New Bank Findings: WT Direct and Salem Five Direct

I have noticed recently two “direct” online banks that offer competitive rates. Though both of them have decent introductory rates, the high minimum balance required to get rates make them less appealing if you have a small deposit.

One is WT Direct, a division of Wilmington Trust. For balance of $10,000 or more, the bank offers a 5.26% APY. If, however, the balance is less than $10,000, then the account is useless as the APY becomes 0.60%, though the bank doesn’t charge any fees. Here’s another link with a 3-month 5.50% introductory APY and 5.36% for balance of $10,000 or more.

Though I like to get the best rate for my money, I usually shun away from banks that require high minimum balance to get a favorable rate. I want to have the option to keep only a small amount in the account without having to close the account to avoid any penalty. I’d rather go to a bank with lower rate but no more than $500 account minimum. For these two banks, Salem Five Direct’s introductory rate is very attractive, but I don’t have $100,000 to enjoy it and the 0.60% from WT Direct for up to $10,000 balance is just unacceptable.

For more discussions on WTDirect, read:

• Emigrant Direct and WT Direct Interest Rate Update
• WT Direct Increases Interest Rate to 3.26% APY

The other one is Salem Five Direct (Thanks Michael for the tip), which is the online banking division of Salem Five Cents Savings Bank, a Salem, MA based bank with more then 150 years of history. Currently, Salem Five Direct’s eOne account offers a 2-month 6.10% introductory APY for account balance of $100,000 or more and 5.30% APY after the introductory period. For smaller balances, the rates are

• 5.00% APY for balance between $0 and $9,999;
• 5.10% APY for balance between $10,000 and $24,999;
• 5.20% APY for balance between $25,000 and $99,999.

Other benefits include:

• No monthly fee;
• No minimum balance;
• $15 monthly ATM fee reimbursement;
• Free online bill payment;
• Unlimited checking, debit card and ATM transactions.

The bank is now offering a $25 bonus when you enroll in direct deposit.

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