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Salem Five Direct's Checking Account Update and Its New Online Savings Account

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Salem Five Direct

Update 6/29/10: The savings account rate has fallen to 1.10% APY.

Salem Five Direct slashed rates on its eOne Checking account. The top rate is now only 0.85% for balances over $100K. The rate is 0.75% for balances under $50K. On the plus side, they launched a new savings account called eOne Savings with a 1.55% APY on all balances up to $1 million (as of 7/16/09). There's no monthly fee or minimum balance requirements.

It's hard to get excited about a 1.55% APY, but for those who have the checking account and plan to keep it, you might want to open the savings account. The only issue with opening the savings account is that it'll be another hard credit pull. I just spoke with the CSR, and he said that they do a hard credit pull when opening any new account even if you're an existing customer. Update: A reader who was an existing customer opened this eOne Savings and reported that he did not receive a hard credit pull.

It's hard to believe that this checking account had an APY of up to 5.30% back in 2007. I haven't reported on Salem Five Direct's checking account in a while since they didn't waste any time cutting rates. I had thought they had hit the bottom of the rates when the top rate was 1.55% APY for balances over $100K. Now I'm afraid I don't know how low these banks will cut rates.

They still don't offer an ACH bank-to-bank transfer service. Update: A reader reported that they now have a bank-to-bank transfer capability. If you've given this a try, please comment on the linking process and any limitations it may have.

They do provide postage paid envelopes for mailing in checks. You can also initiate ACH transfers from another bank to make deposits and withdrawals.

One plus with Salem Five is that they continue to have decent ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 3/31/09 financial data. Salem Five is a member FDIC (FDIC Certificate # 23296). Accounts with funds over the FDIC limit are privately insured by the Deposit Insurance Fund (DIF).

Other Savings Account and Checking Account Options

There are still many options to get higher rates at savings accounts. Refer to my weekly rate summary for the best nationwide savings accounts.

If you want a decent rate on a checking account, your best bet is a reward checking account. You can find these at my High Yield Checking website.

Rate History:

06/29/10: Savings: 1.10% APY

02/11/10: Savings: 1.25% APY, Checking: 0.60% APY up to $50K; 0.65% APY $50K-$1M

01/13/10: Savings: 1.45% APY
07/16/09: Savings: 1.55% APY, Checking: 0.75% APY up to $50K; 0.80% APY $50K-$100K, 0.85% APY $100K-$1M

  Tags: Salem Five Direct, checking account, savings account

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Comments
11 comments.
Comment #1 by Derek (anonymous) posted on
Derek
Yeah. I have their eOne checking account. It is my payroll direct deposit account. The only reason I am keeping this account is that it's my local bank and I got lots of free checks from them. Other than that, I now don't see a reason to stick to them. I particularly hate their hard-pull policy for any new account.

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Comment #2 by Anonymous posted on
Anonymous
FYI, I just opened an Eone Savings account and was an existing Eone customer and they did not pull another hard credit report. You may have gotten wrong information. Also, I just logged online and noticed in my transfer screen that I have the ability to do bank-to-bank transfers. Look at it this way your getting a total rate of 2.40% with cash back on my purchases.

Sincerely,
Happy Customer

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Comment #3 by Virginia (anonymous) posted on
Virginia
The debit card cash back feature doesn't make up for the slashed interest rate. I'm getting at least 1% back on all purchases on my credit cards, which is twice their debit rate with all the protections and perks of credit. If I were going to start using my debit card, I'd use it on a high rate rewards account to earn 4% APY, not to get .05% back on purchases. Bleah.

I've had this account for several years with no problems, since back when the rate was 5%+. I've kept it because it was still fairly close to my "high interest" savings accounts, but at this new rate, I'm not going to stick around.

I'm also annoyed that I haven't received any notice from Salem Five about the rate cut yet - just an announcement about new benefits of cash back and the savings account. It makes me think they are trying to hide the rate cut from existing customers. How typical.

2
Comment #4 by Anonymous posted on
Anonymous
This bank is waste of time!

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Comment #5 by Anonymous posted on
Anonymous
I'm an E-One Checking account customer with Salem Five for several years. And, their person to person customer service contacts have been consistently first rate...

However, it hacks me off a bit that they've continuing been cutting their interest rates, and giving absolutely no notice to their customers of this. And likewise, I use their online banking regularly, but had no idea they'd finally added the feature of external bank transfers.

I went online tonight, and followed the link for beginning to set up external accounts. Got to the point of the web page asking me to enter my external account and ABA #s.... but could find absolutely no info on the timing of their external transfers, any $ limits per transfer, or if any fees are charged for incoming or outgoing external transfers.

Not such a great job on their part.

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Comment #6 by Anonymous posted on
Anonymous
Yeah. I agree with anonymous@8:19am, I also just found out the ACH feature after I did a search in my online banking menu without any bank notice. No fee schedule, limitation description, nadanothing. But I still prefer S5 compared to BoA or other big banks.

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Comment #7 by Sarah (anonymous) posted on
Sarah
I asked customer service, and they said there's a $3 fee for each external transfer initiated from Salem Five. Which, to me, is as good as not having it!

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Comment #8 by Anonymous posted on
Anonymous
This is a follow-up from 8:19 am July 17 who posted above... I sent a bank email to SalemFive asking about the details of their internal ACH system... And I got the following response:

"The details associated with using the external transfers function are as follows. There is a $3.00 fee per transaction that is processed. The maximum dollar amount is $2,000.00 per transaction.

If you have any questions or need further assistance, please email your questions or call our Customer Service Center at 978-745-5555 or 800-850-5000. Our Customer Service Representatives are available to assist you Monday through Friday 7:00 a.m. to 8:00 p.m., Saturday 8:00 a.m. to 4:00 p.m. and Sunday 10:00 a.m. to 4:00 p.m. Eastern Standard Time (EST)."

I did set up several of my external accounts with SalemFive, just in case. And there did not appear to be any limit on their number of linked accounts. Each had to be verified using the usual trial deposits method.

But with the $3 fee (in or outbound) and the $2,000 limit, I don't think I'll be using it too often.

PS - I wrote to SalemFive via bank email because even now I can still find no info on their web site that explains any of the details of their ACH setup... GGGRRRRR!!!!!!

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Comment #9 by Alex G. (anonymous) posted on
Alex G.
Salem 5 charges $3 for ACH transactions at their online banking site. Their website does specify this, but in a very roundabout way.

"For information about the terms of External Transfers, please refer to our Consumer Online Banking Agreement."

So in the Online Banking Agreement it says the following:

"A fee may be charged for External Transfers. Consult our current Fee Schedule for applicable fees."

Then in the Fee Schedule it says the following:

"External Fund Transfer Debit $3.00"

So using this service will cost you $3. I have done ACH transactions initiated from other banks (both push and pull) and it has never cost me any money before, so I assume that this fee is only for the external fund transfer tool that Salem Five has in their online banking site.

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Comment #10 by Anonymous posted on
Anonymous
Rate has dropped to 1.45%.

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Comment #11 by L (anonymous) posted on
L
Yes it's hard to believe that this checking account had an APY of up to 5.30% in 2007. That's what attracted me to the bank. That and the "eone" being a standalone checking account that didn't require savings to earn a high APY. Then the rate plummeted and the bank added a savings account which has a so-so rate. I'm still using the eone checking as my primary checking until I find a bank or credit union that offers a checking signup bonus and a consistently high APY.

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