Emigrant Bank has again launched a new internet bank. This new one is called MySavingsDirect, and it’s website is at mysavingsdirect.com. Those who had an account at Apple Bank’s Grand Yield Direct should have been notified that their accounts are being transferred to MySavingsDirect. I used to have a GYD account, and in addition to the notification, I received a MySavingsDirect baseball cap. I remember receiving an EmigrantDirect cap eight years ago.
MySavingsDirect isn’t just news for GYD customers. The new internet bank’s online savings account, called MySavings Account, can be opened by anyone, and it currently has a very competitive APY of 1.00%. It has no monthly fees and no minimum balance. The question that savers are probably asking is how long will this rate last? Emigrant’s history can provide some insights.
About nine years ago Emigrant Bank first launched the internet bank, EmigrantDirect, with a very competitive online savings account. Rates fell and the savings account eventually became uncompetitive. About five years ago Emigrant Bank launched another internet bank, DollarSavingsDirect, with a very competitive online savings account. Just like EmigrantDirect, DollarSavingsDirect’s savings account rate didn’t remain competitive. It now has a low 0.55% rate.
How long did DollarSavingsDirect’s savings account rate remain competitive?
Over the last ten years, I have found it useful to use ING DIRECT (now Capital One 360) to judge the competitiveness of an online savings account. ING DIRECT rarely had top savings account rates, but it always had respectable rates.
When DollarSavingsDirect (DSD) launched in August 2008, it had a 3.75% APY. At that time ING DIRECT’s savings account had a 3.00% APY. DSD’s savings account kept the rate lead until April 2011. At that time DSD’s rate fell to 0.90% while ING DIRECT was holding at 1.00%. So if you define a competitive savings account rate as a rate higher than what ING DIRECT offers, DSD’s savings account remained competitive for 2 years and 8 months.
So based on the history, the rate may stay competitive for a year or more. So would opening a MySavingsDirect account be worth it? In addition to judging the rate, you’ll want to review the account features. In this case, the features are the same as EmigrantDirect’s features. I just called and confirmed this.
It has been so long since I reviewed EmigrantDirect and DollarSavingsDirect account features, I had to refresh my memory. Below is a summary of some of its important online banking features:
- They don’t allow 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)
- 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)
- Linked accounts can only be personal checking accounts (Q&A)
Another issue to consider is the health of the bank. Emigrant bank’s health has been weak for several years. Currently, it has an overall health grade at DepositAccounts.com of a C+ with a Texas ratio of 30.69% (below average) based on June 2013 data. Please refer to our financial overview of Emigrant Bank for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 12054).
How Does This Savings Account Compare
We currently have only four institutions with non-promo rates at or above 1.00%. Three of those four are the new iGObanking.com money market account, the SmartyPig savings account and Palladian Private Bank savings account. All of these now offer a 1.00% APY. The highest rate continues to be at Connexus Y.E.S. Money Market Account which has a top-tier APY of 1.15% for a $100K minimum balance. An important downside of this account is that it requires an active checking account and direct deposit.
To search for the best rates on savings and money market accounts in your state or that are available nationwide, please refer to our savings account rate table and our money market account rate table.