It's not quite as good as last year's promotion, but it's still a good deal compared to what's available today. Salem Five Direct's new savings account promotion offers a 1.00% APY on balances up to $500K on its eOne Savings Account. This rate is guaranteed through the August statement cycle. Eligibility is limited to consumers who apply online and who do not have an existing checking or savings account. They set up a limited time offer page on its website with the details. The eOne Savings Account rate had been 0.85% before this promotion. It has no monthly fees or minimum balance requirement.
Last year Salem Five Direct was offering 1.25% APY guaranteed to April 1, 2012. At that time, you could get rates around 1.50% in savings accounts at a few other banks.
One thing that Salem Five Direct has changed since last year's promotion is to make it clear that only new customers can qualify. Two readers commented last year of the problems they had when they applied for a new eOne Savings account. The bank's disclosure and the CSRs make it appear that existing eOne savings account customers could qualify for this promotion. After they applied and funded the accounts, the bank closed the new accounts without notice.
I first reported on Salem Five Direct back in 2007 when it was offering the eOne checking account with a 5.30% APY. The eOne Savings account was launched in 2009.
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 DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 13.42% (above average) based on September 2011 data. Please refer to our financial overview of Salem Five Bank for more details.
How This Savings Account Rate Compares
In today's rate environment, the highest rate on a money market account is 1.15% at AmTrust Direct and MyBanking Direct. Flagstar Bank has a promotional rate of 1.15% APY that's guaranteed for four banks from account opening.
If you want a rate that's guaranteed to last until August, you'll need a 6-month CD, but it's hard to find 6-month CD rates of at least 1.00%. KeySource Commercial Bank is offering a special 7-month CD with a 1.00% APY. The best 6-month CD rate at an internet bank is only 0.85%. This is at AloStar Bank.
Ally Bank still offers its No Penalty 11-month CD. The no-penalty feature allows this CD to have any term from 7 days to 11 months. The rate is 0.91%.
These rates are accurate as of 2/1/2012.