SoFi Money $50 + $75 Bank Bonus, $50 Stock Bonus, 10% Cashback Promo

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Updated bank bonus details, 10% cash back categories still active. If have you a SoFi Money account, don’t miss that they are offering earn 10% cash back on select Grocery: Whole Foods, Trader Joe’s, Instacart and Subscriptions: Netflix, Disney+, Spotify when you pay with SoFi Money from 7/1 through 9/30. Max cash back is $50 for Grocery ($500 in purchases) and $50 for Subscriptions ($500 in purchases). I like that they keep coming up with new bonuses.

If you opened a SoFi Money account prior to 6/9/2020, this is available to all members. If you opened a SoFi Money account after 6/9/2020, you need $500+ in monthly deposits (from any source, bank transfers okay) in order to qualify for the 10% cash back program. Looks like they added a new hoop with a grandfather clause, although you would need to add in some money to take full advantage of this promotion anyhow. See app for details.

Bonuses for new accounts:

SoFi (“Social Finance”) has expanded from students loans into a cash management and stock brokerage account. They’ve also updated their bonuses for trying them out, and if you have a spouse/partner, you can refer each other (in addition to other friends and family) to grow the total bonus.

SoFi Money (Cash Management Account)

  • Get a $50 cash bonus when you open a new account and fund the account with at least $500 (from any source including external bank transfer). This is my referral link. The referrer gets money too, so thanks if you use it!
  • After you receive your $50 referral bonus for funding the account with $500 from any source, you become eligible for an additional $75 bonus if you have a direct deposit within the next 30 days. Details here.
  • After joining, you can also refer your own friends and family. You will get $50 as the referrer and they will get $50.
  • FDIC-insured. No account fees. No minimums.
  • Free debit card with unlimited reimbursed ATM fees.

SoFi Invest (Brokerage Account)

  • Get a $50 of your choice of stock when you fund your account with at least $1,000. This is my referral link. The referrer gets $75.
  • After joining, you can also refer your own friends and family. You will get $50 as the referrer and they will get $50.
  • SoFi Invest allows fractional shares (“stock bits”), so you can get exactly $75 worth of Apple, etc. Trade as little as $1 at a time.
  • Sample stocks are Apple, S&P 500 ETF, or Berkshire Hathaway.
  • No trading fees.

The opening process is quick and simple. Find your referral links to refer others in the SoFi app after joining. You can open, apply, fund online and be poking around the app all in the same day.

Bottom line. SoFi is offering cash and free stock bonuses for trying out their new financial products. They can quickly add up to easy money for a minor amount of effort. A couple where one person refers the other can earn hundreds in total bonuses. They have also been consistently offering new bonus categories and various promos to keep you interested.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Marcus Bank AARP 0.10% APY Rate Boost, CD Special, Free AARP Membership

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This is a multi-part deal, but you may already have some of these accounts. Marcus is the online banking arm of Goldman Sachs. AARP members are eligible for two member benefits at Marcus:

  • 0.10% APY rate increase to the Online Savings rate for 24 months. As of 7/29/20, that means 1.15% APY instead of 1.10% APY.
  • Special 8-month No-Penalty CD at 1.10% APY as of 7/29/20. Their standard No-Penalty CD is 0.90% APY for 7 months.

AARP membership is targeted at those age 50+, but there is no actual age restriction. I’ve been a member in the past, as AARP has offered a variety of member benefits that can be quite valuable. Insurance discounts, hotel discounts, restaurant discounts, and so on. If only younger folks had such a well-organized association! The standard membership fee is $16/year, but it drops to $12/year if you sign-up for auto-renewal with a credit card on file (you can still cancel at any time).

Swagbucks is a popular points website, and you can currently get 1,200 Swagbucks for joining AARP through their site. 1,200 Swagbucks is worth $12 in Amazon gift cards, which you can think of as offsetting the AARP annual membership fee. If you are a member, log in and search for “AARP”. If you are not a member yet, join via my Swagbucks referral link and earn a $3 referral bonus + an additional $10 bonus if you spend at least $25 through their shopping portal within 30 days of registration. (There are even some money-making offers on Swagbucks like donating $15 to the Sierra Club and getting 4,000 Swagbucks in return worth $40 in Amazon gift cards.)

Taken altogether, you can get the 0.10% APY rate boost, special CD access, and a year of AARP membership (including many other perks) all at zero net cost. Thanks to reader Bill P for the tip.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

BBVA $250 Bank Bonus: $200 Checking + $50 Savings

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

BBVA has a new $250 bonus promotion, with a $200 bonus for opening an Online Checking account and receiving a qualifying direct deposit of $500+ by October 31, 2020. Get an additional $50 bonus by adding an Online Savings account and having a savings balance of at least $1,000 on October 31, 2020. If you want the $250 bonus, be sure to click on the “Open Both Now” button on the promotion landing page. Offer good for checking and savings accounts opened between July 24 – August 10, 2020. Checking account bonus details:

Eligible accounts include BBVA Online Checking and BBVA Easy Checking (Easy Checking available in AL, AZ, CA, CO, FL, NM, and TX only). Account must be opened online by clicking either the “Open Checking Now” or “Open Bundle Now” button above.

Online Checking account details:

  • Minimum opening deposit is $25.
  • No monthly service charge.
  • No ATM fees nationwide at more than 64,000 AllPoint®, participating 7-Eleven® and BBVA USA ATMs.
  • You will automatically receive a paper account statement by mail for a fee of $3 per month. However, you can opt for free electronic account statements and eliminate the $3 Paper Statement Fee when you turn off paper statements through Online Banking. Don’t forget to opt out!

Savings account bonus details:

You must meet stipulations for the $200 Checking Bonus to be eligible for the $50 Savings Bonus. The Online Savings account must be opened at the same time as the checking account through this landing page using the “Open Both Now Button”.

Online Savings account details:

  • Minimum opening deposit is $25.
  • No monthly service charge.
  • Currently interest rate is 0.05% APY.
  • You will automatically receive a paper account statement by mail for a fee of $3 per month. However, you can opt for free electronic account statements and eliminate the $3 Paper Statement Fee when you turn off paper statements through Online Banking. Don’t forget to opt out!

Additional bonus details:

  • We reserve the right to deduct the bonus amount if the account is closed within 12 months of opening.
  • The BBVA Online savings account holder must be an account holder on the new BBVA consumer checking account.
  • You must be a new BBVA savings customer who has not had a BBVA consumer savings account in the past 12 months or closed due to negative balance.
  • The cash bonus(es) will be deposited into the new checking account within 90 days of meeting the bonus requirements described above.
  • Accounts must be open and in good standing with a balance greater than or equal to $0.00 at the time of payment in order to receive the new account bonus(es).
  • These bonuses are not combinable with other BBVA Direct Deposit or Savings Account cash bonus promotions, and you may not have received a Direct Deposit or Savings Account Bonus in the past 24 months.
My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

US Treasury Yields Lowest In The History of the Republic

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Like many folks, I recently enjoyed the excellent musical Hamilton for the first time on Disney+. I’m a bit embarrassed to say it was also very educational (yes, I know its not 100% historically accurate). I never really thought about how precarious and up-for-debate everything was during the beginning of this country. If Hamilton never survived the war or wasn’t as persuasive, would there be a federal Treasury? I feel like the creator of this WSJ Daily Shot chart was also reading about US history – “US Treasury Yields Lowest In The History of the Republic”:

Alexander Hamilton was the first Secretary of the Treasury and is known as the “Father of American Banking”. Here is his Treasury website bio:

Facing a chaotic treasury burdened by the heavy debt of the Revolutionary War, Hamilton’s first interest when he took office was the repayment of the war debt in full. “The debt of the United States … was the price of liberty,” he affirmed, and he then put into effect, during 1790 and 1791, a revenue system based on customs duties and excise taxes. Hamilton’s attack on the debt helped secure the confidence and respect of foreign nations. He introduced plans for the First Bank of the United States, established in 1791 which was designed to be the financial agent of the Treasury Department. The Bank served as a depository for public funds and assisted the Government in its financial transactions. The First Bank issued paper currency, used to pay taxes and debts owed to the Federal Government.

Today, the rates on US Treasury debt are at all-time lows, while the debt-to-GDP ratio is currently higher than any time since World War II (now over 100% of GDP). The projections are from the Congressional Budget Office, made even before the events of 2020.

I will be the first to admit that I don’t understand macroeconomics. At the same time, I wish that the “experts” would admit when they don’t really know that will happen in the future either.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Merrill Edge + Preferred Rewards = Up to $1,000 Bonus For Moving Assets, Improved Credit Card Rewards

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(Updated again July 2020: Let’s try this again with a non-expired link! BofA has new promotion for up to $1,000, even higher than the previous offer and worth considering if you have adequate brokerage assets to move over to Merrill Edge. Thanks to comment Ken Nand for the pointer. See updated full review below.)

Merrill Edge is the self-directed brokerage arm formed after Bank of America and Merrill Lynch merged together. They are currently offering an increased cash bonus of up to $1,000 for moving “new money” or assets over to them from another brokerage firm. This new bonus is linked to the BofA/Merrill Preferred Rewards program, which is another reason to consider using them as it gets you waived banking fees and better credit card rewards. Here’s an overview along with my personal experience as I’ve had an account with them for a few years now.

Cash bonus. Brokerage firms love to collect assets. The good news is they don’t require cash that will be earning zero interest, and Edge has no management fees if you stick with DIY. If you are holding shares of stock, ETFs, or mutual funds elsewhere, you can simply perform an “in-kind” ACAT transfer over to Merrill Edge. Your 100 shares of AAPL will remain 100 shares of AAPL, so you don’t even have to worry about price changes, lost dividends, or tax consequences. Any cost basis should transfer over too.

This specific offer is better than the standard offer:

  • $50 bonus with $20,000 to $49,999 in new assets
  • $250 bonus with $50,000 to $99,999 in new assets
  • $500 bonus with $100,000 to $199,999 in new assets
  • $1,000 bonus with $200,000 or more in new assets

Note that you must keep the assets there for 180 days. For comparison, here is an expired offer that was the highest I’ve seen. Here is the standard offer that has been around for a while.

This offer includes both IRAs and regular taxable (CMA) accounts:

Offer valid for new individual Merrill IRAs or Cash Management Accounts (CMAs). Offer is limited to one CMA and one IRA, with no more than two enrolled accounts per accountholder. Eligible Merrill Edge IRAs limited to Rollover, Traditional, Roth and Sole-Proprietor SEP only. The Merrill IRA or CMA may be a Merrill Edge Self-Directed account, Merrill Edge Advisory Account or Merrill Guided Investing account. You may be eligible for a different or better offer. Please contact us for more information.

Note that last sentence! It’s not just boilerplate. After I did this bonus once with a partial transfer (just enough to satisfy the requirements), a Merrill Edge rep contacted me and offered me a custom bonus to move even more assets over. (The bonus ratios were about the same, but higher limits.) Therefore, if you are considering this and happen to have more than $200,000 to transfer over, you may want to give them a call and see if they can offer even more money.

You can even transfer in Admiral Shares of Vanguard mutual funds that they don’t let you trade there, but you can only hold or sell them. You can’t buy more shares. You can, however, buy more shares of the corresponding Vanguard ETF if you wish. (Alternatively, you should consider having Vanguard convert your Admiral share into ETFs on a one-time basis that will preserve your original cost basis. After you have ETFs, you can move those over to Merrill Edge and trade them as you wish.)

Preferred Rewards bonus. The Preferred Rewards program is designed to rewards clients with multiple account and higher assets located at Bank of America banking, Merrill Edge online brokerage, and Merrill Lynch investment accounts. Here is a partial table taken from their comparison chart (click to enlarge):

At the Platinum and Platinum Plus levels, Merrill Edge used to offer 30 and 100 free online stock trades every month, respectively. However, now everyone gets unlimited $0 trades. Bank of America’s interest rates on cash accounts tend to be quite low, so moving cash over to qualify may result in earning less interest on your cash deposits. Merrill Lynch advisory accounts also usually come with management fees. The sweet spot is if you have brokerage assets like stocks, mutual funds, and ETFs.

Checking accounts. With Gold status ($20k in assets) and above, you’ll get the monthly maintenance fee on up to 4 checking or savings account waived. That means you no longer have to worry about a minimum balance or maintaining direct deposit, depending on your account type. You’ll also get waived ATM fees at non-BofA ATMs at certain levels (12/year at $50k assets, unlimited at $100k). Free cashier’s checks.

Credit cards rewards. With the Preferred Rewards boost, you can get up to 2.6% cash back towards travel on all your purchases on the Bank of America Travel Rewards Card. You can also get up to 5.25% cash back (on up to $2,500 per quarter) on your choice of gas, online shopping, dining, travel, drug stores, or home improvement and furnishings with the Bank of America Cash Rewards Card.

My personal experience. In terms of Merrill Edge, I’ve had an account with them for a few years now and my lightning review is that they have a “okay/good” user interface and solidly “good” customer service (i.e. real, informed humans available 24/7 on the phone, not email-only customer service that takes hours to days like Robinhood). I would add that I am not an active trader and only make about 10-15 trades a year. I have been quite satisfied with the account. I can also move money instantly between my Merrill Edge and Bank of America checking accounts, making it easy to sweep out idle cash into an external savings account.

The biggest financial benefit to this BofA/Merrill Edge combo has probably been the 75% boost to their credit card rewards, allowing me to get 2.625% cash back on basically all my daily purchases. The second biggest benefit has probably been this cash bonus, and the third is the occasional waived checking or ATM fee. One negative is that the cash sweep options are not very good, but as of July 2020 the interest difference is quite small.

Bottom line. Merrill Edge is currently offering up to $1,000 if you move over a significant amount of assets to their self-directed brokerage. This can simply be mutual fund or ETFs shares currently being held elsewhere. When you keep enough assets across Bank of America and Merrill Edge, their Preferred Rewards program can offer ongoing perks like waived bank account fees and boosted credit card rewards.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Bask Bank Review: Earn American Airlines Miles As Interest (5,000 Mile Referral Bonus)

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

Updated with my own experience and new referral bonus. Bask Bank is a FDIC-insured savings account that pays you American Airlines (AA) miles instead of cash interest. Every $1 earns 1 mile a year. For example, $1,000 kept for a year would earn 1,000 AA miles at the end of the year. If you kept $50,000 there for a year, you would earn 50,000 AA miles at the end of a year. There is no minimum balance and no monthly fees. I’ve updated this review after opening an account.

Bask Bank is part of Texas Capital Bank (FDIC Certificate #34383), which also runs BankDirect. BankDirect has been giving out American Airlines miles for many years on their checking account, but with different requirements and a steep monthly fee. Note that they are all the same bank in regards to the $250,000 FDIC insurance limits per depositor type. Bask Bank routing number is 111026177.

Account opening process. Opening an account was done all online with no issues, with no physical paperwork to send in. They state there is no hard credit check upon opening, and there was none upon my own opening. I received all my promised points (past bonus and monthly interest) on time and without issue. Note: They do not currently offer joint accounts.

Value calculations. If you valued American Airlines miles at 1 cent per mile, then this account would earn you the equivalent of 1% APY. ($10,000 a year = 10,000 AA miles = $100 value.) Given that other online savings accounts also earn about 1% APY nowadays, this has become a closer call after you consider the tax consequences…

1099-INT details. If you get miles instead of cash, what happens at tax time? Bask Bank and BankDirect has stated that they plan to issue 1099-INT for 2020 interest earned based on a valuation of 0.42 cents per mile. This can be found deep in their disclosures:

Since you are Awarded Miles based on the average collected balance in your Account each month instead of interest, Bask Bank calculates an interest equivalent based on a good faith estimate of the value of the miles. Your interest rate and annual percentage yield may change based on a change in either the Miles Award Rate or the estimated value. Miles are currently valued at 0.42 cents per mile, the equivalent of 0.42% annual percentage yield.

So if you held $10,000 for all of 2020 and earned $10,000 miles, current your 1099-INT will show $42 in interest paid. However, this is subject to change and I don’t really like that sort of uncertainty. It is unlikely but still possible that they could change this number and it would be a hassle to dispute such a valuation.

Useful for keeping your AA miles active. Airline miles are useful, but also subject to rampant inflation. Since AA miles are worth less every year, I do not plan on using this as my main savings account. However, the ability to keep about $15 in there and earn at least 1 mile per month to prevent my existing American miles from expiring, that could be useful. If I need a certain amount of American Airlines to reach an award, this may be a backup option as well. I have a large amount of AA miles, so this account gives me peace of mind that they won’t suddenly expire when I’m not paying attention.

New account referral bonus. Bask Bank now runs a refer-a-friend program where if the person referred opens an account by 9/30/2020, deposits at least $10,000, and keeps it there for 90 days, they will earn 5,000 AAdvantage® bonus miles on top of the usual interest. The referrer will also then receive 5,000 miles. Here is my Bask Bank referral link, thanks if you use it. After you open the account, you can also refer up to 5 friends yourself:

If you again value an AA mile at 1 cent a mile, then the bonus is worth $50. Earning $50 for keeping $10,000 there for 90 days is the equivalent of a bonus APY of 2% for those 90 days. So in total, you might get the cash equivalent of 3% APY over those initial 90 days with the referral bonus if you use that 1 cent per mile valuation.

Bottom line. Bask Bank is an online savings account that pays you American Airlines (AA) miles instead of cash interest. It won’t be a great fit for everyone, but may be interesting to those that can maximize the value of an American Airlines mile. You may also like the ability to keep all your AA miles from expiring by keeping a small amount of cash at the bank.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Best Interest Rates on Cash – July 2020

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

The Fed rate is still at zero, which has bought us back to the time when anything above 2% APY is newsworthy (and there ain’t much news). The only reason to pay attention is that being willing to switch bank accounts can still beat out Treasury bonds and/or brokerage cash sweep options that also pay nearly zero.

Here’s my monthly roundup of the best interest rates on cash for July 2020, roughly sorted from shortest to longest maturities. I track these rates because I keep 12 months of expenses as a cash cushion and also invest in longer-term CDs (often at lesser-known credit unions) when they yield more than bonds. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 7/5/2020.

High-yield savings accounts
While the huge megabanks make huge profits while paying you 0.01% APY, it’s easy to open a new “piggy-back” savings account and simply move some funds over from your existing checking account. The interest rates on savings accounts can drop at any time, so I list the top rates as well as competitive rates from banks with a history of competitive rates. Some banks will bait you with a temporary top rate and then lower the rates in the hopes that you are too lazy to leave.

  • Patriot Bank has the top rate at the moment at 1.40% APY guaranteed until 8/31/2020 (last month it was 1.75% APY guaranteed until 7/31/20). I wouldn’t count on anything after the guarantee, as nearly every place else is below that with most likely headed back to the ~1% APY range. There are several other established high-yield savings accounts at above 1% APY for now.

Short-term guaranteed rates (1 year and under)
A common question is what to do with a big pile 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 and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a fixed interest rate that can never go down, but you can still take out your money (once) without any fees if you want to use it elsewhere. Marcus has a 7-month No Penalty CD at 1.00% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 0.95% APY for all balance tiers. CIT Bank has a 11-month No Penalty CD at 0.75% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Pen Air Federal Credit Union has a 12-month CD at 1.25% APY ($500 min). Early withdrawal penalty is 180 days of interest. Anyone can join this credit union via partner organization ($3 one-time fee).

Money market mutual funds + Ultra-short bond ETFs
If you like to keep cash in a brokerage account, beware that many brokers pay out very little interest on their default cash sweep funds (and keep the difference for themselves). The following money market and ultra-short bond funds are NOT FDIC-insured and thus come with a possibility of principal loss, but may be a good option if you have idle cash and cheap/free commissions.

  • Vanguard Prime Money Market Fund currently pays an 0.18% SEC yield. The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.12%. 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 1.18% SEC yield ($3,000 min) and 1.28% SEC Yield ($50,000 min). The average duration is ~1 year, so there is more interest rate risk.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 1.10% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 1.19% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months. Note that there was a sudden, temporary drop in net asset value during the recent market stress.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-bill interest is exempt from state and local income taxes. Right now, this section probably isn’t very interesting as T-Bills are yielding close to zero!

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 7/2/2020, a new 4-week T-Bill had the equivalent of 0.13% annualized interest and a 52-week T-Bill had the equivalent of 0.16% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 0.09% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a -.02% (!) SEC yield. GBIL appears to have a slightly longer average maturity than BIL.

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 2020 and October 2020 will earn a 1.06% 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 2020, 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). Some folks don’t mind the extra work and attention required, while others do. There is a long list of previous offers that have already disappeared with little notice. I don’t personally recommend nor use any of these anymore.

  • The only notable card left in this category is Mango Money at 6% APY on up to $2,500, along with several hoops to jump through. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.

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 to near-zero quickly, leaving a “bait-and-switch” feeling. If you want rates above 2% APY, this is close to the only game in town.

  • Consumers Credit Union Free Rewards Checking (my review) still offers up to 4.09% APY on balances up to $10,000 if you make $500+ in ACH deposits, 12 debit card “signature” purchases, and spend $1,000 on their credit card each month. The Bank of Denver has a Free Kasasa Cash Checking offering 3% APY on balances up to $25,000 if you make 12 (temporarily 6 due to COVID-19) debit card purchases and at least 1 ACH credit or debit transaction per statement cycle. If you meet those qualifications, you can also link a savings account that pays 2% APY on up to $50k. Thanks to reader Bill for the tip. Find a locally-restricted rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
CDs offer higher rates, but come with an early withdrawal penalty. 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 building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD to keep the ladder going. Some CDs also offer “add-ons” where you can deposit more funds if rates drop.

  • Georgia’s Own Credit Union has a 5-year certificate at 1.70% APY ($500 min), 4-year at 1.50% APY, 3-year at 1.45% APY, and 2-year at 1.25% APY. Beware that the early withdrawal penalty for the 5-year is 450 days of interest. Anyone can join via partner organization for one-time $10 fee.
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Vanguard has a 5-year at 0.80% APY right now. Be wary of higher rates from callable CDs listed by Fidelity.

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 long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable early withdrawal penalties. Vanguard has a 5-year at 0.95% APY right now. Watch out for higher rates from callable CDs from Fidelity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a unique 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. But if holding for 20 years isn’t an issue, it can also serve as a hedge against prolonged deflation during that time. As of 7/2/2020, the 20-year Treasury Bond rate was 1.20%.

All rates were checked as of 7/5/2020.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Bank of America Travel Rewards Credit Card Review: Up to 2.62% Back with Preferred Rewards

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

Update June 2020: In response to COVID-19, the Bank of America Travel Rewards Credit Card has expanded the eligible categories of spending against which you can get their 1.5% to 2.62% back from only Travel purchases to include Grocery Stores, Dining, and Takeout. This applies through December 31st, 2020 and applies retroactively to qualifying purchases made within the last 12 months. This should make it much easier to redeem your points for optimal value. Here is the fine print:

Travel Statement Credit Expanded Category Offer. Now through 12/31/2020, you can also redeem Points for a statement credit in U.S. dollars to offset qualifying grocery store and dining purchases. This will apply to all qualifying purchases that posted to your account in the last 12 months, but is limited to the most recent 2,500. Eligible purchases for this statement credit offer include those made in the following merchant category codes (MCC): Grocery Stores/Supermarkets (MCC 5411), Freezer/Meat Lockers (MCC 5422), Candy/Nut/Confection Stores (MCC 5441), Dairy Product Stores (MCC 5451) Bakeries (MCC 5462), Misc. Food Stores (MCC 5499), Eating Places and Restaurants (MCC 5812), Drinking Places (Alcoholic Beverages), Bars, Taverns, Cocktail lounges, Nightclubs and Discotheques (MCC 5813), and Fast Food Restaurants (MCC 5814). Excluded from this offer are wholesale clubs, superstores and smaller stores (like drug stores and convenience stores) that sell groceries and other products. We do not determine which MCC a merchant is assigned.

Full card review:

bofa_travelrewards191The Bank of America Travel Rewards Credit Card is the main “travel rewards” credit card branded by Bank of America. In this review, I’ll cover the card features but also focus on a lesser-known opportunity – if you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. For such “relationship” customers, the bonus can change this card from good to great, making it my current base rewards card (after any bonus 5% cash back categories, sign-up bonus cards, etc). Read on for details.

Here are the highlights of this card:

  • Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don’t expire.
  • 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days –  that can be a $250 statement credit toward travel purchases.
  • Redeem points for a statement credit to pay for flights, hotels, vacation packages, cruises, rental cars, or baggage fees
  • 0% Introductory APR for 12 billing cycles for purchases.
  • Get an additional 10% customer points bonus on every purchase when you have an active Bank of America® checking or savings account.
  • If you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%.

The Preferred Rewards program is designed to rewards clients with multiple accounts and higher assets located at Bank of America banking, Merrill Edge® online brokerage, and Merrill Lynch® investment accounts. Here is a partial table taken from their comparison chart:

bofa_pref1

Let’s consider the options. Bank of America’s interest rates on cash accounts tend to be lower than highest-available outside banks, so moving cash over to qualify may reduce your interest earnings. Merrill Lynch advisory accounts also usually come with management fees. However, if you have brokerage assets like mutual funds and ETFs, moving them over to Merrill Edge won’t incur any additional fees and they charge the same $0 per commission as the other major brokers.

I recently did a partial transfer of a little over $100k of brokerage assets (Vanguard funds) over to Merrill Edge to qualify for Platinum Honors. I should mention it may take a while for your “3-month average combined balance” to actually reach the $100k level and officially qualify for Platinum Honors. Only after that will the 75% rewards bonus on credit card rewards kick in.

(Side note: Stack this offer with their Merrill Edge brokerage sign-up bonus.)

Not all Bank of America consumer credit cards qualify for Preferred Rewards. Another card that does qualify is the BankAmericard Cash Rewards™ Credit Card which has a different rewards structure using bonus categories.

Cash Back Rewards Tiers for Preferred Rewards

This card has a relatively simple rewards structure; you earn 1.5 points per dollar spent on all purchases. 1 point = 1 cent statement credit against any travel purchase made on the card (flights, hotels, vacation packages, cruises, rental cars, or baggage fees). As long you as you travel at least occasionally, I feel it is okay to value them at 1 cent per point, which means you could call this a “1.5% back on all purchases, if applied towards travel purchases” rewards card. Here’s how the bonuses then work out:

  • Platinum Honors: 2.625% back, if applied towards travel, or 2.625 points per dollar spent on any purchase (75% bonus).
  • Platinum: 2.25% back, if applied towards travel, or 2.25 points per dollar spent on any purchase (50% bonus).
  • Gold: 1.875% back, if applied towards travel, or 1.875 points per dollar spent on any purchase (25% bonus).

Note that the terms state “The Preferred Rewards bonus will replace the customer bonus you may already receive with the card.”, which I interpret to mean that you will lose the 10% bonus for redeeming your cash back into a Bank of America® checking or savings account.

For more details, here are my redemption tips and experiences on qualifying for and receiving 2.625% back towards travel.

Their plan is working because Bank of America has managed to convince me to go from only having a checking account with them to now also having a Merrill Edge brokerage account and a Bank of America credit card. I definitely realize not everyone will have this level of assets to move around, and so this is somewhat a restricted offer. But if you do then it is worth considering. Both Platinum and Platinum Honors levels allow you to reach tiers that effectively give you over 2% back on all purchases, with the important caveat that your rewards must offset previous travel purchases on the card.

Bottom line. If you are able and willing to keep enough brokerage assets ($50k/$100k) at Merrill Edge, it will qualify you for their Preferred Rewards program. By using investment assets and not cash balances, it won’t cost you any potential interest from elsewhere. This allows the Bank of America Travel Rewards Credit Card to earn up to 2.6% back on ALL purchases in the form of statement credit offsetting any travel purchases within the last 12 months.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Best Interest Rates on Cash – June 2020

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

Another month of slight rate drops, although bank accounts can still beat out Treasury bonds and/or brokerage cash sweep options by a significant margin.

Here’s my monthly roundup of the best interest rates on cash for June 2020, roughly sorted from shortest to longest maturities. I track these rates because I keep 12 months of expenses as a cash cushion and also invest in longer-term CDs (often at lesser-known credit unions) when they yield more than bonds. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 6/2/2020.

High-yield savings accounts
While the huge megabanks make huge profits while paying you 0.01% APY, it’s easy to open a new “piggy-back” savings account and simply move some funds over from your existing checking account. The interest rates on savings accounts can drop at any time, so I list the top rates as well as competitive rates from banks with a history of competitive rates. Some banks will bait you with a temporary top rate and then lower the rates in the hopes that you are too lazy to leave.

Short-term guaranteed rates (1 year and under)
A common question is what to do with a big pile 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 and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a fixed interest rate that can never go down, but you can still take out your money (once) without any fees if you want to use it elsewhere. Marcus has a 7-month No Penalty CD at 1.20% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 1.20% APY for all balance tiers. CIT Bank has a 11-month No Penalty CD at 1.15% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Lafayette Federal Credit Union has a 12-month CD at 1.61% APY ($500 min). Early withdrawal penalty is 180 days of interest. Anyone can join via partner organization for one-time $10 fee. Note that you will have to park $50 in a share savings account while a member.

Money market mutual funds + Ultra-short bond ETFs
If you like to keep cash in a brokerage account, beware that many brokers pay out very little interest on their default cash sweep funds (and keep the difference for themselves). The following money market and ultra-short bond funds are NOT FDIC-insured and thus come with a possibility of principal loss, but may be a good option if you have idle cash and cheap/free commissions.

  • Vanguard Prime Money Market Fund currently pays an 0.32% SEC yield. The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.20%. 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 1.61% SEC yield ($3,000 min) and 1.71% SEC Yield ($50,000 min). The average duration is ~1 year, so there is more interest rate risk.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 1.87% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 1.83% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months. Note that there was a slight drop in net asset value during the recent market stress.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-bill interest is exempt from state and local income taxes. Right now, this section probably isn’t very interesting as T-Bills are yielding close to zero!

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 6/2/2020, a new 4-week T-Bill had the equivalent of 0.12% annualized interest and a 52-week T-Bill had the equivalent of 0.17% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 0.57% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a -.04% (!) SEC yield. GBIL appears to have a slightly longer average maturity than BIL. Expect that GBIL yield to drop significantly as it is updated.

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 2020 and October 2020 will earn a 1.06% 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 2020, 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). Some folks don’t mind the extra work and attention required, while others do. There is a long list of previous offers that have already disappeared with little notice. I don’t personally recommend nor use any of these anymore.

  • The only notable card left in this category is Mango Money at 6% APY on up to $2,500, but there are many hoops to jump through. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.

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 to near-zero quickly, leaving a “bait-and-switch” feeling. I don’t use any of these anymore.

  • Consumers Credit Union Free Rewards Checking (my review) still offers up to 4.09% APY on balances up to $10,000 if you make $500+ in ACH deposits, 12 debit card “signature” purchases, and spend $1,000 on their credit card each month. The Bank of Denver has a Free Kasasa Cash Checking offering 3% APY on balances up to $25,000 if you make 12 (temporarily 6) debit card purchases and at least 1 ACH credit or debit transaction per statement cycle. If you meet those qualifications, you can also link a savings account that pays 2% APY on up to $50k. Thanks to reader Bill for the tip. Find a locally-restricted rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
CDs offer higher rates, but come with an early withdrawal penalty. 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 building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD to keep the ladder going. Some CDs also offer “add-ons” where you can deposit more funds if rates drop.

  • Lafayette Federal Credit Union has a 5-year certificate at 2.02% APY ($500 min). Beware that the early withdrawal penalty is 600 days of interest! Anyone can join via partner organization for one-time $10 fee. Note that you will have to park $50 in a share savings account while a member.
  • Pen Air Federal Credit Union has a 5-year certificate now at 1.85% APY ($500 minimum). Early withdrawal penalty is 180 days of interest. Their other terms are competitive (relatively), if you want build a CD ladder. Anyone can join this credit union via partner organization ($3 one-time fee).
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Vanguard has a 5-year at 1.05% APY right now. Be wary of higher rates from callable CDs listed by Fidelity.

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 long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable early withdrawal penalties. Watch out for higher rates from callable CDs from Fidelity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a unique 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. But if holding for 20 years isn’t an issue, it can also serve as a hedge against prolonged deflation during that time. As of 6/2/2020, the 20-year Treasury Bond rate was 1.24%.

All rates were checked as of 6/2/2020.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Citibank $200/$400/$700 Checking Account Bonus 2020

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

Citibank has tiered $200, $400, and $700 bonus offers when you open a new eligible Citi checking account by 6/30/20 and deposit and maintain a certain balance for 60 to 150 days. There is also a $1,500 bonus if you have $200,000 to move over. This offer is restricted to those who have not had a Citibank checking account within the last 180 calendar days. Here are the highlights followed by a few tips on how to optimize the bonus.

$200 bonus details:

  • Open a new eligible checking account in the Basic Banking Package during the offer period 4/01/2020 to 6/30/2020.
  • Within 30 days of opening your account, deposit $5,000 in New-to-Citibank funds into the new checking account.
  • Maintain a minimum balance of $5,000 for 60 consecutive calendar days.
  • You will receive your cash bonus within 90 days after you complete the required activities.
  • For the Basic Banking Package, to waive the $12 monthly service fee, make one qualifying direct deposit per statement period and one qualifying bill payment per statement period, or maintain a $1,500 or more combined average monthly balance in eligible linked accounts.

$400 bonus details:

  • Open new eligible checking and savings accounts in the Citibank® Account Package during the offer period 4/01/2020 to 6/30/2020.
  • Within 30 days of opening your account, deposit $15,000 in New-to-Citibank funds between the new checking and savings accounts.
  • Maintain a minimum balance of $15,000 between the checking and savings accounts for 60 consecutive calendar days.
  • You will receive your cash bonus within 90 days after you complete the required activities.
  • A monthly service fee of $25 and a $2.50 non-Citibank ATM fee apply to the checking account in the Citibank Account Package if a combined average monthly balance of $10,000 or more is not maintained.

$700 bonus details:

  • Open new eligible checking and savings accounts in the Citi Priority Account Package during the offer period 4/01/2020 to 6/30/2020.
  • Within 30 days of opening your account, deposit $50,000 in New-to-Citibank funds between the new checking and savings accounts.
  • Maintain a minimum balance of $50,000 between the checking and savings accounts for 60 consecutive calendar days.
  • You will receive your cash bonus within 90 days after you complete the required activities.
  • A monthly service fee of $30 applies to the checking account in the Citi Priority Account Package if a combined average monthly balance of $50,000 or more is not maintained. There is no monthly service fee for a checking account in the Citigold Account Package.

$1,500 bonus details:

  • Open new eligible checking and savings accounts in the Citigold Account Package during the offer period 4/01/2020 to 6/30/2020.
  • Within 30 days of opening your account, deposit $200,000 in New-to-Citibank funds between the new checking and savings accounts.
  • Maintain a minimum balance of $200,000 between the checking and savings accounts for 60 consecutive calendar days.
  • You will receive your cash bonus within 90 days after you complete the required activities.
  • If you do not maintain a minimum combined average monthly balance of $200,000 in eligible linked deposit, retirement and investment accounts, your Citigold Account Package will be converted to the Citi Priority Account Package and your accounts will be subject to the terms and conditions then in effect for that package.

Fine print analysis and value calculations. A tricky part of this bonus is the following fine print:

At the time the Cash Bonus is paid, it will be credited to the new Eligible Checking Account. If the Eligible Checking Account is closed, then the Cash Bonus will be credited to the new Eligible Savings Account. Open accounts must be in good standing.

You explicitly cannot “downgrade” your account to one with lower monthly fees during the 60 day maintenance period, but this seems to also suggest that you need to maintain the package that you opened until the bonus arrives. (It’s not 100% clear, but that is the conservative interpretation.) That means that in order to avoid the possibly hefty monthly fees, you would have to leave a certain amount of money in the account not for 60 days, but up to 150 days until the bonus is deposited.

After the 60 day maintenance period, you would want to withdraw everything not need to avoid the monthly fees, as both the checking and savings account pay negligible interest. Here’s how that would work for each tier:

  • $200 bonus tier. Deposit and maintain $5,000 for 60 days, then lower to $1,500 for 90 days.
  • $400 bonus tier. Deposit and maintain $15,000 for 60 days, then lower to $10,000 for 90 days.
  • $700 bonus tier. Deposit and maintain $50,000 for 150 days.
  • $1,500 bonus tier. Deposit and maintain $200,000 for 150 days. (There may be some alternatives like moving over some investments to satisfy the Citigold requirements.)

Bonus will be reported on 1099-INT (as should be expected). Here is the rough equivalent annualized APY earned from each bonus if you followed the schedule above exactly, got the promised bonus at the 150 day mark, and then downgraded/closed/moved your money out:

  • $200 bonus works out to ~16.5% annualized interest.
  • $400 bonus works out to ~8.0% annualized interest.
  • $700 bonus works out to ~3.4% annualized interest.
  • $1,500 bonus works out to ~1.8% annualized interest.

I have done Citibank bonuses in the past and haven’t had any issues, although they did wait until the last possible moment to post the bonus. I did not experience a hard credit check upon opening. However, others have reported having to call them up and ask for the bonus, and some have reported that they were denied the bonus improperly. Their above-average complaints of unreliability is a big reason why I would not downgrade the accounts, in order to help maintain proper bonus tracking. For all bank bonuses, be sure to keep track of your promotion details and transaction dates in a Google Doc or other spreadsheet.

Bottom line. Citibank has a set of tiered bonuses for opening a new checking and savings accounts with them, which I have broken down how to optimize based on the fine print. If you were planning on opening an account anyway, this can be a good offer. Be sure you understand the terms and conditions first.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Chime Banking App Review: $50 Bonus via Referral

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

With rates drops everywhere and no end in sight, there are no high APY CDs to open, so I’ve been picking up various cash bonuses while stuck at home instead. Chime is a popular fintech bank app with a $50 cash bonus after a payroll direct deposit of $200+ within the first 45 days of new account opening. To get this offer, you must be referred by an existing user. Here is my Chime $50 referral link. Thanks if you use it! It’s a very simple bonus. Here is a screenshot of my bonus appearing nine minutes after my direct deposit:

Here is the fine print:

*In order for both the referred individual and the referring Chime member to each qualify for and receive the $50.00 referral reward, the following conditions must be met: The referred individual may not have previously opened a Chime Spending Account (“Account”); they must open a new Account between January 1, 2020 and December 31, 2020; they must open the new account using the referring Chime member’s unique referral link; and they must receive in the new Account a qualifying direct deposit of $200.00 or more within 45 days of opening. The qualifying direct deposit must be made by the referred individual’s employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Friends transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.

Why is Chime so popular? Chime is the second-most popular online-only bank in the US (only behind Ally) with over 3 million customers and a recent valuation of $5.8 billion. Yet, it pays no interest on checking and only a tiny interest on savings (thus my previous lack of interest). I learned that Chime is very attractive to those who are “unbanked” or underbanked”, those people who don’t like traditional banks due to their monthly fees and $35-a-pop overdraft charges. Instead, Chime offers:

  • No monthly fees. No minimum balance. No minimum opening deposit.
  • No credit check. No Chexsystems check.
  • Access to paycheck 2 days early. If you usually get paid on Friday, you can spend the money on Wednesday.
  • No overdraft fees, and they may even “spot” you up to $100 until you pay them back.
  • Free ATM withdrawals at 38,000+ MoneyPass and Visa Plus Alliance ATMs.
  • No foreign transaction fees.

For many folks that have a lot of activity but maintain a low balance, this fee structure is better getting 4% APY or even 10% APY. The key is avoiding those crazy overdraft charges from the big banks and also the various $2 fees hidden inside many prepaid cards. Chime’s only major fee is a $2.50 fee if you make a cash withdrawal at an out-of-network ATM. Chime earns revenue via interchange fees when you buy things on your debit card.

As I opened an account, I noticed that Chime treats you like have never had a checking account before. The sign-up is easily done completely on your phone in a few minutes. You don’t need to deposit a single cent to open. They send basic “Chime 101” emails explaining the effect of bank holidays and how to set up direct deposit.

There is no credit check, so you can have bad credit and even a bad Chexsystems record (meaning you probably left another bank with a negative balance). Nearly every major bank uses Chexsystems to screen new customers. Otherwise, they are referred to as a “second chance” bank account. Chime might have the lowest fees of all such “second chance” banks.

Chime has the most of the usual bank stuff. Debit card. Paper check deposit via mobile app. Optional savings account that helps you save automatically (but pays astonishingly little interest, just like Bank of America and Chase!). FDIC-insured via partner banks, either Stride Bank or The Bancorp Bank. The only major thing missing besides bank branches is that they don’t provide paper checks. Depositing cash is available, but the third-party physical stores may charge a fee.

Bottom line. Chime is an interesting bank startup that targets the underbanked and unbanked by offering a much better fee structure to those with access to direct deposit. No overdraft fees, no credit checks, no Chexsystems. Currently, there is a $50 bonus available only via referral.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

HMBradley Bank Review: 3% APY After Saving 20% Of Your Paycheck

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

HMBradley is another fintech bank startup that differs by offering customers up to 3% APY based on the percentage of their paycheck that they save. Deposits are FDIC-insured through Hatch Bank. What do you have to do to actually qualify for this rate? Will it be worth the hassle? Here’s my review of HMBradley after reading their FAQ, fee schedule, and deposit agreement. Thanks to reader Guarav for the tip.

Rate tiers. Interest is earned on balances up to $100,000 and is set each calendar quarter. The interest rate updates for all customers at the beginning of each calendar quarter: January 1st, April 1st, July 1st, and October 1st. In order to qualify for a “Savings Tier”, you must receive a direct deposit at least once per month and save at least 5% of your quarterly deposits.

New customers start in Tier 3 and stay there as long as they maintain at least one direct deposit per month. For example, if you open in May, the next reset date would be July 1st and your interest earned for the next 3 months is based on your activity in the previous 3 months. Here are the current rates for each tier:

$100 minimum to open. Interest is compounded daily and credited monthly.

Deposits vs. direct deposits. You must receive some sort of direct deposit each month, as defined below:

For our accounts, we define direct deposits as those deposits made by the customer’s employer or a federal or state government agency or retirement benefits administrator. These generally include payments made by corporations and other organizations. We do not consider deposits to an account that are made by an individual using online banking or other payment provider such as PayPal or Venmo as direct deposits.

However, for the calculations of “savings rates”, all deposits are considered including incoming transfers from another bank account. At the same time, your “spending” will also include any transfer out of your account, even if it’s just to another bank account that you own.

NOW account? No paper checks. It should be noted that HM Bradley’s account is actually a lesser-known form called a “negotiable order of withdrawal (NOW) account”, which per the CFPB which gives the bank the right to require at least seven days written notice of a withdrawal. Supposedly, this is rarely done in practice. Like a checking account, there are no limits on the number of withdrawals each month. However, unlike a checking account… there are no checks! You can probably work around most things using the online Billpay feature. I suspect that not having to deal with paper checks saves them a good chunk of money.

The Bank offers Negotiable Order of Withdrawal transaction checking accounts, which allows you to make deposits by check, ACH payment, transfer from another account at the Bank, or wire transfer. NOW accounts only are available to consumers for personal, family, or household purposes. The Bank does not offer business accounts and you agree not to use your HMBradley Account for business purposes. The Bank may request 7 days’ advance notice of a withdrawal or transfer of funds from the NOW account.

Features. No minimum balance, no monthly fees. No paper checks. There is fee-free ATM access via your Debit Mastercard at over 55,000 ATMs in the STAR and MoneyPass networks (or at any store that allows for cash back on debit purchases). There is online Billpay. However, there is currently no ability to deposit checks (including ATM deposits). In the future, they plan on having remote check deposit only. They may close your account without notice if you maintain a zero balance.

My thoughts. In the current rate environment, the ability to earn 3% APY on up to $100,000 is exceptional. I don’t know of any “rewards checking” account has a balance limit that high. However, there are a lot of moving parts here.

First, the short-term concerns. All new customers that open now (May) will earn 1% APY until July 1st, so there is a delay. If their savings rate is determined to be above 20% as of July 1st, then you will reach Tier 1, but will Tier 1 still be 3% APY then? There is no rate guarantee and they don’t promise to provide any set amount of advance notice. Given the recent Fed moves, there is going to be pressure for them to lower it. Their lower rate tiers have already dropped from what they initially advertised.

I’m also concerned about the long-term sustainability. I like the idea of promoting savings, but the system doesn’t seem to benefit “average” savers enough, while leaving it open to “high” savers. For an “average” saver, saving 15% of deposits is a lot especially if you already have a 401(k) plan, which means they’ll only earn 0.50% or 1% APY. Meanwhile, a “high” saver with sizable existing cash assets can qualify for the 3% easily and then park tens of thousands of dollars at HMBradley. All they have to do is switch over some amount of direct deposit and be careful with their withdrawals. Perhaps there will be enough customers satisfied with earning zero to 0.50% APY interest to subsidize the rest, but we’ll have to see.

Bottom line. HMBradley is a digital bank startup that differs by offering customers a high rate (currently up to 3% APY) based on the percentage of their paycheck that they save. The rules are a bit more complex than I’d like, but if the rates hold steady it can be a competitive offer for motivated savers.

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