SallieMae Bank Raises Money Market And 60-Month CD Rates
With today’s rate increase on its Money Market Account (1.30% APY), SallieMae Bank has become the latest bank to raise the APY on a nationally available money market account. In the last seven months, the Money Market Account (MMA) has experienced three rate increases, adding a total of 40 bps.
There is no minimum or maximum balance requirement for SallieMae Bank’s MMA and there are no monthly fees associated with the account. However,
if you open an Account that remains dormant, with a balance of $100 or less
with no activity for the past 12 months, we reserve the right to close the Account.
Check writing is available, with checks provided at no cost if they are ordered when the MMA is opened; any check orders placed after account opening are $5. There is also a $10 Excessive Transaction Fee for each item beyond the limit of six per month.
If you repeatedly exceed this limit, we’re required to close your account(s).
Complete details about the MMA (including information concerning POD accounts) are available on Deposit Account Terms and Conditions Agreement page.
ACH Transfers
While I’ve mentioned this in the past, it still bears repeating, as it’s important to many DA readers. The good news is that SallieMae Bank's "no limit" policy on the dollar amount of electronic transfers is still in effect. The not-so-good news is there is a long hold period for deposits.
- $5k or less – New account 10 business days; Existing account 5 business days
- $5k+ – New and existing accounts 10 business days
CDs
In a climate of rising rates for shorter term CDs, SallieMae Bank is one of the few financial institutions to recently raise the rate on a long-term CD. Following today’s 55 bps increase, the 60-month CD is now offering a competitive 2.35% APY. SallieMae Bank also raised the rate on its 12-month CD (1.50% APY). The minimum opening deposit for either CD is $2.5k, with no stated balance cap.
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 2.35% | $2,500 | - | Sallie Mae Bank | 60 Month CD | |
| 1.50% | $2,500 | - | Sallie Mae Bank | 12 Month CD |
The new 2.35% APY is the highest rate for the 60-month CD in more than six years. For the past 14 months, the APY held at a fairly unimpressive 1.80%. In the previous three months, 25 bps have been added to the 12-month CD.
As stated on SallieMae Bank’s Certificate of Deposit FAQs page, the Early Withdrawal Penalty (EWP) reads as follows:
If your CD has a term of 12 months or less, the penalty will be equal to 90 days’ simple interest.
If your CD has a maturity term greater than 12 months, the penalty will be equal to 180 days’ simple interest.
The mild six month EWP increases the 60-month CD’s competitiveness. Using DA’s Early Withdrawal Penalty Calculator, you can determine what the effective yields would be, with yields available on a month-to-month basis. For example, closing the 60-month CD at 20 months would result in an effective yield of 1.65% APY.
Thanks to DA reader, buckeye61, for the Forum post about Sallie Mae Bank’s latest rate increases.
Availability
SallieMae Bank is an internet-only bank, with its headquarters located in Salt Lake City, Utah. Accounts are available to individuals who have a Taxpayer Identification Number (usually a Social Security Number) and a physical address in the United States. Opening any account, including MMAs, CDs, and Savings accounts, must be done online.
Bank Overview
SallieMae Bank has an overall health rating of "A+" at DepositAccounts.com, with a Texas Ratio of 1.42% (excellent) based on March 31, 2017 data. In the past year, SallieMae Bank has increased its total non-brokered deposits by $2.05 billion, an excellent annual growth rate of 39.4%. Please refer to our financial overview of SallieMae Bank (FDIC Certificate # 58177) for more details.
When most people hear "SallieMae," they think of private student loans. The Student Loan Marketing Association (aka "SallieMae") opened its doors as a Government-Sponsored Enterprise (GSE), designed to support the guaranteed student loan program created by the Higher Education Act of 1965. Chartered in 2005, the internet-only SallieMae Bank has expanded its product line beyond student loans to include CDs, Savings Accounts, Money Market Accounts, Insurance, and Credit Cards, and today has assets in excess of $19 billion.
How the Money Market Account Compares
When compared to the 175 Money Market Accounts tracked by DepositAccounts.com that require a similar minimum balance and are available nationally, Sallie Mae Bank’s Money Market APY currently ranks second.
To search for Money Market rates, both nationwide and state specific, please refer to the Money Market rates section of DepositAccounts.com or our new Rates Map page.
How the CDs Compare
When compared to the 202 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Sallie Mae Bank’s 12-month CD APY currently ranks third.
When compared to the 180 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Sallie Mae Bank’s 60-month CD APY currently ranks fourth.
*Note: Melrose Credit Union is currently operating under an NCUA conservatorship.
The above rates are accurate as of 7/12/2017.
To look for the best CD rates, both nationwide and in your state, please refer to our CD rates table, or our new Rates Map page.
I have a savings account at Sallie Mae that has a zero balance and no activity for over 5 years - it still shows up in my list of accounts so I would say in practice Sallie Mae does not enforce this rule (at least under the condition that at least one of your accounts with them is considered active by these criteria).
BTW when I check the interest rate of my MM account it still shows up as 1.15% - I assume this will update tonight.
I can get a 2.3% 5 year CD at my broker for some of it but I still need somewhere for my liquid cash needs.
I hope they remain competitive on the MMA.