SallieMae, traditionally a provider of student loans both federally and privately, has entered the online banking retail space by offering both “high yield savings accounts” and high interest CD’s (certificate of deposits). These accounts are federally insured by the FDIC and SallieMae claims the rates to be 5x the national average – though you can still find higher rates in our CD rate database.
Anyone researching bank deposits though will likely tell you rates aren’t everything when finding a CD or savings account to fit your needs. In fact, we’d put rates as the number 2 or 3 most important factors when deciding on a bank. This is simply because rates as a whole are quite terrible and the disparity between a great rate and a terrible one is rarely more than a difference of 1 percent.
That being said, here is why we like Sallie Mae’s new savings account and certificate of deposit products:
First, with a Sallie Mae online savings account, there is no minimum balance requirement to earn their advertised rate as well as ZERO monthly fees. This is much more lenient than most of the online savings, checking and deposit offers from the nations most well known banks. Banks like Bank of America, Chase, and Citibank all impose fees on their checking, and online savings products (plus their rates are significantly lower).
Second, for those with a college education in their near future, SallieMae has something called “UPromise” which helps you save up for just that! Because Sallie Mae has been involved with the financing of higher eduction it only makes sense they link these two together.
How does UPromise work?
UPromise works much the same way as a cash back credit card or checking account would, except that all the cash back you earn gets set aside in a savings account for college tuition. If you shop online through UPromise.com, you can earn anywhere from 1 to 25 percent cash back from SallieMae and this program. Similarly to credit card offers of this nature there are over 600 participating retailers as well as a number of restaurants and grocery stores to choose from.
The third reason we like this account is the interest rate. As per the date of this article their online savings account is featuring a 1.10% APY. As far as interest rates go for online savings accounts go, this is within the top 3.
As with all variable rate savings accounts, SallieMae’s interest rates are subject to change without notice and as with most certificates of deposits, their CD’s come with a fixed interest rate until maturity.
Their online savings account comes with no monthly fees and no minimum balances, similar to other online banking products such as Ally Bank’s online savings account and American Express’s high interest savings account.