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
To 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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