Vanguard Cash Deposit Program: New Cash Sweep Option (Currently Invitation Only)

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Vanguard has been gradually rolling out a new option for the cash settlement sweep in your Vanguard Brokerage Account. The Vanguard Cash Deposit is FDIC-insured via partner banks and is currently available to select customers on an invitation-only basis:

Currently, enrollment in the Vanguard Cash Deposit program is by invitation only to existing clients who have at least one Vanguard Brokerage Account. Mutual fund accounts, 529s, or other accounts are not eligible for Vanguard Cash Deposit.

Here is a quick comparison of the interest rates from the two available options:

Banking Partners (as of 8/10/2022)

  • Valley National Bank (FDIC cert. 9396)
  • NexBank (FDIC cert. 29209)
  • Synovus Bank (FDIC cert. 873)
  • Bank of Baroda (FDIC cert. 33681) (coming soon)
  • Synchrony Bank (FDIC cert. 27314) (coming soon)

Commentary. Vanguard’s existing cash sweep fund, the Vanguard Federal Money Market Fund (VMFXX), already invests “at least 99.5% of its total assets in cash, U.S. government securities, and/or repurchase agreements that are collateralized solely by U.S. government securities or cash (collectively, government securities).” In other words, everything inside is also fully backed by the US government. I am a big fan of FDIC insurance, but even I don’t lose any sleep at all about the safety of VMFXX, not to mention I’ve found VMFXX historically tracks short-term interest rates quite well. As of this writing (8/10/22), VMFXX is yielding about 35 basis points more than the Cash Deposit sweep.

I don’t know if this new cash sweep option is in response to consumer demand, or if it will serve as a profit source for Vanguard. I’m sure that some people out there will prefer having FDIC insurance, even it means less interest income. (Be sure not to exceed the FDIC limits at any of the partner banks, such as having separate account held there.) For now, I’ll pass. If the Cash Deposit sweep does start earning a lot more, I would consider switching.

If you wish to opt in to this option, you can try to check if you are “invited” by visiting the product page, clicking on “Choose Vanguard Cash Deposit”, and logging into your Vanguard brokerage account. I was also repeatedly greeted by a pop-up window upon login.

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 – August 2022 Update

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 as of August 2022, roughly sorted from shortest to longest maturities. We all need some safe assets for cash reserves or portfolio stability, and there are often lesser-known opportunities available to individual investors. 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 8/2/2022.

TL;DR: 4% APY on up to $6,000 for liquid savings at Current with no direct deposit requirement. MyBankingDirect 2.20% APY liquid savings. 1-year CD 3% APY. 5-year CD 3.65% APY. Compare against Treasury bills and bonds at every maturity. 9.62% Savings I Bonds still available if you haven’t done it yet.

Fintech accounts
Available only to individual investors, fintech companies often pay higher-than-market rates in order to achieve fast short-term growth (often using venture capital). “Fintech” is usually a software layer on top of a partner bank’s FDIC insurance.

  • 4% APY on $6,000. Current offers 4% APY on up to $6,000 total ($2,000 each on three savings pods). No direct deposit required. $50 referral bonus for new members with $200+ direct deposit with promo code JENNIFEP185. Please see my Current app review for details.
  • 3% APY on up to $100,000, but requires direct deposit and credit card spend. HM Bradley pays up to 3% APY if you open both a checking and credit card with them, and maintain $1,500 in total direct deposit each month and make $100 in credit card purchases each month. Please see my updated HM Bradley review for details.

High-yield savings accounts
Since the huge megabanks pay essentially no interest, I think every should have a separate, no-fee online savings account to accompany 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.

  • MyBankingDirect is up to 2.20% APY with no minimum balance requirements ($500 minimum to open).
  • SoFi is now offering 1.80% APY + up to $325 new account bonus with direct deposit. You must maintain a direct deposit each month of any amount for the higher APY. SoFi now has their own bank charter so no longer a fintech by my definition. See details at $25 + $300 SoFi Money new account and deposit bonus.
  • There are several other established high-yield savings accounts at closer to 1.50% APY. Marcus by Goldman Sachs is on that list, and if you open a new account with a Marcus referral link (from reader Paul) you now can get an extra 1.00% APY for your first 3 months.

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 (plan to buy a house soon, 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. CIT Bank has a 11-month No Penalty CD at 2.00% APY with a $1,000 minimum deposit. Ally Bank has a 11-month No Penalty CD at 1.40% APY for all balance tiers. Marcus has a 13-month No Penalty CD at 1.55% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Bread Financial has a 12-month certificate at 3.00% APY. Early withdrawal penalty is 180 days of interest.

Money market mutual funds + Ultra-short bond ETFs*
Many brokerage firms that pay out very little interest on their default cash sweep funds (and keep the difference for themselves). * Money market mutual funds are regulated, but ultimately not FDIC-insured, so I would still stick with highly reputable firms. I am including a few ultra-short bond ETFs as they may be your best cash alternative in a brokerage account, but they may experience short-term losses.

  • Vanguard Federal Money Market Fund is the default sweep option for Vanguard brokerage accounts, which has an SEC yield of 1.92%. Compare with the Fidelity Government Money Market Fund (SPAXX), Fido’s sweep option which charges a higher expense ratio and thus only offers a 1.42% SEC yield.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 2.40% SEC yield ($3,000 min) and 2.50% SEC Yield ($50,000 min). The average duration is ~1 year, so your principal may vary a little bit.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 2.37% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 2.55% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months.

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 and are fully backed by the US government. 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.

  • 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 8/2/2022, a new 4-week T-Bill had the equivalent of 2.18% annualized interest and a 52-week T-Bill had the equivalent of 3.09% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 1.38% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 1.18% 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 for electronic I bonds 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 May 2022 and October 2022 will earn a 9.62% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More on Savings Bonds here.
  • In mid-October 2022, 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). 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, as I feel the work required and the fees charged if you mess up exceeds any small potential benefit.

  • Mango Money pays 6% APY on up to $2,500, if you manage to jump through several hoops. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.
  • NetSpend Prepaid pays 5% APY on up to $1,000 but be warned that there is also a $5.95 monthly maintenance fee if you don’t maintain regular monthly activity.

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, a certain number of ACH/direct deposits, and/or a certain number of logins per month. If you make a mistake (or they judge that you did) you risk earning zero 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.

  • Porte fintech app requires a one-time direct deposit of $1,000+ to open a savings account. Porte then requires $3,000 in direct deposits and 15 debit card purchases per quarter (average $1,000 direct deposit and 5 debit purchases per month) to receive 3% APY on up to $15,000. New customer bonus via referral.
  • The Bank of Denver pays 2.00% APY on up to $10,000 if you make 12 debit card purchases of $5+ each, receive only online statements, and make at least 1 ACH credit or debit transaction per statement cycle. If you meet those qualifications, you can also link a Kasasa savings account that pays 1.00% APY on up to $25k. Thanks to reader Bill for the updated info.
  • Presidential Bank pays 2.25% APY on balances between $500 and up to $25,000, if you maintain a $500+ direct deposit and at least 7 electronic withdrawals per month (ATM, POS, ACH and Billpay counts).
  • Evansville Teachers Federal Credit Union (soon Liberty FCU) pays 3.30% APY on up to $20,000. You’ll need at least 15 debit transactions and other requirements every month.
  • Lake Michigan Credit Union pays 3.00% APY on up to $15,000. You’ll need at least 10 debit transactions and other requirements every month.
  • (I’ve had a poor customer service experience with this CU, but the rate is still good.) Lafayette Federal Credit Union is offering 2.02% APY on balances up to $25,000 with a $500 minimum monthly direct deposit to their checking account. No debit transaction requirement. They are also offering new members a $100 bonus with certain requirements. Anyone can join this credit union via partner organization ($10 one-time fee).
  • 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.

  • CFG Bank has a 5-year certificate at 3.65% APY ($500 min), 3-year at 3.55% APY, and 1-year at 2.75% APY. The early withdrawal penalty for the 5-year is 180 days of interest.
  • 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. Right now, I see a 5-year CD at 3.55% APY. 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. Right now, I don’t see any 10-year CDs available vs. 2.76% for a 10-year Treasury. Watch out for higher rates from callable CDs where they can call your CD back if interest rates rise.
  • 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 7/5/2022, the 20-year Treasury Bond rate was 3.22%.

All rates were checked as of 8/2/2022.

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 $750 New Deposit/Transfer Bonus, 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.

Updated. 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 $750 for moving “new money” or assets over to them from another brokerage firm. Here’s an overview along with my personal experience as I’ve had an account with them for a few years now.

Cash bonus. 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.

Fund your account with at least $5,000 in qualifying net new assets within 45 days of account opening. Assets transferred from other accounts at Bank of America, MLPF&S, Bank of America Private Bank, or 401(k) accounts administered by MLPF&S do not count towards qualifying net new assets.

After 90 days of meeting the funding criteria, your cash reward will be determined by the qualifying net new assets in your account (irrespective of any losses or gains due to trading or market volatility) as follows. This specific offer is better than the standard offer:

  • $50 bonus with $5,000 to $19,999 in new assets
  • $125 bonus with $20,000 to $49,999 in new assets
  • $200 bonus with $50,000 to $99,999 in new assets
  • $350 bonus with $100,000 to $199,999 in new assets
  • $750 bonus with $200,000 or more in new assets

Fine print:

For purposes of this offer, qualifying net new assets are calculated by adding total incoming assets or transfers (including cash, securities and/or margin debit balance transfers) from external accounts, and subtracting assets withdrawn or transferred out of the account within the preceding 24 weeks.

Your one-time cash reward will be deposited into your IRA or CMA within two weeks following the end of the 90-day period.

This offer includes both IRAs and regular taxable (CMA) accounts, including robo-advisor and human advisor 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 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 account 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! 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.)

The features for the account itself seem like most other online brokerages. Unlimited commission-free online stock, ETF and options trades (+ $0.65 per-contract fee). You can trade ETFs, fixed income, mutual funds, and options.

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.

BofA 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 card rewards. With the Preferred Rewards boost, you can get up to 2.6% cash back on all your purchases with the Bank of America Unlimited Cash Rewards card, or 2.6% towards travel and no foreign transaction fees with the Bank of America Travel Rewards Card. You can also get 5.2% cash back on the first $2,500 in combined grocery/wholesale club/gas purchases each quarter with the Bank of America Customized 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 am not an active trader and only make about 10-15 trades a year, but 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 with Preferred Rewards 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 $750 if you move over new 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.

CIT Bank Promo: Deposit $15,000+, Get 1 Year Amazon Prime Membership ($139 Value) + 11-Month No Penalty CD 2.00% APY

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

Update 2: CIT Bank also has an 11-month No Penalty CD at 2.00% APY as of 7/28/22. The benefit the No-Penalty CD is that your rate can’t go back down (as it could with a savings account), but you can still close it if rates keep going up. Here’s how to open a new No Penalty CD and fund it using your old one if the rate rises, all within CIT Bank.

In addition, the CIT Bank Savings Connect account is at 1.90% APY as of 7/28/22 and no longer requires a checking account. This Amazon Prime offer below requires $15,000 to remain in their Money Market account for the first 90 days and is much better for those first 90 days, so do it first! But afterward, know that CIT Bank has other competitive products that offer higher interest rates as well.

Update 7/28: CIT Bank has raised the rate on their free year of Amazon Prime promo to 1.30% APY, remaining competitive with the major online savings accounts plus a free year of Amazon Prime worth $139, resulting in now an estimated effective 5.01% APY for 90 days (details below). As an existing CIT Bank customer, I was able to sign up for this offer very easily and quickly. I just used my existing login and could even use an existing external linked bank account to fund. Here’s a screenshot from the last page of my initial application:

Original post (updated maths with new APY):

CIT Bank is an FDIC-insured bank (now a division of First Citizens Bank) that has offered competitive interest rate options to savers in the past including the Savings Builder and No-Penalty CDs, so you may already have an account with them.

The CIT Bank Money Market account has launched a new Amazon Prime deposit promotion: when a new or existing customer makes a deposit of $15,000 from an external funding source and keeps it there for at least 60 days, they get an additional bonus of a 1-year Amazon Prime subscription (cash value of $139). Additional details:

  • Open a CIT Bank Money Market account using the promo code AMZN22.
  • Fund your account with at least $15,000 within 15 days and keep a minimum balance of at least $15,000 for 60 days following the 15-day funding period.
  • Within 30 days following the end of the funding period, if you’ve fulfilled the requirements, CIT Bank will send you an email with your Prime membership code.
  • Yes, this works for existing Amazon Prime users. Customers who are already Amazon Prime members can use the one year of Amazon Prime to renew their membership for an additional year.
  • It appears that existing CIT Bank members are eligible, but you do have to open a new Money Market account (you can have more than one) and fund with “new money” outside of CIT Bank..

Bonus math. If you assume the bonus is worth $139, this is a ~0.93% bonus on $15,000. Let’s assume a minimum holding period of 90 total days, which makes it the equivalent of ~3.71% APY annualized. The bonus is on top of the standard interest rate, currently a competitive 1.30% APY as of 7/28/22. This total of roughly 5.01% APY over 90 days makes it a great short-term rate at that balance size when compared to my latest update of best interest rates. CIT Bank also has a decent history of offering competitive products and promotions on their savings account and CD products.

I plan on grabbing this year of Amazon Prime – I already have accounts at CIT Bank and I already have idle liquid cash elsewhere sitting at effectively the same base APY. Nice to see another bank itching to gather deposits.

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 Free Museum Tickets Nationwide 2022 Dates

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The next eligible Museums on Us weekend is August 6th & 7th. Bank of America is running their Museums on Us program again for 2022, which offers debit and credit cardholders free admission to 225+ museums, science centers, and botanical gardens nationwide on the first full weekend of every month (Saturday and Sunday). Each person just needs to show their valid Bank of America or Merrill Lynch credit or debit card and photo ID for free admission.

Each individual cardholder gets ONE free general admission for themselves only, so be sure everyone with their own BofA cards brings them. If you have a BofA credit card, you may consider adding family members (of any age) as a free authorized user. Another option is to open a Kids Savings Account with no monthly fee and also comes with a debit card. You may need to open this in a physical branch.

Remaining 2022 Calendar Dates (Check specific museum for hours)

  • August 6-7
  • September 3-4
  • October 1-2
  • November 5-6
  • December 3-4

Here is the full list of participating locations. Excludes fundraising events, special exhibitions and ticketed exhibitions. One of the available museums is the Thinkery in Austin, Texas. We found it to be a fun and interactive children’s science center. The admission was $12 per person including kids (23 months and under free), which means this could have saved our family of five $60 for that one day. I’ve seen other museums on their list with $20 admission prices.

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

US Bank $400 New Checking Account 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.

US Bank has a $400 new checking promotion when you open a new Platinum, Gold or Easy U.S. Bank checking account with $25 minimum and complete the following:

  • Enroll in online banking or the U.S. Bank Mobile App within 60 days of opening your account.
  • Complete two or more direct deposits within 60 days of opening your account totaling $4,000 or more.

Must open by August 8th, 2022 and use the promo code 2022JUL. This offer may be restricted to those states where US Bank has a physical branch presence.

You may still be considered a “new” account even if you had a US Bank account years ago:

Offer is not valid if you or any signer on the account has an existing U.S. Bank consumer checking account, had a U.S. Bank consumer checking account in the last two years, or received other U.S. Bank bonus offers within the past two years.

The most basic option is the Easy Checking account, which has a $6.95 monthly fee which that is waived with any one of the following:

  • Your combined monthly direct deposits total $1,000 or more.
  • You keep an average account balance6 of $1,500 or more.
  • You are age 65 or greater.

All in all, a relatively straightforward checking promotion with decent bonus size. Good potential Project Free IRA fodder. Worth a look if you are in their geographic area.

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.

Free IRA Contribution Goal Progress 2022 Q2: $3,687 in Bonuses So Far!

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Mid-year 2022 update. Each year, I have a side goal of earning the equivalent of the maximum annual IRA contribution limit of $6,000 using the profits from various promotions alone. In 2021, I reached $5,592 in bonuses and $2,500+ in extra interest. If you had put $6,000 into your IRA every year for the recent 10 year period (2011-2020) and invested in a simple Target Date retirement fund, you would have turned small deals into a $100,000+ nest egg. That’s worth repeating: An extra hundred grand has been the real-world result of regularly investing $500 a month for 10 years! A couple could double these numbers.

via GIPHY

Ground rules: Real-world results for one real person only. Following with My Money Blog tradition, this will track my personal, real-world results. It would be quite easy to list a bunch of random promotions that add up to $6,000, but these will be promotions that I personally sign up for and complete the requirements (even though I’ve already opened so many bank accounts, credit cards, and brokerage accounts over the years). I will track my individual results only, although my partner does also participate on a more selective basis. Nearly all of them have been documented in real-time in the Deals and Offers category, Top 10 credit cards list, and brokerage bonus list:

2022 bonuses and promotions (so far)

The total tally is currently $3,687, which is 61% of the $6,000 annual IRA contribution limit. I am leaving out any bonuses that are in progress but haven’t posted yet. 55% of the year has passed, which means I am a tiny bit ahead of pace to reach my goal by the end of the year.

I don’t do every deal, and it has been harder to find credit cards for which I am eligible that offer points that I can use in the foreseeable future. I’m sure there are many opportunities that might be valuable to you, that wouldn’t work for my travel patterns or personal preferences. For those new to this hobby, I would first grab the low-hanging fruit like the Chase Sapphire Preferred.

These numbers ignore higher bank interest APYs from switching banks or buying savings bonds. They also ignore ongoing credit card purchase rewards like 2% to 2.6% cash back on all credit purchases (or airline miles or hotel points) and 5% cash back on specific categories.

This is an enjoyable and profitable hobby for me, but I don’t like to waste my time either. I look for a solid return based on the time commitment required. I tend to avoid speculative bets on magic ponzi boxes backed by other magic ponzi boxes, bonuses that are hard to convert to real money and/or things I already buy otherwise, and anything that requires driving to stores where things may or may not be in stock. The deals that I post usually last at least a few days, but it’s a bit like value investing where you have to be ready to take decisive action when an opportunity shows up, because they won’t last forever. The big deals this quarter were the Citi Premier offer worth $800 (still live, but a limited-time offer) and SoFi Personal Loan deal worth $600 (only lasted less than a week).

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.

Reader Question: Buying Individual Corporate Bonds on Secondary Market At 6% APY?

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 a good question from reader Elizabeth in response to yesterday’s post about buying Treasury bonds on the open secondary market:

One thing I’m interested in is on that same table you shared – Corporate bonds rated BBB are around 6% for 5 years. Can you write about this? What are the pros and cons?

Here’s my thought process. Yes, us “retail” investors can also buy individual corporate bonds via major brokers with a fixed income desk like Fidelity. (Bond trading is rare on newer trading apps like Robinhood.) The bonds are judged by various rating agencies and usually separated by their grading. Right now, I see a Moody’s BAA3-rated corporate bond with 5 years left until maturity paying 6.78% interest (click to enlarge):

However, corporate bonds are not within my circle of knowledge. The special thing about every single US Treasury bond is that they are all fully-backed by the US government. Same with an FDIC-insured bank CD or NCUA-insured credit union certificate. It’s like comparing all 16 oz. jars of JIF brand peanut butter; I know all of them are the same, so I can just buy on price.

Once you venture into the world of corporate bonds, things get a lot more complicated. There is wide range of potential credit risk from the issuing company. If the company fails, you may not receive your initial principal back. There is call risk from callable bonds where the issuer can redeem your bond early (to their benefit), not to mention several other early redemption wrinkles like “make whole call”, “sinking fund protection”, and “special optional redemptions”.

Baa3 and BBB- rated bonds are still technically “investment-grade”, but they are just one notch above “below investment-grade”, aka “junk”, aka “high-yield” bonds. Here is a quick table of bond ratings from Investopedia:

If take a closer look at the available bonds above, you’ll see that only one bond is paying over 6.7% and it doesn’t even have an S&P rating, which means there might be something funny going on. The rates quickly go back down to the 5.XX% range.

Do I know why one bond has to pay 6.7% interest rate to entice a buyer, while another one only has to offer 4.8%? I must admit that I really have no idea.

Bonds are for safety. In addition, I should remember my reason for holding bonds. They are my safety blanket. They are my next 10 years of expenses that are guaranteed to be there even if bad things happens. What if Russia bombed a NATO country tomorrow? The US would be obligated to go to war. China might then feel that it has to back Russia. Who knows. Hope for the best. Prepare for the worst.

My goal with bonds is to maximize yield without sacrificing safety.

Stocks are for growth and upside potential. Let’s take the bottom bond highlighted – an Ally Financial corporate bond paying 5.6% yield for the next 5 years. Ally Bank is familiar to me, and I am a longtime customer. Why not buy that bond? Well, if I bought that bond, the most that it will ever pay me back is the bond face value and interest. Worst case is still that Ally goes bankrupt and I lose all or most of my entire investment and end up with zero. This has happened, and to much larger companies than Ally.

Up to 6 days before their eventual collapse, Lehman Brothers had an A investment grade rating. The eventual recovery on their bonds was 21 cents on the dollar.

However, I could also buy Ally Financial stock (ticker ALLY). Right now, it is trading at only a 4.72 P/E ratio and is even paying a dividend yield of 3.54%. Five years from now, I could be sitting on a +50% or +100% or +200% total return. In other words, if you want to take on risk for a higher return, you are competing with stocks. There is ongoing debate about the inclusion of high-yield bonds in a portfolio, but I prefer to take risks with stocks and keep my bonds as safe as possible.

Consider a low-cost, diversified mutual fund or ETF. The benefit of holding riskier corporate bonds inside a mutual fund/ETF is that any one corporate bankruptcy won’t wipe you out. You can be diversified across hundreds of companies. Now, you can’t control the maturity as tightly, you’ll still lose some yield to management costs, and you’re still subject to interest rate risk. If you own the Vanguard Total Bond Market ETF (BND) or any Vanguard Target Retirement Fund, you already own corporate bonds inside a fund.

If I had to buy corporate bonds and wanted a stream of higher income without a reckless amount of credit risk, I would consider the Vanguard High-Yield Corporate Fund Investor Shares (VWEHX, $3k min) or Vanguard High-Yield Corporate Fund Admiral Shares (VWEAX, $50k min). VWEHX has a 0.23% expense ratio and a 30-day SEC yield of 6.71% as of 07/18/2022. VWEAX has a 0.13% expense ratio and a 30-day SEC yield of 6.81% as of 07/18/2022.

You are buying a basket of nearly 700 bonds that straddle the line between investment-grade and below investment-grade. This is a bond fund that I would own for the income stream, not if I needed the entire amount in cash soon as it can drop quite a lot during times of market stress. The expense ratio on this Vanguard fund is much lower than the industry average. Just a suggestion for further research. I don’t own this fund. In fact, I don’t own any corporate bonds at all.

Hope that helps!

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.

[Step-by-Step Guide] How To Buy Treasury Bonds on Secondary Market From Fidelity Brokerage

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.

Fidelity fixed income page screenshot

Here is quick walkthrough from buying a (roughly) 1-year Treasury bond on the secondary market via my Fidelity brokerage account. Please note that I am not a professional bond trader nor a tax professional, and I won’t be able to cover every detail. I maintain part of my portfolio bond allocation in roughly a 5-year bond/CD ladder, comparing and buying the top rate amongst US Treasuries, bank CDs, and credit union certificates across the country as they are all fully-backed by the US government. This guarantees that every year, at least 20% of it is liquid and available in adverse conditions like job loss.

Treasury bonds vs. certificates of deposit. First, you’ll want to compare your Treasury bond effective yield against bank CD rates. At the time of this writing, 1-year Treasury was at ~3.10% while the top brokered 1-year CD was at 3% APY. Due to my local/state tax situation, the after-tax Treasury bond rate was comparable to a 1-year bank CD paying ~3.50%. Right now, the Treasury bond safely wins if held inside a taxable account.

New issue available? For example, if today was 7/15/2022 and I wanted to buy a new 52-week T-Bill from TreasuryDirect or Fidelity, I would look at the official auction schedule see that the next available date for a 52-week T-Bill is on Thursday 8/4/2022 to place an order, 8/9/2022 auction date, and 8/11/2022 settlement date. I have no idea what interest rates will be like then, and for my purposes I wanted to lock in now.

Buying secondary Treasuries on Fidelity. To buy bonds on Fidelity, you must log into your brokerage account and navigate to the “Fixed Income” section, where they will show a quick overview of current rates across roughly 75,000 fixed income investments from brokered CDs to high-yield corporate bonds. (See image at top of post. Click to enlarge.)

Next, click on the “Bonds” tab > US Treasury bonds > Secondary market. This narrows it down to about 578 bond CUSIPs. This search and trade was completed 7/15/2022.

Since I want a Treasury bond with only one year left until maturity, I set the filter for a maturity date between July 2023 and July 2023. That should narrow it down to only 5 bond CUSIPS. Let’s take a look at them (click to enlarge):

These are all “used” bonds that have already been issued and been paying someone else interest at their own rate. The market will adjust the price of these secondary bonds so that everything with a similar maturity ends up paying relatively close to a current “market” rate. Most of these started out paying really low interest rates, so right now you’ll often be buying them at a discount to their face value. (When interest rates go up, prices for existing bond go down since their interest payouts are lower.)

If you hold two bonds with the same “yield to maturity” all the way until it matures and pays you back the principal, you should end up with the same amount of gain at the end even if it is split differently between interest income and capital gain. (If you buy at a discount and have years left until maturity, a pro-rated portion of the discount is reported as income every year until maturity.)

Note that these price quotes are separated into “bid” and “ask”. Bid is what folks are offering to pay, and ask is the price at which folks are offering to sell. There is a spread between them because if there wasn’t, they would have matched up and sold. For example, someone might offer to sell at an effective 3.09% yield, with another offering to buy at 3.14% effective yield.

I’m a small fry, so I just pay attention to the “Ask” and the minimum quantity. Sometimes the offered price looks good but requires you to buy $500,000 of it! (1 bond = $1,000 face value.) Also, the prices are like stocks and fluctuate constantly, so don’t anchor yourself to any specific number. I might wish I could get that 3.20% I saw the day before, but that rate may or may not come back during my buying window.

When you’re ready, you can place a limit order. This lets you set a maximum price you’ll be willing to pay (and thus minimum yield). For example, I chose this Treasury bond that began life as a 5-year bond on 7/31/2018 and matures on 7/31/2023 with an annual coupon of 2.75%. I offered a price of 99.652 each, which guarantees me a minimum effective yield of 3.09% (exempt from state and local taxes). I recommend always using a limit order, just in case.

A note on commissions. Fidelity does not charge a commission (or mark-up) on secondary US Treasury bond purchases if performed online. There is still the indirect cost of the bid/ask spread, but that is more of a concern if I was to sell. I believe that Fidelity has close enough to the best order fill available to an individual investor. I haven’t compared them in detail, but be aware that others may charge a mark-up.

My order was successfully filled at $99.652, which means for 10 bonds with $10,000 face value, I paid $9,965.20 for the bonds plus a little more for any accrued interest. US Treasury bonds are not callable and the interest is paid semi-annually. My next interest payments (at the old bond’s lower 2.75% rate) will be on 7/31/2022, 1/31/2023 and 7/31/2023 with the full return of $10,000 face value at maturity. Again, based on my local/state tax situation, my after-tax interest will be comparable to a 1-year bank CD paying 3.50% APY. This compares well to the best available rates on cash right now.

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 Fintech App Review: $100 Cash Bonus via Referral, 1.00% APY on Savings

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

Bonus back up to $100, savings account 1.00% APY. Chime is a popular fintech app with a $100 cash bonus (up from $50) 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 $100 referral link. Thanks if you use it! It’s a very simple bonus. Here is a screenshot of my bonus (when it was only $50) appearing nine minutes after my direct deposit:

Here is the fine print:

In order for the referring Chime member (“Referrer”) to qualify and receive the $100.00 referral reward and $10.00 temporary SpotMe Bonus Limit increase, and for the referred person (“Referred”) to qualify and receive the $100.00 referral reward, all of the following conditions must be satisfied: (1) Referrer meets SpotMe eligibility requirements and is part of the SpotMe Referral Incentive referral reward campaign; (2) Referred has not previously opened a Chime Checking Account (“Account”); (3) Referred opened a new Account between January 1, 2022 and December 31, 2022; (4) Referred opened the new Account using the Referrer’s unique referral link; (5) Referred received in the new Account a Qualifying Direct Deposit within 45 calendar days of opening the Account; and 6) Referred activated their physical Chime Visa Debit Card within 14 days of receiving a Qualifying Direct Deposit. A Qualifying Direct Deposit is a deposit of $200.00 or more by Automated Clearing House (“ACH”) that comes from your employer, payroll provider, gig economy payer, or benefits payer OR a deposit by Original Credit Transaction (OCT) from your gig economy payer. Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be legitimate are not Qualifying Direct Deposits.

Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.

Why is Chime so popular? Chime is the second-most popular online-only bank in the US (only behind Ally) with over 13 million customers and a recent valuation of $25 billion as of September 2021. 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.

Savings account at 1.00% APY. Once you open the main Chime checking account, you can also open a separate savings account that pays a competitive (but not outstanding) 1.00% APY. No minimum balance and no monthly fees on the savings account, either.

Chime has the most of other bank stuff as well. Debit card. Paper check deposit via mobile app. 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.

Added: I am able to deposit and withdraw fund via Ally Bank push/pull. Your routing number and account number is available openly in the app under “Move Money > Direct Deposit”. My routing number is 103100195, which ABA.com confirms as Stride Bank, NA. based in Enid, Oklahoma.

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 $100 bonus available via referral link and a no-minimum savings account paying 1.00% APY.

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.

Treasury Bond vs. Bank CD Rates: Adjusting For State and Local Income Taxes

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.

If you are an individual investor that usually buys bank certificates of deposit, right now you may want to compare against a US Treasury bond of similar maturity. Treasury bond rates are traded constantly, but this Vanguard brokered CD page can provide a rough idea if they are worth a closer look (even though their brokered CD may or may not be the best CD rate available). Again, this screenshot is already out of date:

Right now, they are pretty close for many maturity lengths. For example, let’s take a 1-year CD paying 3% APY and a 1-year Treasury bond paying 3%.

(Note: This may not be true by the time you read this. Here are the current Treasury bond rates. In the last two weeks alone, the 1-year Treasury has ranged from 2.79 to 3.21%. In 2022 alone, the low was 0.38%.)

An important consideration is that Treasury bonds are exempt from state and local taxes. This can make the Treasury bond significantly more attractive to some folks, even if the initial rate is the same. This assumes you are investing in a taxable account (not tax-sheltered). US Savings bonds are also exempt from state and local taxes.

For example, let’s say you are a single resident of California with a taxable income of $80,000 annually. Any easy way to compare the rates is by using a calculator like this Fidelity tax-equivalent yield calculator. Using the example income, it will find that your marginal tax rates are 22% Federal and 9.30% State (CA). I am assuming no local tax rates from your city or county.

What matters in the end is what you are left with after taxes. As such, the calculator supplies the following chart:

For this example person, a Treasury bond earning 3% will pay the same after-tax interest as a bank certificate of deposit paying 3.44%.

Here is a rough check on my part:

$10,000 * 3.44% * (1 – 0.22 – 0.093) = $236 in annual interest, after taxes

$10,000 * 3.00% * (1 – 0.22) = $234 in annual interest, after taxes

I suspect the minor difference has to do with the way that bond yields are quoted for Treasury bonds. This is also why the corporate bond yields are different from the CD yields even though they are subject to the same taxes.

Bond yields, except CDs, are assumed to be twice the semi-annual yield, as is the normal convention for quoting bond yields. CD yield is calculated as ((( corporate bond yield / 2) +1)² ) – 1

From the calculator fine print:

The calculator does not take into account:

– Reductions and limits on federal itemized deductions
– State and local taxes are not deducted from your federal tax rate. Depending on your personal situation, this may cause the resulting yield to be overstated.
– Federal alternative minimum tax (AMT)
– State alternative minimum tax
– Intangibles taxes levied by individual states
– Net Investment Income Tax
– Additional Medicare Tax

For practical purposes, I don’t sweat the minor differences. In order to actually buy many of these Treasury bonds at the time that you want and for the remaining maturity length that you want, you’ll have to buy them on the open secondary market. The available rates will change by the minute. Or, if you buy them as a new issue, you won’t know the rate at all as it is determined at auction. I mostly just want to know that the Treasury bond is preferable to a bank CD by an adequate margin. In this example, I would say that 0.44% higher annually is enough of a margin.

There are other wrinkles… if you don’t hold to maturity, Treasury bonds don’t offer the ability to withdraw early and only pay a preset interest penalty like a bank CD. You’d have to sell again on the open market, where you may lose (or gain) principal.

Armed with this information, you might create your own bond ladder using US Treasuries instead of a CD ladder. This is easy for an individual investor because you don’t need any skill to determine creditworthiness. Both US Treasury bonds and FDIC/NCUA-insured certificates of deposit are backed by the full faith and credit of the US government. (Municipal bonds don’t come with such a guarantee. Some municipalities are in better financial shape than others. I don’t buy individual municipal bonds for this reason.)

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.

Fidelity Bloom App: Fintech Feel from Traditional Name ($50-$86 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.

Fidelity Bloom is a new financial app from Fidelity Investments targeted at helping young adults become more financially aware and develop better savings habits. The app is currently iOS only, Android “coming soon”. Fidelity has included many “behavioral pyschology” features from other fintech startup apps like a match on savings transfers, debit card cash back rewards, rounding up purchases and saving the difference, and shopping portal cashback. There are also $86 in total bonuses available:

  • $50 new Bloom app user bonus. Open a new Bloom account via app (iOS only currently) and fund it with $25 and get $50 into your Bloom Save account. Must open via app; use the QR code. Valid for both new and existing Fidelity brokerage customers.
  • Annual savings match. Through the end of 2022, new customers will receive an introductory 10% match on the first $300 saved into their Bloom Save account ($30 max for 2022). Standard annual match is 5% on first $300 saved ($15 max for 2023).
  • 10 cents from Fidelity with every debit card purchase. Fidelity will automatically deposit 10 cents into the Fidelity Bloom Save account every time customers use the Fidelity Bloom debit card. Reminds me of the Citi Rewards+ credit card. New users get a upfront $1 bonus for learning about this feature for a limited time.
  • Automatically round up purchases into savings. Customers can automatically round up5 purchases to the nearest dollar and have the difference moved to savings from their Fidelity Bloom Spend to their Fidelity Bloom Save account.
  • Up to 25% cashback through shopping portal. Receive up to 25% cash back into your Fidelity Bloom Save account when you shop in-app with 1,100+ participating retailers. New users get a upfront $5 bonus for learning about this feature for a limited time.

Interest rate? Is it a bank account? Is it a brokerage account? It’s a SIPC-insured brokerage account:

The Fidelity Bloom App is designed to help with your saving and spending behaviors through your Save and Spend accounts, which are brokerage accounts covered by SIPC insurance. They are not bank accounts and therefore are not covered by FDIC insurance.

You do get a routing number and account number for your two accounts, but the cash is held like their other non-retirement accounts. During the sign-up process, you can pick between one of three options for your core position:

  • Fidelity® Interest-Bearing Option (FCASH)
  • Fidelity Government Money Market Fund (SPAXX)
  • Fidelity Treasury Money Market Fund (FZFXX)

Although I have confidence in Fidelity’s long-term experience and conservatism in running these money market mutual funds, the lack of FDIC coverage is something to note. The rates may change daily, but as of 7/7/2022, FCASH yielded 0.69% APY, SPAXX 7-day yield was 1.03%, and FZFXX 7-day yield was 1.03%. View current rates here.

After you open via app, you can see the account balances at Fidelity.com but you’ll still need the app to change any settings. Here’s a screenshot from my app.

Is the new boss going to be same as the old boss? If you can offer the fancy software UI backed by solid customer service infrastructure, then that will be hard to beat.

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.