Salem Five Direct eOne Savings APY Leaps To The Top

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Deal Summary: eOne Savings, 3.50% APY, $10 minimum opening deposit, $1 million maximum.

Availability: Nationwide (online bank)

DA reader, RZ, explained the recent Salem Five Direct eOne Savings rate hike perfectly:

An Old Standby Resumes The Pole Position

Following a 100 bps rate increase, the eOne Savings account now earns 3.50% APY on all balances up to $1 million. Balances over $1 million will be transferred to a Statement Savings Account that currently earns 0.01% APY. As of today, the eOne Savings account offers the highest rate on nationally available savings accounts and Money Market accounts.

APYMINMAXINSTITUTIONPRODUCTDETAILS
3.50*%-$1mSalem Five DirecteOne Savings - New Money
OTHER TIERS: 0.01% $1m+
Rates as of December 2, 2022.

DA readers who are familiar with the eOne Savings account (and its previous rate increases) may recognize the following statement from the promotion page.

The stated APY applies to new eOne accounts opened as of today's date.

In the past, some DA readers reported that their requests to have the new promotion rate applied to their existing accounts were approved. In a Live Chat, CSR confirmed that the new rate does not automatically apply to existing accounts, but current eOne Savings account holders can contact Salem Five Direct to request the new rate.

DA: Does the new eOne Savings 3.50% APY apply to existing accounts?

Salem Five Direct: Yes

DA: Do I have to call and ask for the new rate or will the rate increase happen automatically?

Salem Five Direct: Yes, you have to call (it needs to be on a recorded line) or send a secured message.

There is a sentence under “What You Will Need to Open Account” that continues to be confusing, unless you read carefully:

eOne Savings 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.

The first time I read “existing checking or savings account with Salem Five Bank,” I thought Salem Five Direct, which made no sense, since “consumers with an existing eOne Checking Account are eligible.” If you currently have a Salem Five Bank (not Salem Five Direct) checking or savings account, you are not eligible to open an eOne Savings Account.

Summary

  • eOne Savings accounts opened as of today will earn 3.50% APY on balances up to $1 million.
  • Balances greater than $1 million may be transferred to a Statement Savings Account, which currently earns 0.01% APY.
  • New money (funds not previously on deposit with Salem Five or Salem Five Direct) is required for new accounts.
  • There is no rate guarantee.
  • The minimum opening deposit is now $10 (down from $100).
  • This account must be opened online.
  • Existing Salem Five Bank (not Salem Five Direct) checking or savings account holders are not eligible, “except that consumers with an existing eOne Checking Account are eligible for the eOne Savings Account.”
  • At the time of the application, only one joint account holder and one beneficiary can be added. After the account is approved and opened, additional owners can be added over the phone.

As stated in the eOne Savings Account Disclosure,

This account is designed for customers who bank electronically through ATMs, mobile devices, telephone, and online. If at any time you conduct a transaction at one of the Bank’s branches, the Bank will assess your account a branch transaction fee [$2.00] for the applicable statement period. Additionally, the Bank will assess your account a monthly paper statement fee [$2.95] if you do not elect to receive eStatements within 30 days of account opening or if at any time you discontinue receiving eStatements.

You must register for online banking at salemfive.com. Once registered, you must enroll in eStatements whereby you agree to receive your monthly periodic statements electronically. Once you enroll, paper copies of your statements will not be mailed to you and you will not receive your original cancelled checks. Images of your paid checks, however, will be provided with your eStatements and are available to you within Salem Five Online Banking.

According to CSR, the fees and limits on ACH transfers initiated from Salem Five Direct are as follows:

  • External transfers out of the account will incur a $3.00 charge; external transfers into the account are free.
  • Outgoing external transfers are limited to $5k per transaction, $5k in aggregate per day, and $20k in aggregate per calendar month. If a transfer total exceeds $5k, more than one transfer will be required, as a result of the $5k per transaction limit.
  • Once an external transfer from Salem Five Direct is initiated, it could take up to three days for the other institution to receive the funds.

These fees and small limits have been in effect for about seven years. I had hoped Salem Five Direct would have changed the fees and limits for the better. If you decide to open an eOne Savings account, it would be wise to initiate ACH transfers from another financial institution. For those types of transfers, Salem Five Direct has no dollar limits and no Salem Five Direct fees would apply.

Depositors Insurance Fund, Or The Lack Thereof

Until fairly recently, Salem Five Direct deposits were insured by both the FDIC and Depositors Insurance Fund (DIF). In late July, Salem Five Direct account holders were notified that the Bank would be phasing out DIF coverage by the end of September. While any new accounts opened after September 30, 2022 would no longer be insured by DIF, accounts opened prior to September 30, 2022 will be DIF insured through September 30, 2023.

Not exactly sure what DIF coverage entails? The following is from the DIF website.

All DIF member banks are also members of the FDIC. Each depositor is insured by the FDIC to at least $250,000. All deposits above the FDIC insurance amount are insured by the De-positors Insurance Fund (DIF).

The combination of FDIC and DIF insurance provides customers of our member banks with full deposit insurance on all their deposit accounts. No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

I wasn’t able to get any specifics from CSR as to why the DIF coverage was dropped, just a somewhat ambiguous statement that the Salem Five Bank deposit level had grown too large to be insured by DIF. I recall hearing about other Massachusetts chartered banks that became too big and were forced to leave DIF. When Cambridge Savings Bank introduced its online division, Ivy Bank, about 15 months ago, Ivy Bank’s website made no mention of DIF, even though Cambridge Savings Bank had DIF coverage. The following quote from an Ivy Bank CSR shed some light as to what was happening.

… as the bank grows DIF insurance is not guaranteed. Since Cambridge Savings Bank and Ivy Bank are not separate entities for insurance purposes, and Cambridge Savings Bank is growing to a point of no longer having DIF insurance …

Bottom line – DIF insurance can disappear if your bank grows too big. There actually is a deposit ceiling that forces a bank to no longer be insured by DIF.

Availability

More than 15 years ago, Salem Five Direct opened its virtual doors. As an online division of Massachusetts-based Salem Five, Salem Five Direct offers its product line on a nationwide basis to all U.S. citizens and permanent resident aliens with valid Social Security numbers.

As an internet bank, Salem Five Direct has no brick-and-mortar branches. Opening any type of account, including an eOne Savings account, must be done online.

Bank Overview

As an online division of Salem Five, Salem Five Direct operates under Salem Five’s FDIC Certificate and shares its financial history.

Salem Five Direct/Salem Five has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 2.56% (excellent) based on June 30, 2022 data. In the past year, the Bank has increased its total non-brokered deposits by $384.86 million, an excellent annual growth rate of 8.8%. Please refer to our financial overview of Salem Five Direct/Salem Five (FDIC Certificate # 23296) for more details.

Established in 1855, Salem Five Cents Savings Bank was known as the "Nickel Bank," because the first day’s deposits ranged from five cents and up. Headquartered in Salem, Massachusetts, the Bank has always considered itself innovative, and in 2015 added the Cardless Cash ATM, which allows customers to “open the bank’s mobile app on their smartphone, put in the amount they want withdrawn, then visit an ATM, scan a QR code, and pick up their money.”

Between 2013-2018, Salem Five Bancorp (parent company of Salem Five) completed the acquisitions of three Massachusetts banks: Stoneham Savings Bank (2013), Georgetown Bank (2017), and Sage Bank (2018). Salem Five is currently the sixth largest bank in Massachusetts, with assets in excess of $6.2 billion and nearly 170,000 customer accounts.

How the eOne Savings Compares

When compared to nationally available Money Market Accounts and Savings Accounts tracked by DepositAccounts.com, that do not require large balances or direct deposit and do not have small balance caps, the Salem Five Direct eOne Savings APY shares the top spot with the DollarSavings Direct Dollar Savings Account APY and the Upgrade Premier Savings APY.

The above information and rates are accurate as of 10/28/2022.

To look for the best rates on liquid bank accounts, both nationwide and state specific, please refer to our Money Market Accounts Table and Savings Accounts Table.

Related Pages: Boston savings accounts, savings accounts, nationwide deals, Internet banks

Comments
deplorable_1
  |     |   Comment #1
Actually this is tied with Dollar Saving Direct but at least DSD doesn't charge a fee for ACH withdrawals. This account however does allow 3rd party ACH withdrawals with no cap to avoid transfer fees. Does anyone know how many accounts can be linked for ACH transfers? I would assume at least 3 so could be a better option than DSD but only if the stay competitive with future rate hikes.
punchie
  |     |   Comment #2
Why bother with these guys if they chose not to be competitive up 'til now? Isn't this just a quick cash grab and then they'll nosedive like before?
RichReg
  |     |   Comment #3
You think none of the other ones spiking up so high recently won't do the same?
It's a crap-shoot with any of them...Salem's no different.
fdic
  |     |   Comment #5
But some like NASB and CFG or even UFB more or less keep up. These other crappy ones like Salem, TDB, NorthPointe, even that crappy Bread, they try to go for lazy money and I guess wait forever to make the next increase. I guess they only do that after enough money moves out that it starts hurting them. **** these guys and Chex which thinks opening too many bank accounts is a negative thing
111
  |     |   Comment #6
D1 - With Salem I've only ever had 1 external account linked for ACH transfer, so I'm not sure of their limit.
deplorable_1
  |     |   Comment #10
Thanks 111. Only one external account for ACH? I'll stick with Dollar then at least they are keeping up with rate hikes at the moment.
111
  |     |   Comment #12
No D1 - I said that I only ended up linking 1 external account, because that's all I needed in that situation. I don't know what their upper limit is for linked external accounts.
IGR
  |     |   Comment #13
Just out of curiosity where this notion of ACH FEE comes from?
"There are no fees for incoming or outgoing external transfers initiated from your Online Banking account."
It does have low in/out transfer limits $25K/20K, but nobody expects this account to be ACH Hub.
CSR claimed that Bank does Equifax pull and ChexS inquiry, but eventually retracted the claim for Hard pull for Deposit Accounts.
From my experience, I so far see no credit reports inquiries and Bank seems not to be sensitive to ShexSystems report.
Wire transfer is common issue comes to Internet only Banking.
111
  |     |   Comment #4
FYI - I've had an eOne Savings and eOne Checking account at Salem for years. Regarding Ken's section above entitled “Depositors Insurance Fund, Or The Lack Thereof”, here is the full email concerning that, sent to me on 8/9/22, for anyone who's interested. Ken's description above catches the high points well -

Dear [111],

Thank you for being a valued depositor here at Salem Five. It’s because of customers like you that we have enjoyed the success and growth that we’ve achieved throughout our history, but especially over the last several years. As a mutual institution without stockholders, we operate for the benefit of our customers, employees and communities, so our growth both in terms of asset size and expansion into new markets has truly enhanced our ability to do more for all our constituents.

The bank’s substantial deposit growth in recent years caused us to exceed the maximum deposit level permitted by the Depositors Insurance Fund (DIF), which insures deposit balances in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 per depositor, per account ownership category. After September 30, 2022, we will no longer be a member of DIF. Larger banks and all commercial and federally chartered banks are insured only by the FDIC and this will be the case for Salem Five going forward.

All checking, savings and money market accounts that are open as of September 30, 2022 will continue to be fully insured above the FDIC limit by the DIF for one additional year, until September 30, 2023. The DIF coverage will equal the amount of your balances in excess of the FDIC limit as of that date. Certificates of Deposit (CDs) that are open as of September 30, 2022 will continue to be fully insured above the FDIC limit by the DIF until their next maturity date. All deposits at Salem Five will continue to be insured up to the FDIC limit as they are now and will remain protected by the financial strength and stability of the bank.

Our growth is an indication of our strength and, although it means we can no longer offer DIF coverage, rest assured that for most customers, the standard FDIC coverage of up to $250,000 per depositor is sufficient. If your balance exceeds the FDIC limit, you may be able to restructure your deposits into separate ownership categories to maximize coverage. Please visit the FDIC website at https://edie.fdic.gov to use EDIE, the agency’s Electronic Deposit Insurance Estimator tool, to help you evaluate your FDIC coverage. Our employees also stand ready to answer your questions, to assist you in evaluating your coverage, and to help you restructure account ownership if you wish to do so. You can reach us by calling (800) 850-5000 or by visiting salemfive.com/locations to find a branch near you.

Salem Five was founded back in 1855 and we remain as dedicated to our customers, employees, and communities today as we have ever been. You can be confident that your deposits are in good hands, supported by our strength and by our stability.

Thank you for continuing to allow us to serve you.

Sincerely,

RileySig.png

Joseph F. Riley
Executive Vice President
melsher14
  |     |   Comment #7
melsher14
forget Salem. There wire out policy is beyond comprehension. CSR said u must fill out a wire transfer form when you want to transfer and mail it back, which defeats the whole idea of a wire!

copy of my chat with them
But I can give you the form virtually. You just have to mail it back.
[11:17:15am]
email it back?
[11:17:31am] Dan:
We do not accept email or fax copies back unfortunately.
fdic
  |     |   Comment #9
Wow, thats a new one. Thanks for the heads up, not that I was even thinking of opening an account with these punks
payitforward
  |     |   Comment #11
Many thanks. You saved me lots of grief and $$.
essjaye
  |     |   Comment #8
Another problem with Salem. They do a hard pull!
Buckeyes
  |     |   Comment #14
i did the whole account application, with the trial deposits being the last step. It wouldn't let me verify the deposits, so I had to call. I was told point blank "yea it happens you need to do a new application" Uhh. WTH? Fix your online application Salem!. Since they havent bumped up since Powell, right now it's not worth that hassle.
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Availability: Nationwide (online bank)

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