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 rate.
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.
Goldwater Bank, a new, small bank out of Scottsdale, Arizona is offering a very competitive 4% savings account.
Goldwater Bank, a small bank operating out of Scottsdale, Arizona is offering a very competitive 4% APY savings account. The minimum opening deposit is $1,500 and to get the listed rate you must keep at least $100 in the bank.
A customer service representative (CSR) stated that the rate was good until the end of the year although I'd verify this when opening an account (there's no discussion of this on the website).
The bank opened in 2007 and now has 14 employees and $29.8 million in deposits. It's too new to have a Bauer rating but it is FDIC insured (FDIC Certificate # 58405).
Acccount Opening
Once you fill in the online form, they'll mail you a signature card. You can mail a check with the signature card or do a wire transfer. They do not accept ACH transfers. Wire transfers are free.
Withdrawals
They only allow 6 withdrawals per quarter versus the usual six per month. There is a $20 fee for an outgoing wire transfer but it's free to request a cashier's check.
Interest Payments
They pay interest quarterly. If you withdraw money before the quarterly interest is paid, you lost all of the money accrued during the quarter,
How Does it Compare?
The Goldwater's 4% APY rate is tied withfor second according to the BestCashCow rate table with Amtrust Direct's e-Savings Account. Amtrust offers a smoother account opening process and has a $1 minimum balance. The rate is also below Everbank's 4.76% APY 3 month promo rate. Still, this is a very competitive rate.
The FDIC's insurance may lose 17% of its capital as bank failures have drained it. It's expected to to the point where the FDIC may ask other banks to pay more to replenish the fund.
The FDIC's insurance may lose 17% of its capital as bank failures have drained it. It's expected to to the point where the FDIC may ask other banks to pay more to replenish the fund.
"The pace of bank closings is accelerating as financial firms have reported almost $495 billion in writedowns and credit losses since 2007. The FDIC's ``problem'' bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion. A revised list is due this month. The insurance fund had $52.8 billion as of March 31.
The FDIC estimated its shutdown of California-based mortgage lender IndyMac, which filed to liquidate its assets last month, might drain as much as 15 percent from the fund. Seven other banks will take $1.16 billion, or about 2 percent.
The potential $9.16 billion in withdrawals would be the highest since the insurance account was created in 1933, Diane Ellis, the FDIC's associate director of financial-risk management, said in a telephone interview. Bank failures pulled a record $6.9 billion from the fund in 1988 during the savings- and-loan collapse, Ellis said."
Many analysts expect a rash of bank failures of the next coupe of years as the mortgage mess continues to wreck havoc on bank's balance sheets. This will further draw down the FDIC.
What happens if the FDIC insurance fund is drawn down to $0? In that case, the Federal Government will step in and allocate more money as it did with the S&L crisis in the 1980s.
While your FDIC insured money is safe, we could all be paying more in taxes, bank fees, interest rates on loans because of the poor lending decisions over the last 10 years.
