Sallie Mae Bank Review: High Yield CD & Online Savings Products

by Silicon Valley Blogger on 2010-03-037

Another high yield savings account and a suite of certificates of deposit to consider for your stash of cash.

Guess who launched a few high yield cd and online savings products with competitive rates, along with the strong endorsement to try out Upromise? The largest private originator and service agent for federally guaranteed student loans, that’s who! That would be Sallie Mae, otherwise known as SLM Corporation. While this outfit is best known for granting and managing more than $180 billion in debt, they’ve branched into the savings (and even credit business), having purchased in 2006 and now, via their Sallie Mae Bank subsidiary, they’ve elbowed their way into the savings realm.

Well, that’s great! We certainly need more options here when it comes to our short term savings. Recently, I’ve seen some interesting products such as the PerkStreet Financial Checking Account, which offers rewards or perks instead of a yield (see our review of PerkStreet Financial), as well as SmartyPig, which is a savings account that allows you, along with other people, to make savings contributions to the same account. It’s an account that allows you to collaborate with others to fund a savings goal. I actually consider the Sallie Mae Bank offerings just as interesting (if not moreso). So let’s take a look at some details on these savings products.

Sallie Mae High Yield CD & Online Savings Products

Sallie Mae Online High Yield Savings Account

Sallie Mae Bank offers two types of accounts for your savings.

#1 Sallie Mae Online High Yield Savings Account

This high interest savings account sports an APY that’s 5 times the national average. Currently, this account is returning a 1.30% APY. In addition, this savings account has the following desirable features:

  • It requires no minimum balance, making it easy for anyone to open an account.
  • It’s got no monthly fees.
  • Interest is compounded daily.
  • It’s FDIC insured.
  • You’ll earn an interest of 1.30% APY.
  • You have the potential to earn a cash bonus based on some additional requirements.

The Upromise Connection

Sallie Mae Savings Account & Upromise

So what’s the cash bonus all about? While all this sounds pretty standard for a savings account, with the advertised interest rate falling in the middle of the pack when compared to other online savings accounts, there’s one thing that makes this product stand out. And no, it’s not just that this product is being offered by Sallie Mae, a familiar entity that you can feel you can trust with your loans AND savings; the fact is, Sallie Mae is also the institution behind Upromise, which they acquired a few years ago.

I am actually a member of Upromise and one who can really vouch for the program, whose goal it is, is to help you save for college. Through Upromise, you can get anyone to help you save for college through everyday spending. You can shop online, dine at participating restaurants and purchase groceries, and by using a registered credit card or Upromise credit card, you’ll earn rewards — actually, cash back that will help fund your Upromise account. You can then link your Upromise account to 529 college savings plan accounts in order to further your investment. You can invite your family and friends to participate in the savings process with you.

That said, the extra feature that the Sallie Mae Online High Yield Savings Account provides is the ability for you to receive a 10% annual match on your Upromise earnings, and it works this way:

  • Open a Upromise Account and a Sallie Mae High Yield Savings Account.
  • Link these two savings accounts together in order to be eligible for the 10% annual match.
  • Set up an automatic savings program with a contribution of at least $25 per month OR deposit a minimum of $5,000 into the SLM account (within 90 days of opening the account).
  • Start earning through Upromise by spending on everyday things.

After these requirements are met, then at the end of the calendar year, your Upromise earnings will be assessed. Upromise will then match 10% of these earnings and will deposit this bonus into your SLM savings account in February of the next year (given that your accounts remain in good standing).

Note that these terms may change at any time.

#2 Sallie Mae Certificates of Deposit

In addition to the savings account, Sallie Mae is also offering some high yield cds or certificates of deposit with the following terms:

  • A one year CD returning 1.30% APY
  • A three year CD returning 1.85% APY
  • A five year CD returning 2.45% APY

These online high yield CDs won’t require any minimum deposits, have no hidden fees and no monthly fees, and can be automatically renewed. And as usual, they’re FDIC insured.

You can also review our article on the best CD rates if you’d like to see additional options for bank CDs.

For more on Sallie Mae Bank’s products, check out

Copyright © 2010 The Digerati Life. All Rights Reserved.

{ 7 comments… read them below or add one }

Credit Girl March 3, 2010 at 2:29 pm

1.35% is a lot! I may have to check this out. Sallie Mae is clearly checking out other options after all those debts.

basicmoneytips March 4, 2010 at 5:13 am

I find it interesting that Sallie Mae would get into the CD business. However, since the erratic stock market ride of the last few years, there is a lot of cash on the sidelines sitting in savings and CDs. I can see some logic in the fact Sallie wanted to get in that business.

Garrett Bender March 4, 2010 at 11:46 am

I have sallie mae loans but I never realized they had such great savings plans. I have been looking for a good place to put my money and I think you may have helped me find it.

ConsumerMiser May 24, 2010 at 5:57 pm

Thanks for the info on the Sallie Mae Savings Account. 1.40% seems so low, but it’s actually a pretty good rate right now. What really intrigues me about this article is the connection to Upromise. I am already a member of Upromise, but it seems that I have to buy items I would normally not buy just to earn the Upromise points which are a small fraction of the purchase price of the item. Your article has prompted me to reconsider my Upromise account to see if I can maximize the benefit there. And maybe I will open one of these Sallie Mae Savings Accounts.

Margarita September 22, 2010 at 5:57 pm

Thank you so much for the article about the Sallie Mae savings account. I am working very hard to get out of debt and had some money in a savings account (barely collecting interest) that I just transferred to Sallie Mae today after reading your article. Thank you so very much!

Dan – BankVibe November 18, 2010 at 5:58 pm

They just lowered their rate to 1.30% APY from 1.40% APY last week but they still remain at the top of the charts for interest rates on either online savings accounts or money market accounts. The UPromise integration is also a very promising feature that we particularly like.

Silicon Valley Blogger August 24, 2011 at 6:02 pm

Yup! I am a huge UPromise fan and enjoy the association between Sallie Mae and UPromise. The APY is still a decent return for a savings account.

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