Emigrant Direct American Dream Savings Account Review

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The Emigrant Direct American Dream Savings Account is an online savings account with no fees or minimums. A pioneer in online banking, Emigrant Direct was once one of the highest paying online savings accounts. In recent years, however, Emigrant has let its interest rate fall behind competitors, but longtime customers seem to be happy staying put.

As of this writing, Emigrant was paying 0.5% APY. For comparison, Capital One 360 was paying three times that much. Rates can change at any time, so it’s best to verify current rates at Emigrant Direct’s website. 

Emigrant Account Overview

The main attraction at Emigrant is its High Interest Savings Account. This account is:

  • Fee-free: Emigrant Direct does not charge monthly service fees for account holders, so your savings won’t evaporate if you leave the account untouched for extended periods.
  • No minimums: Like most online banks, the savings account does not have any minimum balance requirements or minimum opening deposit thresholds.
  • Online only: Emigrant Direct is an online-only bank. You can’t visit a branch, but you can do pretty much everything you need on the website, and helpful customer service representatives are available by phone. You can mail in your initial deposit, but after that, you need to deposit funds electronically.

If you currently keep your savings at a brick-and-mortar bank, there’s a good chance you can earn more online, and that’s true even at Emigrant Direct.

Like many online accounts, this account is probably best for building up savings that you don’t intend to use in the near future. You can even lock your money up in CDs for a bit more interest. Although it’s easy to transfer funds back and forth to your linked checking account, the process takes several days.

Emigrant Downsides

Emigrant Direct initially offered an attractive interest rate, and the bank still pays more than most big banks, but several alternatives might be worth a look. There are two areas where Emigrant lags behind the competition.

  • Spending your money. If you want the ability to access funds with a debit card (or an online checking account with the same institution), Emigrant Direct might not be the best fit for you. Look to others such as CapitalOne 360 or Ally Bank for additional features.
  • Mobile deposits. To meet the needs of today’s customers, Emigrant Direct must overcome a significant hurdle: Emigrant customers cannot deposit checks with a mobile device. These days, most large online banks—and even small brick-and-mortar institutions—offer this service.

Emigrant doesn’t appear to offer any mobile app services, much less mobile check deposit.

The Bank

Emigrant Direct is an online division of Emigrant Bank, which is based in New York. Emigrant Bank also runs online banks under the names MySavingsDirect and DollarSavingsDirect. Those websites appear very similar to EmigrantDirect's, although the color schemes and logos are different, and interest rates vary from bank to bank. If you like Emigrant, be sure to compare offers and requirements with those other divisions.

Emigrant is FDIC insured as of this writing, so your money is safe from bank failures, but deposits at the banks mentioned above are all aggregated when calculating FDIC coverage. In other words, you need to keep your combined deposits at all Emigrant banks and divisions below the FDIC limit. FDIC covers up to $250,000 per depositor per institution.

Emigrant Direct does not offer loans, but deposits at the internet bank presumably fund loans for Emigrant Bank customers. Emigrant Bank offers business financing and home loans.

How It Works

At Emigrant Direct, you do everything online, starting with opening your account. To begin the process, visit Emigrant Direct's website. You need to provide personal information as well as details about your existing checking account at a brick-and-mortar bank.

Gather the following information before you start:

  • Contact information, including full name and mailing address
  • Social Security number, Tax ID number, or similar
  • Information about your brick-and-mortar account, which will be linked to Emigrant (your account and routing numbers, as well as the bank name)

You can make your initial deposit by check, but Emigrant Direct will not accept additional deposits by check. You need to link your personal checking account to the American Dream Savings Account and transfer funds electronically.

When making the initial link, monitor your checking account for two small test deposits and verify those transactions with Emigrant Direct. You can link one additional checking account, but the process is cumbersome—you must mail in a voided check along with a form. Most banks allow you to add more accounts online.

Customer Service

Based on reviews and reports from several different sources, account holders seem primarily satisfied with Emigrant Direct’s customer service, but many mention that the interest rate is not as competitive in today's market. If there’s a problem, help from a real person is available, and the operating hours should accommodate just about anybody’s schedule.

Other Concerns

While Emigrant Direct is a perfectly good savings account, the bank does not seem committed to developing its product and competing for customers. The interest rate is regularly lower than other competitive online banks. However, Emigrant's other two online products do offer higher interest rates.

Emigrant Direct’s website looks a little clunky, and it features pitches for riskier investments on the homepage (precious metals and bank-owned foreclosures).

Remember that if you use anything besides the FDIC-insured bank products, you can potentially lose money.

If you have a large account balance and maximizing your earnings is a top priority, Emigrant Direct is probably not the bank for you. But if you already have funds with Emigrant and you’re satisfied with your earnings, there may not be any urgency to change. Especially with a relatively small account balance, moving banks might not be worth the trouble.

Article Sources

  1. Capital One. "Compare Savings Accounts." Accessed March 25, 2020.

  2. Emigrant Direct. "Open Savings Account Online—Learn More." Accessed March 25, 2020.

  3. Emigrant Direct. "Certificate of Deposit." Accessed March 25, 2020.

  4. Emigrant Direct. "Frequently Asked Questions (F.A.Q.)" Accessed March 25, 2020.

  5. Emigrant Bank. "Home." Accessed March 25, 2020.

  6. FDIC. "Your Insured Deposits." Accessed March 25, 2020.

  7. Emigrant Direct. "Contact Information." Accessed March 25, 2020.

  8. Emigrant Direct. "Home." Accessed March 25, 2020.