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
Tom
January 16, 2009
I joined and it's been fine. It's legit. Coming over from WaMu i'm real pleased with the customer service and the user interface. ACH transactions are processed the next day and only a 5 business day hold doesn't seem like a big deal to me since it shows you that you are earning interest on those funds right away.
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tim
January 20, 2009
does dollar savings direct charge a 30.00 fee for withdrawals.
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H
January 20, 2009
Bankrate rating for DSD is now 1 star.
What does the stars mean?
"Bankrate.com's Safe & Sound Capitalization, Asset quality, Earnings and Liquidity (CAEL)î is a proprietary, analytical product that assesses the financial condition of banks, thrifts and credit unions."
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1 star for you
January 21, 2009
Banks with 3 stars have failed, and there is no charge for withdrawals.
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We like Dollar
January 21, 2009
Look for the competition to slam Dollar because they are still offering 4%.
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New Yorker
January 22, 2009
DSD does NOT charge any fees for standard ACH withdrawals (though not likely, make sure to confirm that your linked external OTHER bank doesn't charge you a fee for processing an ACH transaction).
You may incur a DSD fee if you request a withdrwal accomadation in the form of a Wire Transfer. As such requires special handling, a fee seems reasonable (though at a cost of $30 I would better plan my movement of funds to avoid an urgency that requires a Wire Transfer)
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BANG!
January 22, 2009
Just waiting for the 4% balloon to pop!
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townsend
January 22, 2009
I don't think they will hold this 4% rate for long. They are probably waiting till they reach a certain asset level. I had two high yield online savings account at Emigrant Direct for over two years. The initial rate attracted me, but it wasn't long before they cut it. Emigrant Direct ended up lower than my other online accounts on the internet.
So I closed both accounts. Dollar Savings will behave the same.
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New Yorker
January 23, 2009
I agree that the rate won't hold forever but that's to be expected. DSD has been at 3.75% or 4% since inception back in Aug 2008. So it's been a good run and a decent investment. When/If the rate drops I'm sure we'll all revisit the current offerings by others to determine whether we should move our funds.
Regarding "townsends" approach to closing accounts, I might suggest that you consider keeping accounts open with a small balance for ease of funding should the rate improve in the future.
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BANG!
January 23, 2009
Now 3.50%
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