Sallie Mae is most commonly known for its student loans. But it also offers online banking solutions for storing and growing your money. Sallie Mae offers three types of accounts: short and long-term certificates of deposit, a money market account and a high-yield savings account.
But unlike other well-known online banks, Sallie Mae lacks a few essential banking products like a checking account or different types of CDs beyond traditional and retirement options. So it may not be the best bank to combine all your accounts.
Whether you’re looking for competitive interest rates or planning for college, Sallie Mae does have a few banking products and services to help manage your money and earn returns. But there are pros and cons to consider. Here’s our take on Sallie Mae’s banking products and services, plus what else to have in mind before opening an account.
What we like
- Competitive interest rates on savings products
- No minimum balance requirement for select savings accounts
- Several CD term options
- No monthly maintenance fees
- Online college planning tools
- No overdraft fees
What we don’t like
- $2,500 minimum deposit for CDs
- Limited banking options
- 24/7 customer service not available
- No cash deposits or ATM access
- No physical branches
- $10 excessive transfer fee after six per statement cycle
- Sallie Mae can close your account if you have too many overdrafts
Who is Sallie Mae suited for?
Sallie Mae is best suited for customers looking for savings options online — there aren’t any physical branches or ATM access. This bank doesn’t offer a checking account, so look elsewhere if you need an account to handle your daily finances. Sallie Mae also has limited customer service hours by phone, but a live chat is available on the website (live chat hours are not listed on the website).
All in all, Sallie Mae is a good place to park your savings to earn returns. You’ll have several savings account options to choose from. And if you’re preparing for college, the bank has a few college planning tools and student loan options.
However, if you’re looking for a full-service bank to manage your investments, retirement, checking and savings in one place, it’s best to consider options such as Ally or Discover. If you want a full-service bank with physical branches, Capital One is also a good option.
Savings account review
Sallie Mae’s high-yield savings account has a competitive yield that’s on par with other online banks. There’s no minimum balance or monthly maintenance fee. And you can manage your account by computer, mobile app or text.
Interest compounds daily and is paid to you monthly. But to access your funds, you’ll need to transfer them to your Sallie Mae money market account (which lets you write checks) or transfer your money to an external bank account. You can’t deposit cash either, though you can transfer money by check, Automated Clearing House or other electronic transfers. Sallie Mae allows six external transfers per billing cycle, and there’s a $10 excessive transfer charge for each one thereafter, although the Federal Reserve’s Regulation D removed this requirement and allows banks to offer unlimited transfers.
Savings account features
| APY | Minimum balance to open | Monthly maintenance fee |
|---|---|---|
| 3.65% | $0 | $0 |
Rates as of Mar. 1, 2023
What we like
- No monthly maintenance fee
- No minimum balance
- Competitive APY
- Electronic check deposits
- Mobile and text banking
What we don’t like
- No cash deposits
- No checking account to link to this savings account
- $10 excessive transaction fee after six external transfers each billing cycle
CD account review
Sallie Mae only offers traditional CDs. The bank does not offer high-yield, no-penalty, bump-up or other common types of CDs. However, various terms are available ranging from six months to five years. When your CD matures or the selected term ends, you can automatically renew it for another term or you can withdraw your money with no penalty.
Another downside is that regardless of the CD term, there’s a minimum $2,500 deposit. And even though there are no monthly fees, there’s a $5 returned deposit fee if your deposit doesn’t go through due to lack of funds. And if you withdraw from your CD before it matures, you may be on the hook for interest equaling three to six months, depending on your term, which is standard for most banks.
Read more: Types of Certificates of Deposit
CD account features
| CD term | APY |
|---|---|
| 6-month | 3.75% |
| 9-month | 3.80% |
| 11-month | 4.20% |
| 12-month | 4.35% |
| 13-month | 4.50% |
| 15-month | 4.50% |
| 18-month | 4.55% |
| 2-year (or 24-month) | 4.60% |
| 30-month | 4.35% |
| 5-year (or 60-month) | 4.25% |
Rates as of Mar. 1, 2023
What we like
- A range of CD terms to choose from
- Competitive APYs
- CD can automatically renew when it matures
What we don’t like
- High minimum deposit, regardless of the CD term
- Only traditional CDs available
- $5 returned deposit fee
- Early withdrawal penalty can be up to six months of interest
Money market account review
Right now, Sallie Mae’s money market account has a slightly better rate than some CD terms and its high-yield savings account, though it has some drawbacks. Sallie Mae’s money market account lets you write checks and transfer money, but it doesn’t offer a debit card or ATM access. This is a big downside if you prefer using a money market account in place of a checking account.
There’s also a $5 check ordering fee, which can add up if you write checks frequently. Additionally, deposits into your Sallie Mae account will be held for five days — that goes for CDs and high-yield savings accounts, too. So, make sure you won’t need the funds within this time frame. However, if you plan to use this account as a savings method primarily, we do like that interest is compounded daily and paid to your account monthly.
Read more: How to Open a Money Market Account
Money market account features
| APY | Minimum balance requirement | Monthly maintenance fee |
|---|---|---|
| 3.75% | $0 | $0 |
What we like
- No minimum balance, deposit or monthly maintenance fee
- Ability to write checks from your account
- Competitive yields compared to major, traditional banks
What we don’t like
- No debit card
- No ATM access
- $5 check ordering fee after opening your account
- You can only access your money with checks and transfers
Banking experience
Sallie Mae offers limited banking products, including student loans, credit cards and several interest-earning savings options. You can earn a higher-than-average return on your savings with a traditional CD, money market account or high-yield savings account.
The bank also comes with a few financial planning tools. You can use SmartyPig — a savings feature — to create and track savings goals. And Sallie Mae’s college planning tools can help you understand the ins and outs of financial aid, scholarships and student loan options. The bank also offers tools to help you financially plan for college. Additionally, Sallie Mae offers credit cards to offer rewards on student loan payments. However, we do not recommend paying your student loans with a credit card, since credit cards have much higher variable APRs than fixed-rate student loans.
However, Sallie Mae is an online-only bank with some restrictions. You won’t have debit card or ATM access, which means you’ll need to transfer the money to an external account with a debit card for point-of-sale transactions or ATM access. This can be inconvenient if you need the money right away or want to access your funds regularly.
And if you choose a CD, you’ll need a minimum of $2,500, which can be steep compared to other banks, such as Synchrony, which don’t require a minimum deposit to open a CD. And even when your CD matures, you’ll need to transfer funds to another account or write a check if you have a money market account with Sallie Mae.
Overdraft fees
Sallie Mae doesn’t have overdraft fees. If you don’t have enough money in your account to cover a transaction, Sallie Mae may handle overdrafts one of two ways. It can decline the transaction. Or if Sallie Mae covers the transaction and allows an overdraft, balances in other Sallie Mae accounts will be held until the negative balance is paid.
If you overdraft too often, Sallie Mae may close your account. You may be charged any additional fees that Sallie Mae may have paid on your behalf.
Read more: Bank Overdraft Fees: How They Work and How to Avoid Them
Customer service
You can contact Sallie Mae about CDs, money market and high-yield savings accounts by calling 877-346-2756 Monday through Friday, between 9 a.m. and 6 p.m. ET. You can also use Sallie Mae’s banking app to make a payment, manage your accounts and look at your FICO score.
Sallie Mae also has a live chat feature on its website. You may also get answers to your questions from the list of frequently asked questions.
About the bank
Best known for its student loans and college financial tools, Sallie Mae is an FDIC-insured bank with headquarters in Salt Lake City, UT. It’s an online-only bank with several options for savings, credit cards and loans and currently boasts competitive interest rates for your savings.
Sallie Mae: 2023 Banking Review – CNET
Source: Media Star Philippines
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