While skimming my new Suze Orman eBook, I ran across her SaveYourself promotion that I blogged about almost a year ago, but is still going on for a little while longer.
You can get a $100 bonus after one year (expired) if you open an account at Ameritrade by March 31, 2008 and set up an automatic deposit of at least $50 per month for 12 consecutive months. This deal isn’t bad as a mandatory cash savings vehicle if you don’t need to withdraw the money. They even offer a special money market rate much higher than their usual piddly 0.05% rate:
Get started on Suze’s Save Yourself Plan by opening a new account with TD AMERITRADE, featuring a special high-yield deposit account with a 2.78% Annual Percentage Yield (as of February 1, 2008). Your cash is held in an FDIC-insured Money Market Deposit Account (MMDA) at TD Bank USA, N.A.
There are no maintenance fees on the account, plus you receive the $100 offer for making 12 monthly automatic deposits of at least $50 each to help you build up your account balance. [...] Should you need to withdraw the money prior to the twelve-month commitment, you may withdraw all of your deposits, plus the interest earned. However, you will forfeit the $100 bonus.
Doing the math
Looked at one way, if you just put in the minimum $50 in each month, at the end of a year you will effectively have earned 35% interest on your money. If you are truly starting out on a savings plan, this is a pretty nice guaranteed return. $50 a month isn’t too painful, and at the end of the year you’ll end up with over $700 tucked away for your emergency fund, Roth IRA contribution, or whatever. It’s a good incentive to get in the habit of saving.
Alternatively, if you’re already saving all you want in high-yield savings accounts, you’ll still be ahead by about $90 in extra interest.
I wouldn’t necessarily stay and invest with TD Ameritrade, though. They are alright, but at $10 per trade with potentially small balances, here are a few alternatives that I suggest exploring. Note that TD Ameritrade has a $75 fee for transferring out your account directly to another broker. Keep your money in cash, and then simply withdraw it and close your account with no fee when you wish to leave.