Emigrant Direct American Dream Savings Account Review

Another way to bank from your computer. carl swahn/E+/Getty Images

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, Emigrant has let the 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, CapitalOne 360 was paying 0.75% APY, and others were paying two to three times as much as Emigrant.

Rates can change at any time, so it’s best to verify current rates at Emigrant Direct’s website.

Overview

The main attraction at Emigrant is the High-Interest Savings Account. If you currently keep your savings at a brick-and-mortar bank, there’s a good chance you can earn more online.

Fee-free: Emigrant Direct does not charge monthly service fees for account holders, so your savings won’t get slowly drained if you leave the account alone over time.

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’ll need to deposit funds electronically.

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 a few days.

Easier Access?

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 like CapitalOne 360 or Ally Bank for additional features.

Mobile deposits: To win the hearts of tech-savvy customers, Emigrant Direct has to overcome a significant hurdle: Emigrant customers cannot deposit checks with a mobile device. These days, most large online banks—and even brick-and-mortar institutions—offer this service.

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.com and DollarSavingsDirect.com. Those websites appear very similar to EmigrantDirect.com, 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. In the past, Emigrant has offered the best rates at its newer online banks, allowing rates to fall in older accounts.

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. As of this writing, FDIC covers up to $250,000 per depositor per institution.

How it Works

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

Have the following information handy 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 to transfer funds. To make the initial link, watch 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’ll need to mail in a voided check along with a form (most banks allow you to add additional accounts online).

Customer Service

Based on reviews and reports from several different sources, it seems that account holders are largely satisfied with Emigrant Direct’s customer service. If there’s a problem, help from a real person is available, and the operating hours should accommodate just about anybody’s schedule.

What you Might not Love

While Emigrant Direct is a perfectly good savings account, the bank does not seem committed to developing their product and bringing in new customers. The interest rate is regularly lower than other competitive online banks. But MySavingsDirect.com has a better rate than Emigrant, which makes you wonder how longtime Emigrant Direct customers feel about the new bank.

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 might lose money.

Finally, Emigrant Direct still doesn’t offer remote check deposit. This might be an effort to manage risk, and it’s really not that difficult to deposit to your brick-and-mortar account first, but it seems like customers should be rewarded with a slightly higher rate (APY) in return for less risk on the bank’s side.

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.