SoFi Money $75 Bank Bonus + $75 Stock Bonus Via Referral (+ 1% Deposit Match?)

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. Thank you for your support.

(I don’t know if this was targeted, but SoFi Invest (not Money) just sent me an email about a 1% deposit match bonus for the month of June for existing customers. The maximum bonus is $5,000 (if you move over $500,000). You cannot withdraw the net deposits for 90 days. Getting 1% of your deposit in 90 days is roughly the same as 4% annualized, which beats the interest rate on any cash equivalent even if you didn’t invest in anything.)

Updated. 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 $75 cash bonus when you open a new account and make two direct deposits of at least $500 each. This is my referral link. The referrer gets $25, so thanks if you use it!
  • After joining, if you refer a friend yourself, you will get $25 and they will also get the $75 bonus. That means a couple together can earn a total of $175.
  • FDIC-insured. No account fees. No minimums.
  • Free debit card with unlimited reimbursed ATM fees.
  • 20% cash back on DoorDash, Netflix, Disney+, Hulu, HBO Now, Spotify, and more through June 30, 2020.

SoFi Invest (Brokerage Account)

  • Get a $75 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, if you refer a friend yourself, you will get $75 and they will also get the $75 in free stock. That means a couple together can earn a total of $225.
  • 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 $400 in total bonuses.

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 from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

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 from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

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 from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

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 from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

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.

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.

Top 10 Sources to Raise Emergency Cash, Ranked

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. Thank you for your support.

While not exactly a fun exercise, do you know where you’d turn for some extra cash in an extended emergency? Morningstar has 10 Sources of Emergency Cash, Ranked from Best to Worst which contains many good points, but I would differ in my rankings.

I wondered about severity and duration. Is this money you expect to be able to pay back within a year, or is it a one-time permanent expense? You may not know the answer for sure, but for the purposes of this list I will assume that I become unemployed for an extended period and can’t start paying the loan back for 12 months.

1. Do the legwork and delay, defer, or work out a payment plan. Many lenders will work with you if you are in a temporary cash crunch, but you have to take the initiative. It may be possible to defer mortgage payments, put your student loan into forbearance, or get other forms of relief. By delaying any of these bills and ideally adding the payment due to the end of your term, you can save cash now for something else that can’t be put off until later.

2. Existing emergency fund. The standard advice is to keep 3-6 months of expenses in a liquid savings account. Has there been a reliable study on how many households actually have this? I would keep a little held back if possible and move down to the next available option below.

3. Sell the stuff. If you own things you don’t truly need, like a second car, timeshare, boat, jewelry, or other non-essential assets, it may be time to sell even at a loss. Your pride shouldn’t come in the way of protecting your family’s financial security.

4. 0% APR credit cards. Sure, credit card interest rates can be very high, but that’s because they can’t take away your house, car, or 401k balance away from you if you can’t pay it back! This is an important detail! If you’ve been taking good care of your credit score, you can score some low-interest financing for over a year. You can either go for a 0% APR balance transfer or simply put everything possible on your card to take advantage of 0% APR for purchases. If I was really hurting, cashing one of these 0% APR checks I keep getting and paying an upfront 3% balance transfer fee would be fine. If you don’t have them lined up yet, you should apply before you lose your job, as the credit card companies are tracking your employment nowadays and they may know if you’ve been laid off recently.

5. Taxable brokerage account. If you have stocks and bonds held outside employer plans and IRAs, these are fair game to sell. If I was really paying 17% interest, I would pay off the credit cards with some of this. I would first stop reinvesting dividends and start taking them as cash. Most places say to sell your bonds because they probably have minimal capital gains and haven’t dropped significantly in value during a crisis. You may also look for stock lots with tax losses that you can harvest. Again, it would depend on the tax situation; I might move on below if the expense is a temporary one.

6. Margin loans. Don’t want to sell some of your positions? Margin loans are backed by the value of your brokerage assets, and you can get it as cold hard cash. The risk is that if your collateral (stocks, bonds, ETFs, mutual funds) drop steeply in value, your broker will force you to sell them to cover your loan. That could be a double-whammy of badness! Therefore, you should only borrow a very small percentage of the available amount. (In other words, this option is best if you have a big brokerage balance.) If you believe there is a good chance you will use this feature, consider moving your account over to Interactive Brokers as they have some of the lowest margin rates available (currently 1.55% on $25k). Margin requirements can get a little complex, see this Fidelity article.

7. Home Equity Line of Credit (HELOC). Here’s another place I differ from Morningstar. I would much rather draw some money from my HELOC at about 5% interest for maybe a few months to a year than pull out a Roth IRA contribution that I can’t replace ever again. The catch here is that during a crisis, many banks may stop accepting applications or even freeze your existing HELOC. As of this writing, Wells Fargo and Chase have already stopped opening up new HELOCs. You should set one up now and not wait to pull money out at the last minute.

8. IRA “Loan” (CARES Act.) This is specific to right now. The CARES Act now allows you to take up to $100,000 out of your IRAs, after which you have 3 years to put it back into your IRA again without penalty or tax. It’s kind of like a really long rollover window. However, you will owe income tax on whatever partial amount is not put back within 3 years. This is called a coronavirus-related distribution (CRD) and is limited to those affected by the coronavirus (ex. diagnosed with COVID-19, experienced a layoff, furlough, reduction in hours, or inability to work due to COVID-19, or lack of childcare because of COVID-19.)

9. Life insurance cash values. I don’t have any whole life insurance myself, but built-up cash values seem like an acceptable place to draw some money in a true emergency. The loan option seems to be more complicated.

10. 401k loans. If one person in the household has a job that is very secure, then a 401k loan can offer a very low interest rate. You also pay the interest back into the 401k balance, so the only effective “cost” of the loan is that you will pay income tax on the interest an extra time. For example if the interest rate is 8% and your marginal income tax rate was 25%, you’d only effectively be paying 2% interest. The CARES Act now allows you to take out 100% of the vested balance, up to $100,000. The risk with a 401k loan is that if you get laid off, you must pay back the loan within 90 days or it will count as an unqualified withdrawal (taxes + penalties) until you are over age 59.5.

Everything else. Other options may include taking Social Security early, taking out a reverse mortgage on your home, and other forms of personal loans. My overall theme is that I want to protect my tax-sheltered assets if possible. I don’t want to touch my Traditional IRA, Roth IRA, 401(k). These are meant to grow for decades and decades, and since the contribution amounts are limited each year, I can’t get them back once I have taken them out as a hardship withdrawal.

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.

PenFed Credit Union $200 Checking Bonus

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. Thank you for your support.

Update: This promotion appears to have ended early.

Pentagon Federal Credit Union has a $200 bonus promotion for opening their new Access America checking account. You must deposit a minimum of $1,200, and make 5 debit card purchases within 90 days of account opening. They market this as a way of “adding $200” to your $1,200 stimulus check (not a requirement). Offer expires 6/14/20.

In order to avoid a $10 monthly fee with this account, you must maintain a $500 daily balance OR a monthly direct deposit of $500 or more. I would just keep at least $500 in the account until the bonus posts. With interest rates quickly heading back to 1% APY or lower, these bank bonuses are starting to look more appealing. For example, it would take $20,000 earning 1% APY for an entire year to make $200 in interest.

PenFed offers a variety of other financial services. With this account, you also become eligible for their 2% cash back credit card and their $250 bonus on car loan refinances. They’ve also been competitive on mortgages in the past. Unfortunately, their bank CD rates haven’t been great recently.

PenFed’s membership eligibility includes affiliated military and Federal employees, but anyone can join if they are a member of a partner organization. I have been a member for years after joining the National Military Family Association for $17. The website also states that being a previous Red Cross blood donor or volunteer makes you eligible. I recommend going through the PenFed application process and letting them guide you.

Offer valid from 5/4/2020 – 6/14/2020. Must receive at least $1200 in deposits in your checking account within 90 days of account opening and make 5 debit card purchases in the first 90 days. Only available to new personal checking members who do not have an existing checking account and qualify for an Access America Account. Once the criteria is met, the bonus will be credited to the new personal checking account no later than 120 days from account opening. Account must remain open, active and in good standing (no negative balance) at time bonus is distributed. PenFed will issue an IRS form 1099 reporting the value of the bonus. One bonus per member.

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.

Refinance Your Car Loan Due To Ultra-Low Interest Rates?

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Many interest rates are at all-time lows right now. This means that if you have any sort of debt, you should explore refinancing. The goal is to lower your interest rate and monthly payments while paying minimal upfront costs and fees.

Did you know that you can refinance your existing car loan? While I advise avoiding car loans because they turn a painful $1,500 in optional features into “only” $20 a month, I also know that most people do end up taking out a loan. Experian says that 85% of new cars and 55% of used cards are financed as of Q4 2019.

I’ve long recommended a good credit union for a new or used car loan. Below are one refi-centric rate comparison and several national credit unions that offer competitive rates on refinancing existing car loans – down to as low as 2% APR. For credit unions, don’t be afraid to use the alternative paths listed to join. There should be no loan application fee, although you will have to undergo a credit check. You should get multiple quotes to compare, including at least one credit union.

MyAutoLoan.com Refinance

  • This one is not a credit union, it is like LendingTree for auto loan refinancing. Open to everyone, you submit one application and they will give you multiple quotes from different private lenders.
  • They offer an interest rate estimator tool with no credit check based on your overall credit profile.
  • No application fees.
  • Refinance for as low as 2.04% APR for 36 months. They seem to specialized in refi, as their listed refinance rates are lower than their new/used car purchase loan rates.
  • No payments for up to 90 days for qualified borrowers.

Pentagon Federal Credit Union

  • Membership open to active, honorably discharged, or retired military, Federal employees, or select membership groups. This includes being a Red Cross blood donor or volunteer. You can also join the Navy League for $25. I recommend just going through the PenFed application process and let them guide you.
  • Currently, they are offering a $250 bonus when you refinance an auto loan with them.
  • Refinance a 2019/2020 model year car for as low as 2.14% APR for 36 months.
  • Refinance a 2018 or older model year car for as low as 2.99% APR for 36 months.

Navy Federal Credit Union

  • Membership open to active military, veterans, and family members of veterans.
  • Refinance a 2019/2020 model year car for as low as 2.29% APR for 36 months.
  • Refinance a 2018 or older model year car for as low as 3.89% APR for 36 months.

USAA

  • Membership open to those with the military affiliation: active duty, Guard or Reserve, a veteran, an eligible family member, or a cadet or midshipman. USAA is the most strict about their membership if you are not military, but they usually have very competitive rates.
  • No application fee.
  • No payments until 60 days after your loan is approved.

Hanscom Federal Credit Union

  • Membership open to active or retired military as well as other partner organizations. If you don’t otherwise qualify, anyone can join the Nashua River Watershed Association for a one-time $35 fee.
  • Hanscom FCU offers a 0.25% discount for loans on new and used vehicles (excluding motorcycles) to current active duty members in the U.S. Military.
  • No application fees or title transfer fees.

Why multiple quotes? If you apply for a car loan, they will run a credit check and provide a specific rate quote on your credit report data. (Check your credit reports for free once a week until April 2021.) Thus, I wouldn’t only go by which place advertises the lowest “as low as” rate unless you have a perfect credit score. You should apply to multiple lenders and compare as they may target differed borrower profiles. If you make these credit checks within a short period of time (Experian suggests 14 days or less), the credit bureaus should automatically recognize that you are comparison shopping and only count one hard inquiry against your credit score.

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 – May 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. Thank you for your support.

The Federal Reserve is buying everything in sight (even junk bonds apparently), so it has been rate drops all around. Bank accounts now offer much higher available rates than Treasury bonds. I’d also recommend checking on your brokerage money market sweep fund as most are back to very low rates.

Here’s my monthly roundup of the best interest rates on cash for May 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 5/6/2020.

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 1.55% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 1.50% APY with a $25,000 minimum deposit. CIT Bank has a 11-month No Penalty CD at 1.40% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Comenity Direct has a 12-month CD at 1.70% APY ($1,500 min).

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 0.57% SEC yield. The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.40%. You can manually move the money over to Prime if you meet the $3,000 minimum investment.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 2.00% SEC yield ($3,000 min) and 2.10% 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 2.47% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 2.48% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months. Note that the higher yield come partly from a 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 5/6/2020, a new 4-week T-Bill had the equivalent of 0.09% annualized interest and a 52-week T-Bill had the equivalent of 0.16% 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 0.14% 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 debit card “signature” 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.

  • The Federal Savings Bank has a 5-year certificate at 2.05% APY ($10,000 minimum). Early withdrawal penalty is 365 days of interest.
  • Pen Air Federal Credit Union has a 5-year certificate at 2.20% APY ($500 minimum). Early withdrawal penalty is 180 days of interest. Their other terms are competitive as well, 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 and Fidelity both have a 5-year at 1.00% 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. You could also view it as a hedge against prolonged deflation (again if you can hold on for 20 years). As of 5/6/2020, the 20-year Treasury Bond rate was 1.16%.

All rates were checked as of 5/6/2020.

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.

Discover Bank Bonus: $150/$200 ($15,000/$25,000 Deposit)

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disc_osaDiscover Bank has extended the bonus again for their online savings account. If you open a new account through this promotion link by 5/11/20 and use the offer code OBE420, you can receive one of the following bonuses:

  • Deposit at least $15,000 by 5/25/20 to earn a $150 bonus, or
  • Deposit at least $25,000 by 5/25/20 to earn a $200 bonus.

This offer has been around since at least 2017 and is only for new Discover customers, but if you haven’t grabbed it yet it’s a solid bonus. Thanks to reader Geoff for the tip.

Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded or affinity accounts provided by Discover. Account must be open when bonus is credited. Bonus will be credited to the account by 6/8/20. Bonus is considered interest and will be reported on IRS Form 1099-INT. Offer may be modified/withdrawn without notice.

The Discover Online Savings Account has a current interest rate of 1.50% APY as of 4/10/20, which is a competitive rate although not the highest available. There are no minimum balance requirements and no monthly fees. Interest is compounded daily and paid monthly.

If you deposit the minimum amount of $15k, the $150 bonus is effectively another 1% of your initial deposit. The $200 bonus on $25,000 deposited is a lower percentage, but if you have the extra cash then it may still be a good rate. There is no fixed minimum time period where you have to keep the money there after getting the bonus, so your effective ROI can be quite high. Keep in mind that you must still have an open account for the bonus to post.

I did not experience a hard credit pull when opening my Discover bank account on a previous bonus. Historically, their rates are competitive but not the rate leaders. Their overall feature set is not exceptional, so I only maintain $5 in there with an occasional transfer so they don’t close it for inactivity.

Bottom line. The Discover Savings account is a simple, barebones piggy-back savings account with no minimum balance and no monthly fees. The rates are historically competitive but rarely the highest. With no monthly fees, this is a relatively low-risk bonus if you have the funds available and have never had a Discover bank account before.

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.

CIT Bank Savings Builder $300 Deposit Bonus

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. Thank you for your support.

Update: This offer is now expired and no longer available.

Expired information:

CIT Bank still has their Savings Builder Account deposit bonus. The bonus has increased to up to a $300 cash bonus depending on deposit amount, and it is open to both new and existing customers. The bonus is on top of the interest rate, currently 1.70% APY (as of 4/9/20) at their top tier for qualifying accounts. Unfortunately, if you did an earlier bonus, you are not eligible for this one:

PLEASE NOTE: Existing Customers enrolled in a Savings Builder bonus promotion prior to January 17, 2020, are not eligible for this promotion.

New deposit bonus details. For new customers, you must first open a new account with at least $100 and promo code Spring20 at this link. If you already had an existing account as of 2/19/20, you need to first officially enroll in this offer via the “Let’s get started” button at this link for existing customers. After doing that:

  • A new deposit of $25,000 to $49,999 within 15 calendar days of your open/enrollment date will get you a $150 cash bonus.
  • A new deposit of $50,000+ within 15 calendar days of your open/enrollment date will get you a $300 cash bonus.

New accounts will have to maintain this balance for 90 calendar days following the end of the 15-day Funding Period. However, existing accounts will only have to maintain this balance for 30 calendar days following the end of the 15-day Funding Period. The shorter holding period for existing customers is nice, but remember it has to be additional money new to CIT Bank. This is their definition of “starting balance” when measuring new deposits for existing customers:

The balances of all the customer’s individual Savings Builder accounts, any joint Savings Builder accounts in which the customer has ownership, if not already enrolled in the bonus promotion by another joint owner as of February 18, 2020.

They will deposit your bonus within 1 to 5 business days after the Funding Period, but it will be on hold (can’t withdraw) until 7 days after your minimum holding period of 30/90 days to make sure you satisfy the requirements.

Effective APY. Here are the effective interest rates you could get as either a new or existing customer:

  • For a new customer earning either the $150 bonus on $25,000 or $300 bonus on $50,000, which also qualifies you for the 1.70% APY rate, that works out to a total 4.10% APY for 90 days (2.4 + 1.70).
  • For an existing customer earning either the $150 bonus on $25,000 or $300 bonus on $50,000, which also qualifies you for the 1.70% APY rate, that works out to a total 8.90% APY for 30 days (7.2 + 1.70).

Note this is somewhat optimistic as you will probably add a several days of holding time unless your deposit lands at the very end of the 15-day funding period. Still, it’s always nice to stack a cash bonus on top of an already competitive interest rate. There are no minimum balance fees, no monthly service fees, no inactivity fee.

Savings Builder high interest qualifications reminder. This a unique savings account with two ways to qualify for their highest interest rate tier. You need ONE of the following in each Evaluation Period:

  • Maintain at least one single monthly deposit of $100+, OR
  • Maintain a balance of $25,000+.

Everyone earns the top tier rate for the first monthly “Evaluation Period”. Then, if you meet one of the requirements listed above during the first Evaluation Period, you’ll earn the top rate for the next monthly Evaluation Period. If you don’t meet a least one of the requirements, you will receive the base interest rate during the next Evaluation Period. They have an indicator in your online account that confirms that you have qualified. Now, if you’re going for this bonus, you’ll already have $25,000 in there so you will qualify for the higher interest rate.

One option that I did is to set up an automatic monthly transfer from my checking account to this account for $100 and satisfy the requirement on auto-pilot. (I can always transfer additional funds in or out as needed.) More details in my previous full review.

Bottom line. CIT Bank has refreshed their Savings Builder Account deposit bonus with a bigger bonus. You can get up to a $300 cash bonus depending on deposit amount, and it is open to both new and existing customers. Unfortunately, if you’ve done a Savings Builder bonus already, you are not eligible for another one. The bonus is on top of the interest rate, currently 1.70% APY (as of 4/9/20) at their top tier for qualifying accounts. These types of bonuses help me earn higher interest rates even when rates are dropping.

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 Paycheck Protection Program (PPP) List of Required Documentation

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As a follow-up to my initial post on the Paycheck Protection Program (PPP), there has been a some speculation as to the specific documentation required to prove your eligibility and payroll numbers. Each lender may have some discretion as to exactly what they require, but here is what Bank of America has listed as required documentation to submit:

Organizations with employees who file Tax Form 940:

  • Tax Form 940 from 2019
  • Bank of America Paycheck Protection Program Loan Amount Template
  • Bank of America Paycheck Protection Program Application Addendum
  • Tax form 941 or Payroll processor records for the period including Feb 15, 2020

Documents for Sole Proprietors or Self Employed, who do not file Tax Form 940:

  • 1040 Schedule C, if filed for 2019 OR
  • Draft 1040 Schedule C for 2019 if not filed
  • Bank of America Paycheck Protection Program Application Addendum

Documents for All Other Small Businesses:

  • Form 1099-MISC for 2019, for services rendered as an independent contractor
  • Bank of America Paycheck Protection Program Application Addendum

As far as I can tell, the BofA Application Addendum contains the same certifications and questions as the paper PPP application.

Hopefully, this will help you get your documents in order ahead of time so that you can get your applications approved more quickly.

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.