDirect to become less competitive with time.

Existing EmigrantDirect and BancoFortuna Customers?

Readers who are BancoFortuna customers forwarded me an email that they received from BancoFortuna yesterday informing them of this change. According to the email, BancoFortuna customers will be awarded the higher yield without having to create a new account. However, there is a one-time enrollment process that must be done.

For EmigrantDirect customers, you'll have to create a new account at DollarSavingsDirect. According to the CSR, this account will be separate from the EmigrantDirect account. At least there's no hard credit inquiry in the application (according to the CSR). It would have been better if EmigrantDirect just raised its rate to 3.75% so both existing and new customers could easily take advantage of this higher rate.

Important Account Features

Account features of DollarSavingsDirect (which appear to be the same as EmigrantDirect) are listed in their Account Disclosure and in their FAQ page. Some of the important features include:

• No minimum balance fees
• ACH transfer system available for deposits and withdrawals
• Only two checking accounts can be linked for ACH transfers
• Only checking accounts can be linked, and it requires mailing in a voided check
• Hold time for ACH deposits is 5 business days
• Fast ACH transfers. My past experience indicates EmigrantDirect transfers complete in as little as one day.
• Disclosure states that the only acceptable way to withdraw funds if by logging into their website and initiating an ACH transfer (can't officially debit by initiating from an outside bank account)
• Beneficiary can be added to the account. Refer to the chart mentioned in this FAQ to see how to extend your FDIC insurance.

Emigrant Bank Overview

DollarSavingsDirect and EmigrantDirect are divisions of, Emigrant Bank which has been FDIC insured since 1934 (FDIC Certificate # 12054). The bank's financial ratings aren't too strong: 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both are based on 3/31/08 data. As I recommend with any bank, it's best to keep below the FDIC limits.

Thanks to the readers who notified me of this new account

Dollar Savings Direct Rate History:

• 04/22/11: 0.90% APY
• 01/21/11: 1.00% APY
• 09/21/10: 1.10% APY
• 05/12/10: 1.20% APY
• 03/03/10: 1.30% APY
• 02/09/10: 1.40% APY
• 12/04/09: 1.50% APY
• 10/20/09: 1.60% APY.
• 07/15/09: 1.70% APY.
• 04/28/09: 2.00% APY.
• 03/17/09: 2.05% APY.
• 03/07/09: 2.25% APY.
• 03/03/09: 2.50% APY.
• 02/21/09: 2.65% APY.
• 02/12/09: 3.05% APY.
• 02/05/09: 3.20% APY.
• 01/23/09: 3.50% APY.
• 10/08/08: 4.00% APY.
• 08/08/08: 3.75% APY.

Emigrant Direct Rate History:

• 04/22/11: 0.80% APY
• 01/27/11: 0.90% APY
• 05/12/10: 1.00% APY
• 02/09/10: 1.10% APY
• 12/04/09: 1.20% APY
• 09/10/09: 1.30% APY
• 07/15/09: 1.40% APY.
• 05/20/09: 1.55% APY.
• 03/18/09: 1.65% APY
• 03/10/09: 1.80% APY
• 03/03/09: 2.00% APY
• 02/17/09: 2.05% APY
• 01/20/09: 2.40% APY
• 01/06/09: 2.50% APY
• 12/16/09: 2.75% APY
• 07/31/08: 3.00% APY
• ??/??/??: 2.75% APY