Dollar Savings Direct Dropped Rate to 3.50% APY
A couple of days ago I was feeling pretty good about Dollar Savings Direct (Dollar Savings Direct reviews) and their seemingly unbeatable 4.00% APY. Today, I am feeling a little disappointed when they finally decided to follow what other banks have done already, cutting their rate to 3.50% APY. From the bank’s point of view, 4.00% is a great deal for customers, but it probably doesn’t make too much sense for them to offer a significantly higher rate than others with no string attached (DSD does require $1,000 to open an account if you consider that initial deposit *high*). As long as it beats most other online banks, they can still attract savers.
For now I am going to probably stay with Dollar Savings Direct, despite the latest rate cut which I hope will be the last one. No doubt about it, the 3.50% yield is still better than most online banks have to offer if you look at the rate history of online savings accounts. In addition to the rate, I also like the bank for its simple interface that’s very easy to use. If you are looking for a high-yield savings account, what other options do you have? Well, right now there aren’t many banks have better rates than Dollar Savings Direct has. In fact, as far as I know, there only two:
- EverBank Yield Pledge Money Market Account: While the bank’s 3.76% bonus APY is better than Dollar Savings Direct, it only lasts for three months. For the full year, the real yield you will get is 3.18%.
- Bank of Interet Savings Account: I covered the bank early this week. At 3.51% APY for their savings account, the rate is slightly higher than DSD. The only problem I have with it is that how many people actually use it.
Other bank accounts with rates above 3.0% (yup, that seems to be the high-end now) include: Venture Bank Wise-Choice Savings Account 3.30% APY, Provident Direct High Yield Savings Account 3.25% APY, IGoBanking Savings Account 3.08% APY, and E*Trade Complete Savings Account 3.01% APY.
Good deals are getting harder and harder to find these days 
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I’m disappointed in DSD as well, since they kept at 4%, while everyone else was dropping.
I’m more disappointed in schwab checking, which started at 3% and has dropped to 1% in less than 4 months. It’s understandable that giving away 3% for a commitment-less account would be tough to sustain during these times, but still. It is still better than no interest, but I was hoping for better.
I am disappointed with DSD. Specifically, they advertised the 4% interest rate to attract new consumers. I understand that the interest rate is subject to change. However, they advertised in a manner that “set them apart” from other banks.
I recently switched from EmigrantDirect to DSD. I am still receiving a better rate than EmigrantDirect. However, I am know part of the “interest median” pack.