How Fintech Bank Apps like Chime Make Money: Debit Card and ATM Fees

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An uncomfortable fact of personal finance is that you don’t necessarily “pay for what you get”. When a bank offers “Free Checking”, it means “we won’t charge you a monthly fee but we’ll get our money from overdraft charges, ATM fees, and more”. For example, US banks charged their customers over $11 billion in overdraft charges in 2019. Many people had zero overdrafts, while 80% of the overdraft fees were paid by just 9% of account holders. A minority of users often ends up subsidizing the perks for everyone else. This extends to everything from no-annual-fee credit cards to free-trade stock brokers.

Fintech banks like Chime are growing in popularity with their lower cost structure and user-friendly apps. Chime doesn’t charge overdraft fees at all! But despite their claim of “no hidden bank fees” and heavy use of emojis, these are still profit-seeking businesses. This Axios article provides some interesting numbers:

  • Chime made an average of $208 per user per year (annual gross revenue) as of June 2020.
  • The majority of Chime’s revenue was through debit card interchange fees. Chime does not offer any cash back on its debit card. Whenever you use their debit card, Chime keeps whatever transaction fees it generates. Given that other debit card programs offer up to 1% cash back, I can only estimate that Chime can end up making a little more than 1% of purchases overall. (Large banks have their debit card interchange fees regulated, but Chime (Stride Bank) is on the exempt list of smaller issuers.)
  • ~20% of Chime’s revenue was from their $2.50 fees for every out-of-network ATM cash withdrawal. This fee in on top of whatever is charged to you by the ATM owner itself. According to the article, Chime only pays about 10 cents to the ATM owner and the rest is profit.

This is not to criticize Chime, as they provide a useful and valuable service to many people who might otherwise not qualify for a traditional bank account, all without charging monthly fees. A lot of people basically use Chime to get their electronic direct deposit as opposed to the traditional paper check, and then spend it right away. Chime’s business model is well-suited for that customer, who previously may have paid a check-cashing service. I have an account with them (my review + $75 easy bonus) and I can understand why they have become so popular.

My point is that understanding how financial services make money can help you adjust your behavior and/or comparison shop. For banking apps, watch out for overdraft charges and ATM fees adding up despite no monthly fees, as well as spending too much on debit cards when you could be earning better rewards elsewhere. For credit cards, don’t focus on earning frequent flier miles when your debt balance is growing exponentially at 18% interest. For brokerage accounts, many used to quietly make tons of money by paying nearly no interest on your idle cash.

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.

PPP Updates For Self-Employed: Single-Page Forgiveness Form, 2nd Draw Applications Open

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The Paycheck Protection Program (PPP) got a lot of media buzz when it first came out, but I feel that attention has waned. Many PPP loan recipients are self-employed workers, sole proprietors, and/or independent contracts that file a Schedule C (or are single-person LLCs and S-Corps) and got a relatively modest loan amount. I am not an accountant nor a lawyer, but here are some quick updates focused on that group:

Single-page form for PPP Round 1 loan forgiveness. First of all, if you never took a PPP loan, you can still apply for a first-draw PPP loans under the first-draw eligibility rules. If you already have an outstanding PPP loan, you may have to tried to figure out how to apply for forgiveness through the various Forms 3508, 3508EZ or 3508S. However, if you have a loan under $150,000, there is now a single-page form that requires you to submit no additional documentation (it must still exist, of course, and they may ask you for it later if audited). From the Journal of Accountancy:

The US Small Business Administration (SBA) and Treasury on Tuesday published updated Paycheck Protection Program (PPP) loan forgiveness guidance and forms, including a one-page application for borrowers that received a PPP loan of $150,000 or less.

That form, called the PPP Loan Forgiveness Application Form 3508S, can be used by borrowers that received a PPP loan of $150,000 or less. The form seeks information about the borrower’s loan amount, disbursement date, employee totals, covered period dates, amount of the loan spent on payroll, and the amount of the loan for which forgiveness is being sought. Borrowers are not required to submit any supporting documentation with the application but are mandated to maintain payroll, nonpayroll, and other documents that could be requested during an SBA loan review or audit.

For reference, here is a PDF copy of the newest single-page Form 3508S (revised 1/19/21). I would still apply through coordination with your PPP lender, which may require a bit more waiting.

PPP Round 2 loan applications now open. Second-draw PPP loans have a different set of eligibility rules, notably you need to show a reduction in revenue. If you are a self-employed worker with no other employees and have higher than a $100,000 net income (2019 IRS Form 1040 Schedule C line 31 or equivalent), then you must reduce it to $100,000. Here are the full SBA 2nd Draw guidelines.

1. Question: I am self-employed and have no employees. How do I calculate my maximum Second Draw PPP Loan amount? (Note that PPP loan forgiveness amounts will depend, in part, on the total amount spent during the covered period following disbursement of the PPP loan.)

Answer: The following methodology should be used to calculate the maximum amount that can be borrowed if you are self-employed and have no employees, and your principal place of residence is in the United States, including if you are an independent contractor or operate a sole proprietorship (but not if you are a partner in a partnership):

• Step 1: Find your 2019 IRS Form 1040 Schedule C line 31 net profit amount.7 If this amount is over $100,000, reduce it to $100,000. If this amount is zero or less, you are not eligible for a PPP loan.
• Step 2: Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).
• Step 3: Multiply the average monthly net profit amount from Step 2 by 2.5.

The next general hurdle is that you must show a 25% drop in income when comparing the same quarter in 2019 and 2020:

Applicant must demonstrate that gross receipts in any calendar quarter of 2020 were at least 25 percent lower than the same quarter of 2019. Alternatively, Applicants may compare annual gross receipts in 2020 with annual gross receipts in 2019 if they were in business in 2019.

If you were impacted in such a significant manner, then I hope this encourages you to wade through all the bureaucracy and get some additional relief.

Still looking for a PPP lender? I would start with your existing small business banking relationships, but here is the SBA PPP local lender finder. Here is Gusto’s PPP lender list, which includes fintechs (possibly more friendly to those without existing banking relationships).

Looking for a self-employed or small business payroll provider? I want to mention Gusto here, as I use them for payroll and saw them create many tools this year to help their users satisfy the PPP documentation requirements and help them take advantage of this relief. If you are a single-person company, they have a basic tier that costs only $25 per month, which is much less than the major payroll providers. (You can also split up your direct deposit however you like, handy for various banking promotions.)

If you sign up for a Gusto payroll account by 1/31, you can get a $100 Visa gift card (my referral link).

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.

BlockFi Promo: $250 Bonus with $20,000 Deposit + 8.6% Interest (ACH Transfers Now Available)

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.

$250 promo still available, higher ACH limits now possible. BlockFi is a cryptocurrency platform that both pays interest on deposits and earns interest via cryptocurrency-backed loans. Right now, they are offering an up to $250 in bonus Bitcoin for new clients that sign up and fund a new BlockFi Interest Account. Here are the bonus tiers:

  • Deposit $25 to $249, Get $15 in BTC.
  • Deposit $250 to $999, Get $20 in BTC.
  • Deposit $1,000 to $4,999, Get $40 in BTC.
  • Deposit $5,000 to $9,999, Get $75 in BTC.
  • Deposit $10,000 to $19,999, Get $150 in BTC.
  • Deposit $20,000+, Get $250 in BTC.

This must be your first deposit, and you must make the qualifying deposits within 30 days of account opening. The required holding period is roughly 3 months. For example, if you participate in the promo anytime in December, your bonus will be paid out March 15th. This one is an affiliate offer and you should see the promo code partner250 auto-filled on your application.

New BlockFi clients who sign up with a specific partner referral code and fund their account during the promotion period (current calendar month ending at 23:59:59 UTC on the last day of the month) are eligible to receive a tiered bonus paid in BTC. To be eligible for the promotion, this must be your first ever deposit in the BlockFi Interest Account, and you must maintain a $25+ crypto balance through the 14th of the month at 23:59:59 UTC two and a half months from the month of eligibility in order to remain eligible. Eligible payouts occur on the 15th of every month on a rolling basis. If the 15th falls on a weekend, then the payout will occur by the end of the next business day (ex. If you participate in the promo in December, your bonus will be paid out March 15th). This offer is not valid in conjunction with any other current or past promotions and the promo code on the account will be used to determine promo eligibility for new accounts. The bonus will be paid in BTC based on the prevailing market price at the time of payment. Payout will be based on your average daily balance (USD equivalent) maintained through 23:59:59 UTC on the 14th on the month you are eligible to be paid on. Any withdrawals made before 23:59:59 UTC on the 14th of the month you are eligible to be paid out on may affect your tier. BlockFi Interest Accounts are available in most countries worldwide and all U.S. states other than NY. There is a maximum of one bonus per client. This offer is not valid in conjunction. Terms subject to change.

To fund larger amounts quickly, you can do a wire transfer from your bank account or USDC transfer from Coinbase/Coinbase Pro. Update: BlockFi now supports free ACH transfers direct from your bank account with a daily transfer limit, which is much less hassle than wire transfers. They may start with a $500 daily limit, but a reader reports that the limit may be raised to $5,000 daily over time and/or after some successful transfers. Both deposits and withdrawals are fee-free. Linking is done via the Plaid platform.

The BlockFi Interest Account (BIA) currently pays 6% APY on up to 2.5 Bitcoin (BTC) and 8.6% APY on USDC/GUSD stablecoins (subject to change on a monthly basis). There are no trade requirements, but when you deposit USD it will be converted to the GUSD (Gemini stablecoin) by default. (You can then use it to buy USDC or something else if you wish.) You could simply hold the stablecoin and earn interest until the bonus posts. Their overall business model is to earn a spread on the difference between lending out money and paying interest.

To earn interest on crypto, we lend assets to highly vetted and audited institutional counterparties. The interest we are able to pay is based on the yield that we are able to generate from lending, which directly correlates to the market demand in the space (I.e. what rate institutions are willing to pay to borrow specific crypto assets, as it varies from asset to asset).

BIA is available in 49 of 50 U.S. states (excluding New York). One free crypto withdrawal per calendar month and one free stablecoin withdrawal per month. After that, additional stablecoin withdrawals are $0.25 each.

Update 2: BlockFi has announced a new credit card that lets you earn 1.5% back in the form of BTC. You can only join the waitlist if you already have an open BlockFi BIA accounts, so I’d grab this bonus first. However, I’d rather get a better 2% cash back elsewhere and just buy BTC directly.

BlockFi is definitely one of the more well-established crypto sites, but you should do your own due diligence as it is not an FDIC-insured bank account nor a SIPC-insured brokerage account. I found that they were backed by some reputable firms including Fidelity Investments and Coinbase, with over $100 million raised so far. They use Gemini as their primary custodian, which is a licensed custodian and regulated by the New York State Department of Financial Services. As such, they will still require your name, address, and Social Security Number to verify the identity of all accountholders.

Bottom line. BlockFi offering up to $250 in bonus Bitcoin, depending on deposit size, for new clients that sign up and fund a new BlockFi Interest Account. They also pay interest on both Bitcoin and stablecoin.

Also see: $25 BTC Voyager promo.

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 Brokerage Assets, Improved Credit Card 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.

Improved offer available again. 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 extra 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 as well.

This specific offer is better than the standard offer:

  • $100 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. 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). Cash bonus offers, in the aggregate, are limited to one CMA and one IRA per accountholder. Eligible Merrill IRAs limited to Rollover, Traditional, Roth and owner-only SEP IRA. The Merrill IRA or CMA may be a Merrill Edge Self-Directed account, Merrill Edge Advisory Account, Merrill Guided Investing or Merrill Guided Investing with an Advisor 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 one of the tiers), 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 – they won’t let you buy any additional shares, but you can only hold or sell them. 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. These days, 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 Edge with self-directed 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 accounts 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 Platinum and above (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 relatively 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 a flat 2.625% cash back on virtually 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 right now 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.

Marcus Bank: $100 Bonus on $10,000 Deposit (New and Existing Customers)

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(Update: Marcus has a new referral program for new customers. If you open with a Marcus referral link, you will get an extra 0.20% on all your balances for 3 months. I believe that the referrer gets the same. That’s my referral link, thanks if you use it!)

Marcus by Goldman Sachs is offering a $100 bonus if you deposit $10,000+ in new funds into their online savings account within 10 days of enrollment at this special offer page. Valid for both new and existing customers. You must enroll by 2/12/2021 and maintain the new $10,000+ deposit for 90 days. They have done a similar promotion in past years (and it’s nice that you can keep doing it). Thanks to Bill P and others who sent this in.

Yes. after enrollment, you must deposit $10,000 or more in new funds (internal transfers won’t count) into a Marcus Online Savings Account within 10 days of enrollment and maintain at least $10,000 of those new funds in your account in addition to your account balance at the time of enrollment for 90 consecutive days from the date of reaching the required dollar amount.

Each customer is limited to one bonus offer, which can only be applied to a single account. For eligibility purposes, each joint owner will be treated as a separate customer. For example, if you apply the bonus offer to a joint account, the remaining joint owner(s) may apply this offer to another account they own if they have not done so already.

The bonus will be deposited into your account within 14 days after fulfilling all of the bonus requirements.

Bonus math. This is a 1% bonus on $10,000 if you keep it there for 90 days, which makes it the equivalent of ~4% APY annualized. The bonus is on top of the standard interest rate, currently 0.50% APY as of 1/18/21. (0.60% APY for AARP members.) This total of roughly 4.5% APY over 90 days makes it a great short-term rate at that balance size when compared to my January 2021 monthly update of best interest rates. I have gotten the bonus in the past with no issues.

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.

Alliant CU Ultimate Opportunity Savings Review – $100 Bonus

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Alliant Credit Union, one of the top 10 largest US credit unions by assets, has teamed up with Suze Orman to promote their new Ultimate Opportunity Savings account. The interest rate of 0.55% APY and structure appears to be the same as their existing High-Rate Savings account, just with an added $100 cash bonus if you deposit at least $100 a month for 12 consecutive months. Unfortunately, it is open to new Alliant CU members only. Thanks to reader Bill for the tip.

Note that the fine print also states that you must have at least $1,200 in your account at the end of the period (you can’t have withdrawn it after the deposits).

The $100 bonus is automatically deposited into The Ultimate Opportunity Savings Account after you’ve successfully made a monthly deposit of $100 or more for 12 consecutive months. To qualify for the bonus, you must keep a minimum balance of $100 in your savings account, and have $1,200 (or more) in your account at the end of the 12-month period.1

There is no minimum balance required, but you must accept paperless statements to avoid a monthly fee.

Bonus math. In terms of equivalent interest rate, earning an extra $100 of interest for a $100 monthly deposit is roughly 16% APY, so definitely better than any other non-bonus savings account out there. (Without the bonus, this account would earn less than 4 bucks!) Add in the normal 0.55% APY, and your total APY is ~16.5% APY. It’s much less exciting for bigger deposits, but this can still be a pretty good incentive if you want to start building up an emergency fund.

Alliant CU membership eligibility. Credit unions are supposed to be a cooperative non-profit that serves a specific community, but Alliant is pretty much open to anyone nationwide. If you start the online membership application, it will walk you through their various eligibility options. Here are their membership groups:

Any employee or retiree of a Qualifying Company.
Any member of a Qualifying Organization.
Any immediate family member of an existing Alliant member.
Anyone who lives or works in a Qualifying Chicagoland Community.
Anyone who is a member of the Foster Care to Success charity group.

You’ll find that it only costs $5 to join Foster Care to Success, and Alliant will pay that fee on your behalf!

Other potential member perks. Alliant has a good checking account product and their savings account rates have been historically pretty competitive. Like many other credit unions, they also offer competitive rates on auto loans on both new and used cars.

They also have a 2.5% cashback credit card, but there is a $10,000 monthly cap on purchases plus a $99 annual fee after the first year. After that first year, you’ll need to spend at least $19,800 annually (average $1,650 monthly) and less than $10,000 per month to exceed to do better than a 2% cash back card.

Bottom line. If you’ve been meaning to join a credit union and/or start a new savings/emergency fund for the new year, this $100 bonus might be a nice incentive to reach the modest savings goal of $100 per month.

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.

Big List of Free Consumer Data Reports 2021 (1/2): See Your Confidential Credit, Banking, and Payday Lending Data

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.

magUpdated for 2021. Since these are available every 12 months, it is a good idea to check these near or around the same time each year. A lot of companies make their money by collecting and selling data – your personal data. In the past, it was often difficult if not impossible to see what they were telling prospective lenders, landlords, even employers about you. Under the FCRA and/or FACT Act, many consumer reporting agencies (CRAs) are now legally required to send you a free copy of your report every 12 months, as well as provide a way to dispute incorrect information.

Some have an online request form, but some require snail mail with proof of identity. You probably won’t want to bother checking all of them, but if you’ve experienced any sort of rejection or adverse reaction in these areas the cause might be found inside one of these databases. Keep in mind that you may not have a file with all of these places. Requesting a copy of your own consumer reports does not hurt your credit score.

Based on my own situation, I have checked the following reports out of the ones listed below – Experian, Equifax, TransUnion, CoreLogic Credco, Chexsystems, and LexisNexis.

Credit-Related

Experian, Equifax, and TransUnion. The three major credit bureaus track your credit accounts, payment history, and other related information like bankrupts and liens. Free copy of each once every 12 months.

(Note: As part of a class action settlement, you may also request up to six additional free copies of your Equifax credit report directly from myEquifax during any 12-month period through December 2026.)

You can also now freeze your credit reports for free, but you must contact each bureau separately. For the contact info, please see Big List of Ways To Protect Your Identity: Free Credit Monitoring, Free Credit Locks, and Free Credit Freezes

CoreLogic Credco. One of the largest credit-related CRAs and often used by mortgage lenders, your CoreLogic Credco Consumer File can contain: previous homeownership and mortgage info, rental payment history, any reported delinquencies, and other debt obligations like child support. Free copy once every 12 months.

LexisNexis. One of the largest personal information databases that includes public records, real estate transaction and ownership data, lien, judgment, and bankruptcy records, professional license information, and historical addresses on file. Free copy, must mail in form.

Innovis. A supplementary credit report and identity verification provider. Free copy once every 12 months.

SageStream, LLC (formerly ID Analytics). Per their site, they are a “a credit reporting agency that produces credit reports and scores from our repository of consumer information contributed by a wide array of companies including leading financial services organizations, wireless providers, utilities, retailers, auto lenders and many others” Free copy, must fax or mail in a written form.

Banking-Related

Chexsystems. A consumer information database used by an estimated 80-90% of all banks to help determine the risk of opening new accounts. Think of it as the banks’ version of a credit bureau. If a person commits check fraud or overdraws their account, it will be listed here. In addition, the simple act of opening or closing a bank account may be recorded in their database. Having a negative ChexSystems record can leave you blacklisted from opening bank accounts at most major banks. Free copy once every 12 months. You can now request your report online.

CrossCheck, Inc. Provides check verification services for various industries, including automotive sales and repair, building supply, home improvement, retail, medical, dental, and veterinarian industries.

Global Payments Check Services, Inc. Provides check verification services for various industries.

TeleCheck. Per their site, they provide “industry-leading check acceptance, check processing and risk analytics services to merchants and financial institutions.” One of the major companies that protect businesses and banks from bad checks. Must order by phone or mail.

Certegy Check Services. Per their site, a “check risk management company that provides verification, guarantee and risk analytics to thousands of businesses that choose to accept checks as a form of payment for goods or services.” Clients include check-cashing stores and casinos. Free copy once every 12 months. Must order by phone or mail.

Early Warning Services. A collaboration between a group of big banks including Bank of America, BB&T, Capital One, JPMorgan Chase and Wells Fargo. Provides fraud prevention and risk management in relation to bank accounts and payment transactions. Must order by phone.

Subprime-Related (Payday Lending)

The following companies focus on subprime customers with clients including payday lenders, title loan lenders, rent-to-own stores, and subprime auto loan providers.

Teletrack (affiliated with CoreLogic).

FactorTrust. Free copy once every 12 months. Owned by TransUnion.

Clarity Services, Inc.

DataX Ltd.

Microbilt and subsidiary Payment Reporting Builds Credit (PRBC). Microbilt is a provider of credit data for the “approximately 110 million underserved and underbanked consumers in the United States.” Free copy once every 12 months.

Next up, I will double-check and update Part 2: Rental History, Insurance, & Employment Data.

Sources: ConsumerFinance.gov, FTC.gov, Wikipedia

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 – January 2021

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Here’s my monthly roundup of the best interest rates on cash for January 2021, roughly sorted from shortest to longest maturities. I track these rates because I keep 12 months of expenses as a cash cushion and there are many lesser-known opportunities to improve your yield while still being FDIC-insured or equivalent. 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 1/6/2021.

Fintech accounts
Available only to individual investors, fintech accounts oftentimes pay higher-than-market rates in order to achieve high short-term growth. I will define “fintech” as an app software layer on top of a different bank’s FDIC insurance backbone. You should read about the story of the Beam app for potential pitfalls and best practices. Below are some current options with decent balance limits:

  • 3% APY on up to $100,000. New customers should be happy to see the top rate staying at 3% APY for January through March 2021. HM Bradley requires a recurring direct deposit every month and a saving rate of at least 20%. See my HM Bradley review.
  • 3% APY on 10% of direct deposits. One Finance lets you earn 3% APY on auto-save deposits (up to 10% of your direct deposit, up to $1,000 per month). See my One Finance review.
  • 3% APY on up to $15,000. Porte requires a one-time direct deposit of $1,000+ to open a savings account. See my Porte review.
  • 2.15% APY on up to $5k/$30k. Limited-time offer of free membership to their higher balance tier for 6 months with direct deposit. See my OnJuno review.

High-yield savings accounts
While the huge megabanks pay essentially no interest, 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.

  • T-Mobile Money has the top rate at the moment at 1.00% APY with no minimum balance requirements. The main focus is on the 4% APY on your first $3,000 of balances as a qualifying T-mobile customer plus other hoops, but the lesser-known perk is the 1% APY for everyone. Thanks to the readers who helped me understand this. There are several other established high-yield savings accounts at closer to 0.50% 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 0.45% APY with a $500 minimum deposit. AARP members can get an 8-month CD at 0.55% APY. Ally Bank has a 11-month No Penalty CD at 0.50% APY for all balance tiers. CIT Bank has a 11-month No Penalty CD at 0.30% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • CommunityWide Federal Credit Union has a 12-month CD at 0.80% APY ($1,000 min). Early withdrawal penalty depends on how early you withdraw. Anyone can join this credit union via partner organization ($5 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.

  • The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.02%. Vanguard Cash Reserves Federal Money Market Fund (formerly Prime Money Market) currently pays 0.02% SEC yield.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 0.49% SEC yield ($3,000 min) and 0.59% 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 0.28% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 0.50% 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 March 2020 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 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 1/6/2020, a new 4-week T-Bill had the equivalent of 0.09% annualized interest and a 52-week T-Bill had the equivalent of 0.11% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a -0.01% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a -0.06% (!) 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. If you redeem them within 5 years there is a penalty of the last 3 months of interest. The annual purchase limit is $10,000 per Social Security Number, available online at TreasuryDirect.gov. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888.

  • “I Bonds” bought between November 2020 and April 2021 will earn a 1.68% 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-April 2021, 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.
  • See below about EE Bonds as a potential long-term bond alternative.

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 severely 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.

  • One of the few notable cards 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 which usually involve 10+ debit card purchases each cycle, 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 would rather not bother. Rates can also drop suddenly, leaving a “bait-and-switch” feeling.

  • 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 2.50% APY on balances up to $25,000 if you make 12 debit card purchases and at least 1 ACH credit or debit transaction per statement cycle. (BoD now says debit transactions must be $5 minimum each and must reflect “normal, day-to-day spending behavior”.) If you meet those qualifications, you can also link a savings account that pays 1.50% APY on up to $50k. Thanks to reader Bill for the updated info. Presidential Bank has another competitive offering. 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.

  • Affinity Plus Federal Credit Union has a 5-year certificate at 1.50% APY ($500 minimum). Early withdrawal penalty is 1 year of interest. 4-year at 1.20% APY, and 3-year at 0.95% APY ($500 minimum). Anyone can join this credit union via partner organization ($25 one-time fee).
  • Hiway Federal Credit Union has a 5-year certificate at 1.35% APY ($25k minimum) and 1.25% APY with a $10,000 minimum. Early withdrawal penalty is 1 year of interest. 4-year at 1.20% APY, and 3-year at 1.10% APY ($25k minimum). Anyone can join this credit union via partner organization ($10 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. I see nothing special right now, but it might still pay more than your other brokerage cash and Treasury options. 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. You might find something that pays more than your other brokerage cash and Treasury options. 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 0.10%). 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. Purchase limit is $10,000 each calendar year for each Social Security Number. As of 1/6/2021, the 20-year Treasury Bond rate was 1.60%.

All rates were checked as of 1/6/2021.

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.

OnJuno Review: 2.15% APY on $5k/$30k, 5% Cash Back on Chosen Brands

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.

OnJuno joins the fintech banking world with the notable features of 2.15% APY on up to $30,000 and also 5% cash back on select merchants. They partner with Evolve Bank and Trust for FDIC insurance. Here’s my initial review after signing up, making my first deposit, and poking around their website. Here are the basics of their two options:

  • Basic tier. 2.15% APY on up to a $5,000 checking balance. 5% cash back on up to $500 a year in debit card purchases ($25 max). 1 free out-of-network ATM withdrawal per month. No monthly fee.
  • Metal tier. 2.15% APY on up to a $30,000 checking balance. 5% cash back on up to $3,000 a year in debit card purchases ($150 max). 3 free out-of-network ATM withdrawals per month. $9.99 monthly fee.

If you signed up on their waitlist, check your e-mail for 6 months of their higher Metal tier for free. Otherwise, they also give all new sign-ups 6 months of Metal tier for free if you set up direct deposit. The APY drops to 0.25% on balances above $5,000 for Basic and $30,000 for Metal, with a total limit up to $100,000. The 2.15% rate is only guaranteed until April 2021.

Sign-up process. The sign-up process was completed 100% online and mostly fine, although I had to spend some extra time carefully taking smartphone photos of the back and front of my driver’s license. My pictures kept getting rejected for being too dark, too much glare, too fuzzy, etc.

According to this American Banker article, OnJuno intends to target Asian immigrants who like to build up savings and then remit some of it internationally to their families abroad. You only need a Social Security number and state-issued ID to join.

Bank-to-bank transfers. OnJuno uses the Plaid service to link with external bank accounts for funding and free ACH transfers (both deposits and withdrawals). They also provide you with the full account number and routing number, which you can use to connect with other banks like Ally, Marcus, CapOne 360, etc. The routing number is 084106768 which is confirmed as that of Evolve Bank & Trust. I was able to make a deposit and withdrawal initiated at Ally without issue.

5% cash back merchant list. You can choose 5 from the following list of brands. Notably missing is Costco (sad face).

  • Amazon, Target, Best Buy, Walmart, Netflix, Amazon Prime, Disney+, Spotify, Headspace, Calm, Whole Foods, Walgreens, Trader Joe’s, CVS, Uber Eats, Grubhub, Postmates, Doordash, Starbucks, Dunkin Donuts, Blue Bottle Coffee, In N Out, Taco Bell, Wendy’s, Chick-fil-A, Uber, Lyft, and AirBNB.

Here are my picks, as I already have the Amazon Prime credit card with 5% back at Amazon and Whole Foods.

Additional features.

  • No minimum balance requirements for either Free or Metal tiers.
  • Fee-free access to both Allpoint and Moneypass ATM networks (85,000+ locations).
  • Free debit Mastercard.

No app. No mobile check deposit. I was surprised to discover that they have no smartphone app. This means that there is no mobile check deposit available. When I searched in the Apple App Store, I saw another app called “Juno” that wasn’t a bank but did appear to perform international money transfers. Maybe that’s why they changed it to “OnJuno”? (Juno was also the name of a ride-sharing app that was eventually acquired by Gett.)

Customer service. You can contact them via phone at 415-969-5775 (9am to 6pm Pacific) or online message (usually takes a few hours to reply).

My quick take. I signed up and I’ll definitely take advantage of the higher APY for 6 months free on $30,000 as that is a pretty high limit, but paying the $10/month going forward will depend on them maintaining a high interest rate. The free tier is also a nice gesture, but even 2.15% on the full $5,000 only adds up to about $7 a month in extra interest over Ally Savings at 0.50% APY. If the rate drops, it may not be worth the extra effort. The benefit from the 5% cash back will depend on your personal spending patterns and existing credit card rewards. Since the 5% brands list doesn’t include Costco as initially teased and I already have the Amazon-branded card, this feature probably won’t be enough to keep me if the interest rate drops.

Bottom line. OnJuno has launched as a fintech checking account paying 2.15% APY interest on up to $30,000 and also 5% cash back at select merchants on debit card purchases. New customers that set up a direct deposit can get Metal tier perks for 6 months free (usually $10 a month). Much will depend on whether they keep the rate high. The 2.15% APY rate is only guaranteed until April 2021.

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 – December 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.

Here’s my monthly roundup of the best interest rates on cash for December 2020, roughly sorted from shortest to longest maturities. I track these rates because I keep 12 months of expenses as a cash cushion and there are many lesser-known opportunities to improve your yield while still being FDIC-insured or equivalent. 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 12/10/2020.

Fintech accounts
In the currently low-interest rate environment, individual investors can get higher-than-market rates by moving their money into fintech accounts that are trying to achieve high short-term growth through a combination of lower cost structure and venture capital. I will define “fintech” as an app software layer on top of a different bank’s FDIC insurance backbone. You should read about the story of the Beam app for potential pitfalls and best practices. Below are some current options with decent balance limits:

  • 3% APY on up to $100,000. HM Bradley requires a recurring direct deposit every month and a saving rate of at least 20%. See my HM Bradley review.
  • 3% APY on 10% of direct deposits. One Finance lets you earn 3% on auto-save deposits (up to 10% of your direct deposit, up to $1,000 per month). See my One Finance review.
  • 3% APY on up to $15,000. Porte requires a one-time direct deposit of $1,000+ to open a savings account. See my Porte review.
  • 2.15% APY on up to $5k/$30k. OnJuno just went live. More details to come after I open an account.

High-yield savings accounts
While the huge megabanks pay essentially no interest, 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 0.45% APY with a $500 minimum deposit. AARP members can get an 8-month CD at 0.55% APY. Ally Bank has a 11-month No Penalty CD at 0.55% APY for all balance tiers. CIT Bank has a 11-month No Penalty CD at 0.30% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • CommunityWide Federal Credit Union has a 12-month CD at 0.90% APY ($1,000 min). Early withdrawal penalty depends on how early you withdraw. Anyone can join this credit union via partner organization ($5 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.

  • The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.02%. Vanguard Cash Reserves Federal Money Market Fund (formerly Prime Money Market) currently pays an 0.03% SEC yield.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 0.55% SEC yield ($3,000 min) and 0.65% 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 0.30% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 0.51% 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 March 2020 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 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 12/9/2020, a new 4-week T-Bill had the equivalent of 0.07% annualized interest and a 52-week T-Bill had the equivalent of 0.10% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a -0.01% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a -0.05% (!) 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. If you redeem them within 5 years there is a penalty of the last 3 months of interest. The annual purchase limit is $10,000 per Social Security Number, available online at TreasuryDirect.gov. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888.

  • “I Bonds” bought between November 2020 and April 2021 will earn a 1.68% 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-April 2021, 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.
  • See below about EE Bonds as a potential long-term bond alternative.

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 severely 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.

  • One of the few notable cards 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 2.50% APY on balances up to $25,000 if you make 12 debit card purchases and at least 1 ACH credit or debit transaction per statement cycle. (BoD now says debit transactions must be $5 minimum each and must reflect “normal, day-to-day spending behavior”.) If you meet those qualifications, you can also link a savings account that pays 1.50% APY on up to $50k. Thanks to reader Bill for the updated info. Presidential Bank has another competitive offering. 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.

  • Hiway Federal Credit Union has a 5-year certificate at 1.35% APY ($25k minimum) and 1.25% APY with a $10,000 minimum. Early withdrawal penalty is 1 year of interest. 4-year at 1.20% APY, and 3-year at 1.10% APY ($25k minimum). Anyone can join this credit union via partner organization ($10 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 nothing special right now, but it might still pay more than your other brokerage cash and Treasury options. 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. You might find something that pays more than your other brokerage cash and Treasury options. 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 0.10%). 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. Purchase limit is $10,000 each calendar year for each Social Security Number. As of 12/9/2020, the 20-year Treasury Bond rate was 1.48%.

All rates were checked as of 12/10/2020.

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.

Porte Banking App Review: 3% APY on up to $15,000 (+$50 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.

Porte is another banking fintech app, this time with the notable feature of 3.00% APY on up to $15,000 on their attached high-yield savings account. To enable access to this account, you must have a one-time occurrence of $1,000+ of direct deposits within one month. There doesn’t appear to be any ongoing requirements after that.* This makes it a more simple setup than the 3% APY accounts of HM Bradley and One Finance, albeit with a lower balance limit. Thanks to reader Matt for the tip.

Referral bonus. New sign-ups can also earn an additional $50 bonus if you open a new account via referral link (now working with in both regular and mobile browsers) and establish a direct deposit of at least $500. That’s my link and I will also get the same bonus, so thanks if you use it! If you have issues with the bonus posting, please let me know.

Quick 3% APY math. If you were to max out the $15,000 at 3% APY and this interest rate holds for a year (a big if), you would get $450 of interest over that year. Compare with a 0.50% APY savings account that would earn $75 in interest on $15,000 in a year, for a difference of $375 a year. As long as that gap stays wide enough, that could be an ongoing $20 to $30 a month in extra interest income.

Additional features.

  • No monthly fees, no minimum balances.
  • Fee-free access to Moneypass ATM network (32,000+ locations).
  • Free debit Visa card.
  • Mobile check deposit via app.

They have “real human” (their words) customer service available at 800-267-7080. FDIC insurance is provided by their partner bank, MetaBank. This is the same bank behind Netspend, which used to have a more interesting 5% APY prepaid card. Note that interest also posts quarterly.

An important missing feature is that you can’t use their app to link an external bank account to make ACH deposits/withdrawals. You can make one-time deposits via a debit card from one of your other accounts (they use Plaid). You will have to link this account using another online bank as the hub (Ally, CapOne 360, Marcus, etc) to make ACH transfers. Otherwise, you’ll have to use their debit card and use Venmo/Apple Cash or similar. Little things like this show that it is a small start-up.

* Fine print. The wording on the site is a little ambiguous, but if you look through the fine print you’ll see that you only need one direct deposit to open the savings account, and once it is open, everybody gets the higher interest rate (3% APY as of this writing). There are no ongoing hoops listed.

No minimum balance to open Savings Account or obtain the yield(s). However, you must receive direct deposit(s) totaling at least $1,000 within one (1) calendar month to be eligible to open a Savings Account.

If the Average Daily Balance is $15,000.00 or less, the interest rate paid on the entire balance will be 2.97% with an annual percentage yield (APY) of 3.00%.

My experience. I opened the checking account and was allowed to open the savings account immediately after making $1,000 in qualifying direct deposits. (They don’t seem to be highly discerning as to what constitutes a direct deposit, but no guarantees.) You must manually transfer your funds from the checking to savings in order to get the 3% APY, which makes the funds inaccessible to your debit card. Even so, I declined their “Overdraft Service”, as I’d rather they just reject any transaction that would send me into negative territory. It doesn’t appear that the savings can be used as an overdraft source. My routing number is 073972181, which matches MetaBank, NA. I was able to make deposits and withdrawals to this account.

Bottom line. Porte is a new fintech app that offers a notable 3% APY on balances up to $15,000 once you complete a one-time direct deposit of $1,000 within a month. This is currently a much higher interest rate than the competition. The rest of the app is similar to other fintech offerings, but the high-yield savings account may be attractive for savers.

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 Deposits

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 a fintech bank startup that differs by offering customers a variable interest rate based on their savings rate. Deposits are FDIC-insured through Hatch Bank. As of October 2020, the top rate is 3% APY, which is over 2% higher than the popular online savings accounts like Ally Bank, Capital One, or Marcus. Is there a catch? What’s the fine print? Here’s my review of HMBradley after opening an account and 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 every 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 October, the next reset date would be January 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:

Requires a “real” direct deposit every month. 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.

They appear to be relatively strict on receiving a “real” direct deposit and not a person-to-person transfer. Based on my experience, they have a system for detecting incoming deposits and marking them automatically as “real”, but it is not 100% accurate and your direct deposit may have to be reviewed manually. Their online account interface clearly tells you if you have made the required direct deposit for the current month (see screenshot below). If not, you should contact them in order for them to manually check and mark your transfer as a direct deposit. I have a legit employer direct deposit and still had to do this every month. Having it marked properly is required to get the top rate.

Savings rate is based on ALL deposits and withdrawals. For the calculation of “savings rate”, all deposits are considered including incoming transfers from another personal 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.

Basically, money has to keep coming into HMBradley and not go back out, if you maintain a positive savings rate. That’s rather clever. They just have to maintain the high interest rates to keep reinforcing this cycle.

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! I suspect that not having to deal with paper checks saves them a good chunk of money. I’m personally fine with that as long that equates to a higher interest rate.

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.

Credit card adds 0.50% APY. They recently added a credit card, but it is only open to those that have sizable payroll direct deposits as that is part of their creditworthiness criteria. If you do get it, you can earn another additional 0.50% APY, for a total of up to 3.5% APY.

Additional features. No minimum balance, no monthly fees. $100 minimum to open. Interest is compounded daily and credited monthly. 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 no online billpay (“coming soon”) and there is no ability to deposit checks (remote deposit also “coming soon”). 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 of $100,000. This can be a good opportunity if you understand the rules and the top interest rate stays higher than the competition.

All new customers that open now will earn a maximum of 1% APY until the next quarter starts (January 1st, 2021 as of this last update). This is actually a good rate in the current rate environment. If your savings rate is determined to be above 20% as of December 31st and you had a “verified” direct deposit each month, 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. I was happy that they maintained their 3% APY rate for October-December 2020, but it should also be noted that some of their lower rate tiers have already dropped from when they first starting taking deposits.

The idea of incentivized higher savings rates is good, but it may be a tough hurdle for those living paycheck-to-paycheck. On the other hand, as long as you can switch over a partial direct deposit, adding some consistent amount each month with minimal withdrawals would also work.

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 deposits that they save. They require moving over a monthly direct deposit, and the rules are a bit more complex than I’d like, but if the rates hold steady it can be a very competitive offer for motivated savers.

Added 11/16/20: HMB added a new referral program. If you sign up via my referral link, I will get a free “Tier Rewind” if my savings rate drops later on. You can refer others for the same benefit. Thanks if you use it! Also here is an interesting interview with the CEO, which thankfully shows a good respect for anti-fraud vigilance.

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.