Dollar Savings Direct: 2.05% APY Emigrant Clone

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Dollar Savings Direct Logo

FDIC Update: There were some concerns as to whether Dollar Savings Direct was actually a division of Emigrant Bank and whether it was FDIC insured, those have been laid to rest thanks to the work of some dutiful readers. Dollar Savings Direct is FDIC insured under the certificate of Emigrant Bank and shares limits with any assets you may have at Emigrant Direct. This was confirmed by Jeff who was in correspondence with the FDIC.

Sometime in the last month or so, (or longer, I have no idea honestly) a new high yield savings bank appeared with little fanfare or press: Dollar Savings Direct. It’s a division of Emigrant Bank, FDIC Certificate #12054, which is the same parent company of Emigrant Direct. On the face of it, it appears there’s little difference besides interest rate and minimums. Dollar Savings Direct has a higher APY at 2.05% but has a minimum balance of $1,000 but no fees (if your balance falls under the minimum, you earn only 1%). If you go to their respective homepages, they’re designed with nearly the same elements (layout is the same except on Dollar Savings you have a picture of Benjamin Franklin versus a patriotic top hat, the buttons are basically the same, color-schemes, etc).

What’s the deal? Well, I called Dollar Savings Direct and chatted with a very nice CSR who explained the whole story. She confirmed that there was no difference other than APY and minimums, that was interesting. She also explained that Dollar Savings Direct was merely Banco Fortuna, Emigrant Bank’s foray into the Spanish-speaking banking market, rebranded in English. I suppose Emigrant’s foray wasn’t as productive as they had hoped. If you visit the Banco Fortuna homepage, it redirects you to Dollar Savings Direct, confirming the CSR’s explanation.

So, from someone who didn’t know about Banco Fortuna (or that it was going away), it appeared as though Emigrant Bank was trying to get more deposits without having to pay their existing Emigrant Direct customers. It now appears that isn’t the case.

The last question I had for the CSR was whether I could transfer between the two accounts and she said no. They were two separate banks, despite having the same FDIC certificate, so to transfer funds you’d need a checking account intermediary.

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160 Responses to “Dollar Savings Direct: 2.05% APY Emigrant Clone”

  1. Tom says:

    I have been doing some research on OSA’s and came across this thread.

    Very informative!!!

    I have no experience with investing, saving accounts, CD’s, stocks, etc.

    OSA’s seemed like a good starting point to learn about how money can work for me, a form of “investing”.

    Everybody here seems so experienced.

    What OSA’s would you consider a good choice right now?

    I read up on Everbank and it had horrible reviews from many, many customers.

    • Jim says:

      Everbank has one of the best rates now but their system is a bit antiquated, lots of paperwork involved and not as clean and crisp as many people have come to expect. I think, with rates so low, time is better spent elsewhere and you should just pick a bank that has good rates. Dollar Savings Direct isn’t bad but they have low marks from Bankrate and Bauer Financial in terms of capital risk and other factors (but they are FDIC insured so those rankings are meaningless to me).

      • Tom says:

        Thank you, Jim…

        Would you have a specific recommendation where to look?

        • Jim says:

          For a bank? I try to maintain a list of updated interest rates at this high yield interest rate page.

          • Tom says:

            Jim, I appreciate your help very much…

            I had a look at your “high yield interest rate page.” Since my balance would be less than $9,999 the interest rate would actually drop to 1.39% after the 3-month bonus rate.

            At that point, GMAC would be more interesting.

            Do you, or anybody else, have any experience with this bank?

          • Jim says:

            GMAC is a fine bank, I haven’t heard anything bad about them since the whole issue with them converting to a bank holding near the end of last year.

    • Mike says:

      I had a difficult experience with Everbank. It somehow opened two accounts, and no one at Everbank was able to resolve it — I’ve e-mailed and called many times. They tell me they will close the accounts, but it just doesn’t happen.

      I canceled my initial funding, and decided not to bank with them at all, but to this day (two months later), I have two accounts at Everbank with zero balance.

      Plus, I just visited their site to see if my accounts were still active before posting (they are), and I see their first year APY is 1.87. It’s really less 1.65, but they massage the numbers because you get a “bonus rate” of 2.51 for the first three months.

      If you have more than $10K, Capital One is at 2.01. Their site isn’t as user friendly as ING, where I’ve been since 2006, but the rate is quite a bit better.

  2. Charlie says:

    @Tom: I have both savings and CD accounts at GMAC. They have great service, friendly people, and they get everything right. That, plus a **** rating from makes them, I think, a good bet.

    @Jim: I can’t agree about ratings not mattering. FDIC insurance guarantees you will get your money eventually, but it doesn’t guarantee a hassle-free experience. They’re now starting to shut down more banks, and actually pay out the insurance, as opposed to their traditional practice of finding another bank to take over the accounts. Because of this, there are bound to be delays and glitches.

  3. Jae says:

    I’ve switched over to GMAC from DSD. Everything is very similar to DSD except when you transfer $ out of Gmac to your external bank account, it usually takes 3-5 business days to get to the other bank. Meanwhile the amount of $ you transfer out of gmac gets deducted from your main balance immediately. Who pays interest for my $ while it’s en route to my external account? shady…

    • Jim says:

      No one pays interest… for one simple reason. While in transit the money is at the Federal Reserve who does not pay interest. With DSD, transfers have usually appeared in my linked account the nest business day.

  4. Charlie says:

    Well, I know it’s not relevant to everyone, but in the case of Omni bank last week FDIC did not cover amounts over $250,000. Some people thoughtlessly bought $250K CD’s, and didn’t realize that their accumulated interest would be uninsured. They will become general creditors, and may or may not get that money back. When there is a takeover, even the uninsured money has usually been safe and immediately available.

    Not a big deal, but when there are safe banks around (either because they are really safe, or because they are in the “too big to fail” category, e.g. Citi and BofA) why not go there?

  5. New Jersian says:

    Does anyone have experience or opinion with Centeniel bank, 4 star rating? They offers 3.3% APY, it seems to be highest saving interest rate.

    • Bill says:

      I looked at Centeniel Bank but they do not have any online access to view statements, transactions or transfer funds. Everything must be done via phone, or mail.

      I opened an account at First Trade Union Bank. Also 4 Stars at Their APR is 3.04%. Their web page states they won’t have transfers until July 2009 but at least they have online visibility and you can link an external account to make deposits or withdrawals until then……

      “When opening your account with First Trade, your initial deposit must be made by check.

      External transfers cannot be initiated through your First Trade account at this time. This functionality is targeted for July 2009.

      External transfers can be initiated from another financial institution to or from your First Trade account”

  6. Charlie says:

    Bill, thanks for the tip on First Trade Union Bank. I’ve just spoken to them, and checked them out at the FDIC Web site. They’re really small, with total deposits of $377 million. They’re owned by the New England Carpenter’s Annuity Fund. The FDIC certificate number is 32551.

    They confirmed that they will accept ACH transactions in and out initiated by other banks, or you can mail or fax a letter requesting a check, which they will mail the same day. They have branches in Boston and New York where you can do deposits and withdrawals.

    They wouldn’t, of course, say anything about how long they’ll be offering >3%, except to say that they intend to “remain competitive”.

    Looks like a great find.

  7. Vusi says:

    I’m very interested in opening an account with DSD, but i’m a bit scared of losing my rands since im in South Africa. Can this saving method really work;even if you are in Africa?

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