Salem Five Direct Review 2024: High-yield savings and CDs, low fees, but limited product range
While Salem Five Direct provides a strong digital banking experience with a highly-rated mobile app, its product range is limited to basic checking, savings, and CDs.
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Allison is a Certified Financial Education Instructor (CFEI) and personal finance writer. Her work has appeared in Bankrate, Experian, Investopedia, and MoneyTalksNews. She also develops interactive financial wellness curricula for education entities, churches, nonprofits, small businesses, and community centers.
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Hanna Horvath is a CERTIFIED FINANCIAL PLANNER™ and Bankrate's senior editor of content partnerships.
Updated August 7, 2024, 2:35 PM EDT
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Salem Five Direct, the online division of Salem Five Bank, is a solid option if you’re looking for high-yield accounts with minimal fees. The bank offers a straightforward product lineup: A no-frills checking account, a high-yield savings account (5.01% APY), and certificates of deposit (CDs) with competitive rates (5.00% APY).
While Salem Five Direct's product range is limited compared to full-service banks, its fee-free structure and strong digital banking capabilities make it worth a look.
Fox Money rating: 8.6/10
Salem Five Direct offers high rates on savings accounts and CDs, with no monthly fees on its basic accounts. While it provides a strong digital banking experience and good ATM access, its limited product range and high CD minimums may not suit everyone.
About Salem Five Direct Bank
Salem Five Direct is the online banking arm of Salem Five Bank, a well-established financial institution headquartered in Salem, Massachusetts. Founded in 1855, Salem Five Bank was the first bank to establish an online presence in 1995. As an FDIC-insured institution, Salem Five Bank extends this coverage to Salem Five Direct account holders.
There’s a lot to love about Salem Five Direct. The bank primarily offers high-yield savings products and basic checking services with minimal fees. Its competitive rates on savings accounts and CDs offer a great way to grow your money.
However, Salem Five Direct's CD offerings require a substantial minimum deposit of $10,000. Plus, while the bank is affiliated with Salem Five Bank, which has physical branches, Salem Five Direct customers are subject to a $9.95 fee for in-person transactions at these locations.
Pros
- High APY on savings accounts and CDs
- No monthly maintenance fees on checking and savings accounts
- Low minimum deposit requirements for checking and savings
- Fee-free access to 55,000+ Allpoint ATMs
- Up to $15 in ATM fee reimbursements for out-of-network withdrawals
- Highly rated mobile apps
- Cash-back rewards on non-PIN debit card purchases
- First order of checks complimentary
Cons
- Hefty opening deposit requirement for CDs
- Only three CD terms available
- Branch transactions subject to a $9.95 fee
- No physical branches outside of New England
Salem Five Direct Bank accounts
Salem Five Direct Bank offers a personal checking account, savings account, and three CD terms. Both the CDs and savings account earns high interest, and the checking account comes with a debit card that earns cash back rewards.
Checking account
- APY: 0.01%
- Minimum initial deposit: $10
- Monthly fees: $0
The eOne Checking account from Salem Five Direct is a no-frills online checking account. To open an account, you'll need to make an initial deposit of at least $10, but you won't be subject to any monthly fees or minimum balance requirements.
One of the standout features of this account is the ability to earn cash back rewards on debit card purchases. This means you can benefit from a little extra money in your pocket just by using your debit card for everyday transactions.
This account also comes with online bill payment services, mobile check deposit functionality, and $15 monthly fee reimbursements for out-of-network ATM charges.
Savings account
- APY: 5.01%
- Minimum initial deposit: $10
- Monthly fees: $0
The eOne Savings Account offers 5.01% APY, making it one of the best high-yield savings accounts on the market. Plus, there are no monthly service fees or minimum balance requirements, allowing you to save without worrying about costly maintenance charges.
It's important to note that the 5.01% APY applies to balances up to $1,000,000. If your account balance exceeds this threshold, Salem Five Direct may transfer the excess funds to your eOne Checking account, which earns a lower interest rate of 0.01%.
CDs
- APY: 5.00%
- Terms: 6, 9 or 12 months
- Minimum initial deposit: $10,000
Salem Five Direct offers three CDs with competitive interest rates. With an APY of 5.00% across all available terms (6, 9, and 12 months), these CDs provide an excellent opportunity to grow your savings securely.
The downside is you’ll need at least $10,000 to open a CD, which can be a hindrance to many savers.
Early withdrawal penalties also apply. A 2% penalty is charged on the amount withdrawn for CDs less than one year old, and a 4% penalty is charged on the amount withdrawn for CDs one year or greater.
Other accounts Salem Five Direct Bank offers
In addition to its standard checking and savings accounts, Salem Five Direct offers a bundled option that allows you to open both accounts with a single application. This makes managing your checking and savings needs easy under one roof.
Salem Five Direct’s parent company, Salem Five Bank, offers a wider range of products, including personal loans, mortgages, and individual retirement accounts (IRAs).
Salem Five Direct Bank fees
While Salem Five Direct doesn't charge monthly service fees for its accounts, that doesn’t mean you’re off the hook. The fees you’ll face will depend on how you manage your account and the types of transactions you make. Let's take a closer look at some of the key fees you might encounter:
- Overdraft protection annual fee: $25
- Excessive transaction fee (eOne savings): $10
- Out-of-network ATM fees: $2
- Paper statement fee: $2.95
- Branch transaction fee: $9.95
- Stop payment fee: $30
- Debit card replacement fee: $10
- Incoming wire transfer fee: $15
- Outgoing wire transfer fees: $25$40
Salem Five Direct Bank banking experience
One of the standout features of banking with Salem Five Direct is how convenient its mobile and online banking options are.
Online and mobile banking platform
Salem Five Direct offers mobile banking apps for Android and iOS devices, allowing you to take control of your accounts on the go. Through the app, you can:
- View account balances and transaction history
- Deposit checks using the mobile check deposit feature
- Transfer funds between accounts
- Pay bills using the online bill pay service
- Locate nearby Salem Five branches or ATMs
- Send and receive money with Zelle
The mobile apps have received high user ratings, with 4.4 stars on the Google Play Store and 4.7 stars on the App Store. Users praise the app for its simplicity and practicality. However, some users have reported login issues following recent updates, which is worth keeping in mind.
Salem Five Direct does not have its own physical branches. If you need to conduct in-person transactions, you can visit a Salem Five Bank branch — but keep in mind that you'll incur a branch transaction fee of $9.95 for this service.
To avoid branch visits and related fees, you can take advantage of the mobile check deposit feature, initiate ACH transfers from external accounts for deposits, or withdraw cash using in-network ATMs.
Customer service
Salem Five Direct offers several ways to contact customer support, including phone, live chat, and email.
The phone is available Monday through Friday from 8 a.m. to 6 p.m. ET, Saturday from 9 a.m. to 3 p.m. ET, and Sunday from 11 a.m. to 3 p.m. ET. You can also live chat with a banker Monday through Friday from 8 a.m. to 6 p.m. ET or send an email using the website's online form.
Reviews on the Better Business Bureau (BBB) website for Salem Five Direct's parent company, Salem Five Bank, highlight some issues with the level of service provided.
Specifically, customers have complained about the handling of fraudulent transactions and difficulties with opening accounts.
Salem Five Bank has received a low rating of 1 out of 5 stars on the BBB website and is not accredited. Accreditation signals that a bank has met the BBB’s customer service and practice services standards. Similarly, on Trustpilot, the bank has a rating of 2.7 out of 5 stars, with reviews citing poor communication, low interest rates, and subpar service as the main issues.
Account security
When it comes to the safety of your funds, Salem Five Direct provides FDIC coverage through its parent company, Salem Five Bank. This means your deposits are insured up $250,000 per person, per account.
Salem Five Direct employs industry-standard security measures, including data encryption, multi-factor authentication, and firewalls, to safeguard your personal and financial information from fraudsters.
For added security when using the mobile app, you can enable Touch ID or Face ID, providing an extra layer of protection for your accounts.
How Salem Five Direct Bank stacks up
Let's see how Salem Five Direct stacks up against some of its competitors in the online banking space.
Salem Five Direct offers high rates on its savings account and CDs, on par with many of its rivals. However, its checking account APY is relatively low compared to other online banks.
Is Salem Five Direct right for you?
Deciding whether Salem Five Direct is the right online bank for you depends on your financial situation and banking habits.
Salem Five Direct may be right for you if:
If earning competitive returns on your savings and CDs is a top priority, Salem Five Direct's 5.01% APY on savings and 5.00% APY on 12-month CDs are among the best in the online banking market.
One potential downside of online banking is the lack of ATM access. Salem Five Direct solves this with its partnership with the Allpoint network’s 55,000+ fee-free ATMs.
Plus, Salem Five Direct's checking and savings accounts do not have monthly maintenance fees, so you can avoid unnecessary charges.
Salem Five Direct may not be right for you if:
Salem Five Direct's product lineup is limited to checking, savings, and CDs. If you need additional services like loans, credit cards, or investment options, you may want to consider a more comprehensive online bank or a traditional brick-and-mortar bank.
While you can visit Salem Five Bank branches for certain transactions, you'll incur a $9.95 fee as a Salem Five Direct customer. A traditional bank might be a better fit if you value face-to-face interactions and free branch access.
How we rated this bank
Every bank review we publish has undergone a rigorous editorial process to ensure accuracy and objectivity. Learn more about our methodology here.
Here are some of the factors that influenced this bank’s overall score:
The bottom line
Salem Five Direct's strengths lie in its high interest rates and low fees for basic accounts. It also offers a solid digital banking experience and good ATM access.
However, it falls short in product variety, has high CD minimums, and appears to have some customer service issues. It's a good choice if you’re looking for high yields on savings and basic checking services, but it may not suit someone looking for a full range of banking products or frequent branch access.
Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.