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Salem Five Direct1.00%-$500keOne Savings - New Customers Only
Accounts mentioned in this post. Rates as of August 30, 2014

Salem Five Direct Increases Savings Account Promo Rate


Salem Five Direct

Salem Five Direct just increased the new-account rate on its eOne Savings Account from 1.00% to 1.25% APY. There's no guarantee about how long this will last. The promo rate applies to balances up to $500,000. It used to apply to balances up to $1 million. This new rate and balance cap are listed at the Salem Five Direct eOne Savings page as of 11/07/2012.

As before, this promo rate only applies for new accounts. In the small print, it says "The stated APY applies to new eOne accounts opened after 08/27/2012." If you had opened an eOne Savings account before that, you'll have to check your statement or call the bank. I once again tried to get the rate for existing customers, but the CSR refused to provide any details. I was told that "rates vary as to when an account was opened and which promotion a customer received."

In my opinion it's misleading to only list the promo rate on the public website without listing the ongoing rates that current customers receive. Other banks that offer promo rates also list their standard rates. One example is EverBank.

In June two DA readers who were eOne savings account customers described how they were mislead in this forum thread. Their savings account rate was cut to 0.75% long before this rate cut was shown on Salem Five Direct. One reader said that he was only able to tell that the rate cut occurred when he reviewed his statement and noticed the rate was cut at the start of the statement cycle (over a month ago).

Salem Five Direct has been offering various eOne Savings Account promotions for the last two years. In April 2011 it was offering a 1.25% APY guaranteed to June 1, 2011. In February 2012 it was offering a 1.00% APY guaranteed through August. Then in August, another 1.00% promotion was launched but there was no more guarantee about how long the rate would last.

The current 1.25% APY is very competitive, but not knowing how long this will last and not having an easy way to tell when it changes are major downsides.

Salem Five Direct savings account also has other downsides. There are fees and small limits on its ACH bank-to-bank transfer system. Below is an excerpt of the CSR chat describing this:

There is a fee for outgoing transfers only if you initiate it from Salem Five. External Transfers outgoing from your account are limited to $2,000 per transaction, $2,000 in aggregate per day and $20,000 in aggregate per calendar month. Please be aware that there is a $3.00 fee for each outgoing transfer; there is no charge for incoming transfers. If you initiate it form another bank there is no fee and there is no limit to withdraw.

CD Promotion

Salem Five Direct continues to offer a CD promotion with two special CD rates that are very competitive: 1.15% APY for 18 months and 1.50% APY for 30 months. Minimum deposit is $10,000. These rates are listed in the Salem Five Direct eCD page as of 11/7/2012. I have more details in my Salem Five Direct CD review.

Bank Overview

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 of 4 stars (out of 5) with a Texas Ratio of 13.07% (above average) based on June 2012 data. Please refer to our financial overview of Salem Five Bank for more details.

Related Pages: Salem Five Direct, savings account, checking account

Related Posts

Comment #1 by Anonymous posted on

I’m writing to alert readers to my problem with Salem Five.  The staff gives inconsistent information, and apparently even the manager does not have her facts straight. Prior to opening an eCD with them, I called their customer service department to see if the account could be opened in the name of my trust. I was advised that it could not be done online but once the account was opened, I could submit the trust documentation and the account would be retitled in the name of the trust. My husband and I both completed the online application forms. When the online application is completed a message pops up indicating that signature cards would be mailed and needed to be returned within 10 days. However, when we printed our copies the form asks that they be signed and mailed back.  This is the first of many inconsistencies. When I called about this inconsistency I was told that the website needs to be updated and to just mail the form back. I asked to speak with the manager to clarify this and the trust account conversion.  The manager informed me that the account could not be opened in the name of the trust, despite information received from the bank to the contrary.  I then asked if the trust could be made the beneficiary and she said yes, that was possible and the signature cards with a beneficiary designation would be mailed out. Ten days and two phone calls later, still no signature cards!  Finally, we mailed out the forms we had printed, adding the trust as the beneficiary.  Four days later I hear from the bank informing me that the trust cannot be made the beneficiary. The manager refuses to call me and I hear from the IT guy that a trust cannot be the beneficiary and they are willing to close my account without a penalty.  This is now the third week and I have missed out other opportunities. He offers to mail out signature cards to designate an individual as a beneficiary.

Another issue is with their ACH verification process. My husband called the customer service department and indicated that the funds are in a joint checking account and how would we determine which of the test deposits were meant for him versus me. He was told to just try a few combinations and call back if there were issues. Of course, after 3 unsuccessful attempts we were locked out.  A  IT guy said that they would now submit two deposits for me the next day and following that verification, would send two more deposits for my husband.  Needless to say this delayed the account opening even though we had proactively indicated that this could be a problem. They could have done this right away when we called rather than after for the problem developed.

This is one of the worst banks we have ever dealt with. They don’t know their own policies and consistently supply misinformation. It’s amazing that even the manager is so misinformed! So, if you are opening an account online beware of the frustrating process!

Comment #2 by Anonymous posted on
I have used ACH test deposits when I opened other accounts at other banks, but I have never heard of a test deposit to a specific owner of a joint account.  The test deposits go to one account and anyone (either owner) who signs into the account should be able to see the deposit amounts.  The deposits are directed to the account, not to one individual who is on the account.  It sounds like you asked the new bank to send two sets of test deposits to one joint account based on two names.  Maybe your checking account is not really a joint JTWROS account, but some kind of special trust of some kind?

Comment #3 by Anonymous posted on
I have never had problems with ACH transfers when only one person at a time was opening an account.  In this case, two people were opening accounts and the bank sent 4 test deposits and 4 test withdrawals to our joint checking account and therein lies the problem. Both of us can see the test deposits and withdrawals but there is no way to tell which of them are intended for verification by me versus him. We tried a few combinations but were locked out.  I called and explained to them that we could each verify every test deposit and withdrawal but that was not acceptable. The IT person insisted that it would need to be done individually.  So over the next two days they sent test deposits that I was supposed to verify and once that was completed, they sent additional deposits to be completed by my husband.  Giving them a heads up that we would run into this problem went absolutely nowhere!

Comment #4 by Anonymous posted on
I have had an eOne savings account for about 1 1/2 years, the APY straight from my last 6 statements has been between .97%-1.00%. The .97% is for the 31 day statement periods, the 1.00% is for the 30 day statement periods.

Comment #5 by Todd Wallack (anonymous) posted on
Todd Wallack
I'd love to interview any customers who actually opened an account recently to obtain the 1.25% rate for an article in the Boston Globe. My email is twallack@globe. Phone is 617-929-2069. 

Comment #6 by DougNYC (anonymous) posted on
The 1.25% APY rate for the eOne savings account is no longer available (for new customers) . . . but is promised to continue for existing customers who got in on the latest promotion.
See announcement emailed today:

Those who have come on board as a Salem Five Direct customer at the 1.25% APY promotional rate over the last few months, will continue to enjoy this leading rate of return.

If you recently took advantage of the eOne Savings offer from Salem Five Direct at the 1.25% APY promotional rate, we wanted you to be aware that this promotional rate for new customers has come to an end. If you see a new lower rate advertised on our website, we didn't want you to think your rate was being lowered as well.

We appreciate you joining us during this past promotional period and are currently holding your rate at 1.25% APY.

For how long?
As long as we can.

How long is that?
With the interest rate environment in constant flux, we really can't say for sure. We are always striving to strike a balance between the long term needs of our bank and our long term commitment to our customer. Our overall customer satisfaction and loyalty over our many years in this business speaks to our dedication to providing highly competitive products and services, and our eOne customers are no exception.

Comment #7 by Anonymous posted on
did any1 check their sept statement? it dropped from 1.25% to 1.1%

time to bail? but where to go?

Comment #8 by Anonymous posted on
Rate going down again.  From 1.1% to 1.0% when I checked my view account information link on the Account Activity page.  Bailing out.