Dedicated to Deposits: Deals, Data, and Discussion

5.25% Savings Account at Salem Five


Salem Five has a new online product called the eSavings Account which pays 5.25% APY. It requires that you open a checking account called the eChecking. Both have a $100 minimum opening deposit requirement, but neither has a minimum balance requirement after opening, and there are no maintenance fees. The only other requirement to retain the high yield is a minimum of 3 bill payments each month from the eChecking account (Bill pay is free). Without the 3 online bill payments, you'll earn a reduced interest rate (currently 0.50% APY). No interest is earned on the eChecking account. One nice feature of the eChecking account is the refunding of ATM fees charged by other banks (up to $10 per month).

Some things I'll need to find out once the customer service center is opened: External ACH transfer service? Hard credit inquiry? ATM reimbursements automatic or do you have to send in receipts? Free checks? If not, first book of checks free?

Salem Five is FDIC insured. Accounts with funds over the FDIC limit are privately insured by the Deposit Insurance Fund. One thing a little intersting is that Salem Five was established in 1855, but it wasn't FDIC insured until 1981.

This savings/checking package could be a nice alternative to what Citibank and Wamu offer. The only thing bad about these packages is that if you write many checks, you won't earn interest between the time that you write the check and the time the money is debited from the account. I've heard some people timing when they move money from the Savings to minimize the no-interest time. If you mistime or have trouble accessing the account, you could be hit with a NSF charge. This is one advantage of high yield checking accounts, such as ebank's ePremium Checking (see post).

Thanks to Scott who mentioned this new product in the finding deals post.

Comment #1 by Anonymous posted on
I have been using salem5 for more then 10 years. It is a great local bank.
The only problem is that high interest rates don't last long. How long will 5.25 rate be around?

Comment #2 by scott (anonymous) posted on
I have also been with them for about 10 years, Great local bank but also decent size at almost $2 1/2 Billion. Have had a number of checking accounts with them and have never had a hard pull. I saw in the branch that they use that creditchex to verify ID. I think the rate holding will depend on how profitable account is, They should make a decent amount in float money since most people do not think like us. Also I have their Platinum cash account and even though they changed terms to libor minus a 1/2 a couple weeks after offering account they kept me at full rate for over a year after. Just found out on 2/15 my account changes to minus, Which put's the rate at 4.96% so this account might take it's place, But would miss all that float time on bills and funding new CD's. I don't think you will be able initiate ACH from it but will work if done from outside. To fund you must send a check or if you have an account with them you can transfer from that. On ATM reimbursement, They credit to your account at statement date

Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
Thanks Scott for providing the details.

Comment #4 by logue (anonymous) posted on
Attractive offer and has a good potential to be a primary account with a combo of savings and checking, if only their bill pay has e-bill/bill presentment. I'm still looking for a decent savings/mm and checking combo that provides a decent rate and bill pay with e-bill.

Comment #5 by Anonymous posted on
if i miss 3 bill payments in the month of march, it says the savings rate will drop to the low 0.50%. will it go back to the promotional 5.25% rate if i make the 3 bill payments in the next month, or does it stay at 0.5%??