(As of July 2006, EmigrantDirect is paying 5.15% APY at its savings account. Read PFBlog's review and take a try!)
One surprising episode during my vacation in NYC is related to my savings account. When my wife and I were (window) shopping on the 5th Avenue, we ran into a familiar name: Emigrant Savings Bank. If you recall, back in spring, I blogged a lot about EmigrantDirect, the online arm of Emigrant Savings Bank. At the time I stopped by its branch, I had more than $21,000 emergency fund in this very bank. I was not completely unaware that Emigrant is first and foremost a brick-and-mortar bank, but for me, who primarily banks online, it is pretty surreal to see the physical form of the bank that holds most of my money in the downtown of Manhatten. (Later I found out Emigrant Savings Bank has 12 locations in Manhatten alone.)
I have been very satisfied with EmigrantDirect since I deposited the first water-testing $100 to the bank in January 2005. While its web site is not the fanciest, it delivers -- by that I mean it consistently leads the wave by increasing yields of money market/savings accounts. Along the way, I have been using ING Direct, VirtualBank and CapitalOne, but today, I only have $4,000 in VirtualBank, $140 in ING Direct and $10 in CapitalOne.
If your savings account only yields 1% or 2%, you really need to know that the leading brands are offering 3% and more now. Here are some of the banks I have experience with, and my personal observations. All institutions are FDIC-insured, so safety is not a concern.
| Bank |
The Deal |
The Good |
The Bad |
| EmigrantDirect(*) |
3.50% APY $1 to open |
Very nimble in consistently offering the top rate |
Online banking interface is minimalistic. |
| CapitalOne Savings |
3.45% APY $1 to open |
|
Online banking interface is minimalistic. |
Virtual Bank(*)
|
3.40% APY $100 to open |
Well-designed online banking interface. |
Not fast enough in offering the most competitive rates |
ING Direct (*)
 |
3.30% APY $1 to open |
Well-established name in online banking. |
Always lagging in the current price war |
| (*) PFBlog received nominal referral fee
if you sign up using the link provided here. |
Another source of top-yielding money market/savings accounts is Bankrate. For example, I kept this link in my favorite folder, and it allows me to check out latest offerings in one page. Note, some of the offerings require fairly high upfront deposits. Besides names in this list, another contender is Presidential Bank, which offers 3.75% APY checking and 3.87% APY savings accounts, although both require hefty deposits.)
For now, I'll stick to EmigrantDirect. ING Direct and VirtualBank are famous names, but they might well be too big to be the most competitive in offering the best rates.
