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.
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