Sallie Mae has become a household name as the largest originator of student loans in the country.

Founded in 1972 as the Student Loan Marketing Association, Sallie Mae operated with government sponsorship by handling both federal and private sector loans.

Some may remember their Federal Stafford and Federal Perkins loans coming from Sallie Mae. However, Sallie Mae started the path of incorporation as a private company during the 90s and completed it in 2004, severing their operation from the government.

Today, their product suite covers a large range of financial services from private education loans and college savings programs to banking services and insurance programs.

In this review, we’ll focus on the savings side of Sallie Mae Bank. Sallie Mae is a member of the Federal Deposit Insurance Corporation and currently offers several types of FDIC-insured savings accounts for a variety of needs: the SmartyPig savings account, certificates of deposit, money market, and high-yield savings accounts are all on the menu with Sallie Mae.

Please note the SmartyPig savings account will not be covered here. Use the link above to read more about that account.

Sallie Mae CD Rates + Account Details

If you’re looking to lock-in an interest rate, a certificate of deposit may be the way to go.

Sallie Mae was named as one of the best banks for certificates for deposit in 2020 by GOBankingRates.

Although their CD rates have been more competitive in the past, they still feature returns that beat the national average(s) for their respective terms by decent margins.

Term	Minimum Deposit	APY
6 months	$2,500	0.75%
9 months	$2,500	0.75%
11 months	$2,500	0.75%
12 months	$2,500	0.95%
13 months	$2,500	0.95%
15 months	$2,500	0.95%
18 months	$2,500	0.95%
24 months	$2,500	0.95%
30 months	$2,500	0.95%
36 months	$2,500	0.95%
60 months	$2,500	0.95%

To put Sallie Mae’s CD rates (above) in perspective, the current national average for a 12 month CD sits at 0.26% APY and the current average for a 5 year CD sits at 0.61% APY.

As you can see from the table, there is a wide range of terms to choose from but the current yields don’t vary much by term.

Grace Period

Upon the maturity of your Sallie Mae CD, you’ll have a 10 calendar day grace period during which you can withdraw funds from your CD account without penalty. If no action is taken within the 10 day grace period, the funds will automatically renew into the same CD with its current rate.

Locking-In CD Rates

The interest rate and APY will be determined on the date you fund the CD account, not the date you open the account. However, you will receive the higher interest rate of the date your account opened or was funded if the first deposit occurs within ten days from the opening date.

Once your interest rate is set and fixed, you will be paid this rate until maturity. Interest is compounded daily and credited to your account monthly.

The interest begins to accrue on the same business day if the deposit is received before 11:00 PM ET. If the deposit occurs after 11:00 PM ET on a business day or non-business day, the deposit is considered received on the next business day.

Early Withdrawal Penalties

If your CD account has a maturity of 12 months or less, the penalty is equal to 90 days of simple interest on the amount withdrawn. If the CD account has a maturity greater than 12 months, the penalty will equal 180 days of simple interest on the amount withdrawn.

In circumstances such as death or incompetence of the account holder, the law may permit an early withdrawal penalty waiver.

Sallie Mae Money Market Rates + Account Details

Sallie Mae’s money market account is similar to their SmartyPig account but with a few more features. For example, you can write checks from the money market account plus earn a slightly higher rate.

Unlike Sallie Mae’s CDs there are no minimum deposit requirements to open a money market account. The APY you receive applies to all balances as well, which is different than most money market accounts that tie yields to balances.

Sallie Mae Money Market Account Rates

Monthly Balance	Minimum Deposit	APY
$0	$0	0.99%

To put the APY (above) in perspective, the current national average for a money market account sits at roughly 0.11% APY. On top of the respectable yield, the lack of both minimum deposit and monthly balance requirements make this an attractive account. Keep in mind money market rates are variable and can change at anytime without notice.

Transaction Limitations

You may deposit or withdraw money via:

• Check,
• EFT, or
• Wire Transfer.

There is a maximum of 6 transfers or withdrawals (a combination of either) during any calendar month or statement cycle per Federal Regulation D. Please note that if using your Sallie Mae money market account to repay loans at Sallie Mae, there is no limit in the number of transfers you may make.

Sallie Mae Fee Schedule

• Check Order Charge (for orders placed after account opening; orders placed at the time of account opening are free): $5
• Stop Payment Charge: $15
• Returned Check Fee: $5
• Insufficient Funds (NSF) Fee: $19
• Wire Fee: $20 (United States only). Please note that the receiving bank may charge a wire fee on their end. Sallie Mae will not allow international wire transfers.

Sallie Mae Money Market Promotional Offers

Sallie Mae may offer a bonus interest rate and APY from time to time for their money market account customers. The promotional period’s bonus rate will be paid regardless of your balance and discontinued after the promotional period has ended. Your interest rate and APY will then revert to Sallie Mae’s current interest rate and APY. Promotions are not valid with other offers or promotions unless otherwise stated.

Sallie Mae High Yield Savings Account Rates + Details

The high yield savings account is similar to the SmartyPig and money market account in that it has no minimum balance/deposit requirements or monthly maintenance fees.

The rate is slightly lower the money market account, but still handily beats the current national average for FDIC-insured online savings accounts.

Sallie Mae High Yield Savings Account Rate

Monthly Balance	Minimum Deposit	APY
$0	$0	0.90%

Rates are compounded daily and credited to your account monthly. As with the money market account the APY is variable and subject to change at anytime without notice.

Transaction Limitations

You may withdrawal or deposit money via:

• Check,
• EFT, or
• Wire Transfer

The same 6 transaction limitation applies to the high yield savings account. This applies to both withdrawals and deposits (a combination of either) per federal regulation.

Fees

• Returned Check Fee: $5
• Wire Fee: $20 (United States only). Please note that the receiving bank may charge a wire fee on their end. Sallie Mae will not allow international wire transfers.

Banking Experience and Customer Sentiment

Sallie Mae has just one physical location in Utah, which is their headquarters. So if you value in-person banking this institution likely isn’t for you.

That said, if you value respectable rates and low maintenance accounts that can be managed 100 percent digitally than Sallie Mae deserves your consideration. Their rates are regularly among the top online offers available and their accounts have received a number of awards from third party sites.

According to user reviews on both Android and iOS apps, Sallie Mae’s app experience ranges from mediocre to comfortably above average (especially as far as banking apps go).

They receive just 3.6 starts on Android, but an impressive 4.6 stars on the App Store.

Sallie Mae’s SmartyPig account has a separate app and also receives high marks.

Final Thoughts

Sallie Mae has a variety of options in terms of deposit accounts. All of their variable rate products feature $0 minimum deposit and monthly balance requirements which make them available to pretty much anyone.

Their CDs feature above average rates, but better APYs can be locked-in through other online institutions or credit unions.

Deposit accounts are bank accounts held at banks and credit unions that allow for safe-keeping of your funds.

Most of these accounts also provide interest while your funds are held, but some accounts like everyday checking accounts, may not.

These accounts come in two distinct types:

1. ⏲️ Time Deposits
2. 🏦 Demand Deposits

Time deposits, such as certificates of deposit, limit access to your funds for a fixed amount of time in exchange for interest paid to you. 

Demand deposits such as money market and checking accounts, provide access to your funds ‘on-demand.’ The bank or credit union will let you withdraw the entirety of your sum without needing permission from them.

You’ll want to note that while the bank or credit union can’t stop you from accessing your funds in demand accounts, they can impose strict fees for doing so. 

There are two primary benefits of deposit accounts:

1. 🔐 Security
2. 💰 Interest (APY)

Security. Although these waters haven’t been tested since the bank collapse of 2008, you can rest easy knowing your funds will be there when you need them. FDIC insurance (NCUA for credit unions) backs up all deposit accounts in the event of credit union or bank failure to the tune of $250,000 per depositor. For joint accounts, deposits up to $500,000 are insured ($250,000 x 2 depositors = $500,000 FDIC coverage).

Interest. Since the bank is using your deposit for commercial endeavors – namely, to loan out to borrowers – it only makes sense that you get a kick back in the form of a dividend for your part in the equation. 

Banks and credit unions compete for consumer deposits with attractive interest rates. The longer the consumer keeps his/her funds with the bank, the higher the interest rate and APY (annual percentage yield) they will receive.

On fixed deposits like CDs, rates generally ascend with terms. So longer duration CDs like 5 year deposits provide higher returns than 12 month deposits. And why shouldn’t they? Consumers should be increasingly rewarded with the duration in which the bank gets to hold their funds.

But that’s not the only reason your money earns more over time. The second factor is “compounding interest.”

Depending on the specific institution you’re banking with, interest is usually compounded daily, weekly or monthly with the proceeds being re-deposited into the account to ‘compound.’ The more frequent the compounding (daily, weekly, monthly) the higher your overall APY or annual percentage yield will be. That’s why when comparing deposit accounts you always want to look at the APY rather than the interest rate to calculate your bottom line earnings.

Now that we understand some of the nuances of deposit accounts, let’s dive into the specifics of each account type.

Certificates of Deposit (Time Deposit)

Certificates of deposit are fixed-rate, time deposits that generally come with terms between 3 months and 10 years. With these accounts you will not have access to funds prior to the deposit’s maturity date. If you do need access, you will incur a fee. These fees generally eat away at some, most, or even all of the interest you’ve accrued on your deposit. In most cases, these fees won’t eat away at your principal, but you’ll have to check with the institution’s fine print to make sure this holds true for your bank of choice.

You’ll also want to set a reminder for yourself to let you know when your CD is about to mature. Banks and credit unions have “grace periods” upon maturity, that generally last around 10 days. During this period you can change the deposit terms or move your funds fee-free to another account. If left untouched, the funds automatically renew into the same deposit product.

When should someone open a certificate of deposit?

• In a falling interest rate environment. Timed deposits come with fixed rates. This can be a good thing or a bad thing depending on how interest rates are trending. In a falling interest rate environment certificates of deposits are a great strategy. In this environment look for longer term maturities to ride out the interest rate downturn. Conversely, in a rising interest rate environment variable rate products are better as their rates rise with the tide.
• When promotional or ‘special term’ deposit products are offered. Some banks and credit unions have promotional deposits that can come with cash bonuses or extremely high rates on certain balances. These should always be considered when looking for FDIC-insured savings vehicles. Some credit unions, and online banks in particular, also offer deposits with special terms such as “No Penalty CDs,” which allow for penalty free access to your funds, or “bump-up” or “step-up CDs” which allows for your rate to rise during the life of the of the CD. It should be noted that step-up CDs are similar but not identical to bump-up CDs. For bump-up CDs the consumer specifies when the rates get a bump and with step-up CDs the rates rise at intervals set by the financial institution.
• When you don’t need access to your money. Just be sure to pick a term you’re comfortable with as early withdrawal penalties are steep. Also, double check online savings account rates and money market rates before locking in a fixed rate CD. They may be more lucrative than the particular CD term you’re after.

IRA CD (Time Deposit)

IRA CDs are certificates of deposit held within your individual retirement account. Much of what we covered (above) applies to IRA CDs as well, just note you’ll have the added tax-advantage that IRAs offer.

Credit Unions and banks (both offline and online) as well as brokerage firms all offer IRA CDs. They can offer these in the form of traditional IRAs or Roth IRAs.

You’ll want to note that the IRS takes 10% of all sums withdrawn from an IRA account prior to the owner turning 59 and a half. They will make some considerations for new home purchases, emergency or unforeseen payments, and others.

When should someone open an IRA CD?

See above as the same conditions that apply for standard CDs also apply for an IRA CD. 

Be sure to set notifications for grace periods on deposits held within IRA accounts if you plan on moving the funds upon maturity as these can be easier to forget.

Money Market Account (Demand Deposit)

Looking for competitive rates AND access to your money? Try a money market account. 

Unlike CDs, these are demand deposits that allow for full access of your funds – at your demand. 

Accessing your money can generally be done through ATM/debit cards or checks. ACH transfers are also permissible. Just note that per federal regulation D, only six transfers are allowed per month. Check with your individual institution on the fee structure beyond six as it varies. 

Minimum deposit and/or monthly balance requirements for these accounts are generally steeper than traditional savings accounts. In normal interest rate environments rates are tiered so that larger balances receive higher APYs. In less competitive savings environments rates tend to be flat across all balances.

When should you open a money market account?

• When you have larger sums of money and want to earn a respectable interest but still have access to your funds.
• In rising interest rate environments. Money market accounts tend to offer higher APYs than standard savings accounts but often require higher balances. Rates are variable and rise and fall with the overall interest rate environment.

Savings Account (Demand Deposit)

Like money market accounts, savings accounts are on demand deposit accounts that provide access to your money and an interest on your balance. 

Access to your funds isn’t quite as easy as it would be with a checking account, but it’s still available to you if you need it. Some accounts offer ATM or debit cards as well as check writing capabilities, but most online savings accounts do not. 

With online savings accounts you generally get a top tier interest rate but access to your funds is usually restricted to ACH transfers. Again, this varies by institution so check with your bank of choice prior to opening an account.

Same federal Regulation D regulations apply to savings accounts as they do with money market accounts, limiting you to 6 ACH transfers per month. Transfer fees will apply to anything beyond that and, in some cases, your account can be shut down or transitioned into a checking account.

When should you open a savings account?

• When you want to separate funds designated for savings from your everyday spending money. Savings accounts are great for slowly building up funds for a later date. Whether you’re saving for an emergency or a big ticket item you wish to purchase in the future, savings accounts are great tools to use to achieve these goals.
• When you want to safely earn an interest on your savings. Like all other deposit accounts, savings accounts are FDIC or NCUA insured up to $250,000 per depositor. APYs on these accounts, especially online savings accounts, can be quite competitive in normal interest rate environments.

Checking Account (Demand Deposit)

Checking accounts are your everyday bank account. They are used for withdrawing and depositing funds. You can access money easily with a debit or ATM card, check or online transfers. Funds can be deposited digitally via a mobile app or direct deposit from your employer. They can also be deposited physically with cash or check.

You won’t receive much interest on these accounts compared to other deposit accounts, but we have seen promotions featuring cash bonuses for signing up.

If you decide to open a checking account with a large national bank, beware that many impose monthly maintenance fees up to $15/month. Especially for accounts that don’t meet certain balance and/or activity requirements. 

When should you open a checking account?

• When you need to open your first bank account. Because these accounts are designed for your everyday banking needs, it’s likely the first account we open with a bank or credit union. These accounts usually come with tools to help you learn about saving and budgeting as well as facilitate your everyday banking needs.

Rewards Checking Account (Demand Deposit)

These are eye-catching accounts that first started popping up in the product suite of local and community credit unions. The rewards these accounts feature can definitely grab your attention, but be cautious of the fees and activity requirements.

The rewards come in the form of cash bonuses or abnormally high interest rates. The interest rates can be upwards of 3 – 4% APY in this environment, but they’ll likely cap that yield to balances of $10,000 or less.

Here’s what is generally required of the consumer to obtain these rewards:

• Usually 10 to 15 debit card transactions from the account are required. Meaning this will likely have to be your primary account, potentially even replacing your basic checking account.
• You’ll likely have to set up at least one direct deposit OR one automatic ACH automatic withdrawal from the account. So a direct deposit from your employer or an auto pay on your mortgage, student or car loan would likely suffice.
• You’ll also have to go mostly (or completely) digital as the accounts require the use of self-service options like e-statements or online bill pay at least once per month.

As you can see this is no easy feat to obtain the flashy rewards. However, if you can meet the requirements, they may be worth a look.

When should you open a rewards checking account?

• When you’ve demonstrated to yourself that you can meet the monthly requirements of the rewards account through your everyday checking, then it may be worth switching over.
• When the rewards checking account comes without so many strings attached. Occasionally less cumbersome versions of these rewards checking accounts hit the market and can be considered after reading the fine print.