Emigrant Direct – opening an account

The welcome letter from Emigrant Direct for the savings account that I opened about a week ago arrived in the mail yesterday. The letter has the account number and instructs you to go to EmigrantDirect Web site to complete the sign up. Here’s where the first glitch in the process happened. The welcome message was, I thought, pretty self-explanatory:

  • If you are a new EmigrantDirect customer and have just received your account number confirmation in the mail, please first register for online access by clicking on sign up.
  • If you have previously completed the registration for online access, enter your user ID and password above to access your account.
  • Can’t access your account? Contact Customer Service at 800-836-1997.

Having signed up online with them before, I figured the second option fit me, but then the username+password combinations would just fail to work, although I was pretty sure about the combination. That resulted in a call to customer support, who promptly told me that what I thought was a sign-up was not valid, since they only required that temporarily. Going through the re-sign-up process went rather smoothly, except for occasional error messages and then I was presented with the view of my account.

Emigrant Direct account view pane - sorry, the account number crossed out so no one can get my five bucks

Having used ING I can say that ING probably doesn’t have the best Web site in the business, but at least it’s usable. Emigrant Direct doesn’t seem to provide too many options beyond viewing your account balance. I can’t seem to find the amount of interest that my $5 earned me so far. And there’s also no clear way to hook up additional checking and money market accounts. For example, how do you link an external account based on the following menu?

Well, how do I add an external account?

It seems that many people have experienced problems with Emigrant Direct Web experience. This thread on FatWallet contains a bunch of complaints about the way the system works, and many people (including me, I think) will stick to good ole ING Direct for now, until the quirks are worked out in the system. The feature set is also a bit lacking. For example, ING deposits generally take 7 days to materialize and be available from withdrawal via ACH. In Emigrant Direct the funds are frozen for 30 days, which seems to be a way of enforcing a 1-month certificate of deposit on you.

Also, it seems kinda odd that their CD rates are lower than their savings rates. As perne from FatWallet notes:

one thing that strikes me odd… their CD rates are pretty good for CD’s at this point (match ING’s anyway), but their 6 month and 1 year cd’s are LOWER than their simple savings account.. so it would make zero sense to ever get into one of the 6 month or 1 year CD’s… this tells me one of two things… either the savings rate will be short term and will decline soon, or their CD rate should increase in the short term… because it makes no sense to offer completely inferior products to their standard savings account.. afterall the benefit of a CD is the slightly higher interest rate at the cost of locking in your money… but why offer a CD that locks your money in AND pays less interest than a completely liquid savings account? you’d have to be off your rocker to actually sign up for a 6month or 1 year cd from these guys rather than just dumping the money into their savings account….

Another thing to be careful about is to research whether your bank, the one you currently have checking account with, charges for additional ACH transactions beyond some established limit. Emigrant Direct will hit you four times – two small deposits to your account followed by two small withdrawals (yeah, they want that money back). In case your bank limits you to 3 ACH transactions per month, you might be burned on that.

Update: A comment below points out I am wrong on 30 days policy. Yes, just checked Emigrant Direct frequently asked questions to read this:

For security reasons, initial deposits have a 10 business day hold before they can be withdrawn. Future deposits may be withdrawn after five business days.

Posted Saturday, March 5th, 2005 under Money.
  • Anonymous

    I’m curious why you think that funds you deposit are frozen for 30 days. I questioned that, so I read the FAQ at their website. This is what it says:

    When are deposits available for withdrawal?

    For security reasons, initial deposits have a 10 business day hold before they can be withdrawn. Future deposits may be withdrawn after five business days.

  • http:/// Alex

    You’re right, looks to me like they changed it.

  • Anonymous

    Since I recently opened up an account with Emigrant Direct, your entries make we want to find the answers. After you create an account, you can’t link an external account online. You have to do it through the mail. Here’s another one of their FAQs:

    Can I have more than one checking account linked to my American Dream Savings Account?

    At the present time, an individual may have 2 checking accounts linked to EmigrantDirect, including the checking account you used for your initial funding deposit. To add a second checking account you must mail in a check made out to EmigrantDirect for at least one dollar with your EmigrantDirect account number and the words “additional external account” on the Memo line. The name on the accounts must be the same. We can only accept your personal check as a second linked checking account. For your protection, EmigrantDirect places a temporary restriction on transfers to new linked accounts for up to 8 business days.

  • Ann G. Loeb

    I bank there regurlarly at Emigrant that is, but it sounds to me I should wait a bit to try out Emigrant Direct that pays a much better interest rate, so I appreciate your comments.

  • http://moskalyuk.com/blog/ Alex

    Ann, there are no fees and the only catch there is 10 business days freeze for the account. Since you have an account with regular Emigrant Direct, maybe they’d waive that (since you can always back up your deposits by your other accounts). The only thing that would cause me to wait a bit is maybe Emigrant Direct will launch a promotion similar to ING’s with free money going to the account when you’re referred by a current member or MS Money application ($25 and $50 bonus, I believe).

  • Giles Snyder

    I recently tried to open an account with Emigrant Direct. I filled out all the blanks on the form and clicked the submit button. I received a message stating that they were sorry, but I could not open an account at that time. I called the customer service nunber and spoke to a rep who advised me that I had not put the expiration date on my drivers license on the form. I apologised and went back to the form and started over. With my wife watching over my shoulder I filled in all the blanks. There was NOT a blank for the expiration date of my drivers license. Isubmitted the form again and received the same “sorry, etc” message. I called customer service again and detailed th4e scenario. The customer service rep said I must be missing a required field somewhere in the form. He advise me to try again, but after confirming my e-mail address also said he would e-mail me a form to fill out just in case. I redid the application the 3rd time, same result. Six days later I am still waiting for my e-mailed form. I found that AAA has a CD program that is actually better. Check it out. By the way, I have just sold my home, and the procedds, about 225K were going to go to emigrant for at least 9 months.

  • dognose

    The reason that a CD rate would be lower than the savings rate, and the reason that you’d want to get a CD instead of putting money into the savings account is simple. They expect the savings rate to go down, lower than the CD rate. They are clearly creating a high rate to generate buzz and open new accounts. They’ll lower the rate when this promotion is over.

  • Anonymous

    I just got this email from Emigrant Direct…

    WE ARE PLEASED TO ANNOUNCE THAT AS OF MONDAY, MARCH 14, 2005, YOU WILL EARN 3.25% APY ON YOUR AMERICAN DREAM SAVINGS ACCOUNT WITH EMIGRANTDIRECT.COM AND THAT THIS NEW INCREASED RATE IS GUARANTEED THROUGH DECEMBER 31, 2005.

    The American Dream Savings Account at EmigrantDirect.com continues to offer you flexibility, freedom, and security that is unsurpassed in personal banking today. No hidden costs. No fees. No penalties. No service charges.

    Plus, with America’s Highest Rate* you get more money for your money.

    *Highest nationally advertised annual percentage yield for unrestricted day of deposit to day of withdrawal savings accounts.

    ——–

    I have an account with ING Direct also. ING Direct is a much more polished site than Emigrant Direct, but I’ll accept Emigrant Direct’s quirks for the 3.25 versus 2.60% rate.

  • http://www.consumerismcommentary.com/ Flexo

    I have decided to try Emigrant Direct after being an ING Direct fan for the last few years. I’m still in the process of opening the account. So far, I haven’t thought much of their user interface.

  • NotSoEasyToOpenAccount

    I just tried opening an account and got an error that my account could not be opened at this time.I think the whole problem lies with Equifax ( which I believe is the worst of the three bureaus).I called customer service immediately who said, will email me an application form which I have to mail.

    If this is the fate for opening a NEW account, I am a little concerned as to how it might be AFTER you open you account and cannot access the website!It will blow the lights out of me if this were to happen.

    I have been waiting since February to open an account.Perhaps I should wait for some more time till they streamline their website.

    And by the way,I dont think much of the website either.The main page itself looks so forlorn!

    Jeez.

  • Interest junkie

    My fiancee and I opened a joint account with them (Emigrant Direct) last week. I’m excited about the 3.25%, but here I am searching the web for a reason why it’s too good or too risky to be true. Glad to hear noone’s been robbed yet.

  • Ron

    The 3.35% APY is guaranteed through December 2005. It appears that this is NOT a promotion only type situation, although we will definitely have to keep any eye on the interest rates offered in 2006.

  • Ron

    Sorry, 3.25% APY not 3.35%.

  • Manoj Kumar

    Emigrant Direct has a very poor customer service. I wanted to know if a change had been done to my account and they didn’t know. They asked me to call back on a business day.

    Once earlier they put a hold on my entire balance despite passage of over 20 days. When I asked that I cannot transfer money out of the account they took it off but I had to wait 3 hours before I could do that.

    FYI

  • Melchorr

    Hello there…I opened an account with Emigrant Direct last month. It was a bit of a chore to set things up, but I suspect the entire interface will be improved in the near future. Anyway, after I noticed my available balance jumping around I sent them a few questions via their message center online (my current balance was holding steady, so I wasn’t overly anxious at this point). When I got no response from my inquiries I finally just called them up. The woman I spoke to was very friendly and quickly explained what was happening. She even conceded that their system needed some improvements.

    Emigrant Direct is going through growing pains (I’m guessing). From what I understand, they are a brick-and-mortar bank in New York and have been around for a long time (though they are quite new to the national money market account arena). While I’m a bit uneasy about some of the bugs that still appear to inhabit their system, it is nice to know that I can actually talk to someone and get some answers. There is even a physical street address listed on their website, so this isn’t some shady operation working from a P.O. Box.

    I shifted most of my money from the ING account that I had before. I like the ING website’s ease of use better, but as of this writing (3/22/05) its current rate (2.60%) has fallen behind the rates of banks like Emigrant Direct (3.25%), Western Financial Bank (3.25%) and Capital One (3.05%).

  • Melchorr

    I have a calendar sitting right next to me and still don’t know what day it is! As of the above post (written 3/21, not 3/22 idiot!) those rates were up-to-date.

  • Anonymous

    ING Direct just raised their interest rate to 2.80% – still less than Emigrant Direct and the other two banks you mention in comment 15.

  • Anonymous

    I was wondering what people thought about Western Financial Bank and Capital One?

  • HMMMM!

    With the Fed having raised the rates on 3/22/05, I am waiting to see if Emigrant goes upto 3.50%.

    I am sure it would come in less than a month.

  • Alex

    Unless the 3.0% -> 3.25% APY jump was done to anticipate the Fed rate going up.

  • HMMMM!

    I would not think so. What if the Fed had not raised the rates for another say, 3 months? Emigrant would have got stuck with 3.25%

  • Anonymous

    I just heard Suze Orman recommending Emigrant Direct, if that makes anyone feel better (or worse!) about the possible risks.

  • HMMMM!

    I missed this news item, what exactly did she say?

  • Squeeky Tightwad

    I opened an Emigrant Direct account earlier this month. I went to their website (www.emigrantdirect.com) to see how to transfer (withdraw) funds back into my regular bank’s checking account, but I can’t see any way to make withdrawals on their website.
    I emailed the “contact us” web adress with this question three days ago, but have not received a response. Seems odd. Withdrawals are not in their FAQ section either.
    Do they have a poorly designed website or is this intentional?

  • Ron

    I believe that you have to click on “External Transfers” and then click on either “One time transfers” or “Repeating Transfers”. The resulting screen allows you to select “from” and “to” for your accounts involved and also prompts the transfer date and amount. Looks simple enough to me.

  • Peter C

    I am having a very difficult time with Emigrant Direct. During account set-up, and again later with a subsequent transfer of funds in, EMigrant got my account number wrong for the ACH transfer. At first they told me it was the bank I was transferring money out of, but when they conceded it was there error. I have been a customer less then a month and had this happen twice already!

  • Pingback: Emigrant Direct and ING Direct - what’s the catch @ Alex Moskalyuk Online

  • Amit

    dang it, i just trasferred money from ing to my bank, to transfer to emigrant, and ing increased their rates today. ughhh…now theyre givin 3.0.

  • Bob

    Got my letter with the account number and signed up with the new username and password. There is no place on the site yet to make additional transfers either way. No external transfers to click on yet as mentioned in post #25. Do you have to wait for your initial deposit to be made “available” before that option appears? And by the way … other than this, I had absolutely no problem opening the account!
    Bob

  • Bob

    The links appeared this morning … as Ron suggested in Post #25! And other options appeared as well. Though their website might not look like something designed by Microsoft, I find it pretty user-friendly and self-explanatory! Don’t know why everyone was having so much trouble. During the application process it is very important to read every word. For example, it said if you clicked the back button on your browser, it would knock you off the site and wouldn’t let you open an account “at this time” … possibly what happened to the fellow in Post #6. And finally, the link below is to a brief comment from Chicago radio station WGN about Suze Orman’s comment (for HMMMM in Post #23): http://wgnradio.com/Dean/links.html
    If it’s not clickable just copy and paste!
    Thanks,
    Bob

  • http://emigrantdirect Evelyn Greenstein

    I have been on the computer for over an hour and cannot find the link to bring up account I
    signed up for 3 days ago. Will call emigrant on Monday but this is very upsetting.

  • Anonymous

    Evelyn… did you receive the letter from EmigrantDirect.com in the mail with your account number? Until you receive that letter, you will not be able to view any of your account information.

  • Bob

    If you didn’t get an email with a link … then the account isn’t ready to be accessed yet. The letter tells you when that email link will be active

  • Sue

    Yes, folks, it takes reading the directions, following their setup rules, waiting for mail confirmation and learning to use the website, but there’s no mystery about Emigrant Direct. All the info is accessible on the website if you’re patient and follow the instructions. No big mystery there. So far I’m satisfied.

  • CTP

    Hello there…just opened an account with emigrant direct two days ago and received the two small deposits in my account this morning and validated the account. got this message along with it:

    Instructions
    You have now successfully validated ownership of your account with EmigrantDirect. Please make sure that your linked funding (checking) account has sufficient funds in place, so that we may process your initial deposit transaction.

    The next step in the process is that we will send you a letter, via US mail, with your account number and instructions for activating your account online. This step, which is outside the online environment, is for your added security.

    Please do not attempt to log onto EmigrantDirect and view your account until you have received this letter and followed its instructions. You cannot access any of your information until you have received your account number.

    When you do sign up, you will select a new user ID and a new Password. The user ID and password you selected for the account ownership validation process, which you just completed, were for that one-time use only and should be discarded.

    If you have any questions or need assistance, please contact Customer Service at 800 836-1997 or email us at emigrantdirect@emigrant.com.

    I am reading that they have alot of problems with their web system but the 3.25% is good enough to make up for that

  • Liam

    I think the process has gone well for me. I like the way they did the tiny verification transactions with my checking account. I think adding the USPO part to the process give me comfort that they are making significant effort to verify my identity, and there is some added security in finalizing the account opening by US mail. Changing the original user ID and password by mail that first time also adds security by removing that change from the WWW.

    Some of the complaining above is weak. One person above was complaining that it is not easy to link the emigrant direct account to another bank for transfers out. Well that seems like a plus to me. If I want to move my money to another bank, I can bring it back to my original checking and transfer it wherever I want from there. It also prevents crooks from transfering savings out of emigrant direct to anywhere but back to the source account. The ability to transfer it out of emigrant direct savings, to another 3rd party financial institution just opens up a whole new avenue for abuse, and shady activity, for example poetintial fraud or “money laundering”? Think about it.

    I think emigrant direct is smart to not allow this. Electronic banking has lots of vunerablities, and from what I see so far they have taken steps to keep it secure. Of course my relationship is just starting with them, so we will see if I am singing the same tune as time goes by. I will keep checking with this site again and see how its going for the rest of you.

    Thanks

  • Adam

    Despite the extended time it took me to set things up, mostly because I was too busy, Emigrant Direct has been great. The website is very simple; not a lot of bells and whistles. If you are just parking money for the interest rate it is perfect. I am very satisfied.

    I was frustrated at first as well because I received the error message that many people are complaining about, but I just figured that when you are dealing with money, why do you want it to be too easy. I appreciate the extra safeguards they have implemented, even if it makes things a little less convenient.

  • user

    opened 2 accounts with them, 1 worked fine, the other is still waiting after a week for the transfer option to appear. Have wrote them 4 emails over 4 days and received ZERO response.

  • Joe

    I opened an Emigrant Direct account a few days ago and just noticed the initial small deposits in my checking account, so I went to the link they provided in their email and entered the two dollar amounts and submitted the form and it hung for a while and eventually returned with a page stating that an error (1005) had occurred. I therefore didn’t know if my validation had succeeded or failed. I attempted to login to the same page with the same link again but this time it told me “This account is currently not available. Please contact customer service.” I then called customer service and they told me that I had successfully validated, and that upon validation the temporary validation account is not valid for logins. So everything worked fine except that I never received a “success” webpage after submitting the deposit information. It’s a bit annoying, but not a huge deal.

    I am curious to know if both deposits to, and withdrawals from, the ED account are initiated from the ED side. My checking-account’s bank has no fees for ACH transfers (deposits or withdrawals) as long as they’re initiated by the other bank.

  • Alex

    Joe, yes, everything is initiated by Emigrant, since you basically browse their site when initiating withdrawals or deposits.

  • Eric

    I’ve been waiting for three weeks for the letter by US Mail to complete the
    sign-up procedure. In the meantime I have no access to the somewhat large
    (to me) amount I opened the account with.

    I’ve written emails twice and gotten absolutely no response. If you have
    trouble with your US Mail getting to you reliably, this process can be terrifying!
    I’ve called and waited maybe 1/2 hour for customer service to verify that they
    did send me the mail by US Post.

    But if that mail gets lost, what happens then?! I’m still waiting (for replies to
    my now 3 emails) (and on hold again) to find out…

  • Wayne

    Emigrant is rock solid. Problem is somewhere between your keyboard and your seat.