Breaking News: Sallie Mae Enters Online Banking!

Yesterday Sallie Mae launched the newest division of their company, online banking! Better known for their student and education loans, they're branching out a bit. I haven't tried their services but I'm all about options so here's the run down on Sallie Mae's online bank.

They're focusing on two types of online banking:

1. Savings Account

2. Certificates of Deposit or CD's

Savings Account also known as "Online High-Yield Savings Account"

- 1.35% Annual Percentage Yield (Claim that rates are 5 times the National average)

- No Minimum Balance

- No Monthly Fees

- Daily Compound Interest

- FDIC Insured

- Pairs with Upromise program - The New York Times has a great section about the benefits of Upromise as linked to the high-yield savings account. Click here to read article

Click here to get more information

Certificates of Deposit

CD's are a GREAT way to "make your money work harder for you" by allowing you to get a higher interest rate on your investment pending on the fact that your money will be tied up in the CD for a fixed period of time (can range anywhere from 2 months to 20+ years)

Sallie Mae's Certificates of Deposit

- No Minimum Deposit

- No Monthly Fees

- Guaranteed Return

- FDIC Insured

- Option of automatic renewals at maturity

Three options - the longer the fixed period of time, the higher the interest rate

1. 12 Month CD at 1.50% APY

2. 36 Month CD at 2.20% APY

3. 60 Month CD at 3.00% APY

Click here to get more information

I LOVE certificates of deposit! I've gotten in the habit of trying to "put away" $2,000 or so in a CD if/when I can find a good rate. (1.50% APY is definitely a competitive rate given the current economy) There are a TON of options so be sure to do your research. I have yet to do some real digging into the best CD rates out there but I'll be sure to report back as that's next on my financial "to-do" list.

Sallie Mae is just ONE option and there's no PERFECT bank. Many people fall into the trap of assuming one bank can do everything for them.

When looking for a bank, shop around and do your homework by looking for the highest annual percentage yield for checking and savings accounts, making sure your credit cards and the perks that come with them fit your lifestyle, and by knowing their customer service policies and hours. (What happens you lose your credit card or have an issue? Is there a live person to help you or are you stuck with a machine?)

Under no circumstances should you get pressured into opening a bank account. You want to make sure you're comfortable with whatever bank you go with, they're working for YOU...not the other way around! Get to know their online interface and your local branch, if they have one and don't be afraid to ask questions, they're there to help you!