Update 10/16/08: The rates were cut today. The yield for balances under $50K is now 2.75% APY.
Salem Five Direct slashed rates today on its eOne checking account. The bottom tiered rates were reduced by 60 basis points to 4.10%, 4.20% and 4.30% APY. The top tier rate went down by 50 basis point to 4.60% APY. Below is how the rates have changed since Salem Five launched eOne.
Tiers Original 9/25/07 12/18/07 3/29/08 10/16/08
APY APY APY APY APY
Under $10K: 5.00% 4.70% 4.10% 3.00% 2.75%
$10K-$25K: 5.10% 4.80% 4.20% 3.10% 2.75%
$25K-$50K: 5.10% 4.80% 4.20% 3.20% 2.75%
$50K-$100K: 5.20% 4.90% 4.30% 3.20% 3.05%
$100K-$1M: 5.30% 5.10% 4.60% 3.50% 3.35%
Note, there were a few rate changes between 12/18/07 and 3/29/08.
One good thing about Salem Five Direct is that they don't make frequent rate changes. So we can hope there won't be more cuts any time soon. If that happens, these rates may become more competitive as other banks continue to cut their rates.
Although these rate cuts make this account less appealing, it still has many nice features. The basic features include:
- $25 bonus for enrolling in direct deposit
- $100 initial deposit required
- No monthly fee or minimum balance requirements
- ATM refunds up to $15 per statement cycle
- Unlimited checking transactions - first 25 are free
- Free online bill pay and debit card
- Account requires eStatements and is not available at Salem Five branches
- No ACH system. External transfers can be initiated from your other banks.
I have more details of this account in this May post. Many readers have provided more details of this account in the comments. Below is a summary of these:
- Hard pull from Equifax (slightly dings your credit score)
- Postage-paid envelopes for deposits are provided for free
- Poor support for Quicken. $5/month is charged for Intuit's Quicken Bill Pay service.
- Good customer service that can be reached quickly
- ATM cash withdrawal limit listed at $500
- Little things can cause Salem to reject application such as a driver's license with an old address
Salem Five is FDIC insured (FDIC Certificate # 23296). Note that the FDIC page only lists the SalemFive.com URL and not SalemFivedirect.com. One thing to note, however, is that the toll-free number listed at Salem Five Direct is the same one listed at Salem Five.
Accounts with funds over the FDIC limit are privately insured by the Deposit Insurance Fund (DIF). DIF insurance applies to all Massachusetts state-chartered savings banks. A reader noted that Massachusetts had a number of banks fail in the 80's and not one person lost a penny in a DIF bank.
Checking Account Alternatives
Please see my the best checking account post for other alternatives. I'm afraid it's a little out-of-date.
Thanks to the readers who commented on this rate change.