Sallie Mae Online Bank Account Review - High Interest Rates, No Monthly Fees
Sallie Mae is no longer just for student loans–it’s for savings and loans. In our Sallie Mae Online Bank Account Review, we’ll go through all the ways you can supercharge your savings with low fees and high-interest rates.
- High interest rates
- No monthly service fees
- Low personal loan rates
Founded in 1972 as the Student Loan Marketing Association, Sallie Mae started as a government sponsored enterprise, similar to Fannie Mae and Freddie Mac. But in 2004, it split into two separate companies. One is SLM Corporation, which is the continuation of Sallie Mae. The other is Navient Corporation, which services government student loans. Since its founding, the company has helped more than 34 million Americans pay for college during that time.
Sallie Mae Bank was founded in 2005 as part of SLM Corporation, and is a Utah state-chartered industrial bank. The bank provides education loans and savings products to both students and their families. Like most banks today, Sallie Mae Online Bank operates primarily as an online bank.
The bank not only provides education-based loans, but also attractive savings programs, as well as its innovative personal loan, that offers certain advantages of peer-to-peer competitors, who provide similar loans.
Sallie Mae offers four different savings products. Please note that the bank does not offer a checking account. However, you can write checks from your Sallie Mae Money Market Account.
All Sallie Mae Online Bank deposit accounts can be easily managed from your online management account.
Sallie Mae Online Bank SmartyPig Account
This is a free online “piggy bank” that you can use for long- and short-term savings goals. There are no monthly or annual fees for the account, and you can earn a high interest rate, even on small account balances.
You start by setting a specific savings goal, with a target deadline to reach the goal. You then set up automatic monthly or biweekly deposits from your bank account to fund the account, and move toward your goal.
SmartyPig accounts have no minimum required balance to open an account. You can earn interest on a balance with as little as $0.01. The annual percentage yield (APY) as of February 13, 2019, is 1.75% on all account balances.
Sallie Mae Online Bank Money Market Account
The Sallie Mae Money Market Account is available for depositors who want to earn higher interest than what is available on savings accounts. You can make a maximum of six withdrawals from the money market account each month, including checks written against the account. There are no monthly or annual account fees.
The Sallie Mae Money Market Account has no minimum required balance to open an account, or to earn interest. The APY as of February 13, 2019, is 2.20% on all account balances.
Sallie Mae Online Bank High-Yield Savings Account
The Sallie Mae Online Bank High-Yield Savings Account pays one of the highest interest rates on a savings account available anywhere. There are no monthly or annual account fees. You can make a maximum of six withdrawals from your account each month.
The Sallie Mae High-Yield Savings Account has no minimum required balance to open an account, or to earn interest. The APY as of February 13, 2019, is 2.10% on all account balances.
Deal of the Day: CIT Bank has a 1.80% APY on their Money Market Account. $100 minimum deposit required and all deposits are FDIC insured up to the $250,000 per depositor maximum.
Sallie Mae Online Bank Certificates of Deposit
Sallie Mae offers CD’s with 11 different terms, ranging from six months to 60 months. A minimum of $2,500 is required to open any CD, and interest rates vary by term.
As is the case with all banks, Sallie Mae CDs have prepayment penalties if you withdraw principal early (see below). But you can receive interest disbursements from your CD monthly, quarterly, annually, or at maturity. You can even have the interest electronically sent to a linked bank account.
Interest rates on Sallie Mae’s CDs are as follows, as of February 13, 2019:
CD prepayment penalties are as follows:
- For a CD term of 12 months or less, the penalty will be equal to 90 days’ simple interest.
- For a CD term of greater than 12 months, the penalty will be equal to 180 days’ simple interest.
Unlike most traditional banks, and many online banks, Sallie Mae does not offer credit cards. Nor do they offer mortgage loans. However, they do offer personal loans, and of course, education loans through the Sallie Mae organization.
Sallie Mae Online Bank Personal Loans
Sallie Mae Online Bank Personal Loans are similar to what are available from online peer-to-peer (P2P) lenders, but they have lower interest rates. They also charge no origination fee, which is typically between 1% and 6% of the loan amount charged by most other P2P lenders.
You can apply online and use the loan proceeds for just about any purpose. This includes debt consolidation, major expenses, or life events, like a wedding or unexpected medical bills.
Personal loans are completely unsecured, and your funds may be available as soon as the next business day. Sallie Mae Online Bank Personal Loans also provides your TransUnion FICO Score 8 on a quarterly basis, and at no extra charge.
Here are the basic terms of Sallie Mae Online Bank Personal Loans:
Loan amounts: $3,000 and $35,000
Loan terms: 36 months or 60 months
APR: 6.99% to 24.99%
Origination fee: None
Prepayment penalty: None
Sallie Mae Education Loans
Though not offered directly through the bank, Sallie Mae does offer all types of student loan financing. These include loans for the following borrowers:
- Undergraduate student loans
- Graduate student loans
- Career training student loans
- Parent Loans (Sallie Mae Parent Loan)
- K-12 student loans, covering private education from kindergarten through high school
You can apply for a student loan through the Sallie Mae Student Loan Portal.
Beyond providing student loan financing, Sallie Mae also operates as a complete resource center for student loans. They provide in depth information on everything related to student loans, including determining how much to borrow, using a cosigner, and even the pluses and minuses of private student loans.
Sallie Mae Mobile Banking and Text Banking. You can use mobile and text banking with CDs, High-Yield Savings and Money Market Accounts. This is available on any device capable of receiving text messages. There is no fee for the service. You’ll receive text messages and alerts. A PIN will be required for access to the app. You can use the app to track account balances, view transactions, and transfer funds between accounts. You can also use the app to make mobile deposits by snapping a picture of the check you’re depositing.
Sallie Mae Referral Program. You can earn a $10 reward for every friend you refer who opens a SmartyPig account, sets a goal, and contributes to it.
Interest crediting. Interest is compounded daily, and credited to your account monthly.
Account protection. Sallie Mae Online Bank is an FDIC member bank, with all accounts protected for up to $250,000 per depositor.
There are no monthly service fees connected with any Sallie Mae Online Bank deposit accounts.
There are however other fees associated with your account, including:
Returned deposit fee – $5
Stop payment – $15
Insufficient funds fee – $19 per unpaid check
Check order – You can order 25 checks for your Money Market Account, at a cost of $5 by standard delivery, or $15 for expedited delivery (two to three days). However, your first check order is free when you first open your account.
Over-limit withdrawal fee – Since you are limited to no more than six withdrawals from either your Money Market or High-Yield Savings Accounts, any excess withdrawals will incur a fee of $10.00 per of transfer. If you’re regularly exceed the limit, your account will be closed. However, there is no limit on the number of transfers you can make from either account to repay Sallie Mae loans.
To sign up for a deposit account with Sallie Mae Online Bank, you’ll need to provide the following information:
- Email address
- Phone number
- Social Security Number (for you and for any joint account holders)
- Date of birth
- Your occupation
- Home address
- Bank account information (source of funds for your Sallie Mae Online Bank Account)
You’ll then select what type of account you want to open, and check whether it will be a single or a joint account. You’ll also have the option to provide beneficial information.
Once you supply the basic information, you’ll be required to create a username and password.
You can make deposits and withdrawals to and from your Money Market and High-Yield Savings Accounts in one of four ways:
- Sallie Mae e-deposit (You can make deposits electronically with your iPhone or Android device.)
- By direct deposit
- Electronically by ACH transaction
- Check by mail
Once you’ve signed up for the service, you can access your account through the Sallie Mae Online Bank login page.
Question: Why am I limited to no more than six withdrawals from the Money Market and High-Yield Savings Accounts?
A: It’s actually Federal law, and not a rule put in place by the Bank itself. It’s imposed under Federal Regulation D, and it applies to all banks.
Question: Why doesn’t Sallie Mae Online Bank offer a checking account?
A: Like many online banks, Sallie Mae Online Bank offers a limited product line. That helps to keep interest on savings high, and bank fees low. Or in the case of Sallie Mae Online Bank, the fees are practically nonexistent. Many online banks focus their business primarily on high yield deposit accounts only.
Question: What happens when my CD matures?
A: Unless you choose not to renew your CD, it will be renewed automatically. However, you will have a 10-calendar day grace period during which you can withdraw funds without penalty. When a CD is renewed, it will be for the same term as the original CD, unless you direct the bank to do otherwise
Question: How soon do my deposits began accumulating interest?
A: It starts as soon as the deposit posts to your account. This is usually two or three business days for electronic deposits, or as soon as a check is processed, in the case of check deposits.
Question: I’ve heard something about a 10% annual match from Upromise on High-Yield Savings Account customers – why doesn’t this review doesn’t mention anything about it?
A: That match program ended on December 31, 2017.
Sallie Mae can be contacted by either email or toll free phone. They are available during the following times (All times Eastern):
- Monday through Thursday – 8:00 AM to 9:00 PM
- Friday – 8:00 AM to 8:00 PM
- Saturday – 9:00 AM to 6:00 PM
Pros and Cons
- Sallie Mae Online Bank provides some of the highest interest rates being paid on savings products, even among online banks.
- Deposit accounts have no monthly service fees.
- Personal loan rates are lower than what are available from most peer-to-peer (P2P) lenders, and require no origination fee (which is typically from 1% to 6% of the loan amount with P2P lenders).
- Deposit accounts have no required initial deposit, and begin earning interest on the first dollar in the account.
- SmartyPig accounts give you the ability to set up goals, and fund them through a high yield savings account.
- You’ll have access to all Sallie Mae student loan programs.
- No checking accounts are offered.
- Sallie Mae Online Bank does not offer business banking services. Most online banks don’t offer this service.
- There are no physical bank branch locations, which again is typical with online banks.
Given the lack of certain important banking services, like checking accounts and credit cards, Sallie Mae Online Bank won’t be suitable as your all-purpose bank. You’ll most likely need to continue maintaining a relationship with the local bank that offers all needed banking services.
But if you’re looking for higher returns on your savings, the kind that are not available at the local bank, then you’ll want to begin a bank relationship with Sallie Mae Online Bank. Not only are the Bank’s interest rate returns many times higher than what you can get at a local bank, but they’re also near the top of the range even for online banks as well.
The Sallie Mae Online Bank Personal Loan is a loan program that may also be worth investigating. It’s basically an unsecured loan, set up as an installment loan, for any purpose needed. It can be a perfect opportunity to do a debt consolidation on high interest credit cards. You can borrow up to $35,000 on a term of three or five years, and with an interest rate as low as 6.99%.
Sallie Mae Online Bank is also an excellent choice if you need student loan financing. They don’t service student loans anymore, but you can apply for them through the bank, while also maintaining your high yield banking with the same institution.
If you’d like more information, or you’d like to sign up for the service, visit the Sallie Mae Online Bank website.