Opening an Emigrant Direct Savings Account, Part II

Comments (scroll down to add your own):

1. I was about to open an account until I ran across this little gem in their agreement:

   The Bank may refuse to permit withdrawals in cases such as, but not limited to, the following:

   1. The Bank chooses to exercise its legal rights to require up to 60 days’ advance written notice of any intended withdrawal from this Account and the 60 days have not passed since we received the required notice from you;
   ….
   8. An equipment problem or Act of God, including, but not limited to, war, strike, act of terrorism which prevents the Bank from determining the availability of funds

   Those are some pretty blanket reasons for not giving you your money and is one of the main concerns I have about Emigrant. As far as I know, Emigrant is entirely based in New York City. What happens if there is a terrorist attack there (again)? Does Emigrant freeze all accounts? How soon will I have access to my money? In a worst case scenario where a dirty bomb goes off in New York and everyone flees the city, how will I get my money back?

   I don’t recall ING having a similar blanket withdrawl policy.

   I’m reconsidering…

   Guest

   Comment by Guest — Oct 26th 2005 @ 9:28 am

2. I just sent them an email (about the agreement) to see what they would say, I’ll let you know.

   Comment by jim — Oct 26th 2005 @ 10:13 am

3. Hmmm… I hadn’t yet seen that little bit of info. To be honest, I’ve never checked my other banks for similar statements, so it *might* be standard fare. Then again, maybe not.

   Comment by nickel — Oct 26th 2005 @ 10:27 am

4. I rarely read any legal mumbo jumbo either with one fine exception: Anything that has to do with money (my money), I pour over with a fine tooth comb.

   ING doesn’t have any 60 day limit on withdrawls. It does have a liability disclaimer but reads differently and refers to liability not an excuse not to give you your money.

   OUR LIABILITY FOR FAILURE TO COMPLETE AN ELECTRONIC FUND TRANSFER. If we fail to complete a transaction on time or in the correct amount, when properly instructed by you, we will be liable for damages proximately caused by our failure unless:

   F. The failure was caused by an Act of God, fire or other catastrophe, or any other cause beyond our control despite reasonable precautions that we have taken;

   The KEY Difference here is Emigrant’s “may refuse to permit withdrawls” vs. ING’s “Our liability is limited”

   I’m not a lawyer but it seems Emigrant may simply shutdown in cases of emergency and stop withdrawls. This is important to me since I was closely involved in Katrina and Rita hurricanes and I know how hard it was for people to pull money out of banks/ATMs during the crisis.

   Comment by Guest — Oct 26th 2005 @ 1:56 pm

5. The 60-day provision would be a dealbreaker for me on any account that was supposed to be liquid. But every bank I’ve ever dealt with has had contract provisions covering force majeure. (Just as every bank I’ve ever worked for has had multiply-redundant technology infrastructure, so that a Katrina-scale hurricane or a 9/11-scale terrorist attack wouldn’t completely wipe them out…although it might cause some slight delays.)

   On the other hand, if the terrorists get enough nukes to take out every major American city on the same day, chances are you won’t be able to withdraw your money, no matter who your bank is.

   Comment by Matt — Oct 27th 2005 @ 4:31 am

6. The disclosure here does not seem to contain this reference. Is there another location you refer to here? Thanks

   Comment by Reader — Nov 1st 2005 @ 4:54 pm

7. Go here, scroll down a bit to the section titled “Withdrawing Funds” and then look under “Refusal to Permit Withdrawal.”

   Comment by nickel — Nov 1st 2005 @ 8:10 pm

8. This is a NY banking law provision, which can be studied here.

   All NY chartered banks required to have and it was last invoked during the bank runs in the Great Depression (not the notification by telegraph …) (as per the NY State Banking Department at http://www.banking.state.ny.us/)

   2. A savings bank may at any time by a resolution of its board of
   trustees require a notice of sixty days before repaying deposits which
   are not demand deposits, in which event no non-demand deposit shall be
   due or payable until sixty days after notice of intention to withdraw
   the same shall have been personally given by the depositor. Any such
   non-demand deposit shall cease to be due or payable under such notice or
   by reason thereof upon the fifteenth day after the expiration of such
   sixty days’ notice if not withdrawn by the fifteenth day thereafter.
   Nothing herein contained, however, shall be construed as prohibiting any
   savings bank from making payments of such deposits before the expiration
   of said sixty days’ notice. Except as provided in subdivision four of
   this section and in subdivision one-a of section two hundred thirty-four
   of this chapter, no savings bank shall agree with its depositors in
   advance to waive said sixty days’ notice nor shall it require a longer
   notice than sixty days. In the event that any savings bank shall require
   that notice be given before such deposits may be withdrawn it shall,
   upon the day such requirement is made effective, notify the
   superintendent by telephone or telegraph that such requirement has been
   made.

   Comment by Reader — Nov 2nd 2005 @ 8:19 am

9. Well that settles that. I will steer clear of all New York Banks!

   Comment by Guest — Nov 2nd 2005 @ 9:24 am

10. The way banks work is that they have checking accounts (called demand deposit accounts) that must release funds on demand. Savings and NOW accounts (stands for negotiated order of withdrawal) are used by banks to fund loans, so in order to protect the bank from a “run” that would put them out of business (they could not call the loans fast enough to pay the deposits) they put in the withdrawal terms. I don’t think Emigrant has ever exercised this and I am sure they don’t ever want to as it would erode trust and cause the very “run” they are trying to protect.

    I had a problem with ING. I had an arrangement with a third party to debit my ING account. We had a little problem getting in sync and they bounced 3 ach debits. We finally got it together and all was going fine. I just got an email that ING closed my accounts and sent the money to my linked checking account. Never once did they contact me to either warn me or find out what was going on. They don’t care that I now have to stop the “now running right” ACH debits before they try to hit the account. My call to customer service resulted in a snotty attitude from the guy. All-in-all I am really unhappy with the human service. The system worked fine but don’t make a mistake or your kicked to the curb.

    On the bright side it made me look for something else and now I am going to be paid more for my money at Emigrant, 4% is not bad and the risk of them exercising the 60 day rule is nil.

    Comment by dacyma — Nov 6th 2005 @ 6:10 am

Leave a comment