Salem Five Direct Review - Everything You Need to Know

Earn more and spend less with competitive interest rates and low fees

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Salem Five Direct is a Massachusetts-based financial institution founded in 1855. While the bank offers a modest branch footprint in the Northeastern U.S., it is a great choice for online-only banking no matter where you live. They're best known for no monthly fee checking and savings accounts.

Who is Salem Five Direct Best For?

In our review, we found that it's a great option for people who:

  • Want low fees and good interest rates
  • Like easy online self-service
  • Get paid via direct deposit and use little cash
  • Are locals in Massachusetts

Pros

  • Checking and savings with no monthly fees

  • Nationally competitive interest rates

  • No ATM fees and up to $15 monthly reimbursement for fees from other bank ATMs

Cons

  • Branches only in Massachusetts and New Hampshire

  • Mediocre customer service reviews

  • Some common fees; like a $35 overdraft charge if you don’t pay for overdraft protection

Types of Accounts

Salem Five Direct offers both consumer and business bank accounts. You can apply for the checking and savings accounts together with one application as a combo or apply for each individually.

  • eOne Checking
  • eOne Savings
  • eCDs
  • Mortgages and lending

eOneChecking

For checking accounts, eOneChecking is a nationally competitive account that offers interest and features that go head-to-head with some of the top checking accounts nationwide.

Some major features include:

  • 0.25 percent interest on balances up to $1 million
  • No minimum balance or monthly fees
  • Cashback on non-PIN debit card purchases
  • No ATM fees and up to $15 in reimbursements for other bank ATM fees

One unique feature of eOneChecking is overdraft protection. If you don’t opt-in for the overdraft protection plan, you’ll pay $35 per overdraft. Alternatively, you can pay $25 per year for overdraft protection from a linked line of credit. If you opt-in, you’ll pay $3 each time that protection kicks in.

Most other fees are comparable to other traditional banks, though you can avoid most of them by using your account responsibly and avoiding certain fee-bearing activity.

Salem Five Direct is a member of the Allpoint, Mastercard/Cirrus, and Visa/Plus ATM networks. However, you can use any ATM and the fee reimbursed up to the monthly limit.

eOneSavings

Open an eOneSavings account concurrently with an eOneChecking account or sign up for one on its own to take advantage of great interest rates and arguably the best deposit insurance in the country. This account currently pays 2.05 percent APY on balances up to $1 million.

This and other savings accounts at Salem Five Direct are covered by both FDIC insurance and DIF insurance. The DIF, or Deposit Insurance Fund, is a state-level insurance that offers additional protection above and beyond what you get from the FDIC. This means accounts in Massachusetts get more than the $250,000 per depositor per account you are used to at other banks.

There is no minimum balance and no monthly fees. You can manage this and other accounts using online or mobile banking, including mobile check deposits.

eCDs

Salem Five Direct offers online CD accounts, which it calls eCDs. These special rate CD accounts come in a range of durations for balances from $10,000 to $500,000. Current CD special rates include:

Keep in mind that you can’t withdraw your funds from a CD until the maturity date without paying an interest penalty. Regular CDs are available in 3-month to 60-month terms. This bank also offers a 9-month no penalty CD.

Salem Five Direct also offers callable CDs and IRA retirement account CDs.

Mortgages and lending services

As a full-service direct savings bank, Salem Five Direct offers a range of mortgage and lending products.

For mortgages, you can apply for these types of home loans at Salem Five Direct:

  • Home purchase loans (conventional, adjustable rate, and jumbo mortgages)
  • Mortgage refinance
  • Construction and renovation
  • VA mortgage
  • Reverse mortgage
  • Specialty loans
  • Low-income mortgages

One type of mortgage here that many borrowers are less familiar with is the reverse mortgage. With this type of loan, you can tap into your home equity to get a payment from the bank every month instead of paying the bank. These are most popular for households in retirement on a fixed income.

Borrower beware, however, as the end of the term leaves you with no equity and may require you to get a new mortgage to stay in the house. That is a big risk worth considering before signing up for any reverse mortgage at any bank.

Outside of mortgages and home equity loans, this bank offers auto loans, student loans, credit cards, and overdraft lines of credit.

Banking with Salem Five Direct

If you live in Massachusetts (or near the one branch in New Hampshire), you can bank at Salem Five Direct as either a traditional in-person customer or use your account primarily online. For most of us, however, this is an online-only bank.

If you are new to online banking as your only option, the transition will probably be easier than you realize. Aside from depositing cash, you can do everything just fine with online-only banking. In fact, with great online and mobile self-service options, you’ll probably find you save a ton of time and a bit of money when switching from a traditional brick-and-mortar bank.

Self-service features through online and mobile apps include remote check deposits, funds transfers to other accounts both at Salem Five Direct and other banks, eBills and online bill pay, mobile alerts, electronic statements, and a personal finance manager app.

Salem Five Direct cards work with major digital wallet apps such as Apple Pay, Google Pay, and Samsung Pay.

The personal finance manager offers features that compete with apps like Mint.com, Personal Capital, and Clarity Money. It includes easy budgeting, an intuitive dashboard, and the ability to view balances and transactions across financial accounts both at Salem Five and elsewhere. This is a great value-adding feature.

Salem Five Direct also offers a few advanced mobile banking tools through a partnership with financial services firm Fiserv. PopMoney is a fast money transfer app that allows you to send funds for free to friends or family at other banks with just a few taps. Card Valet gives you granular control over the security of your linked debit card, including abilities to limit the card to work in specific geographic locations or pause your card if it is misplaced.

Salem Five Financial

This bank also offers investment and financial planning services through its financial advising arm: Salem Five Financial. This division offers services such as retirement planning, education planning, estate planning, and life insurance.

Even if you don’t take advantage of these services, there are a few useful calculators to help with your financial planning available for free to anyone with an internet connection.

About Salem Five Direct

Salem Five Direct is an old financial institution founded in 1855 in Salem, Massachusetts. That doesn’t make the bank as old as the infamous Salem Witch Trials, but it is older than many other banks in the country.

As a mutual savings bank, it is unlikely that Salem Five Direct will expand its physical footprint. This type of bank is focused around a specific geography. So while you can sign up as a customer even outside of the primary region the bank is located, it probably won’t be opening a branch near you anytime soon.

The bank has 34 branches and is headquartered in the heart of Salem.

The Bottom Line

Benefits

Salem Five Direct is a great online bank with low fees and good interest rates. If you like the idea of banking online and handling most of your transfers and other needs yourself, this bank’s online checking and savings accounts are a competitive option.

If you live in Massachusetts, the appeal is even bigger. In that area, you can use the bank online or in-person. But even if you don’t have a branch or Salem Five Direct ATM nearby, you can use any ATM in the world with no fees and get reimbursed for other bank fees up to $15 per month.

Drawbacks

Unless you live near one of the 34 branches in Massachusetts, you can only bank with Salem Five Direct online. That smaller footprint means you may have a more boutique banking experience than you would get with a larger, nationwide bank.