(As of July 2006, EmigrantDirect is paying 5.15% APY at its savings account. Read PFBlog's review and take a try!)

Unless you live in Big Apple, you probably had never heard the name Emigrant Savings Bank until two months ago. This New York local brick-and-mortar bank is now advancing to the Internet by promoting its flagship Emigrant Direct American Dream Savings Account with 3.0% APY -- the nation's highest for a no-fee savings account, at least to my knowledge. The bank is also FDIC-insured, so the first $100,000 for each account type is protected by the government.

As you know, I have no afraid of trying new financial products, so I opened a new account at EmigrantDirect lately. However, my account-opening experience with EmigrantDirect is not a smooth one.

It requires several steps to open an account at EmigrantDirect:

First, one have to go to the EmigrantDirect site, click "Open Now", and fill several forms. You will be asked for some multiple-choice credit-related questions like which bank holds your mortgage and where you lived before -- the same questions when you request your (free) credit reports online. Emigrant Direct will also ask for the information about your checking account, to which your future EmigrantDirect account will be linked to.

Second, EmigrantDirect will post two small transactions to your checking account, and ask you to verify the amount to prove you are the authentic account owner of the checking account. Upon success validation of the checking account, EmigrantDirect will send you a snail mail to your mailing address with your account number.

Once you receive your account number thru USPS, you can sign up for the online account access. For me, I had a hard time in this step getting myself signed up and had to call customer service to get it resolved. (EmigrantDirect's CSR is nice, cheerful and helpful, though.)

Sometimes, I am bothered by the fact that many online banking products requires snail mail as a double security check of your information. I can understand the small deposit check, which is a necessary one because someone can easily get your checking account information by obtaining one of your checks, but to validate your mailing address after validating your key credit information from the credit report is definitely an overkill for me. To this extent, I love Virtualbank and ING Direct, whose account-opening process is 100% online.

Anyway, 3.0% APY is a good thing: for the current size of my liquid cash, I can easily earn $100 more every year. I can complain about the account-opening hassle, but I will never complain about a higher interest rate.

(This post is part of PFBlog Product Review series. Check out more reviews here.)