Bank Accounts

Emigrant Direct Review: What They Offer

Emigrant-DirectEmigrant Direct, the online bank of Emigrant Bank, is a virtual bank that consumers access on the Internet. Emigrant Bank is one of New York City’s largest privately held banks, and is located in Lower Manhattan.

Emigrant Savings started in 1850 as an Irish owned bank serving newly arrived emigrants. It is the oldest savings bank in New York City. It is owned by the Milstein family, who made a fortune in real estate. But unlike Emigrant Bank, Emigrant Direct has no physical bank branches, offices or high overhead costs. Customers do transactions remotely on the Internet, the phone and through ATM machines.

Because of the low overhead costs of Internet banking, Emigrant Direct is able to offer a high interest savings account. They also offer certificates of deposit and credit cards. It’s simple to open a savings account at Emigrant Direct. Consumers can go online and provide the bank with personal data, including a current bank checking account. This is important at Emigrant Direct because the customer’s checking account at another institution is the usual vehicle to make deposits. There are no stores or offices to walk up to with a virtual bank. Customers can check on their accounts 24/7 at the Internet site.

The big advantage of a virtual bank for consumers is a high interest rate paid on savings accounts, although this return has fallen off during the Great Recession. This has earned the bank no better than an average score from critics of late.

American Dream Savings
Emigrant Direct advertises a .50% rate of return on its basic savings instrument, the American Dream Savings account. It is FDIC insured. It earns a variable annual percentage yield, and the bank points out that it could go up at any moment depending on market conditions. The American Dream Savings account has no fees, service charges or minimum deposit requirements, and those features attract customers.

Credit card offerings
Currently, Emigrant Direct issues two credit cards through the Visa Signature program: A Plus Rewards card and a Bonus Rewards card. Both cards earn one point for every dollar spent. With the Plus Rewards Card, card holders get an automatic point boost of 50% every month. With the Bonus Rewards card, they get a 25% boost in points monthly. With Plus Rewards, there’s $50 back with the first purchase. That will offset the $50 annual fee on the Plus Rewards Card. On the other hand, there’s no annual fee on the Bonus Rewards card and you get $25 back on your first purchase, so that’s a net gain of $25. On both cards, there are no caps on points and you have five-plus years to redeem them. With both cards, you enjoy a 0% APR for balances and transfers for six months, but the rate goes up to 10% to 20% thereafter.

The reward points can be redeemed for cash in the form of deposits to your American Dream Savings or your credit card account. You can also use points for unrestricted travel with airlines, exchange them for gift cards from your favorite retailer or buy brand name merchandise. Card holders also get concierge services and deals on sports and concert tickets. They also enjoy upgrades at hotels, resorts and cruises.

“My Way” CD
The Emigrant Direct “My Way” CD is accessible to holders of the American Dream Savings account and requires a $1000 minimum deposit. Short-term and long-term CDs are available, with penalties for early withdrawal. The money can be transferred from an American Dream account, the affiliated checking account or with a check from a legitimate account. The CD is FDIC insured to the limits. The stipulation that you must open an American Dream Savings account is not an obstacle, just a formality.

Although the interest rate on its savings account no longer outpaces that of a traditional bank, Emigrant Direct still has some advantages that make it worth looking into if you are interested in opening an account at an online-only bank.

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