Salem Five Direct Review: High Interest on Deposit Products

GOBankingRates Score

Salem Five Direct
4.9
SCORE
GOBankingRates Best Banks 2023 scores and rankings are objectively determined by our research/editorial team. Our scoring formula weighs several factors that differ from category to category depending on what consumers want from varying products and banks.
Quick Take: Salem Five Direct is the online division of Salem Five, headquartered in Salem, Massachusetts. Salem Five Direct offers deposit products checking, savings and CD accounts with good interest rates and no fees or minimums.
  • Savings Account
    5.0
  • Checking Account
    4.8
  • CD Accounts
    4.8
  • Banking Experience
    5.0
How did we calculate this?

Pros

  • High interest on savings with any balance
  • No limit on savings transactions
  • Cash back on non-PIN debit card transactions

Cons

  • Deposit products only

Salem Five Direct Overview

Salem Five Direct is the online-only division of Salem Five, a mutually owned bank with $6.2 billion in assets. Salem Five Direct offers checking, savings and CD accounts with higher-than-average interest rates to customers nationwide.

GOBankingRates has ranked Salem Five Direct as the winner of the Best Online and Neobank Savings Account of 2023, and among the Best Online Banks of 2023.

Key Features

Here are some of the key features of Salem Five Direct’s banking products and services.

eOne Savings Account

The Salem Five Direct eOne Savings account was rated the Best Online and Neobank Savings Account of 2023 by GOBankingRates — and for good reason.

This account pays APY on every dollar of savings, up to $1,000,000. There are no monthly maintenance fees and no minimum balance requirements. You can open an account with as little as $10. You can also move money in and out whenever you want — there’s no monthly transaction limit.

eOne Checking Account

Salem Five Direct’s eOne Checking account has no minimum balance and no monthly fees, and you can open one with just $10. You will never pay an ATM fee to Salem Five, and you can get reimbursed up to $15 per statement cycle for the ATM fees that other banks charge. The account pays interest, but it’s just APY.

When you use your Salem Five Direct debit card for purchases and select “credit” at the point of sale, you’ll get $0.05 cash back for each transaction. There’s no limit to the amount of cash back you can earn, and rewards are posted to your checking account on the last day of the statement cycle.

You can also open a combination eOne Checking and eOne Savings account at the same time. You can easily move money between accounts with online banking or the Salem Five mobile app.

Certificates of Deposit

While the APYs for Salem Five Direct’s regular CDs are unremarkable, it offers lower minimum deposits — just $500 — for several terms.

Salem Five Direct offers considerably higher rates on its Special CDs. The minimum balance to open a high-yield CD is $10,000, and the maximum deposit is $500,000. As with CD offerings at any bank, there is a penalty for taking money out of a CD before the end of the term — for Salem Five Direct, this penalty is equal to three months’ interest.

Banking Experience

In addition to being selected as having the Best Online and Neobank Savings Account of 2023, GOBankingRates also named Salem Five Direct among the Best Online Banks of 2023.

Salem Five Direct has no branches — although its parent, Salem Five has 30 branches in Massachusetts — but you can do all your banking on the mobile app and at ATMs. You can move money between your Salem Five Direct accounts on the app, and you can also transfer money to and from accounts at outside banks. You can use Allpoint ATMs nationwide with no fee, and Salem Five Direct will reimburse you up to $15 per statement period if other banks charge you to use their ATMs.

Salem Five Direct customers use the same Salem Five Banking mobile app used by customers of the Salem Five brick-and-mortar banks. The app has a rating of 4.1 out of 5 stars on Google Play, and 4.7 out of 5 stars on the App Store.

Comparable Online Bank Options

If you’re looking for a new bank, it’s important to compare your options to find the right bank for you. Think about how you will use your bank and which features are most important to you. Then compare the available options to choose the right bank for you.

Here are some banks that are comparable to Salem Five Direct that might be in your consideration set.

First Internet Bank

First Internet Bank is also an online-only bank and has been since it opened in 1999. In addition to deposit products, First Internet Bank offers loans and mortgages and provides banking products and services for businesses. Its Money Market Savings account pays APY. It has a free checking account that does not pay interest but has no monthly fee, or an interest-bearing checking account that pays APY with a monthly maintenance fee of $10 if you don’t have a $500 average daily balance.

Bank5 Connect

Bank5 Connect also offers only deposit products. Its high-yield savings account pays just APY; however, its checking account pay APY as long as you maintain a $100 balance. Like Salem Five Direct, Bank5 Connect offers free ATMs nationwide and reimburses up to $15 per statement cycle for the ATM fees charged by other banks.

Final Take

If you’re looking for an online bank with a great interest rate on savings, Salem Five Direct is a solid choice. A combination checking and savings account gives you a good return on your savings and a checking account with cash back for point-of-sale non-PIN transactions.

FAQ

Here are the answers to some common questions about Salem Five Direct and Salem Five Bank.
  • Is Salem Five Direct legitimate?
    • Yes. Salem Five Direct is the online division of Salem Five Bank, a brick-and-mortar bank located in Salem, Massachusetts that has been in business for 160 years.
  • Is Salem Five Direct FDIC-insured?
    • Yes. Deposits at Salem Five Direct are FDIC-insured for up to $250,000 per depositor, per ownership category. Ownership categories include individual, joint, trust and employee benefit plan accounts, so you could have $250,000 in an individual account, and another $250,000 in a trust account, and still be protected.
  • Who owns Salem Five Bank?
    • Salem Five is a mutually owned bank, so it is owned and operated for the benefit of its customers. It is not a publicly held company and so is not beholden to stockholders.
  • Is Salem Five Bank a good bank?
    • Salem Five Bank has been in business for 160 years and is well-respected in the community where it operates. It is a mutually owned bank, so it is operated for the benefit of its customers and is also active in the local community. Salem Five Direct is the online division of Salem Five Bank.

Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Jan. 4, 2023.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

To determine rankings for the Best Online Banks, GOBankingRates looked at the following factors across exclusively online banks: (1) total assets as sourced from the FDIC; (2) monthly checking fee ratio (percentage based on the minimum to avoid the fee compared to the monthly fee itself); (3) savings APY; (4) 1-year CD APY; (5) customer service options and mobile products offered (24/7 customer service, live chat with a human, mobile app and remote check deposit); (6) Bauer rating (out of 5 stars); (7) products/services offered (auto loans, mortgage loans, credit cards, investment services and insurance); and (8) the average mobile app rating between the Android and Apple app stores. Factors (1) and (2) were weighted 0.5 times, and factors (3) and (7) were weighted 2 times. For all savings and checking account data, only the basic accounts/products offered at each institution were analyzed.

To determine rankings for the Best Online Bank and Neobank Savings Accounts, GOBankingRates looked at the following factors from all online banks and neobanks: (1) total assets as sourced from the FDIC; (2) minimum deposit to open an account; (3) monthly savings fee ratio (percentage based on the minimum to avoid the fee compared to the monthly fee itself); (4) minimum balance needed in account to earn APY; (5) savings APY; and (6) the average mobile app rating between the Android and Apple app stores. All factors were then scored and combined, with the lowest score being best. Factor (1) was weighted 0.5 times, factor (4) was weighed 1.5 times and factor (5) was weighted 3 times.

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About the Author

Karen Doyle is a personal finance writer with over 20 years’ experience writing about investments, money management and financial planning. Her work has appeared on numerous news and finance websites including GOBankingRates, Yahoo! Finance, MSN, USA Today, CNBC, Equifax.com, and more.
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