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Sallie Mae Bank Review
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Sallie 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.
{ 21 comments, please add your thoughts now! }
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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.
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.
After looking it over, I think I’ll stick with ING.
The Statement Copy Fee – $5 per statement puts me off.
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
I agree. Everything I’ve done with ING has been completely without hassle, unlike any other bank I’ve used.
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.
What happened?
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.
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.
HOw are people earning $1000 / year on Upromise..Pray tell.
My Upromise earnings have always been low, and a 10% bonus would net me pocket change over the course of a year.
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.
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.
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.
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.
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
Whats the liquidity on the sallie mae savings account? do i have complete access to the funds id needed?
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.
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.
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.