Sallie Mae Bank Review – One of the Higher Yield Online Savings Accounts

by David Ning · 15 comments

Sallie Mae Bank is yet another option for our savings, and initially, I thought the yield wasn’t high enough to justify talking about it. However, with the competition all recently dropping rates, it’s time to take a look.

The Standards Offering of Sallie Mae Bank

I don’t want to bore you with the standard fluff, as we’ve talked about online savings accounts a ton here. You know the drill: Rates that are slightly higher, online only option, easy sign up process and the like. In essence, it works.

What’s Different with Sallie Mae Bank

Though things are more of less the same, some may feel that because Sallie Mae lends money to students to fund their education, it is easier to do business with them. I mean, which would you rather: your money being used to fund other people’s car purchase, or your money going towards a quality education?

Click Here to Learn More and Sign Up for a Sallie Mae Savings Account

The Upromise Difference

Since Salle Mae also owns Upromise, they’ve decided to leverage their offerings (meaning good things for you as a customer). All you have to do is link your Upromise account with a Sallie Mae savings account and you get a 10% bonus on your Upromise earnings, calculated annually. It’s necessary to setup a monthly automatic savings program of at least $25 or have at least $5,000 in the Sallie Mae account within 90 days of opening the account, but if you have Upromise account, this seems like a no lose situation.

Aside: For those who don’t know, Upromise is a rewards program for helping you save money for college, where you can earn money for doing everyday things like going to participating restaurants and buying groceries. The best part is that you can still use your own credit card if you wish, so you get double savings. You can learn more about UPromise here

Some Caution about Sallie Mae Bank

Many may not care, but while looking through their account terms, I found something about Sallie Mae’s fund holding period that is of interest:

  • Your initial deposit is held for 10 business days in most cases, but could be longer if verification of the funds are required. This is common, but it gets more interesting from here.
  • Once your account is open, your subsequent transfers are held for five business days after your account gets credited of the funds if the amount is $5,000 or less. If the amount is $5,000 or more, they are held for 10 business days.
  • When you close the account, Sallie Mae Bank may place a temporary hold on your funds to allow any necessary processing procedures to be performed.

On some level, I understand that this could deter fraud. But if they wait until the funds clear from the other side, why do they have to hold your deposits for additional time? What do you think?

Also, the account closing clause is obviously to protect them in case everyone wants to close their account. But if you ever want to do this, I suggest withdrawing all your cash before you mention that you are closing your account just in case they decide to delay the process.

Is Sallie Mae Bank’s Online Savings Account Right for Me?

I’m not sure that the market needs another offering, but as a customer, competition is always welcome. If you are an Upromise user (or someone who will benefit from college savings), then having a Sallie Mae account is a no-brainer. For those who are looking for a new savings account, you may like the fact that it’s putting your money to good use, or the fact that the rate is one of the highest in the nation. It’s a solid offering, but just remember about the holding period for your deposits. While it’s not a deal-breaker in my opinion, at least know the fine print, especially if you want to close your account.

You Can Click Here to Learn More or Sign Up for an Account

Resources:

Sallie Mae Bank is just one of the online banks we reviewed on MoneyNing.com. Here is the full list of online high yield savings accounts we have experience with.

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{ read the comments below or add one }

  • Even though Sallie Mae has lowered their rates recently I believe they are one of the more reliable companies out there. I know some people might have had issues with them but I believe over time they have gotten better.

  • They lowered their rate to 1.30% APY from 1.40% APY last week but they still remain at the top of the charts for interest rates on either online savings accounts or money market accounts. The UPromise integration is also a very promising feature that we particularly like.

  • Blue Spyder says:

    No way, these people ruined my moms credit, she got down to the very last 4 payments, mailed 1 in late and they acted as if she defaulted on a mortgage, screw this bank…

  • eric says:

    i had money marker account with Sallie Mae Bank’s, they change the rate and play game with the customer’s. bad bank …

  • ZACH says:

    Sallie Mae Bank is small town bank, its 2 people operation, they try to Freud me, they will hold your money for 1 week with out giving up.
    don’t do business with this bank, you will be disappointed.

  • luis gomez says:

    If possible ,had paid student laon want to know if i still own the bank.please notify me asap if nessecery contact me personally at (347)318-688

  • Janet Lindsey says:

    Your student loan rates are horrible. My son went thru Sallie Mae to attend a railroad school. The loan was originally around $6400.00 in Apr. 2006, and this month Sept.2010, he still owes $4063.00 on his loan. He has paid anywhere from $100.00 a month in 2006 to $85.00 a month in 2010. They lowered the minimum amount due in 2009. The loan is for 10 years and will end up costing him over $10,000.00 when finally paid off.

  • Robert says:

    I opened an account, at the beginning of July, only to find out that I can’t transfer money to an from the account via the online interface, only can do this over the phone, currently the tab and only the first step of the transfer process work apparently steps 2 and 3 were not important enough for them to complete before opening their Online Banking, and I also see no pending transactions even when there are pending transactions, done via phone of course. When I questioned when this core functionality will be fixed I received the following response. The spelling errors are from them, apparently spell-check is to high-tech for them to use, I removed my name and had to remove character encoding for the carriage return and line feed.

    ———————————————————————————–
    FORMATTED:

    Mr. ~~~~~~~~,
    We do apoligize for the inconvenience on transferring funds from the website. The anticapted time of this issue being rectified is Aug. 6. You can certainly wait until Aug 6 to transfer, but if you would like us to assist you in the meantime we would be more than happy to process your request from the office.
    Please let us know if we can be of futher assistance to you.

    Thank you,
    Sallie Mae Bank
    1-877-346-2756

    ———————————————————————————–
    ORIGINAL:

    Mr. ~~~~~~~~,_$C(13)_”_$C(10)_”_$C(13)_”_$C(10)_We do apoligize for the inconvenience on transferring funds from the website. The anticapted time of this issue being rectified is Aug. 6. You can certainly wait until Aug 6 to transfer, but if you would like us to assist you in the meantime we would be more than happy to process your request from the office._$C(13)_”_$C(10)_”_$C(13)_”_$C(10)_Please let us know if we can be of futher assistance to you._$C(13)_”_$C(10)_”_$C(13)_”_$C(10)_Thank you,_$C(13)_”_$C(10)_Sallie Mae Bank_$C(13)_”_$C(10)_1-877-346-2756_$C(13)_”_$C(10)_”_$C(13)_”_$C(10)_”_$C(13)_”_$C(10)_

    ———————————————————————————–
    I hope this helps in any one making the decision to move their money to Sallie May. I’m pulling my money the moment they fix the transfer problem and putting it someplace I feel more secure about the quality of the services provided.

  • Whit says:

    I have emigrant direct and I’m satisfied with them but their yield is only 1 percent. It’s my money after all, so I want it to do more. Should I switch over to Sallie Mae just for their higher yield? Or will it eventually come down to the ING/Ally 1.10% yield as well? Any help or comments are much appreciated.

  • Jason says:

    They just raised their rates to 1.4%, which is best in the industry. Is there a reason why I shouldn’t go with them? Anyone care to share?

  • Melanie says:

    I transferred some savings from ING to Sallie Mae, since I do UPromise, etc. They have lost it. Their computer glitched and transferred it twice, then they are saying my bank has it, but not true, meanwhile, it’s out there somewhere. I’m hoping that this is a one-time thing and they find my money instead of trying to place blame.

  • Vincent says:

    The rate on the Sallie Mae online savings account already dropped to 1.25%. I guess the Upromise deal is good for some but someone like me who’s looking for the rate alone, there are better deals out there.

  • David says:

    The only difference between Sallie Mae bank and the others is the generous 10% reward. At the current 1.35% yield (as of 3/8/2010), it’s comparable to is competition and there really isn’t any reason for a rate chaser to switch unless the online bank they are using has a lower rate.

  • Mona says:

    I joined Upromise and racked up quite a bit of rewards already. The 10% will be good. If anyone is thinking about this, I highly recommend checking Upromise out.

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