Savings Account Paying 4.0%

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* had slightly higher rates than INGDirect. Just this past week, I discovered that 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 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.

10 thoughts on “Savings Account Paying 4.0%

  • September 26, 2005 at 10:58 am

    I just started the sign-up process this past week too. Initiated tuesday, test deposits were made on either TH or FRI…I verified them online this weekend. I had forgotten that they discard your first username as a one time only use (during verification) account…so I am bummed about losing one of my standard logins. oh well. Now I wait for the snail mail portion….

  • September 26, 2005 at 12:50 pm

    Is it FDIC insured?

  • September 26, 2005 at 2:13 pm

    I made the same switch about 8 months ago and have not had any problems.
    EmigrantDirect even sent me a free nice logo ball cap.

  • September 26, 2005 at 7:02 pm

    Charles, that is a great question! EmigrantDirect is FDIC insured, so their accounts are protected just like local banks’ savings accounts.

    From EmigrantDirect’s website:

    Is EmigrantDirect FDIC insured?

    Yes, to the maximum allowed by law.

    EmigrantDirect is the online banking division of Emigrant Savings Bank and your deposits at EmigrantDirect are FDIC insured up to $100,000 per depositor. Keep in mind that individual and joint accounts are insured separately, so if you have both types of accounts with us, your total deposits can be insured up to $200,000; that’s up to $100,000 in all your individual accounts, and up to an additional $100,000 in your joint accounts.

    Plus, you may even be able to extend your FDIC insurance coverage at EmigrantDirect if you establish deposit accounts in different ownership categories. View our handy chart to learn more. For general information about the FDIC, visit their website,

  • September 26, 2005 at 9:44 pm

    Presidential Bank is paying 4.12% for savings, 4.0% for checking. The checking account includes free online bill payment, which makes it a nice one-stop shop — convenience and high rates!

  • September 29, 2005 at 12:54 pm

    Good, i learned in the late 80’s and early 90’s when all the Alaskan banks failed that the insurance is very important, even if you have less than 100,000 – you might get your money back but if not insured it can take years to get as the bankruptcy trustee liquidates the assets of the failed bank or credit union.

  • October 18, 2005 at 11:02 am

    I don’t trust presidential bank. Emigrant is old and established. Plus, did you hear what they did for Katrina victims?? They gave each of their customers in the devastated area $1000. That money went right into their accounts. They also helped get money to the people who couldn’t access computers. I sure know that their rate of 4% isn’t taking away from their appeal, but that other stuff matters.

  • January 16, 2006 at 10:33 am

    hsbcdirect online savings is paying 4.25% interest.

  • February 24, 2006 at 10:30 pm

    the only issue with is that it holds your funds for a few days after you’ve the request to transfer/take it out. The money is deducted from your emigrantdirect account but is not credited to the second account until 4 days later. I don’t like it. It is like they are taking away my interest.

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