I wrote about ING Direct  and Emigrant Direct  a while back (read the article “Where to park short term funds ,” dated 1/31/05) and recently both banks increased their rates. ING Direct, probably because of pressure from both Virtual Bank  and Emigrant Direct, increased their rates to 2.60% (to match Virtual Bank). Well recently, Emigrant Direct increased their rates to 3.25%.
There have been mixed reports about opening up an account Emigrant Direct. Some people have had problems getting their money in (nothing fraudulent, just the usual hiccups) but the rate is very attractive. If you’ve had any experience with it, please let me know. ING is still at 2.60%.