Opened a Dollar Savings Direct Account With 4% APY

I love my ING Savings Account. But on 10/9/08, ING decreased its APY from 3.0% to 2.75%. It's still much better than the 0.1% interest rate I'm getting from my bricks-and-mortar banks (I'm talkin' about you, Wells Fargo and Bank of America!), but it's not as good as the 3.5% APY I'm getting from Citibank's Ultimate Savings Account.


I recently learned that Dollar Savings Direct is offering a 4.0% APY with a $1,000 minimum balance.

Dollar Savings Direct is the online banking division of Emigrant Bank. In a time where banks are dropping like flies, I checked the soundness of Emigrant Bank and found that it was either rated 2-stars or 3-stars.


Not the resounding endorsement that I was hoping for, but it appears that the bank is stable and capitalized well enough for me to try it out. And hey, since I'm depositing less than $250,000, my money will be FDIC insured.

I expect completing the whole process will likely take about a couple of weeks since I've opted to mail in my initial deposit of $1,000. In order to do so, I'll have to transfer money from my ING account (about 3 business days), snail mail my check (about 2 business days) and probably another 2 business days for processing. Pretty ironic that setting up an online bank account takes longer than opening an account at a bricks-and-mortar institution. :-P

On a related topic, this article provides tips on how to speed up money transfers with online banks.

Anyhow, have a Happy Halloween everyone!!