Since ING Direct pioneered the first online-only high-yield savings account in the late 1990’s, a number of other banks soon followed suit. Just ten years later dozens of banks are offering their own version of a high-yield savings account, and the competition for your online savings dollar is greater than ever before. In terms of account values, Emigrant Direct is most certainly in the top five of all online savings accounts, but is it where you should put your money?
Emigrant Savings Bank has been around since 1850 and was founded by a group of Irish emigrants. The bank is located in New York City and is the largest privately owned bank in the country. Currently it has 36 branches and assets of nearly $12.5 billion dollars. Emigrant’s mortgage subsidiary offers loans in 20 different states and has provided over 4000 home loans in the year 2005 alone. This is certainly not your fly-by-night bank that could be gone at any moment.
When compared to other online savings banks, Emigrant Direct has historically had very competitive rates. A lot of banks start out with high rates and then drop them after they get a bunch of new customers, but Emigrant has stayed near the top when it comes to the interest rate. As of February of 2007, the interest rate that Emigrant offered was 5.05%. At that time, online savings banks ranged from 4% to 5.3%. It’s certainly not the absolute highest, but it is definitely up there. Their American Dream Savings account has no fees or service charges to speak of. In addition there is no minimum balance to open the account. The money in your Emigrant Direct American Dream Savings Account is FDIC insured, so you know that your money is safe.
The signup process is fairly straight forward compared to other online savings accounts. You can apply online through their website. They’ll ask for some personal information and perform a soft credit inquiry, meaning that your credit score will not be affected. Emigrant Direct will then put two small deposits into your checking account, and then you will need to verify that information so that they know you own the checking account.
After you verify your checking account, they will mail you a letter with your account number. This can take upwards of a week if you live a distance from New York. You can use your account number to login, and then they will ask you for the answers for the five secret questions you entered when you signed up. Write them down, because they are very hard to remember! You will then be able to login to your new Emigrant Direct American Dream Savings Account.
The interface on the website is not particularly complex, but it is functional much in the same way that ING direct is. It is also much better than the banks which make use of the Cashedge transaction system which are horrendous to use.
When all is said and done, Emigrant Direct’s American Dream Savings account is a very attractive option for your savings account. Bankrate.com gives it a customer service rating of 4 out of 5 stars, and reasonable sign-up process in addition to its high interest rate and no hidden fees makes it a very good place to put your money.