Sallie Mae Savings Account Review: High Yield Plus Upromise Benefit

A high interest rate savings account is an essential part of our financial system. With a large amount of money that is currently held in bank accounts, I’d love to get as much return as possible while making sure that the money will be there when we need it in the next few months. Unfortunately, the current status of high-yield savings accounts don’t offer too much help in terms of returns. In fact, I found that online savings accounts are increasingly becoming what we called “chicken rib” these days. On one hand, I really can’t get much from it as yields of most savings accounts are now in the low 1.0% APY, while on the other hand, it still won’t make any sense to just abandon the passive income generated in savings accounts because the interest rates are so low. Late last year, I was considering getting another savings accounts for myself. After looking around and watching rates at banks I was interested got cut repeatedly, I gave up that idea because I realized that it’s just not worth it to get another account with rate that’s only 0.1% higher than what I already have. Plus, with rates changing so fast even as the Fed funds rate has been held steady for more than a year, today’s winner could well be tomorrow’s loser. The rate-chasing game is not worth playing in this environment. Anyway, if you are looking for a high-yield online savings account, here’s another option in addition to those I listed earlier: the Sallie Mae High-Yield Savings Account. Sallie Mae (NYSE:SLM), which is known for its operation in the student loan business, recently launched its own online savings account with an yield at 1.10% APY. The account is FDIC insured (FDIC Certificate number: 58177, member since November 28, 2005) with no minimum balance requirement and no monthly fee. Here’s some other information about the Sallie Mae Savings Account:

  • Daily compounded interest
  • Sallie Mae routing/ABA number 124385119
  • ACH fund transfer to/from external accounts
  • Trial deposit account ownership verification
  • 5-day hold period for deposit $5,000 or less, 10-day hold period for deposit more than $5,000
  • Maximum 6 free withdrawals per statement cycle ($10 per withdrawal over the limit)
  • Customer service toll free number (877) 346-2756

Sallie Mae Savings AccountTo be fair, 1.10% APY is a good rate (better than ING Direct, FNBO Direct), but not really that competitive (lower than Ally Bank and American Express Bank). However, if you are using Upromise like I do, then there is a little extra benefit for Sallie Mae Savings Account owners as Sallie Mae also operates Upromise. Here’s how the 10% annual match on Upromise earnings works

To be eligible for the 10% annual match on your Upromise earnings from Upromise, you must link your High-Yield Savings Account to your Upromise Account and, within 90 days of opening your High-Yield Savings Account, either: (1) set up an Automatic Savings Plan with a monthly deposit of $25 or more, or (2) fund the account with $5,000 or more. Upromise will match 10% of your Upromise earnings posted as ”funded” to your Upromise Account during the calendar year of January 1 through December 31. Your 10% annual match will be deposited into your High-Yield Savings Account in February of the following year provided that both accounts remain active and are in good standing at the time of transfer.

I have a Upromise 529 plan and the way I earn Upromise rebates, which are then invested in the 529 plan, is shopping through Upromise network and paying with BofA Upromise credit card. It’s not a lot of money you can make, but it doesn’t require much effort either if you already have a Upromise card and use it everyday.

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4 Responses to “Sallie Mae Savings Account Review: High Yield Plus Upromise Benefit”

  1. brad |  Apr 19, 2010 at 4:54 am

    I was just checking my Sallie Mae loan online for about $20,000 when I see an advertisement for this savings account on that very page RIGHT next to my balance and accrued interest and all that BS.

    “It’s like CPR for your savings!!! Discover how a high yield savings account can help revive your riches!” At 1.25%? When you are charging 8.25% on my loan? On $20,000 that %8.25 comes to roughly $1650 of interest per year.

    Say I’m stupid enough to save $5000 to throw in their lousy savings account. I’ll earn about $62.50 in interest for the year.

    Yeah, piss off Sallie Mae. I think I’ll pay down my principal with my $5000 rather than let you borrow it and profit more off me and pay me lousy returns.

    I will have this paid off in about a year and a half or so pouring around a grand per month toward it. Quite burdensome, but not as bad as if I let them collect over $1500 in interest per year from me.

    Even if you are debt free. All the rates the banks are offering are petty. It’s better than nothing I suppose. It would eat at me knowing they are making money off it and paying me 1.25% interest though.

    You shouldn’t try to save money when you have debt.

    How did these banks need bailouts? They seem to be making plenty of money.

    • Sun |  Apr 20, 2010 at 9:53 pm

      Sure, when you have a loan at 8.25%, the savings account rate 1.25% APY is nothing. However, right now it’s not a good environment for savings accounts since all the rates are pretty low. You are lucky if you have an account that pays even 1.5% APY.

  2. John |  Mar 30, 2011 at 12:27 am

    Sallie Mae is a White color scam! Using our tax dollars to make a profit for themselves and then turn around and suck more interests out of the life of poor students/working parents. Sweet American value..huhh?

  3. Ann |  Sep 26, 2011 at 4:13 am

    Nice and very helpful information i have got from your post. Even your whole blog is full of interesting information which is the great sign of a great blogger.