I went ahead and opened an account at DollarSavingsDirect and their attractive 4.0% APY. WaMu had dropped their savings rate to 2.5% APY, and DollarSavingsDirect still seems to be in their “new bank customer accumulation” stage, which means keep the rates high as long as possible. Might as well take advantage of loss leaders…
People have called EmigrantDirect and DollarSavingsDirect clones of each other. I mean, your money is at the same bank – Emigrant Bank, FDIC Certificate #12054 and the home pages look very similar. But man, they truly did a cut-n-paste job. Check out the identical internal interfaces, down to the color scheme:
The application was straightforward and efficient – completely online, no paperwork to sign or print out, and your deposit is done using only routing and account numbers. Took less than a week to get up and running. I would pick your funding account carefully, because adding additional bank relationships does require paperwork.
As noted, the major difference is that with DollarSavings you need to maintain a $1,000 minimum balance to get the 4.0% APY, unlike Emgirant with no minimum. Good news is that there are no fees at DSD if you drop below $1,000 though, just a lower 1.0% APY.
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hi, i have been an avid reader of your blog for some months now.
i just wanted to know if you had an opinion on GMAC CDs. I have a CD maturing in April ’09 and the amount is well under the FDIC coverage maximum.
http://www.bloomberg.com/apps/news?pid=20601213&sid=a_AUFalIF.Dg&refer=home
with news like this and GM possibly running out of cash come mid 2009, do you think it would be wise to close my CD immediately and forego the accumulated interest?
Wait, I’m confused. First you’re going to everbank now you’re going to dollar savings direct? Which one is it?
I’ve been reading your blog for about a month now and really like it. I was just about to open up a CD with USAA at about 3.5% for 7Months, my savings account with them only makes 1.26% which is nothing. So now I can have accessible money at 4% or unaccessible money at 3.5%. How do money transactions work with this bank, I’ve only had two bank accounts my entire life. It’s been a pain in the butt to transfer funds from FSNB(FortSillNationalBank) they either charge me 12bucks for a wire capped at 5k or I can use their online bill pay service which takes up to 2 weeks to deposit money at USAA. With USAA I can do online deposits, write my self a check and deposit it using my scanner and pc with a limit of 5k. I was also able to transfer funds to my Scottrade account electronically within a matter of minutes using Money Direct. Do these online banks use something similar to money direct to transfer money in and out of other accoutns?
Everbank has a 4* rating while EmigrantBank has a 2* rating (bankrate) although, if you read the memorandum, both banks are in fine shape but EmigrantBank has a bit less liquidity now so I think they are trying to get some more with this 4% promotion. However, at 3.93% Everbank is also an attractive option and it looks to be more stable. These ratings are as of end of June so it might be a different picture now.
Having said this, WaMu was also pretty stable until it wasn’t so I would go with the 4% of DSD (EmigrantBank) while it lasts. In fact I created an account with them as well, thanks for the tip J.
Also, Everbank has ~80% mortgage securities, while EmigrantBank has ~52% in case it matters to you.
Are you able to transfer funds directly between EmigrantDirect and DollarSavingsDirect?
Raj – I wouldn’t, as you say they are FDIC insured funds. Your money is safe, and you’d be facing a pretty stiff early withdrawal penalty.
heyhehes – I did open an Everbank account, and got 4.76% for 3 months. However, I’ve been lazy and haven’t written a review for Everbank or DollarSavingsDirect, and Everbank’s rate has now dropped to around 4%. So, I figured I’d do a quick update for DSD, which I opened as my next “jumping to” point.
Mario – DollarSavings is run like most other online-only savings accounts – ING Direct is most well known). No checks, it is basically a piggyback to a checking account.
IMO, Everbank is actually very stable, they just reported record profits when most banks are losing money left and right. Mortgages are one thing, *bad* mortgages are another. For example, Wells Fargo is doing well these days because they didn’t take too much risk.
anon – Not sure. I haven’t had any significant money in Emigrant in a while, so I didn’t try. I suppose you could try it as your primary funding account, but additional linked account require a checking account and a voided check. So if you really wanted to go direct, you should try and fund from your EmigrantDirect account, and then switch to something else later. Otherwise, just do ED > Checking > DSD.
I *still* find it utterly absurd that DollarSavingsDirect exists as a near clone of EmigrantDirect. As a long time ED customer, it not only makes me feel less important, but also annoys me to have to jump through more hoops to take advantage of their parent bank’s best offer. The fact that they have near identical interfaces simply adds insult to injury…
Grant, you almost answered your own question. If they raise the rate at EmigrantDirect, they *may* attract new customers but they would also have to pay their existing ones more interest. By opening a new ‘bank’ they have the opportunity to make news and attract new customers. I do believe it is a bit odd: anyway I have opened a DSD account and am in the process of moving money from ED to DSD.
Thanks Jonathon, I started opening the DSD account today. I may move everything there for a while to “reward” them for offering the higher interest.
I did see some, what I take to be, unusual terms as far as them holding your money up to 60 days in some circumstances. It’s probably typical of online banks, but does anyone worry about the terms?
Jonathan, any idea why Emigrant Bank would open yet another subsidiary with such similar requirements as EmigrantDirect?
It seems to me that if they’re looking to attract customers to gain liquidity, they could just raise the rate at EmigrantDirect to 4% and be in nearly the same boat as DollarSavingsDirect.
I like the extra 1% at DSD, but I have to think that right when I move my money from EmigrantDirect they’ll lower the rate at DSD…
Everbank is down to 3.41% after the 3 month intro(3.93%)
Yes, I believe Emigrant is trying to attract new customers while not having to pay the same to their old customers – basically making money off the inertia/laziness of their EmigrantDirect customers. There is really no other way to explain it.
Also remember, EmigrantDirect has it’s cashback credit card that requires $10,000 in savings account balances to get 1.2% cashback. So some of it’s ED customers are held “hostage” in that way. This is why I don’t like credit cards with such vague requirements.
Wow I guess I should be happy with my 6% INGDirect online account 😀 Benefits of high interest rates in Australia!
Johnathan,
I’m not too familiar with online banks. Would I be able to transfer funds from one bank to another in just a few clicks? Are there any limits whether it be funds or number of transfers. I guess now would be a good time for me to look at their FAQ’s. Anyways thanks for the info.
I had money in EmigrantDirect for a while but finally closed out that account after a few instances of not being able to log into my account. Scheduled downtime is one thing, but repeated downtime sends a pretty bad message. I also fiercely hate their interface (both their designers and developers need some serious help) and of course there’s the fact that their rates just stopped being competitive long ago.
The one bright spot was that the day after I moved all my money out, an official from the bank called me to better understand why I was leaving the bank – pretty impressive for an online bank.
Everbank’s FreeNet Checking Account gives you 3.93% for the first THREE MONTHS ONLY, then drops to 3.18%, no monthly fee, no monthly minimum balance.
Their Money Market Account gives you the same 3.93% for the 1st 3 months, then drops to 3.41% — BUT you must have a $1500 monthly balance or pay $4.95 monthly.
I moved some of my Etrade cash (interest rate 3.3%) over to DollarSavingsDirect and it was painless, Dollar gives you also a running total of interest earned each day on your account page. So long as they continue to offer 4% I’ll leave it there. It’s all insured up to $250,000 so I feel safe. I had Etrade connect to Dollar using Etrade’s External Account function (you can have as many external account as you want at Etrade) and the cash moves MUCH faster if you do the deposits and withdrawals from the Etrade side rather than using Dollar. Once the cash is noted at Dollar (transfered in one day) it is earning interest but there is a 5 day hold on availability, no problem as long as it’s not in limbo NOT earning interest. Doing it the other way from Etrade — external account withdrawal from Dollar and Deposit into my Etrade also happened quickly. If you use Everbank and Dollar to do your transfers, the time delay is MUCH longer.
I started this merry go round at Wamu, then they dropped their interest rate as did Everbank (from 4.65% to 3.93 1st 3 months)
Hope this help in out ongoing watch for highest interest rates.
I am an existing EmigrantDirect customer, and consider the new DollarSavingsDirect account a slap in the face to existing customers. I called them to transfer my money from EmigrantDirect to DollarSavingsDirect, and they wouldn’t allow it. They said I would have to transfer my money out to a checking account, and then back into the new DollarSavings account.
So I sent in a voided check from my local bank checking account to establish a transfer link to EmigrantDirect. They rejected that stating that there needs to be additional paper work filled out to establish the transfer link. They sure make you jump thru many hoops in order to transfer your money out, so beware of this!
I used to be a loyal customer, but now I’m thinking twice. Great way to treat your customers Emigrant Bank… Grrr….
I’ve had DSD for a little over a month. So far, so good…
I have been reading this blog for a while, and I noticed a lot of people go back and forth with different online banks trying to get the most out of their interest rates. Quick question though, where do you store all your passwords and such, do you keep creating a new one and different set of answers for each question for each new account? I don’t like writing down any of this valuable information on paper, so I just memorize it, but if I keep switching banks, I fear I will forget at some point what my different passwords are. How do you all do it??
Because it’s not only banking where they ask you for passwords, it’s your cell bill, email, etc, etc.
@Alex: I use paper and have no problem with it.
please help!!!!
does anyone know is DSD has any transfer limits, either amount wise or number of transactions a month?
i have an everbank high yield account or whatever its called, but they restrict ACH transfer’s to $10,000 per transfer, and i believe after a certain amount of transfers a month there is fees.
I went ahead and moved my cash to DD from emigrant. Pretty easy and worth the extra 1%.
@Alex: I am using a program called KeePass. It keeps a password protected encrypted database of things like urls, ids, passwords, notes – where you can put the security questions and answers, etc.
Also note that with anything that requires a password, your hiers will not be able to know the passwords to your accounts or password database after you pass on so consider making sure that you have a way to handle this situation. It could be pretty difficult for a joint account holder to get access if they don’t know the passwords.
Bernie, so you were able to initiate a transfer with Etrade and DSD accepted it? DSD told me on the phone that you can only initiate transfers from their website; otherwise all other transfers would be rejected. They also said they don’t allow any 3rd party debits (ie credit cards taking funds for payments). Has anyone tried this and knows for sure either way?
Update………
Dollar holding at 4%
Emigrant is down to 2.75% (I noticed on 12/19)
FNBO holding at 3.25%
Eric, you are correct, only one way to do it, via Dollar, but it took only one day for Etrade to get the transfer amount, so I’m happy with that. Now that Etradxe has dropped their rate to 3.01 from 3.3, I’ve moved most of my money to Dollar, happy with 4 % iof they hold it.
nice. I just transferred all my savings to dollar savings direct. Can’t beat 4% without having to touch the markets right now.
I moved from Everbank to DSD for 2 months now. I am very happy with its simplicity and quick ACH transfer. Will continue to do business with DSD as long as 4% holds.
Eric:
DSD does not allow any ACH Withdrawals (Direct Debit). So, for example, you cannot log onto to your Credit Card’s website and pay your card directly out of your DollarDirect account. They’ll return the transaction unpaid.
Does anyone know if DSD does a hard credit check??
Soft Credit Check Inquiry only
“I would pick your funding account carefully, because adding additional bank relationships does require paperwork.”
John can you elaborate on this?
And thar she blows……….
DSD down to 3.50% as of 1/23/09
After watching their CD rates dropping I wondered when they’d do it. Welp, it’s today!!
🙁
I had an ED account a while back & was very satisfied with it UNTIL they lowered & lowered their rates…my local bank gave a better rate so transferred my $ & that lasted for a good while…then they began to lower…so I read about DS & transferred most of my $ there for the 4% ONLY to have them lower their rate to 3.50 % a few days later! I am a bit concerned about their rating/stability but am planning on leaving my $ there unless they begin to play the lowering the rate game again!
What do you do with OLD Accounts?
Do you close it or you keep it open with NO money?
I have an Emigrant account, plus few more. But when you open a new account do you close some other that are no longer paying better return??
On the same note how many Saving/Checking account ppl keep on avg.??
Thanks
So it is really true that you cannot initiate a directdebit from my mortgage company to pay my mortgage? I have been doing this for over 2 years at Emigrant. I figured it Emigrant let’s you do it than DSD would also. Thoughts?
Now down to 3.20% APR… 🙁
And now it’s 3.05% APR… Still claims to be the highest in America though.
2.65% now..
EmigrantDirect has sunk to a * rating on Bauer Financial. (They are listed as Emigrant Bank.) Pretty shaky. Their APY is 1.65%.
I too think it “a slap in the face” to ED customers that DSD exists.
Right now, with the * rating, I’m looking for another home. Yeah, yeah, I know FDIC insured an all that, but am not so sure that you can always get your hands on your money when a bank is shutdown, may take some time for the accounts to be moved over to the acquiring bank, if any.
I see Malvern Federal in Paoli is offering a reward checking acct (with usual annoying conditions) with 5.01 APY. Appears to be offered nationwide. Banc2 in Oklahoma City has a 5.01 APY checking also. Difference: Malvern’s current *** or **** rating, and Banc2’s *** rating (falling from ****).