Say Goodbye to Emigrant Direct

Update: Emigrant Bank, the owner of Emigrant Direct, has launched a new high-yield savings account, Dollar Savings Direct (my review), which offers 4.00% 1.50%APY. Check out my other discussions on Dollar Savings Direct here and here. Now it’s really the time to say “Goodbye” :)

Emigrant Direct was good, for some time.

I have been using their savings account for almost two years and at one time it had all my deposit when their rate was at 5.15% APY (currently 3.00% APY). And they probably have the fastest ACH transfer among all the online banks I have used so far. But Emigrant Direct also appeared to be the only bank that actually dropped their savings rate while newcomers and competitors were trying to catch up or hold their customer basis by offering 5.30+% APY. To me, Emigrant Direct, the same as ING Direct, seems to be a thing of the past. However, Emigrant Direct is not ING, which is much bigger and more successful.

My account was almost empty since late last year and with some many choices out there, I don’t see myself use it again, unless they bump up their rate to 5.40%, which is not going to happen. So I informed Emigrant Direct yesterday that I want to close the account and get the $150 deposit back. Hopefully, the process could complete next week.

Get the most of your money with these High-Yield Savings Accounts:

After the closing of Emigrant Direct, I reduced my online savings accounts to four: ING Direct, HSBC Direct, IGoBanking, and FNBO Direct. I will wait till September to see what to do FNBO Direct when their promotional period ends. If the rate falls back to the pre-promotion rate of 5.24%, there’s no reason for me to continue using it when I can get 5.30% from IGoBanking. One advantage FNBO has over IGoBanking is they have a much larger monthly outbound transfer limit of $500,000. For IGoBanking, I can only move $25,000 out of my account every month.

Since I started to simplify our finance, I have

  • Terminated two bank accounts: Virtual Bank and Emigrant Direct
  • Closed one brokerage account: ShareBuilder
  • Canceled one credit card: American Express Cash Rebate

Still a long way to go to live a simple life, but we will get there.

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26 Responses to “Say Goodbye to Emigrant Direct”

  1. Tim |  Jul 21, 2007 at 1:11 pm

    Igobanking is $25k per rolling 30 days out of.

  2. Dennis |  Jul 22, 2007 at 12:14 am

    I will be moving all of my money out of Emigrant Direct at the end of this month too. Mainly because I had a horrible experience with their customer service and have sworn off their bank forever.

  3. Prism |  Jul 22, 2007 at 5:55 am

    you wrote: “Still a long way to go to live a simple life, but we will get there.”

    No, you will NOT get there. Reducing the number of your accounts will not simplify your life.

    Whatever bank account, car insurance, cell phone plan, credit card, etc. that you have, you will be changing it in a year. Its a moving target.

    To simplify your life you would need to _freeze_ all of your accounts. In a couple of years you will be over paying (or under earning) on all accounts. That is simple!

  4. 2million |  Jul 22, 2007 at 6:32 am

    I like Emigrant Direct because their transfers happen so fast compared to the other online bank accounts. I’m leaving my account open to help seperate some of my funds (ie rental income).

  5. TJP |  Jul 22, 2007 at 11:05 am

    I really like Emigrant Direct, even though I cannot setup automatic ACH transfer into my brokerage accounts.

    How would you rank the high yield online savings accounts? I’ve been thinking about ING for a long time.

  6. MoneyNing |  Jul 22, 2007 at 8:37 pm

    TJP: Most people will tell you to go with whichever has the higher yield. Some banks might have bad customer service etc etc, but does it really matter if all you are looking for is building wealth?

    Sun: Good for you! The less accounts, the better!

  7. junger |  Jul 22, 2007 at 10:39 pm

    I was going to open an Emigrant account way back when they were one of the top APY providers, but since there was physical paperwork involved, it just didn’t make since.

  8. John |  Jul 28, 2007 at 12:44 pm

    Don’t forget about the Emigrant 1.4% cashback credit card. To get 1.4% cashback, you must keep 10k in the Emigrant account. I charge enough on the card so that it more than makes up for the lower 5.05% rate (I never figured it out exactly, but I probably make about 5.75% on that 10k). Of course, it doesn’t make sense to keep more than 10k in the Emigrant account; I transfer the excess money out periodically.

    I just received an offer for the Chase Freedom card in the mail. It pays 3% cashback on “your top three” spending categories that month. Like Prism says, where your money goes is a moving target. I’m now deciding if it makes sense to get this card and switch some/all of my EmigrantDirect credit card activity here (which means emptying my EmigrantDirect account as well).

  9. Louis |  Oct 01, 2007 at 11:35 pm

    Anyone concerned how deep the sub-prime mess goes? Do any of these banks invest in collateralized debt obligations? How safe is our money? FDIC insured?
    Just a little bit curious.
    Louis

  10. Louis |  Oct 01, 2007 at 11:53 pm

    O.K. No worries, I guess, since Emigrant is FDIC insured. Sorry, false alarm.
    Louis

  11. Pete Young |  Nov 19, 2007 at 5:33 pm

    Today is Nov. 19th. The stock market just dropped another 200 points plus. Citibank is in trouble according to Goldman Sack – predicting another major subprime write down in addition to the $11B. Citi already announced.

    Is Emigrant going to be hit next?

    Shall we close our saving account there just to be safe?

    Thanks in advance for any insights!

  12. Sun |  Nov 21, 2007 at 12:30 am

    Pete: So far those banks that have been hit hard are those either provided subprime loans or had investments that tied to the loans. I am not sure whether Emigrant Direct is in that business or if so how big is the business, at least I haven’t heard anything. However, I won’t worry too
    much about the money in the savings account. The money is insured by FDIC up to $100,000. I think your money is save as long as it’s under $100,000.

  13. Ben |  Sep 14, 2008 at 4:24 pm

    EmigrantDirect starts paying at 3% on the first dollar — EverBank has tiered rates, so at 3.5% you are really only earning 2.9% — at todays rates at least…

  14. Ben |  Sep 14, 2008 at 4:26 pm

    Oops, I was looking at checking — by bad — Everbank beats the others with the 4.75% intro