February 22, 2009 Update: DollarSavingsDirect cuts its savings account rate to 2.65% APY. See how this compares to other top savings and money market rates.
In a rather strange move, Emigrant Bank, the parent company of Emigrant Direct has launched another online direct brand, DollarSavingsDirect. DollarSavings differs slightly from Emigrant Direct and currently has a higher savings rate of 3.75% APY, which is competitive with some of the best savings rates offered by other banks. The minimum balance to open the account is $1,000. Emigrant Direct's American Dream Savings Account offers a 3% APY with a $1 minimum balance. At the moment, the difference in rate and minimum balance seem to be all that seperates the two accounts.
The bank is a seperate division of Emigrant Bank although located at the same location as Emigrant Direct. Its FDIC insurance falls under Emigrant Bank, meaning that an account at Emigrant Direct and DollarSavingsDirect both count towards the FDIC limit.
Accounts can be opened online and funded via an ACH transfer from a personal checking account.
Why has Emigrant Direct started a seperate brand? We called Emigrant with this question but didn't receive a reply. My guess is that Emigrant plans to make significant changes to either Emigrant Direct or DollarSavingsDirect over the next couple of months to differentiate their offer and pursue different markets. It will be interesting to see how this develops.
Comments
cork soaker
March 08, 2009
2.25% and the drop continues! Americas Highest, my azz!
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Pilm
March 08, 2009
Just like Emigrant Direct, Dollar Saving Direct will only allow transfers out to a checking account. Many other online banks don't have this restriction (I can move money between my WT Direct, E-Trade, Capital One savings accounts directly). Being able to do direct savings account transfers really helps you in the rate chase, so this is a big drawback for DSD. Also, DSD is in the process of bringing rates down to ED rates, so you probably don't want to waste your time setting up an account and transfer to DSD when in just a couple months their rates will be the same. Just in the last month DSD rates have plummeted, and are not far from ED ... so it's just a matter of time. A final consideration about ED and DSD, they have very poor bank safety ratings, so if you have more than the FDIC limit in accouts combined, you would be wise to put the excess somewhere else (don't procrastinate).
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townsend
March 09, 2009
Yes, now they are down to 2.25%, and will probably reach the ED level of 2.00% in the near future.
This is why I locked in a 3.00% 16-month CD through DSD, but like others, I have $$ I never to have semi-liquid that I don't want to lock into a fixed term investment like a CD.
I'm not worried about ED or DSD defaulting, regardless of their ratings. FDIC can't afford to allow any banks to go bankrupt. Period. Regardless of bank safety ratings. Bank safety ratings are probably worthless anyway. Who established them and are they ever updated? Finally, FDIC is covering up to 250,000 at a single institution up to 12/09. You could increase this amount through holding different categories of accounts (single, joint, revocable trusts).
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Well Done
March 09, 2009
"FDIC can't afford to allow any banks to go bankrupt" Dude, you need to watch the news, including the latest 60 minutes episode about bank failures. There has been 17 so far this year with many more to come.
BTW, do you really think 3% for 16 months is good?
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townsend
March 10, 2009
Yes, I watched Sixty Minutes. During the segment, no depositor lost their money at a FDIC insured bank. Either a bank is covered by FDIC or not. I only put my money in banks covered by FDIC. I can't predict which banks will fail. I don't think bank safety ratings predict which banks will fail. Therefore, just invest in banks covered by FDIC.
Is a 16-month CD at 3.00 good? While all my other CDs pay more, at this time I couldn't find a better combination of rate & shorter duration. At this site, the closest comparable rate is 18-month CD at 2.95%. My rate is better and my duration is shorter, which I prefer since rates may go up in the future. 3.00% beats most online savings accounts, once you ignore the teaser rates that are only good for 3 months, and then gradually drop into the 2.00-2.50% range. If you found a better rate that is locked in for 12-16 months, please let me know.
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Time To Go
March 12, 2009
Get ready for 2% folks...
Glad I bailed on this one star loser.
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GET OUT
March 17, 2009
Emigrant at 1.65% and Dollar at 2.05%, Thanks Bernanke!
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Rip The Jacker
March 18, 2009
Bank Rate.com no longer has this bank listed at all.
What's the deal?
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Bailout
March 19, 2009
Probably the misleading info about being the highest rate, which is not true.
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Ken
March 21, 2009
Can't transfer fund using ACH initiated from other bank. They rejected it even throught other bank did test deposit first.
Also, they will not allow Treasurydirect to deduct fund from this account, if I use it to purchase treasury bill.
Rate drops very fast recently, from 2.6 to 2.05 within 2 weeks.
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