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
Make EMIGRANT RATE higher or make some tiers to earn more like:
I tried to link my EmigrantDirect account and the transfer was reversed. I also received an email explaining that only checking accounts can be linked.
They take back the initial small verification deposits. So when you first open the account, they will make two small deposits to your external account, followed by two withdrawals, followed by a third withdrawal for your initial funding for the new account.
If your external account has a monthly limit on withdrawals (like the typical six from money market accounts), these three withdrawals will make quite a dent in your monthly quota.
I signed up on the DollarSavingsDirect website and put in my routing info for ACH transfer. According to the instructions 2 small test amounts would be deposited and withdrawn from my linked account in 2 days, I am then to login to DollarSavingsDirect and verify the 2 amounts. I did not receive any email confirmation after opening the account, I like to get an email confirmation when I am going to give someone my money. Two days later I checked my linked account I saw the 2 small test amounts deposited and withdrawn but I was surprised to see the full amount I was funding the account with was also withdrawn on the same day. I don't know why they bothered with the 2 small test amounts if they transfered the full amount before I could verify the 2 test amounts. I had the money available in my linked account so it wasn't a problem and I was glad there wasn't an additional delay of a day or two waiting to verify the 2 small test amounts. I was also pleasantly surprised that the interest rate increased from 3.75 % to 4.00 % right after I opened the account. I received a confirmation letter in the mail a week later.
Then called dollarsavingsdirect to ask about the 60 day thing.. they said that is only in the case the bank goes bankrupt..... (hopefully they wont)
Lastly i asked about linking it to a savings account. The CSR told me i could not do that.. although their computers won't detect if its a savings or checkings you are transfering money from.. lol
I transfered from my countrywide savingslink.. we'll see what happens....
works for me, just tried it today and 2 days ago. No problems ever
Even people who have had money more than the FDIC limit at banks that have failed havent lost anything....
I guess I could have pursued Capital One at 3.25%, but, for me, I am only putting 10% of my net worth into Dollar Savings Direct, so, if it were held up, I wouldn't be happy, but, would manage.
Thanks for sharing your experiences. Out of curiousity, how long was "your" money held up when your S&L failed?
I don't advise putting your money "in one basket" because if that one place had an issue, you are stuck and could possibly have your money frozen or worse, gone for good. The only investment that I regretted not taking advantage of was when 30 year Treasury bonds were offering over 12% back in the early 1980's. At the time, I thought inflation would never go down. I would still be earning that rate up until at least 2014!
That S&L branch was located right across from the White House. So much for your money being secure next to the President. I discarded all of the S&L statements from that time, but I recalled that it took around 4 months to close out the finance books at that S&L. FSLIC was also liquidated in the process. I had little money at that S&L, so I wasn't concerned about getting my money back even if it took a long time.
One day funding to the account is good. A lot of banks have hold periods for transferred funds. It is probably to prevent fraudulent transfers from being completed in case you illegally moved the money and then tried to move or withdraw it immediately.
The one thing that I noticed regarding Emigrant's Bank rating is that the 1 star applies to this particular bank. There is also an Emigrant Mercantile Bank and Emigrant Savings Bank that have higher ratings. I don't know if they are affliated with each other.
that I didn't loose interest on ACH transfers for those institutions, like I did for Capital One...crooks...eg. they say they received the money on Thursday but the sending bank says it was withdrawn on Mon.). I used premium transfers at Savings Square
(no charge)...Savings Square has a complicated setup (for transfers) but with patience and cordial telephone conversations with bank reps, it can be done.
What this means is another bank can pay a higher rate but it will not count unless they 1) advertise nationally and 2) have a minimum that is exacty $1000 (not more and not less).
Three rate drops in Feb...time to move somewhere else.
In the event the average daily balance in your Dollar Savings Account falls below $1,000.00 during the statement period, your account will receive an APY of 1.00%.
Dollar Savings direct please STOP DROPPING
Where you guys taking your money to???
I'm going with rewards checking from Farmers & Merchants Bank of Virginia until a savings account can come anywhere close (4% up to $50K, 1% thereafter).