Sallie Mae Bank Raises Savings Account Rate from 1.25% APY to 1.40% APY

Sallie Mae Bank today raised their savings account rate from 1.25% APY to 1.40% APY. That represents one of the few rate increases we've seen over the past six months. The 1.40% rate makes it much more competitive on the BestCashCow rate tables and it is the second highest rate for accounts with no minimum balance.

Sallie Mae Bank entered the online savings space relatively recently. Key savings account features include:

• No minimum balance
• No monthly fees
• Daily compounding interest
• Linkage with Upromise that provides a 10% match on Upromise earnings.

The application supports joint accounts and is fully electronic. Once the application is approved you'll receive a welcome letter via email with login information. Deposits are done via ACH with an account you choose to link. The linkage process if verified by two small trial deposits that are made to the external linked account. This is standard online banking procedure and the more automated way to link and transfer funds.

Sallie Mae Bank has three out of five stars from Bauer Financial for its safety and soundness. The bank is FDIC insured and according to the FDIC has $7.9 billion in deposits as of Dec 31, 2009. The bank is part of student loan lender Sallie Mae.