As I’ve stated in earlier blog posts, SallieMae Bank has continued to increase the rates on its Money Market account, High-Yield Savings account, and several CDs since beginning of the year. While the individual rate increases haven’t been exceptional, the cumulative effect has kept SallieMae Bank within striking distance of the rate leaders.
Money Market Account
The Money Market Account (MMA) continues to be SallieMae Bank’s most competitive deposit account, currently offering 2.00% APY. There have been eight rate increases since the beginning of the year, adding a total of 70 bps to the MMA’s APY.
The MMA has no monthly service fee and can be opened with as little as $1. While there is no minimum or maximum balance requirement for SallieMae Bank’s MMA,
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.
SallieMae Bank’s MMA offers check writing, unlike some other so-called MMAs, such as CIT Bank's Money Market Account (1.85% APY) or Capital One's 360 Money Market (1.85% APY). Checks are provided at no cost if they are ordered when the MMA is opened; any check order placed after account opening will cost $5. There is also a $10 Excessive Transaction Fee for each item beyond the limit of six transactions per month.
If you repeatedly exceed this limit, we’re required to close your account(s).
SallieMae Bank’s product line is unique, in that its high-rate account is the MMA (2.00% APY), rather than the High-Yield Savings account (1.85% APY). While the MMA and High-Yield Savings are similarly structured with no tiers or fees, the MMA's check writing ability gives it a distinct edge: when withdrawing a large amount, the money will keep earning a top rate until the check has posted and settled. To quote one of my DA colleagues, “that’s often a reason banks offer higher rates on their savings account, rather than on their MMAs.”
Complete details about the MMA (including POD accounts information) are available on Deposit Account Terms and Conditions Agreement page. Another thing to note in this document is the hold times. Sallie Mae Bank's ACH transfer service has several nice features including the capability of large transfers. The one downside is long hold times. When an ACH deposit of over $5k is made via Sallie Mae Bank's transfer service, the hold time for the amount over $5k is 10 business days.
Following yesterday’s 10 bps increase, the High-Yield Savings now earns 1.85% APY on all balances. Since January, the High-Yield Savings has had six rate increases, adding a total of 85 bps.
The High-Yield Savings has no minimum opening deposit or minimum balance requirement, but a dormant account (a balance of $100 or less with no activity for the past twelve months) may be closed. There is also an Excessive Transaction Fee of “$10 for each item that exceeds the maximum number (6) of transactions.”
The following chart shows how SallieMae Bank's MMA and High-Yield Savings APYs have continued to rise in the past ten months, with the High-Yield Savings rate a uniform 10-15 bps lower than the MMA.
About ten days ago, SallieMae Bank raised the rate on its 12-month CD (2.65% APY). The minimum deposit is $2.5k, with no stated balance cap. The 12-month CD has been offered since 2010, but for the vast majority of that time, the APY was decidedly non-competitive. The 12-month CD has gained 115 bps in the past year, making it the most competitive CD SallieMae Bank currently offers.
As stated on SallieMae Bank’s Certificate of Deposit FAQs page, the Early Withdrawal Penalty (EWP) reads as follows:
If your CD has a maturity term greater than 12 months,
the penalty will be equal to 180 days’ simple interest.
Many thanks to DA reader, buckeye61, for his many Forum posts on SallieMae Bank.
Headquartered in Salt Lake City, Utah, SallieMae Bank is an internet-only bank, with no brick-and-mortar branches. Accounts may be opened by individuals who have a Taxpayer Identification Number (usually a Social Security Number) and a physical address in the United States. Opening any account, including CDs, Money Market, and Savings accounts, must be done online.
SallieMae Bank has an overall health rating of "A+" at DepositAccounts.com, with a Texas Ratio of 1.42% (excellent) based on June 30, 2018 data. In the past year, SallieMae Bank has increased its total non-brokered deposits by $1.17 billion, an excellent annual growth rate of 15.97%. Please refer to our financial overview of SallieMae Bank (FDIC Certificate # 58177) for more details.
The "SallieMae" brand is most often associated with 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 $24 billion, with more than $17.1 billion in deposits.
How the Money Market Account Compares
When compared to 183 Money Market accounts tracked by DepositAccounts.com that are available nationwide and have a minimum deposit requirement of $5k or less, SallieMae Bank’s Money Market Account APY currently ranks fourth.
Looking for the best MMA rates, either nationwide or in your state? Please refer to our Money Market Accounts rates table page.
How the CD Compares
When compared to 209 similar length of term CDs tracked by DepositAccounts.com that are nationally available require a similar minimum deposit, SallieMae Bank’s 12-month CD APY currently ranks third.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.
The above rates are accurate as of 10/6/2018.