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Salem Five Direct Savings Account Promotion - Available Nationwide


Salem Five Direct

Salem Five Direct has just started a very nice savings account promotion. They're guaranteeing 1.25% APY on balances up to $1M until April, 1, 2012 on its eOne Savings Account. The offer is scheduled to expire on June 1, 2011. They set up a limited time offer page on its website with the details. The eOne Savings Account rate had been 1.00% APY before this promotion. It has no monthly fees or minimum balance requirement.

The 1.25% APY may not sound like much, but in today's interest rate environment, it's a good deal. Many of the past rate leaders like Discover Bank, Capital One and Incredible Bank have cut their rates below 1.25%. There are currently two banks that are offering rates around 1.50% (The Morrill and Janes Bank and Tennessee Commerce Bank), but there's no guarantee how long these rates will last. EverBank is offering 1.51% for 3 months on its money market and checking, but the total amount that qualifies is capped at $150K. Salem Five Direct's rate guarantee of almost 12 months is very rare these days.

Savings Account Details

I just called Salem Five Direct for some additional details that weren't clear on the website. According to the CSR, you don't have to open the checking to qualify for the savings account promo. If you already have the checking, you should be able to qualify if you fund the savings account with new money. I was told that a hard credit pull is done via Equifax. They also use ChexSystems. You can use an ACH transfer for the initial funding with no limit on the amount. They use trial deposits to verify your external account. They will then mail you a signature card. I was told there will be a hold on your initial deposit until they receive the signature card.

One issue with Salem Five Direct is their poor ACH system. This was added in 2009, but it's not much better than not having one. Here's a quick summary of the service:

  • $3 fee for outgoing transfers, no fee for incoming transfers
  • $2,000 limit per transaction
  • $10,000 limit per day

They don't have any limitations on the ACH transfers initiated from another bank. So that would definitely be the best way to make deposits or withdrawals after it's opened.

Checking Account Details and History

I first reported on Salem Five Direct back in 2007. At that time they were only offering an internet checking account, the eOne checking. The checking account used to have a standard top rate of 5.30% APY back in 2007. This rate went down by so much that I stopped following it. In 2009, they then launched the savings account eOne Savings. The rate started out competitive, but that too fell to a level in which it wasn't competitive.

The eOne Checking was popular not only for its high rate, but it also had several nice features and these features have remained. These include:

  • No minimum balance
  • Free ATMs worldwide - no charge for using other banks' ATMs and refunds of up to $15 per month that other banks charge
  • Free online bill payment
  • First order of checks free

Bank Overview

Salem Five Direct is an online division of Salem Five Cents Savings Bank, which is based in Massachusetts. As a Massachusetts bank, it's a member of the Massachusetts Depositors Insurance Fund (DIF) which covers deposits that exceed the FDIC limits. One thing to note about DIF is that it's a private insurance fund. So there's no government guarantee. You can read the details at the DIF website.

Deposits up to the FDIC limits are guaranteed just like they are at every other FDIC member bank. Salem Five has been a FDIC member since 1981 (FDIC Certificate # 23296).

Salem Five has an overall health score at of 4 stars (out of 5) with a Texas Ratio of 12.85% (average) based on December 2010 data. Please refer to our financial overview of Salem Five Bank for more details.

  Tags: Salem Five Direct, savings account, checking account

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Comment #1 by Anonymous posted on
Ken, I was about to open an account. Got to last page and read account agreement and saw limits of 2K/day external transfer.  It does not say there is no limit on ones initiated at another bank.  They charge $10 to close an account by phone, so I figured it would be hard to get your money out unless you had a checking account there.  Are you sure they have no limit to funds taken out, initiated at another bank?  Is this in writing somewhere?  Thanks

Comment #2 by KenBDG posted on
About the limitations of ACH transfers initiated by another bank, I don't know if it's in writing. That is what I was told by the CSR. Many readers had their checking account back in 2007 when rates were much higher and I don't remember comments about funding or withdrawal problems when using another bank's ACH.

Comment #3 by Anonymous posted on
I called CSR. They said that the rate garantee is for opening a new eone saving account. Since I already have an eone saving account. The rate is subject to change weekly.

Comment #4 by KenBDG posted on
Thanks. I forgot to ask about existing eOne Savings Account customers. Do you still qualify for the 1.25% APY or is it still 1.00% APY for existing customers?

Comment #5 by scottj posted on
I had the eone savings account and had no problem opening this new one, have had accounts there for many years and never a problem opening one of their new accounts. Also if you have account their you will not get hit with a hard pull, You click that you have account and it asks a couple questions and finds your info. I appled on Fri and account was open and funded on Tues. Also have never had any issues with pulling out 6 figure amounts when done from other bank side.

Comment #6 by Anonymous posted on
The CSR said that existing eone savings account customers will get 1.25% APY, but not garanteened for a year.

Comment #7 by dexter (anonymous) posted on
My experience with opening up a new e-1 savings account in a word has been horrible. I have had accounts with this bank for 4 years, including both e-1 checking and savings accts., and was told that to get the new guaranteed 1.25% rate I had to open a new acct. 3 separate people, a CSR supervisor,someone in the e-1 department, and a branch manager (I am local), assured me it was perfectly o.k. to have 2 separate e-1 savings accts, so I opened and funded the new one. After a couple of days, I had a call that my new acct had been unilaterally closed as 2 accts were now not allowed. Salem has a very bad habit of moving the goalposts on their e-1 accts, in addition to their horrendous ACH policies. I am severing my relations with this bank ASAP, and my advice to others is AVOID THIS BANK.

Comment #8 by scottj posted on
Yep turning into a complete **** show, mine got opened because I had the E-1 checking but not the E-1 savings, but I opened for my mother and they closed. She had both E-1 checking and E-1 savings. Salem Five is local to us and we both have accounts there for many years. Hers got funded and they even called her to let her know it was open, then next day they called and told her they are closing because you can't have two E-1 savings. I called and spoke to a couple different CSR's I have talked to a couple times and told her this is what disclosure said

"Eligibility is limited to consumers who apply online and who do not have an existing checking account with Salem Five Bank at the time of the application, except that consumers with an existing eOne Checking Account are eligible for the eOne Savings Account. Account must be opened with funds not currently on deposit with Salem Five Bank."

Nothing at all about having exsisting E-savings.  She said it was decision made inside the bank. Plan on filing a complaint.  Also they were complete ****es on the phone

Comment #9 by dexter (anonymous) posted on
scottj---please post how and where you are filing a complaint, as I would like to join you.

Comment #10 by scottj posted on
Can fill out here and fax in. When my mother told them she planned on filing a claim they told her they no longer wanted her as a customer and gave her two weeks to close all her accounts with them or they will close them. %26 Banking&L3=Consumer Complaints %26 Public Resources&L4=Complaints&sid=Eoca&b=terminalcontent&f=dob_compform&csid=Eoca

Comment #11 by scottj posted on
I noticed they have now changed the disclosure, First is a copy&paste that I posted a couple posts up the other day where it said nothing about having  an existing savings account

"Eligibility is limited to consumers who apply online and who do not have an existing checking account with Salem Five Bank at the time of the application, except that consumers with an existing eOne Checking Account are eligible for the eOne Savings Account. Account must be opened with funds not currently on deposit with Salem Five Bank."


Now here is what it says now

"Eligibility is limited to consumers who apply online and who do not have an existing checking or savings account with Salem Five Bank at the time of the application, except that consumers with an existing eOne Checking Account are eligible for the eOne Savings Account.  Account must be opened with funds not currently on deposit with Salem Five Bank.  Customers with an existing eOne Savings account are not eligible for this promotion."

In the past I have seen Banks/CU's like Penfed honor deals when they know they made a mistake, not so for lousy Salem Five Bank

Comment #12 by Anonymous posted on
DON'T DO BUSINESS WITH SALEM 5!! You will get TWO hard pulls if you try to open both the checking and the savings.  I recently applied for the E1 Savings Account.  What a hassle but it finally went thru.  Now I am applying for the E1 Checking Account... I have been told repeatedly I am "not recognized in their system as a customer". I spoke to several CS's yesterday all of whom told me to wait till today & try again.... no dice.  I phoned again today & learned that "it takes 30 days to recognize your new account in our system".  Therefore, if I want to apply I can apply as if I was never a customer there -- but guess what?? You will get hit with ANOTHER hard pull!  This is grossly unfair but there is no way around it!  The deal is only on till June 1 so that leaves me nowhere I guess!

Comment #13 by Anonymous posted on
UPDATE:  I am anon #12.  I just spoke to someone else. She spoke to the supervisor and they are sending me a signature card to sign and I will send them a check back to open the account. Whew!!