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4.00% 16-Month Online CD at Dollar Savings Direct


Update 2/05/09: The CD rate has fallen to 3.00% APY and the savings account yield has fallen to 3.20% APY.

Update 1/05/09: The CD rate has fallen to 3.50% APY. The savings account yield remains at 4% APY.

Emigrant Bank's DollarSavingsDirect is still offering 4% APY on its online savings account for balances of at least $1,000 (as of 12/23/08). However, I doubt this will last too much longer. If you want to lock in 4%, DollarSavingsDirect is also offering 4% APY on a 16-month certificate of deposit. With last week's historic Fed rate cut, this CD is now quite competitive. Emigrant Bank's old online bank, EmigrantDirect has already lowered its rates. EmigrantDirect's savings account APY is now 2.75% and its 16-month CD APY is 3.00%.

Details about DollarSavingsDirect's CDs are provided in this FAQ and in the account disclosure. A few important points regarding the CD include:
  • Must already have DollarSavingsDirect savings account to open CD (The savings account has no minimum balance fees so there's little downside to this)
  • $1,000 minimum balance is required to establish a CD and to earn the APY disclosed
  • Interest will be compounded on a daily basis and credited to your CD on the last day of the month and at maturity
  • Early withdrawal penalty for a 16-month term is an amount equal to 180 days interest (whether earned or not)
  • You may withdraw your posted interest at any time by transferring the money back to your linked funding account
  • 10 calendar day grace period at CD maturity in which you can close the CD without a penalty
  • If you choose to close your CD Account, no interest will be earned during the grace period
Emigrant Bank started DollarSavingsDirect in August 2008. Refer to my review of DollarSavingsDirect for more details. Like many banks these days, Emigrant decided to create a new savings account with high rates rather than raising the rate on its existing savings account at EmigrantDirect. Unfortunately, if you're an EmigrantDirect customer, you have to go through the entire new-account process at DollarSavingsDirect.

DollarSavingsDirect and EmigrantDirect are divisions of, Emigrant Bank which has been FDIC insured since 1934 (FDIC Certificate # 12054).

The bank's financial ratings for soundness have gone down in the last few months. It has dropped from 3 stars to 2 stars (problematic) at BauerFinancial and from 2 stars to 1 star (lowest) at Bankrate.com. These latest ratings are based on 9/30/08 data (old ratings based on 3/31/08 data). As I recommend with any bank, it's best to keep below the FDIC limits.

Related Pages: DollarSavingsDirect, New York, CD rates

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Todd K
Todd K (anonymous)   |     |   Comment #1
Is Dollar Savings a different bank than Emigrant Direct, and therefore I can can keep $250 K at both banks?
Anonymous   |     |   Comment #2
They are one and the same bank.

Dollar Savings Direct is simply a trade name that Emigrant Bank uses to market a set of online accounts. There is no separate bank known as Dollar Savings Direct. Any accounts you open under the DSD name will be combined with any accounts you open under the Emigrant name.

No, you cannot keep $250k at both banks and have it be covered.

But Emigrant does have several other legitimate banks with separate charters that DO have separate FDIC insurance.

The separate banks are:
Emigrant Savings Bank - Manhattan
Emigrant Savings Bank - Bronx/Westchester
Emigrant Savings Bank - Brooklyn/Queens
Emigrant Savings Bank - Long Island

If you have more than $250k to deposit, Emigrant encourages you to call them and they will arrange to spread the deposits over the banks.
See the following advertisement:

If you have trouble with that URL, use this one:
Anonymous   |     |   Comment #3
The question is, how long this rate will last?

FNBO down to 2.80% APY
virgquest (anonymous)   |     |   Comment #5
Just FYI - GMAC is also offering a 4.00% CD rate on a 12 month CD. Might be useful if you are wealthy enough to need to split funds between 2 banks. I've had great service with GMAC and their ACH speeds are very fast! Good rate on their online savings account too.
Anonymous   |     |   Comment #6
Rates have been changing faster than you can blink as the Fed keeps making changes and banks get in and out of trouble. Anyone can see the latest and greatest rates at www.GoBankingRates.com
Anonymous   |     |   Comment #7
The 4% CD does not need new money...you can fund from your existing DSD savings account. Saved lost interest time and the hassle.

4% right now for a 1yr-1.5yr CD is just about the best you can get after the 0% Fed rate cut.

Obviously the 4% savings rate is not long for this world considering they are offering a 4% CD...
Tamalpais Bank
Tamalpais Bank (anonymous)   |     |   Comment #8
I liked your blog. It has lots of good account information and bank offerings.
Kate (anonymous)   |     |   Comment #9
I'm very upset. I opened a savings account a week ago in order to open a CD because the FAQ page said you have to open a savings account in order to open a CD.

Well, they put a very long hold on the funds in my savings account that would not be lifted until tomorrow, and now I find that the CD rate has dropped to a pathetic 3.5%. Ugh!!! I hate having to move fund all over the place!