Republic Wireless: Unlimited Talk, Text, 3G Data for $25/Month, Moto E for $99

motoeSeveral updates. Republic Wireless uses WiFi coverage to place mobile phone calls and texts whenever possible, saving both you and them money. They have quickly become a popular frugal option for cell service. When WiFi is unavailable, you fall back onto Sprint cell towers. No contracts, but you must buy a phone specially programmed with their WiFi software. Some recent updates:

  • Moto E. This newly-released value phone costs just $99. It won’t compete with a cutting-edge phone and is 3G-only, but it will do nearly everything you need – email, text, Facebook, internet. The reviews are actually pretty positive – read the Engadget and Verge reviews. Looks like the weakest point is the camera.
  • Moto X. Their premium phone is the Moto X at $299, which has 4G capabilities and also has solid reviews at a higher price point. See Engadget and Anandtech reviews.
  • Switch between plans for free. You can switch between any of the new plan options, up to twice per month, with no penalty. This means you could upgrade to cellular data for a week or a month if you need it, or downgrade to the $5 or $10 plan if you are traveling or don’t plan to use any data that month. Nice flexibility, and you can switch plans directly from your phone without calling customer service.
  • MMS and text short codes now supported. MMS (multimedia/picture texting) is now officially working with all major carriers and most regional carriers. You can also now text shortcodes.

Plan Options

Here’s a new graphic that explains the plans pretty succinctly:

  • $5/month = WiFi only. This is basically like VoIP home service, but on a smartphone. You must route all calls and text through WiFi.
  • $10/month = WiFi + Talk + Text. Unlimited talk and text, no cellular data.
  • $25/month = WiFi + Talk + Text + 3G Data. Unlimited talk, text, 3G data.
  • $40/month = WiFi + Talk + Text + 4G Data. Unlimited talk, text, 3G/4G data.

Prices don’t included taxes and surcharges. Below is information quoted about their Acceptable Use Policy:

Our policy is targeted toward the top 1% of users, based on mobile data consumption —that means users who consume more that 5GB of cellular data or 100MB of roaming data. The vast majority of our users will never reach these limits. In fact, the first time you hit this threshold, we give you a free pass —once in any six-month period we’ll allow you to exceed the limit— and your speed won’t be reduced. If you hit the threshold twice within a six month period, your speed will be reduced to 2G speeds for the remainder of the month of billing. We’ll make sure you’re aware if your usage starts to approach either benchmark.

My Thoughts
I think Republic Wireless has found a good balance between offering “unlimited” data and still making sure people use WiFi at home/work whenever possible as that is critical to their business model. If you remember, their initial limit back in 2011 was about 500 mb of data, which many (including me) thought was too restrictive. Now, it’s 10 times as much at 5 GB of data, and you get a free pass every 6 months. I like that they are continually improving their service in a relatively open and transparent manner.

With the announcement of their new $99 Moto E phone, I finally bought one with the goal of letting my parents use it (and play with the technology myself…). Their previous phone was a Virgin Mobile Kyocera flip phone, so this should be a huge upgrade. They do have an iPad, so it shouldn’t be too hard to pick up. Hopefully, they can cycle between the $10 and upgrade to the $25 plan when they travel. I don’t think they need data on a daily basis. Learn more at RepublicWireless.com.

$20 Referral Bonus
Until October 31st, 2014 (only one more week!) new customers can also get a $20 monthly plan credit by signing up via my referral link. If you don’t use it all, it will carry over to future months. If you get $20, my parents will also get $20 of monthly plan credit. You should see the credit on your confirmation page, see this screenshot.

Savings I-Bonds November 2014 Interest Rate Estimate

savbonds4Savings bonds offer a unique opportunity for individuals to buy an investment that is closed to large institutional investors. Compare the rates on these savings bonds to what you’re earning on your FDIC-insured bank deposits or even your TIPS and bond mutual funds, and you may find them a good addition to your portfolio.

Since inflation-linked savings bonds (“I bonds”) are based on CPI numbers announced two weeks earlier, we can make predictions about upcoming savings bond rates before their official announcement. This also allows us the opportunity to know exactly what a current bond purchase will yield over the next 12 months, instead of just 6 months.

New Inflation Rate
March 2014 CPI-U was 236.293. September 2014 CPI-U was 238.031, for a semi-annual increase of 0.74%. Using the official formula, the variable component of interest rate for the next 6 month cycle will be approximately 1.48%. The new fixed rate won’t be announced until November 1st (speculation below). You add the fixed and variable rates to get the total interest rate. If you have an older savings bond, your fixed rate may be different.

Purchase and Redemption Timing Reminder
You can’t redeem until 12 months have gone by, and any redemptions within 5 years incur an interest penalty of the last 3 months of interest. A known “trick” with I-Bonds is that if you buy at the end of the month, you’ll still get all the interest for the entire month as if you bought it in the beginning of the month. It’s best to give yourself a few business days of buffer time though, since if you wait too long your effective purchase date may be bumped into the next month.

Buying in October

If you buy before the end of October, the fixed rate portion of I-Bonds will be 0.1%. You will be guaranteed the current variable interest rate of 1.84% for the next 6 months, for a total rate of 0.1 + 1.84 = 1.94%. For the 6 months after that, the total rate will be 0.1 + 1.48 = 1.58%. Let’s say we hold for the minimum of one year and pay the 3-month interest penalty. If you buy on October 31st, 2014 and sell on October 1st, 2015, you’ll earn a ~1.49% annualized return for an 11-month holding period, for which the interest is also exempt from state income taxes. That is better than any 1-year bank CD that I can find right now, keeping in mind the liquidity concerns and the purchase limits. If you hold for longer, you’ll be getting the full 1.76% over the first year.

Given the combination of current low rates and the fact that you lose the last 3 months of interest (again, for holding less than 5 years), it might be better to wait long enough to grab 12 full months of interest by holding for 15 months (14 buying late). If you buy on October 31st and hold until January 1st, 2016, you’d achieve an annualized return of ~1.51% over 14 months. (Check my math.)

Buying in November

If you wait until November, you’ll give up the opportunity to lock in the 0.1% fixed rate from April. Instead, you will get 1.48% plus an unknown fixed rate for the first 6 months. The next 6 months will be the sum of the same unknown fixed rate plus an unknown rate based on future inflation. If there is high inflation for the next 6-month period, buying in May may get you a higher rate sooner. My best guess for the fixed rate is that it will be somewhere between 0.0% and 0.2%.

As for my decision, I already maxed out my contribution limits for 2014 back in April to lock on the 0.2% fixed rate.

Existing I-Bonds
If you have an existing I-Bond, the rates reset every 6 months depending on your purchase month. Your bond rate = your specific fixed rate + variable rate. Even at a low or even zero fixed rate, your existing savings bonds are paying more than current savings accounts and will continue to be hedged against inflation, so weigh carefully whether or not to redeem them.

Annual Purchase Limits
The annual purchase limit is now $10,000 in online I-bonds per Social Security Number. For a couple, that’s $20,000 per year. Buy online at TreasuryDirect.gov, after making sure you’re okay with their security protocols and user-friendliness. You can also buy an additional $5,000 in paper bonds using your tax refund with IRS Form 8888. If you have children, you may be able to buy additional savings bonds by using a minor’s Social Security Number.

For more background, see the rest of my posts on savings bonds. I’m keeping all of mine for the foreseeable future, due to their tax deferral possibilities and other unique advantages.

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