Frequent Flier Miles: Which Airlines Are Easiest To Redeem Economy Awards?

Cashing in your frequent flier miles for a free flight can be hit or miss, especially around a holiday. Which airlines are the most generous with making seats available? Each year, IdeaWorks tries to run a fair comparison of all the major airlines to keep them honest. This WSJ article discusses the results:

During March, IdeaWorks made more than 7,000 trip searches among 25 airlines, looking for two seats at the basic “saver” award level—25,000 miles for a domestic U.S. round-trip, for example—on 14 specific travel dates June through October. Each airline’s 10 busiest long routes and 10 busiest medium-length routes, both domestic and international, are queried to get the fullest picture of award availability.

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Most improved goes to American, which admitted that they significantly increased their overall seat availability, especially to Hawaii and Europe. Worst decline goes to Alaska, which says it didn’t change the amount of seats released, so perhaps there is simply more competition and usage of the program. Note that the survey focuses on economy tickets (not business or first class).

Southwest and JetBlue remain on top at close to 100% availability, but that is a bit misleading since both of their points are revenue-linked with no blackout dates. For example, 25,000 Southwest points will buy you basically any “Wanna Get Away” ticket that costs up to about $340. So the results are really just saying that Southwest’s busiest routes almost always have a flight that costs under ~$340. Southwest doesn’t fly to Europe at all, but they do have plans for Hawaii soon (which I look forward to, but will probably hurt their numbers).

Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® Review – 60,000 Bonus Miles

Citi AAdvantage Platinum Select MasterCard Art

The Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®, from our partner Citi, has updated the offer on their co-branded American Airlines credit cards.  Here are the updated card highlights:

  • For a limited time, earn 60,000 American Airlines AAdvantage® bonus miles after making $3,000 in purchases within the first 3 months of account opening*
  • New: Earn 2 AAdvantage® miles for every $1 spent at gas stations*
  • New: Earn 2 AAdvantage® miles for every $1 spent at restaurants*
  • Earn 2 AAdvantage® miles for every $1 spent on eligible American Airlines purchases*
  • New: Earn a $100 American Airlines Flight Discount after you spend $20,000 or more in purchases during your cardmembership year and renew your card*
  • No Foreign Transaction Fees*
  • First checked bag is free on domestic American Airlines itineraries for you and up to four companions traveling with you on the same reservation*
  • Enjoy preferred boarding on American Airlines flights*
  • Receive 25% savings on in-flight food and beverage purchases when you use your card on American Airlines flights*

The annual fee is $99, waived for the first 12 months.

Bonus details. Note the following language for the personal card. Basically, to get the personal card bonus, you can’t have had the personal card opened or closed within the last 24 months. Having the business version is okay.

American Airlines AAdvantage® bonus miles are not available if you have had any Citi® / AAdvantage® card (other than a CitiBusiness® / AAdvantage® card) opened or closed in the past 24 months.

The offer matches the highest bonus that I have ever seen on this card of 60,000 bonus miles + first year annual fee waived, and is signficantly better than their standard offer (usually around 30,000 miles).

To clarify, you can have one of both the consumer version of this card and the CitiBusiness® version designed for businesses under your name. The bonuses are also separate. You can get one consumer bonus every 24 months, and you can also get one business bonus every 24 months.

Baggage fee value. Currently, American Airlines charges $25 one-way for the first checked bag and $35 one-way for the second checked bag in Economy. That’s $50 roundtrip for a single checked bag, per person. With this card, your first checked bag is free on domestic American Airlines itineraries for you and up to four companions traveling with you on the same reservation.

Redemption tips. American Airlines MileSAAver awards are still 25,000 miles for a round-trip ticket within the contiguous 48 states. Their online system is pretty good for looking for domestic AA awards. If the trip is less than 500 miles, then it is only 15,000 miles round-trip within the contiguous 48 states. Under-500 miles routes include Las Vegas to/from Los Angeles, Charleston to/from Miami, New York to/from Washington DC, Philadelphia to Boston, and many others.

This card also makes you eligible for Reduced Mileage Awards, where you save up to 7,500 miles on roundtrip MileSAAver® awards to select destinations on American Airlines operated flights. Combine this with the 10% rebate on redeemed AAdvantage miles, and you can stretch your miles a lot further.

Bottom-line.  The 60,000 bonus American miles is a great promotion when paired with the annual fee being waived for the first year. As with most of these co-branded cards, a lot of the ongoing value comes when you fly on American and utilize the free first checked bag benefit for you and up to 4 companions ($50 per person, round-trip) and also when you redeem miles for award flights. If you plan to fly American a lot in the next 12 months, this offers brings good value.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

CitiBusiness® / AAdvantage® Platinum Select® World Mastercard® Review – 70,000 bonus miles

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The CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®, is running a limited-time offer on their co-branded American Airlines credit cards. Here are the details:

  • Designed for businesses
  • For a limited time, earn 70,000 American Airlines AAdvantage® bonus miles after making $4,000 in purchases within the first 4 months of account opening*
  • First checked bag is free on domestic American Airlines itineraries for you and up to four companions traveling with you on the same reservation*
  • Enjoy preferred boarding on American Airlines flights*
  • Earn 2 AAdvantage® miles per $1 spent on eligible American Airlines purchases*
  • Earn 2 AAdvantage® miles for every $1 spent on purchases at telecommunications, care rental merchants and at gas stations*
  • Earn 1 AAdvantage® mile per $1 spent on other purchases.*

Note the following fine print:

American Airlines AAdvantage® bonus miles are not available if you have had any Citi® / AAdvantage® card (other than a CitiBusiness® / AAdvantage® card) opened or closed in the past 24 months.

To clarify, you can have one of both the consumer version of this card and this business version under your name. The bonuses are also separate. You can get one consumer bonus every 24 months, and you can also get one business bonus every 24 months.

Annual fee is $95, waived for the first 12 months.

American Airlines MileSAAver awards are still 25,000 miles for a round-trip ticket within the contiguous 48 states. If the trip is less than 500 miles, then it is only 15,000 miles roundtrip within the contiguous 48 states. Under-500 miles routes include Las Vegas to/from Los Angeles, Charleston to/from Miami, New York to/from Washington DC, Philadelphia to Boston, and many others.

There are some small differences between this and the consumer version of this card. This business card offers 2 AAdvantage® miles for every $1 spent on purchases at telecommunications, car rental merchants and at gas stations. The consumer version does not. I also do not see any mention of the ability to earn 10% of your redeemed AAdvantage® miles back on this business card.

However, this business card does make you eligible for Reduced Mileage Awards, where you save up to 7,500 miles on roundtrip MileSAAver® awards to select destinations on American Airlines operated flights.

Business card eligibility. Many people aren’t aware that they can apply for business credit cards, even if they are not a corporation or LLC. Any individual can be a small business. Perhaps you sell items on eBay, Craiglist, or Etsy. Maybe you do some graphic design, web design, freelancing and/or consulting. If you received a 1099-MISC tax form and filled out a Schedule C, that means you have business income, you pay self-employment taxes, and you’re a sole proprietorship. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID.

Bottom-line. If you fly American a lot, get some miles for your business purchases. Due to the 24-month waiting periods, it is best to apply during a limited-time offer such as now. The annual fee is waived during the first year. As with most of these co-branded cards, a lot of the potential value comes when you fly on American and use the early boarding and free first checked bag benefit ($50 per person, roundtrip) and also when you redeem miles.

Please note this a business card, designed specifically for businesses. Click here for the consumer version.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

Hilton American Express Cards Limited Time Offers (75k, 100k, 125k Points)

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The following Hilton Hotel co-branded credit cards with American Express have limited-time offers. The current AmEx policy is that applicants can only get one welcome offer, per card in your entire lifetime, so if you’re going to get one you might as well wait until one of these temporary bump-ups.

Hilton Honors Credit Card from American Express

  • Limited Time Offer: Earn 75,000 Hilton Honors Bonus Points with the Hilton Honors Card after you use your new Card to make $1,000 in eligible purchases within the first 3 months of Card Membership. Offer ends 06/27/2018.
  • 7X Hilton Honors Bonus Points for each dollar of eligible purchases charged directly at hotels and resorts in the Hilton portfolio.
  • 5X Hilton Honors Bonus Points for each dollar of eligible purchases at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • 3X Hilton Honors Bonus Points for all other eligible purchases on your Card.
  • Complimentary Hilton HHonors Silver status.
  • Spend $20,000 on eligible purchases on your Card in a calendar year and you can earn HHonors Gold status through the end of the next calendar year.
  • No Foreign Transaction Fees.
  • No annual fee.

Hilton Honors Ascend Credit Card from American Express

  • Limited Time Offer: Earn 100,000 Hilton Honors Bonus Points after you spend $3,000 in purchases on the Card within your first 3 months of Card Membership.
  • Plus, earn a free weekend night award after your first anniversary of Card Membership. Offer ends 06/27/2018.
  • 12X Hilton HHonors Bonus Points for each dollar of eligible purchases charged on your Card directly directly at hotels and resorts in the Hilton portfolio.
  • 6X Hilton HHonors Bonus Points for each dollar of eligible purchases on your Card at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • 3X Hilton HHonors Bonus Points for all other eligible purchases on your Card.
  • Complimentary Hilton HHonors Gold status.
  • Spend $40,000 on eligible purchases on your Card in a calendar year and you can earn HHonors Diamond status through the end of the next calendar year.
  • $95 annual fee.

Hilton Honors American Express Business Card

  • Limited Time Offer: Earn 125,000 Hilton Honors Bonus Points after you spend $5,000 in purchases on your Card in the first 3 months of Card Membership. Offer ends 6/27/2018.
  • Plus, earn a free weekend night award after your first anniversary of Card Membership. Offer ends 06/27/2018.
  • 12X Hilton HHonors Bonus Points for each dollar of eligible purchases charged on your Card directly directly at hotels and resorts in the Hilton portfolio.
  • 6X Hilton HHonors Bonus Points at Select Business & Travel Purchases (ex. U.S. gas stations, U.S. restaurants, flights booked directly with airlines)
  • 3X Hilton HHonors Bonus Points for all other eligible purchases on your Card.
  • Complimentary Hilton HHonors Gold status.
  • Earn a Weekend Night Reward from Hilton Honors after you spend $15,000 in purchases on your Card in a calendar year.
  • Earn another Weekend Night Reward from Hilton Honors after you spend an additional $45,000 in purchases on your Card in the same calendar year.
  • 10 free airport lounge visits each year once enrolled in complimentary Priority Pass™ Select membership, which offers access to over 1,000 lounges in over 120 countries.
  • $95 annual fee.

Hilton has some really nice properties, but the value of Hilton points depends greatly on what kind of hotels you are looking to book with them. I’ve seen some valuations around 0.6 cents per point, but I mentally mark them at 0.5 cent a point. That would make my personal valuation of 100,000 points at $500.

iPhone 6S Plus + New Apple Battery = Best Used/Frugal Phone?

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Update 3/17: DailySteals just added new stock in iPhone 6 and iPhone 6S at under $200 (Verizon + Fully GSM unlocked). Compare with Swappa.

More and more people are being scared away from paying $1,000+ for a new smartphone as they realize that every September there will be another one that is a bit newer and shinier. I think the absolute amount that the iPhone improves each year is getting smaller and smaller. If you’re not committed to staying on the bleeding edge, why not save some bucks?

I recently took advantage of the special pricing on iPhone battery replacements on my iPhone 6, and it definitely made a difference in speed (and of course battery life). They performed the battery swap in the Apple Store in about an hour while I shopped elsewhere. This made me think about what the current best value would be for an iPhone (functionality/price).

My choice as of mid-2018 is the iPhone 6S Plus. They currently start in the $220 range, compare prices at sites like Swappa (person-to-person) and DailySteals.com (refurb deals). You have Touch ID. You get the bigger 5.5-inch high-resolution “Retina” screen for easier reading. From a superficial perspective, it’s really hard to tell it apart from an iPhone 7 or 8 (especially with case). The speed is adequate, even if you update to the current iOS. Of course, this assumes that you add a new battery ($29) direct from Apple. (You even get a physical headphone jack!)

Free National Emerald Club Executive Membership

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(Update 2018: Here is a new alternative sign-up link that should give you instant Emerald Executive Club status at National. I’m not sure if my previous link below still works, but it did as of March 2018 according to the comments. More details in original post below.)

When I’m paying for it myself, my preferred car rental company is National. Now, when AutoSlash says I’ll save big bucks by going elsewhere, I will, but if the difference is small then I will stick with National. Here’s why:

  • If you sign up for their free Emerald Club loyalty program, even at the base tier you get to pick from any car in their “Emerald Aisle” while paying the Mid-Size price level. As a car enthusiast, that adds a bit of fun and excitement to the process, even if it is choosing between a Hyundai and a Chevy compact. At most major airports, you can show up, walk up to the car you like, and drive off without waiting in lines.
  • Even though they aren’t Hertz or Avis, they aren’t a tiny shop that I’m afraid will try to wring every last penny out of me. I’ve never had any issues when returning cars with tiny scratches or dents, so I don’t have to stress about making every scratch noted when picking up the cars.
  • There are often promotions where I can get upgraded to their a higher status level, Emerald Club Executive.

Here is a current sign-up link that will get you free National Emerald Club Executive Status. The upgraded status will last for the rest of this year, plus another 14 months. Note that you have to provide valid Driver’s License information; I put in the wrong information initially because I just wanted to test out the link, but it only worked after putting in the real information. Perhaps they check it against some sort of database.

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Here is a quick summary of the perks of Emerald Club Executive over the base Emerald Club level.

  • Obtaining this status usually requires 12 paid rentals or 40 paid rental days in a calendar year. It is also available to American Express Platinum cardholders.
  • While paying the Mid-Size rate, you can pick from cars in the Executive Aisle, which are a notch nicer than the standard Emerald Club aisle. There are usually full-size cars and SUVs available in the Executive aisle. Off the top of my head, I’ve driven a Chevy Impala, Dodge Charger, Chrysler 300, Ford Mustang, and a GMC Terrain.
  • You’ll always pay for one car class less when you reserve a full-size or luxury car. For example, if you reserve a full-size car, you’ll pay the mid-size price. This discount can be thought of as a “free upgrade”.
  • You can earn a free rental day every six rental credits, as opposed to every 7 credits at the base tier.

Once you obtain your status and/or membership kit, you can also ask for a status match with Hertz, Avis (request via email), or Enterprise. For example, based on the qualification criteria, it appears at Emerald Club Executive lines up with Hertz Five Star, while Emerald Club Executive Elite lines up with Hertz President’s Circle.

eBay: Spend $150+, Get Free Google Home Mini ($49 Value)

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Google is offering eBay customers who spend $150+ in eligible items a free Google Home Mini ($49 retail). Eligible items exclude items from the Coins & Paper Money, Gift Cards & Coupons, and Real Estate categories. Expires 5/20/18 or while supplies last.

How to redeem your Coupon:

Include a Google Home Mini worth $49.00 direct from Google in your cart.
Shop for $150+ in Eligible Items. (See below for exclusions).
Enter the Coupon code in the redemption code field: PFREEMINI
Check out by 11:59 PM PST on May 20, 2018
Free Google Home Mini to arrive within 10 (ten) business days.

Not a bad deal if you were already considering such a purchase, or if something $150+ you wanted was a similar price on eBay. An alternative idea is to buy $150 worth of US Postal Service Forever Stamps.

Remember, you can also stack with cashback shopping portals like eBates ($5 new customer bonus), Mr. Rebates ($5 bonus), and TopCashBack ($5 right now, but varies).

The Business Platinum Card from American Express: 100,000 Point Limited-Time Offer

amexbusplatLMThe Business Platinum Card® from American Express OPEN is the premium AmEx business card with a variety of perks, including the best airline lounge access program (American Express now has their own Centurion lounges too). Right now, they are running a limited-time offer of up to 100,000 Membership Rewards points. Offer ends 8/8/18. Here are the details:

  • 100,000 Membership Rewards Points Welcome Bonus. Earn 50,000 Membership Rewards points after you spend $10,000 & an extra 50,000 points after you spend an additional $15,000 all on qualifying purchases within your first 3 months of Card Membership. Offer ends 8/8/18.
  • 5X points on flights and prepaid hotels on amextravel.com.
  • 1.5X points per dollar on each eligible purchase of $5,000 or more. Up to 1 million additional points per year.
  • 1 point per dollar on all other purchases.
  • $200 Airline Fee Credit. Up to $200 a calendar year in baggage fees and more at one airline.
  • $100 Fee Credit for Global Entry or TSA PreCheck.
  • Free Unlimited Boingo WiFi access + 10 Free Gogo inflight internet passes annually.
  • $450 annual fee.

American Express Global Lounge Collection. Some other travel cards give you Priority Pass Select, which is nice but not as inclusive as this card’s list of partners. Domestically, you get Delta Skyclub access (Individual Skyclub membership costs $495 from Delta) as well as the new Centurion Lounge network built specifically for American Express cardholders.

  • The Centurion® Lounge
  • The International American Express Lounges
  • Delta SkyClub®
  • Priority Pass Select
  • Airspace Lounge
  • Escape Lounges

Other benefits:

  • 35% Airline Bonus: Use Membership Rewards® Pay with Points for all or part of a flight with your selected qualifying airline, and you can get 35% of the points back, up to 500,000 bonus points per calendar year.
  • 35% points back on all First and Business class flights, with all airlines available through American Express Travel.
  • Automatic Starwood Preferred Guest (Marriott) Gold status.
  • Automatic Hilton Honors Gold status.
  • No Foreign Transaction Fees.

Note the following language: “Welcome bonus offer not available to applicants who have or have had this product.”

35% Airline Bonus details. Let’s say your selected airline is Delta, and you want to buy a couple economy Delta tickets for $1,000 using their Pay with Points features. This means that $1,000 ticket booked through AmEx Travel will only cost you 65,000 Membership Rewards points net (100,000 points and then 35,000 point rebated back). This improves the 1 cent per point value to 1.54 cents per point value. This means that 100,000 Membership Rewards points can be worth $1,540 in airfare on your selected airline.

Transfer partners. You can transfer Membership Rewards points to 16 airline and 3 hotel partners including Delta, British Airways, Hawaiian, JetBlue, Air Canada, Hilton, Starwood Preferred Guest, and Choice Hotels. If you’re good at snagging award tickets, you can get even better value this way.

Overall, this small business card is meant for big spenders that travel regularly and value convenience and comfort. Spending $25,000 within 3 months is a relatively high spending hurdle. (Given the 5X bonus category, it would be perfect if you needed to book some business flights/hotels soon.) If you can swing that, then this card can offer a lot of value in a year. In addition to the 100,000 membership rewards points (see above for value), the $450 annual fee can be offset by the $200 annual credit towards airline fees and the $100 Global Entry credit. I think the biggest value factor is the wide lounge access which includes more domestic lounges than Priority Pass Select alone.

Bottom line. The Business Platinum Card from American Express card tries to make your air travel more pleasant by addressing things like baggage fees, economy plus upgrade fees, TSA PreCheck security lines, Global Entry customs lines, inflight WiFi, free snacks and drinks at airline lounges, etc. Right now, they have a limited-time 100,000 point welcome offer if you meet the qualifying spending requirements for new cardholders.

Urbanr: Pay Rent With Credit Card – 1.5% Transaction Fee

urbanr0Urbanr is an apartment rental website that allows renters to pay rent to landlords using a credit card. Urbanr accepts all Visa, MasterCard, and Discover credit and debit cards. The 1.5% transaction fee can be paid by renter, paid by the owner, or split evenly between them (owner pays 0.75% and the renter pays 0.75%). The owner/landlord must sign up on the service first to accept payments (direct deposited to their bank account).

Urbanr wants to make it so that everyone pays rent with a credit card, and they claim that they are not losing money on the transaction fees. If so, they must be very good negotiators. You’ll need both parties interested for this to work. That means renters perhaps with a 2% cash back credit card or similar miles/points card, and an agreeable landlord (easier rent collection?).

Marriott Rewards Premier Plus Card: New 100,000 Point Bonus

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The new Marriott Rewards Premier Plus Credit Card is now available from Chase and the newly-merged Marriott/Starwood/Ritz-Carlton rewards program. They are launching with a limited-time offer of 100,000 Marriott Rewards points after spending $5,000 in 3 months. Here are the card highlights:

  • Earn 100,000 Bonus Points after you spend $5,000 on purchases in the first 3 months from account opening.
  • Free Night Award (valued up to 35,000 points) every year after account anniversary.
  • Earn 6 points per $1 spent at participating Marriott Rewards & SPG hotels.
  • 2 points for every $1 spent on all other purchases.
  • Automatic Silver Elite Status each account anniversary year.
  • Get upgraded to Gold Status when you spend $35,000 on purchases each account year.
  • Coming in 2019, 15 Elite Night Credits each calendar year.
  • $95 Annual Fee.

Note: If you have the old Marriott Premier card, click here for a targeted upgrade offer to this card. You can also call the number on the back of your card.

The Marriott and Starwood merger isn’t fully complete, and so you can use these points at either Marriott properties (Ritz-Carlton, Renaissance Hotels, Courtyard, Residence Inn, Springhill Suites, Fairfield Inn & Suites) or Starwood Properties (Westin, Sheraton, The Luxury Collection, Four Points by Sheraton, W Hotels, St. Regis, Le Méridien, Aloft). Transfer points between the two programss at the ratio of 1 Starpoint = 3 Marriott points.

View the Starwood hotel category list here. You can still do airline miles transfers at a 1:1 ratio, with the bonus of 20,000 Starpoints = 25,000 airline miles.

View the Marriott hotel award chart and category list here. Redeem 4 nights, and get the 5th night free. Hotels on their PointSavers list have temporarily reduced redemption costs. Also, don’t overlook the Marriott Hotels + Miles travel packages that include a week of hotel accommodations and airline miles.

In August 2018, there will be a new merged hotel night redemption chart. All Starwood points will converted be Marriott points, permanently. Each of the 6,500+ hotels will be assigned a Category number. There will be no blackout dates, but there will be seasons (off-peak, standard, and peak) from 2019 onward (just standard for 2018). Here’s the new chart:

marriott_new

In August 2018, Marriott Rewards points will also transfer to various airline frequent flier miles (3 Marriott points = 1 mile). Similar to the Starwood bonus structure, they will add 15,000 points for every 60,000 points you transfer to airline miles. 60,000 Marriott points = 25,000 airline miles.

Finally, Marriott points are also convertible to gift cards, but it takes 60,000 points to redeem for a $200 gift card for Marriott or retailers like Best Buy, Home Depot, or Nordstrom. That ratio isn’t all that great so you’ll definitely get the most value via hotel night redemptions or airline miles transfer.

If you’ve gotten a bonus from this Marriott Rewards® Premier Credit Card within the last 2 years, please note the following:

The product is not available to either (i) current cardmembers of the Marriott Rewards Premier or Marriott Rewards Premier Plus credit card, or (ii) previous cardmembers of the Marriott Rewards Premier or Marriott Rewards Premier Plus credit card who received a new cardmember bonus within the last 24 months. If you are an existing Marriott Rewards Premier customer and would like this product, please call the number on the back of your card to see if you are eligible for a product change.

After your account anniversary and paying the $95 annual fee, you’ll get an Anniversary Free Night Award automatically deposited into your account within 8 weeks. The Anniversary Free Night Award is valid for a one night hotel stay at a property with a redemption level up to 35,000 points. Getting $95 value out of hotel night is pretty easy to achieve, as long as you use it before it expires after 12 months.

marriottpremplusBottom line. The Marriott Rewards Premier Plus Credit Card is a newer version of their Premier card and is currently offering 100,000 Marriott Rewards points after spending $5,000 in 3 months. As with all hotel cards, the value is dependent on your unique travel preferences. This new offer is better than the previous one, so if you have the old card you may be able to get a bonus for upgrading.

Barron’s Best Stock Brokerage Rankings 2018

barrons2018Barron’s has released their 2018 online broker rankings. The considerations include trading experience/technology, usability, mobile trading, range of offerings, research tools, customer service, and cost.

The Barron’s list always comes from the perspective of their subscriber base – high-net-worth active investors – which may or may not describe you. The overall winner this year was Interactive Brokers. Last year’s winner Fidelity Investments was pushed back to #2. Thankfully, Barron’s also supplied separate rankings for novice investors, long-term investors, and those that value in-person service:

Top 5 Brokers for Novice Investors

  1. TD Ameritrade.
  2. Fidelity
  3. Merrill Edge
  4. Charles Schwab
  5. Ally Invest

Top 5 Brokers for Long-Term Investing

  1. TD Ameritrade.
  2. Fidelity
  3. Charles Schwab
  4. Merrill Edge
  5. E-Trade

Top 5 Brokers for In-Person Service

  1. Merrill Edge.
  2. Charles Schwab
  3. Fidelity
  4. TD Ameritrade
  5. E-Trade

Commentary. A few thoughts on the rankings and other overlooked brokers:

Interactive Brokers is hard to argue against for very active traders. Their average account made 476 trades last year! However, they have a minimum commission of $10 a month for accounts under $100,000, or a minimum commission of $20/month under $2,000. You must pay them $120/$240 a year no matter what. That doesn’t work out for me, as some months I don’t trade at all. IB is not for newbies.

TD Ameritrade recently showed a lack of commitment to their commission-free ETF list and went for quantity over quality. The free ETF list is still decent, but that move didn’t scream “long-term” in my book. I think the customer service is solid, and some people may feel better knowing that they merged with Scottrade and their physical branch network. (E*Trade ate OptionsHouse. Schwab ate OptionsXpress. TD Ameritrade ate Scottrade. Ally ate TradeKing, now Ally Invest.)

Vanguard was included this year for the first time in recent memory, and they were promptly knocked to the bottom for being the most expensive broker due to their high trading costs on non-Vanguard ETFs and mutual funds. Vanguard doesn’t court active traders, and active traders probably won’t like it at Vanguard.

Robinhood was ignored again this year, despite the fact they have free trades and recently added a web interface for trading and free options trading. They probably would have also ranked low due to limited feature set.

M1 Finance is another free investing app that just popped on my radar. It lets you pick a customized basket of individual stocks (or ETFs) and then lets you buy them with zero commission. I used to worry that Robinhood was alone, but now there is competition. Maybe Barron’s will notice one day.

I keep most of my long-term assets directly at Vanguard along with a Solo 401k at Fidelity. My (much more modest) individual stock trading is done through Merrill Edge. I’m happy with them so far. If you have $50,000 in assets across Merrill Lynch, Merrill Edge, and Bank of America accounts, you get 30 free trades per month. That’s already more trades than I need, but $100k in combined assets gets you 100 free trades per month.

Best Interest Rates on Cash – May 2018

cream225Interest rates are rising. Rate-chasing is becoming more worthwhile again. Here is my monthly roundup of the best safe rates available, roughly sorted from shortest to longest maturities. Check out my Ultimate Rate-Chaser Calculator to get an idea of how much additional interest you’d earn if you switched over. Rates listed are available to everyone nationwide. Rates checked as of 5/1/18.

High-yield savings accounts
While the huge brick-and-mortar banks rarely offer good yields, there are a number of online savings accounts offering much higher rates. Keep in mind that with savings accounts, the interest rates can change at any time.

  • Popular Direct is at 2% APY with a $5,000 minimum opening deposit. SalemFiveDirect is at 1.85% APY, albeit for new money only/not valid for existing customers. DollarSavingsDirect is at 1.80% APY (no min). CIT Bank Money Market is at 1.75% APY (no min, $100 to open).
  • My “hub” bank account is the Ally Bank Savings + Checking combo due to their history of competitive savings/CD rates, 1-day external bank transfers, and overall user experience. The free overdraft transfers from savings allows to me to keep my checking balance at a minimum. Ally Savings has been raising their rates, but it still lags a bit at 1.50% APY. I’ve been keeping more money in no-penalty/short-term CDs.

Money market mutual funds + Ultra-short bond ETFs
If you like to keep cash in a brokerage account, you should know that money market and short-term Treasury rates have been rising. The following money market and ultra-short bond funds are not FDIC-insured, but may be a good option if you have idle cash and cheap/free commissions.

  • Vanguard Prime Money Market Fund currently pays an 1.82% SEC yield. The default sweep option is the Vanguard Federal Money Market Fund, which has an SEC yield of 1.58%. You can manually move the money over to Prime if you meet the $3,000 minimum investment.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 2.23% SEC Yield ($3,000 min) and 2.33% SEC Yield ($50,000 min). The average duration is ~1 year.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 2.12% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 2.22% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months.

Short-term guaranteed rates (1 year and under)
I am often asked what to do with a big wad of cash that you’re waiting to deploy shortly (just sold your house, just sold your business, legal settlement, inheritance). My usual advice is to keep things simple. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • CIT Bank 11-Month No-Penalty CD is at 1.85% APY with a $1,000 minimum deposit and no withdrawal penalty seven days or later after funds have been received. The lack of early withdrawal penalty means that your interest rate can never go down for 11 months, but you keep full liquidity. Full review. You can open multiple CDs in smaller increments if you want more flexibility.
  • Several banks have 12-month CDs at 2% APY and above. Watch the early withdrawal penalties. For example, MidFirst Direct has a 2.25% APY 12-month CD, but the early withdrawal penalty is a fixed 1% of the amount withdrawn + $25. Meanwhile, Ally Bank has a 9-month CD at 2% APY and a 12-month CD at 2.10% APY with $25,000 minimum deposit and early withdrawal penalty of 60 days interest.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. There are annual purchase limits. If you redeem them within 5 years there is a penalty of the last 3 months of interest.

  • “I Bonds” bought between May 2018 and October 2018 will earn a 2.52% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More info here.
  • In mid-October 2018, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with exceptionally high interest rates. The negatives are that balances are capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). The offers also tend to disappear with little notice. Some folks don’t mind the extra work and attention required, while others do.

  • Insight Card is one of the best remaining cards with 5% APY on up to $5,000 as of this writing. Fees to avoid include the $1 per purchase fee, $2.50 for each ATM withdrawal, and the $3.95 inactivity fee if there is no activity within 90 days. If you can navigate it carefully (basically only use ACH transfers and keep up your activity regularly) you can still end up with more interest than other options. Earning 3% extra interest on $5,000 is $150 a year.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with unique risks. You have to jump through certain hoops, and if you make a mistake you won’t earn any interest for that month. Some folks don’t mind the extra work and attention required, while others do. Rates can also drop quickly, leaving a “bait-and-switch” feeling. For example, Northpointe Bank was mentioned for several months here but later dropped to 1% APY. That’s just how it goes with these types of accounts.

  • Consumers Credit Union offers up to 4.59% APY on up to a $20k balance, although getting 3.09% APY on a $10k balance has a much shorter list of requirements. The 4.59% APY requires you to apply for a credit card through them (other credit cards offer $500+ in sign-up bonuses). Keep your 12 debit purchases small as well, as for every $500 in monthly purchases you may be losing out on 2% cashback (or $10 a month after-tax). Find a local rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
You might have larger balances, either because you are using CDs instead of bonds or you simply want a large cash reserves. By finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider a custom CD ladder of different maturity lengths such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account.

  • Synchrony Bank has a 14-month CD at 2.35% APY ($2,000 min). Live Oak Bank has an 18-month CD at 2.35% APY and a 24-month CD at 2.50% APY ($2,500 min). Early withdrawal penalty for both banks is 90 days of interest.
  • Ally Bank has a 5-year CD at 2.60% APY ($25k minimum) with a relatively short 150-day early withdrawal penalty. For example, if you closed this CD after 2 years you’d still get a 2.07% effective APY even after accounting for the penalty.
  • Mountain America Credit Union has a 5-year Share Certificate at 3.00% APY (minimum deposit varies). Anyone can join via a partner organization for a one-time $5 fee, usually right on the online application. However, note the early of withdrawal penalty of 365 days of interest. You can also find a 5-year non-callable brokered CD at 3.20% APY from both Vanguard and Fidelity. More info below.

Longer-term Instruments
I’d use these with caution due to increased interest rate risk, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10+ years? You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable fixed early withdrawal penalties. As of this writing, Vanguard is showing a 10-year non-callable CD at 3.25% APY (Watch out for higher rates from callable CDs from Fidelity.) Unfortunately, current CD rates do not rise much higher even as you extend beyond a 5-year maturity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently a sad 0.10% rate). I view this as a huge early withdrawal penalty. You could also view it as long-term bond and thus a hedge against deflation, but only if you can hold on for 20 years.

All rates were checked as of 5/1/18.


CIT Bank No-Penalty CD