An important part of value investing is cash management. In addition to maintaining an adequate emergency fund, you also need to maximize your returns on cash as you wait for the next fat pitch investment opportunity.
I was keeping much of my cash with INGDirect, which was paying 3.3% interest. I thought INGDirect was as good as you can get with a savings account. However, I noticed over the past few months that EmigrantDirect.com* had slightly higher rates than INGDirect. Just this past week, I discovered that EmigrantDirect.com raised their rates to 4.0% APY, which is significantly higher than INGDirect’s current rate of 3.4%. The difference was enough for me to make the switch. Like INGDirect, the EmigrantDirect account is managed online, has no minimum balance and no fees.
I signed up for an account with them this weekend. The application was fairly simple. The only challenging part involved a credit identity verification process that taxed my memory of my old addresses and phone numbers. Apparently, I got the questions right and I made it to the next part of the application process.
I opted to electronically connect my checking account with the EmigrantDirect savings account. I have to wait a few days before some small deposits are placed into my checking account. Then I have to log into EmigrantDirect.com and indicate the amounts of those small deposits.
I’ll keep you posted on my experience with EmigrantDirect. I hope it will be similar to my positive experience with INGDirect, except now I’ll even earn a higher rate on my savings.
* This is an affiliate link that will generate a small payment to me if you sign up for a new account.