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Sallie Mae Bank Review

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Sallie MaeSallie Mae, normally known for their federal and private student loans, is entering the savings account area with a high yield savings account currently offering 1.35% APY with no monthly fees and no minimums. It’s your standard online bank offering with a pretty standard savings account rates. In scanning their list of offerings, the only thing that stands out is their 10% bonus for Upromise earnings, which can be substantial if you’re a big user of Upromise.

Why Sallie Mae?

I’ve been racking my brain to come up with an explanation of why Sallie Mae has started to offer banking services and I was at a loss until I remembered one key insight – most consumers, until recently, were completely unaware of high yield online banks. It wasn’t until Ally Bank made front page news that online banks started to get respect and awareness for your average consumer.

It’s easy for “us,” readers and producers of personal finance blogs, for us to forget that because we get a daily dose of it. If you mentioned “reward checking accounts” to some of your friends, I bet you’d see some puzzled looks. Ultimately, I think Sallie Mae is leveraging their connection with students and parents to bring even greater awareness to the consumer.

Upromise 10% Bonus

If you use Upromise, you can get a 10% annual match on your earnings if you satisfy these conditions:

You must link your High-Yield Savings Account to your Upromise Account and, within 90 days of opening your High-Yield Savings Account, either: (1) set up an Automatic Savings Plan with a monthly deposit of $25 or more, or (2) fund the account with $5,000 or more. Upromise will match 10% of your Upromise earnings posted as ”funded” to your Upromise Account during the calendar year of January 1 through December 31. Your 10% annual match will be deposited into your High-Yield Savings Account in February of the following year provided that both accounts remain active and are in good standing at the time of transfer.

The Upromise bonus, a partnership that makes sense, is the differentiator for this account. If you earn a lot from Upromise, this normally dull 1.35% APY might be much much higher once you factor in the 10% bonus. If you don’t, then this account doesn’t really offer much else.

Pedestrian CD Rates

Their CD rates are competitive with the best CD rates but they’re not rate leaders (but they aren’t rate laggards either):

  • 12 month – 1.50% APY
  • 36 month – 2.20% APY
  • 60 month – 3.00% APY

There are no minimum balance requirements on CDs and standard fees for closing a CD before maturity (3 months interest if it’s a 12 month or less CD, 6 months interest for CDs over 12 months). Pretty standard stuff.

Account Fees

While there are no monthly fees and no minimums, there are fees associated with the account, set out in the Fees and Charges section of the Terms & Conditions:

  • Excessive Transaction Fee – $10 (The “Truth-in-Savings” section applicable to your Account(s) sets forth transaction limitations.)
  • Returned Deposit Fee – $5
  • Paper Statement/Statement Copy Fee – $5 per statement

If you do open an account, be sure to avoid excessive transactions (more than 6 transfers a month) and request paperless statements.

What are you thoughts on this account? I’m especially interested in hearing from people who use Upromise a lot to get a sense of how much they’re earning in a calendar year. If the most active people are earning $1,000 a year, then an extra $100 is going to be great. If most people are earning $100 a year, then $10 is… eh, so so.

{ 34 comments, please add your thoughts now! }

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34 Responses to “Sallie Mae Bank Review”

  1. Soccer9040 says:

    I guess on the UPromise front, I wouldn’t do this for the college savings advantage. Iv’e had UPromise for 10 years now and it just doesn’t ever really add up. Yes I’ll be happy to use the hundred or so dollars I’ve accumulated, but its just not enough.

    • Chris says:

      Same here…It is almost like lost money, found years later. You can’t do much with it but it is mine for the taking.

  2. Shirley says:

    After looking it over, I think I’ll stick with ING.

    The Statement Copy Fee – $5 per statement puts me off.

    • jsbrendog says:

      ing all the way. until someone completely blows away the interest rate there is no reason to switch from them. I am a very satisfied customer

  3. Jeff C says:

    I am just not a fan of Sallie Mae’s. After doing to loans for my daughters college I would never use them again. And I have 4 more kids to go. Ouch.

    • Jim says:

      What happened?

      • Jeff C says:

        Well for the most part its my own fault. The first year that we got a loan from them it ended up being 8.5% and deferred payments until she was out of college. It is not a great loan but not horrible. I would rather not do the deferred payments but we just cant really help her with the loans right now. The next year everything got held off till the last minute, she filled out the applications and they sent me mine to cosign. I signed them without looking through them carefully. Again I have have no one else to blame but me. When the loan came back it was at 12.45% and the interest needs to be paid each month. $120.00. She cant afford that right now and neither can I, but I am paying it. When I called them about that they said they didn’t do the deferred loans anymore and this was it and there was nothing they could do to help us. They dispersed the first semester I canceled the second and went with someone else.
        Having to pay the interest now is difficult, I do realize its the best way it just makes it hard right now. Its the 12.45% that really pisses me off. Its all my fault for not analyzing it but I still wont use them again and my daughter has 2 more years to go and 3 brothers and a sister behind her.

        • Jeff,

          I am assuming that you maximized your federal loan options first(Stafford and Plus)? The federal parent plus loan is fixed at 8.5% and is a much better option than a private loan.

          If for some reason you are denied on the Parent Plus Loan, your student will automatically be eligible for $4000 in additional unsubsidized Stafford loan monies.

          Hope this helps. When your others are making their way through high school and looking at colleges feel free to look me up. Be glad to provide any guidance.

  4. I think that you are exactly right as even up until somewhat recently I did not know all of the details of the various rewards checking accounts that are out there.

  5. Chris says:

    HOw are people earning $1000 / year on Upromise..Pray tell.

  6. zapeta says:

    My Upromise earnings have always been low, and a 10% bonus would net me pocket change over the course of a year.

  7. daenyll says:

    I really don’t see much value in upromise, I do get some earnings ~25/yr thru a survey site that links thru them. But I’m not going to give in to overspending with their credit card and thru online shopping at stores I don’t tend to use just to earn some savings. I put a link from the urpromise to sallie mae loan payments but wouldn’t use the new sallie mae savings.

  8. Jim,

    My understanding is that Sallie Mae is offering these saving options to students and families because it gives them cheaper access to cash reserves. If they have to borrow it from the feds, the rate will be much more.

    Add in the extra cash they make through the Upromise merchant fee exchange program and they are golden.

    It will be interesting to see if they get many takers.

    Participating in Upromise is a no-brainer but depending on how early you get in the program, you are probably only looking at book money by the time your student heads off to college.

  9. Ginger says:

    I already had a upromise account and make a least $50/year from erewards through upromise and sometimes up to $100 so I signed up for sallie mae. I don’t like them, they have not gotten all the kinks worked out yet but hey, it is free money. $5 to $10 may not seem a lot to you but it adds up. Last year I made $300 in interest chasing deals like this. That $300 pays pays for more than 6 month worth of my interest cost. Ever little bit helps when you just finished college.

  10. eric says:

    Yeah all of the UPromise users I know don’t make big bank. I thought about signing up when they first came around but decided it wasn’t really worth it.

  11. Mike Gritman says:

    I don’t know if I have the right location , but here i go.6 months after graduation they informed me I owe them $9,000 directly. They never filed the paper work for my loans, so now I can’t defer my payments while I’am in another school. They had 9 months of school to tell me if there was a problem with my financing

  12. jeff snyder says:

    Whats the liquidity on the sallie mae savings account? do i have complete access to the funds id needed?

    • Elliott says:

      Not always. There is a 5-10 day hold on deposits (10 for initial deposit and those over 5k)

      • John E says:

        Yes, those holds are true, but only if you initiate the transfers from within your Sallie Mae account. If you initiate the transfers from within your other banking institution into your Sallie Mae account there is no hold time. Your money is available to use immediately upon the deposit hitting into your Sallie Mae account. I have tested this and it is true.

  13. Carrie says:

    I just signed up for both Upromise and the Sallie Mae savings account. The rates for the Sallie Mae savings account outdo my ING Direct savings account offers by .3% and I mean everything helps. I do have two accounts I plan on keeping with ING (savings and checking) because I like how they do business, but I figured I’d give this a whirl and see how it goes. I’ll update after a few months of having the account. So far setting up the account is the same as any other online banking setup. I’ve also had CD’s with ING and Metlife bank so I have some background to compare to.

  14. JoAnna says:

    I was reading reviews on this account, and I’m with Carrie on this one. Their interest rate is higher, and every little bit helps, but I will keep my ING account active.

    For the record, I’ve had Upromise for 7 years, and have earned about $400, so roughly $57 per year. A 10% match is not a significant of money, but with a higher interest rate as well, it seems like a good deal. Plus, it’s really all “free money” to me.
    I don’t go out of my way to spend money for the earnings, and I don’t use Upromise exclusively. I use other reward programs such as BondRewards and some of the shopping programs through my credit cards like Discover Mall. I just shop through whichever one gives me the best reward.

  15. Online Banking All The Way says:

    I use Dollarsavingdirect.com which is a child of Emigrantdirect.com, but with higher interest. Currently, Sallie Mae is .2% higher which is not enough to make a change worthwhile.

  16. Elliott says:

    Correction for your review: the excessive transaction fee is for going over six transactions per quarter, not per month. The truth in savings disclosure on my account said the limit was six per statement period and their statement periods are quarterly.

    • Tanya says:

      Thanks for the clarification Elliott. Does that mean “all” transactions, even deposits into your Sallie account? I put a few dollars in just to see what happens.

  17. JoAnna says:

    I actually found that for me, the Capital One savings account that earns 1.35% with a 10% interest bonus (under certain conditions) is a better deal for me. I earn just slightly more in interest per month than I do with Upromise, so a 10% bonus on interest vs. Upromise earnings is a better deal for me, even with the slight interest rate difference.

  18. Tyler says:

    So the Excessive transaction is monthly and they will not even give you a warning or have any humanity when you call. I called to discuss the fee and the first answer I was given was that they do not charge fees. Second they called me a 6am to discuss why there was a fee. I called to ask some more questions like is there a warning period or refund because it was my first time, like at Capital One, and all I got was please read your terms and conditions and the FAQ.

  19. JoAnna says:

    Wow, it’s a shame that they have such poor customer service. I wound up opening an account with both Sallie Mae and Capital One because I am going to “race” them and see which one seems to add up faster. Unfortunately, that was before I saw Tyler’s comment. Hopefully I won’t need their customer service anytime soon!

  20. momofhsjr says:

    How the heck are people earning $100.00/yr and more at upromise????!!!! I’ve been a member since 2003 and my total earnings for 7yrs is a mear $20.19….that’s LESS THAN $3.00/YR :[

  21. OnHold says:

    One big glaring example of misleading is their misstated fund hold policy. Their disclosure reads:
    ————
    Hold on deposits: For your initial deposit — whether made by check or electronically — funds will be held for 10 business days, unless a longer hold is required per the verification process. Your funds will also be held until you verify the microdeposits on your linked account. For all subsequent deposits made by check or electronically in the amount of $5,000 or less, funds will be held for 5 business days from the effective date of the deposit. For all subsequent deposits made by check or electronically in excess of $5,000, funds will be held for 10 business days from the effective date of the deposit.

    The effective date of the deposit is the day that your account is credited for that deposit. To the extent permitted by law, Sallie Mae Bank reserves the right to extend these timeframes for certain reasons, including suspicion of fraud. In addition, funds in an account that is being closed may be subject to a brief temporary hold in order to allow outstanding transactions to clear and for any necessary processing procedures to be performed.
    —————

    So I make an additional deposit of $5000 which I expect to be held 5 business days per above ($5000 or less). But no – Sallie Mae is holding the $5000 for 10 days. Not what their agreement and disclosure states.

    Phone rep tells me $5000 is held for 10 days no matter what disclosure says. Also adds that law permits holding any amount of time they so choose for fraud protection.

    I asked they correct their published fund hold policy but Sallie Mae appears to have no intention of doing so.

    • John E says:

      Yes, those holds are true, but if you limit a transfer to $5000 or less the hold time is, indeed, 5 days. But if you initiate a transfer of $5000 and during the hold time of this $5000 you initiate another transfer of some amount less than $5000 it appears that the lesser amount will be available in 5 days and the greater amount ($5000 in this case) will be held for 10 days. So it looks like you should do a transfer of $5000 or less and wait for the 5 day hold to expire before you initiate another transfer.

      If you initiate the transfers from within your other banking institution into your Sallie Mae account there is no hold time. Your money is available to use immediately upon the deposit hitting into your Sallie Mae account. I have tested this and it is true.

  22. Graduate says:

    Stay away from borrowing from Sallie Mae!! “Smart Option Student Loan”… more like Worst Option Student Loan.

    Was told that I was eligible for a payment plan of 14 months, interest only, effective immediately. I subsequently have been making interest only payments.

    Yesterday I received a letter in the mail saying I was overdue. Turns out that I wasn’t eligible for the interest only payments. Supposedly Sallie Mae sent me a letter notifying me of the error, but I never received that letter.

    When I called today to see what was going on, I was told that they have “retrained” the employees involved and that’s all they can do. Now I’m out significant $$ due to their error with no agreeable solution.

  23. This Girl says:

    So I opened a Sallie Mae NoFee Student checking and it says I have funds on hold. Which is wierd because the school only deposited the first part of my 1st grant which after deducting tuition and all that was about $250 dollars. Now it says I have $24 dollars(aka funds on hold) on hold and I have an available balance of -8.91 but a current balance of 15.09 and the funds on hold so wth lol. Am I missing something here just curious:)

  24. Brad says:

    Their ACH hold policy is pretty bad. They place a 5 day hold on ACH deposits, which is much longer then most banks, S&L, or NCUs. I quote from their email..
    —————————————-
    Dear Mr. ____,

    Thank you for contacting Sallie Mae Bank.

    For all deposits made by check or electronically in the amount of $5,000 or less, funds will be held for five (5) business days from the effective date for those funds, which is the day that we credit your Account for that deposit.

    Deposit hold for ACH transfer is not only by Sallie Bank, it is both a Regulatory and Bank Standard Hold Policy.

    Thank you,
    Sallie Mae Customer Service


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