In Strange Move, Emigrant Bank Launches DollarSavingsDirect

http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33&sort=2

Still at the top with 4%! What are you concerned about?

There's one obvious reason for them to open this new separate division -- they don't want to have to automatically pay their existing EmigrantDirect customers the higher interest rate.

Their ED division itself used to have one of the highest rates, but they reduced it drastically once they got enough people hooked in, and now they're casting out a separate net to get other depositors without having to make the same offer to their existing depositors.

If a current ED customer shops around then of course they will find the new offer but in that case it's okay because otherwise they might lose them to another bank anyway.

It's not very nice but it's a common strategy -- don't offer your promotional or lowest price to your existing customers so long as they will continue to do business with you at the current price.

I doubt I'll open an account with DSD since I don't like to have to actively "rate chase" like that just to keep the good rate.

I use HSBCdirect, which has been okay as far as keeping their rate pretty high over a long period of time, although they sometimes offer a promotion for "new money only". (And I like the fact that I can transfer money into an HSBC "offline" account and go to the local branch and immediately withdraw it without having to wait for any ACH transaction to clear.)

But from what I've read, FNBOdirect gets the prize for keeping their rates very high, very consistently, for the longest period of time. I haven't tried them though.

David R

Just to bottom-line my previous comment, it's quite naive to think that launching this new division is a "Strange Move" for Emigrant. It's an annoying but perfectly understandable strategy on their part to offer a loss leader but not to their present customers so long as they're not going elsewhere. I wouldn't be surprised if they suddenly contact their ED depositors and tell them about DSD as soon as they try to transfer their money elsewhere :-)

Attention rate-chasers: when you move your money to a different bank to get a higher rate, don't forget to take into account the amount you will lose while getting exactly 0% interest for some number of days during the transfer into the new account *and* some number of days in the transfer *back* to the old account in the event that the new bank's rate goes down. You will find that the difference in rate has to remain pretty big for a significant length of time in order for the move to pay off for you.

I wonder whether this loss of interest during a transfer would apply to an EmigrantDirect-to-DollarSavingsBank transfer -- something tells me it would :-)

David R

All this ranting for what?

Its simple:

The Dollar rules at 4% with interest compounded daily and FDIC insured!

All this ranting for what?

Its simple:

The Dollar rules at 4% with interest compounded daily and FDIC insured!

Just a heads up: Emigrant bank of New York only received a single star rating (out of a possible five stars) as of 9/30/2008. See http://www.bankrate.com/brm/safesound/rating.asp for details. High rates are usually a reflection of higher risk. Read the attached memorandum for details.

I am very satisfied with Dollar Savings Direct. Not only do they offer the best interest rate, their online format is straightforward and secure. I have accounts with ING-Direct as well. They, too, are first-rate. However, Dollar Savings Direct has a superior interest rate which is most important to me. I highly recommend this bank to anyone who is serious about saving money.

Is there any limit to the initial deposit? and is there any limits to subsequent inbount or outbound ACH's ?

No Limits!

BankRate has them down to 1 star now. That can't be good. Are they in danger?? Why only 1 star??