Sports Betting vs. Investing: Slight Edges Adding Up in Very Different Ways

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According to CNBC, over 100 million bets were placed over Super Bowl weekend. Sports gambling is becoming more and more accepted as a casual part of the entertainment, but right now people are hiding from their spouses and partners the fact that they lost hundreds, thousands, or more. They are already planning their next bets to “just break even” and “just get back to zero” whereupon they promise themselves they will stop. But the more they bet, the deeper the hole gets.

A quick lesson on sports gambling odds. The standard odds on a basic spread bet are -110. Let’s take Super Bowl 54 as an example, where the betting line is Chiefs favored to win by 1.5 points over the 49ers. You can either bet on the Chiefs to win by 2 or more points (since 1.5 is impossible), or the 49ers to either win outright or lose by 1 point or fewer. Simple bet, only two outcomes. However, you must bet $110 in order to win $100. If you lose, you lose the entire $110. Feels very similar to a coin flip. However, the slight house edge is actually quite enormous over time.

Let’s say two people bet. $110 on one side, and $110 on the other side. One winning side will win, so they end up with $110 + $100 = $210. The other losing side ends up with nothing. The sports casino took zero risk and gets $10. $10 out of $220 is 4.5%. The casino got 4.5% of the total amount bet with essentially zero risk (the line moves to equalize both sides).

This “small” ~5% edge happens every single time, grinding you down to zero at a fast pace. If you bet $100 each time and lost $4.54 on average every bet, you’d have lost the entire $100 in 22 bets. In reality, the spread of possibilities is much wider, but with each bet, you are that much farther away from ever “breaking even” again. You keep playing, and the only inevitable result is broke. The only way to avoid catastrophe is to stop and accept the loss.

I am always disappointed when intelligent investing and gambling are confused. Here’s a timely tweet from @QCompounding:

Too many people focus on the first row above. 60% win and 40% lose? It looks too much like a coin flip. I put in money and my balance is lower after a year. Why bother?! Investing is the same as gambling, right? No! Over time, the fundamentals will win out. Investing directly in a basket of profitable companies with growing earnings is betting with the odds in your favor. Similarly, if you consistently buy real estate with conservative cashflow numbers, the odds are in your favor.

Investing with the edge in your favor adds up in a good way. The current price/earning ratio for companies in the S&P 500 index is about 20. That means if you buy $100 worth an S&P 500 ETF, that basket is earning $5 of profit every year. That $5 may be sent to you as a dividend check or used to reinvest into the business for future profits. It is a different “5%” edge”, but one that makes me excited instead as those earnings tend to keeping growing bigger over time. As you can see above, that edge adds up and will eventually overwhelm short-term market swings.

I recently read in a Warren Buffett biography that he once bought a slot machine and installed it in his house. He allowed his children to play with it, hoping that they would quickly learn a valuable lesson once their allowance kept disappearing into the machine. I wonder if that really worked.

I used to read up on various gambling strategies, but I have since personally decided to never bet on sporting events or casino games in the hopes that my children will never find interest in it. I want them to think – Why would I ever waste my time on things that virtually guarantee me to lose my hard-earned money? Instead, I hope to teach them to be excited when they see a good investment with positive expected returns.

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.

Ally Invest and Ally Bank: Access High-Yield Vanguard and Fidelity Money Market Funds

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.

Ally Invest is the self-directed brokerage arm of Ally Financial, and you may have an account from previous TradeKing and/or Zecco mergers. Ally Invest just removed their $9.95 mutual fund transaction fee, including for money market funds:

At Ally, we’re all about doing the right thing for our customers. That’s why we’re excited to share that as of February 9, 2023, we’ve eliminated our $9.95 mutual fund transaction fee.

You can access more than 17,000 mutual funds when you log in to your Ally Invest Self-Directed Trading account. Please note, other fees may still apply.

First of all, the default cash sweep for Ally Invest pays zero interest. In addition, this change may be of interest to customers who also use Ally Bank, given that their online savings account only pays 3.40% APY (as of 2/15/23). Meanwhile, here are the 7-day SEC yields (as of 2/14/23) of top money market funds:

  • Vanguard Cash Reserves Federal Money Market Fund Admiral Shares (VMRXX) – 4.51% ($3,000 min)
  • Vanguard Federal Money Market Fund (VMFXX) – 4.50% ($3,000 min)
  • Vanguard Municipal Money Market Fund (VMSXX) – 3.43% ($3,000 min)
  • Gabelli U.S. Treasury Money Market Fund (GABXX) – 4.43% ($10,000 min)
  • Fidelity Government Money Market Fund (SPAXX) – 4.19% ($100 min*)

* The Fidelity fund does not have a minimum itself, but Ally has a $100 minimum order size for online mutual fund orders.

I have gone into my Ally Invest account and manually tested all of the money market mutual funds listed above, and it let me put in the order at the minimum amounts shown. Ally Invest also does not charge a short-term redemption fee. I was able to make an instant transfer of funds from my Ally Bank deposit accounts to my Ally Invest brokerage account. Therefore, if you have an Ally Bank account and don’t want to look too far elsewhere, you may consider this option to increase the yield on your cash holdings.

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 – February 2023

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 February 2023, 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 2/12/2023.

TL;DR: 5% APY available on liquid savings. 5% APY available on multiple short-term CDs. Compare against Treasury bills and bonds at every maturity (12-month near 4.89%). 6.89% Savings I Bonds can be bought with 2023 annual limits now.

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.

  • 5% on up to $25,000, then 4% up to $250k. Juno now pays 5% on all cash deposits up to $25,000 and 4% on cash deposits from $25,001 up to $250,000. No direct deposits required. $10 referral bonus. Please see my Juno review for details.
  • 4.00% APY on $6,000. Current offers 4% APY on up to $6,000 total ($2,000 each on three savings pods). Must maintain a direct deposit of $200+ every 35 days. $50 referral bonus for new members with $200+ direct deposit with promo code JENNIFEP185. Please see my Current app review for details.

High-yield savings accounts
Since the huge megabanks STILL 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.

  • The leapfrogging to be the temporary “top” rate continues. Primis Bank at 5.03% APY for both checking and savings. All America/Redneck Bank is at 4.25% APY for balances up to $75,000 ($500 to open, no min balance).
  • SoFi Bank is now up to 3.75% APY + up to $275 new account bonus with direct deposit. You must maintain a direct deposit of any amount each month for the higher APY. SoFi has their own bank charter now so no longer a fintech by my definition. See details at $25 + $250 SoFi Money new account and deposit bonus.
  • There are several other established high-yield savings accounts at 3.40%+ APY that aren’t the absolute top rate, but historically do keep it relatively competitive for those that don’t want to keep switching banks.

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 4.10% APY with a $1,000 minimum deposit. Ally Bank has a 11-month No Penalty CD at 3.85% APY for all balance tiers. Marcus has a 13-month No Penalty CD at 3.85% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • BMO Harris has a 12-month certificate at 5.00% APY. $1,000 minimum. Early withdrawal penalty is 180 days of interest.
  • Capital One Bank has a special 11-month certificate at 5.00% APY. No minimum deposit, early withdrawal penalty of 3 months 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 4.50%. Odds are this is much higher than your own broker’s default cash sweep interest rate.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 4.33% SEC yield ($3,000 min) and 4.43% SEC Yield ($50,000 min). The average duration is ~1 year, so there is some term interest rate risk.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 4.62% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 4.62% 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 2/10/23, a new 4-week T-Bill had the equivalent of 4.61% annualized interest and a 52-week T-Bill had the equivalent of 4.89% annualized interest.
  • The iShares 0-3 Month Treasury Bond ETF (SGOV) has a 4.18% SEC yield and effective duration of 0.10 years. SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 4.11% SEC yield and effective duration of 0.08 years.

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 November 2022 and April 2023 will earn a 6.89% 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-April 2023, 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.

  • Genisys Credit Union pays 5.25% APY on up to $7,500 if you make 10 debit card purchases of $5+ each, and opt into receive only online statements. Anyone can join this credit union via $5 membership fee to join partner organization.
  • Pelican State Credit Union pays 5.11% APY on up to $10,000 if you make 15 debit card purchases, opt into receive only online statements, and make at least 1 direct deposit, online bill payment, or automatic payment (ACH) per statement cycle. Anyone can join this credit union via partner organization membership.
  • The Bank of Denver pays 5.00% APY on up to $15,000 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. Thanks to reader Bill for the updated info.
  • All America/Redneck Bank pays 4.50% APY on up to $15,000 if you make 10 debit card purchases each monthly cycle with online statements.
  • Presidential Bank pays 4.25% APY on balances between $500 and up to $25,000 (3.00% APY above that) if you maintain a $500+ direct deposit and at least 7 electronic withdrawals per month (ATM, POS, ACH and Billpay counts).
  • 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.

  • Navy Federal Credit Union has a special 15-month CD at 5% APY. Open now with just $50, but you can still add on more deposits later. You must have a military relationship to join NavyFed.
  • Sallie Mae Bank via SaveBetter has a 27-month CD at 4.85% APY. $1 minimum. Early withdrawal penalty is 180 days of simple interest.
  • Seattle Bank has a 5-year certificate at 4.70% APY ($1,000 min), 4-year at 4.65% APY, 3-year at 4.60% APY, 2-year at 4.55% APY, and 1-year at 4.50% APY. The early withdrawal penalty for the 5-year is a very reasonable 180 days of interest.
  • Lafayette Federal Credit Union has a 5-year certificate at 4.63% APY ($500 min), 4-year at 4.58% APY, 3-year at 4.52% APY, 2-year at 4.47% APY, and 1-year at 4.42% APY. They also have jumbo certificates with $100,000 minimums at even higher rates. The early withdrawal penalty for the 5-year is very high at 600 days of interest. Anyone can join this credit union via partner organization ($10 one-time fee).
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Right now, I don’t see any competitive 5-year non-callable CDs. Be wary of higher rates from callable CDs, which means they can call back your CD if rates drop later.

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 see a 10-year CDs at (none available, non-callable) vs. 3.80% for a 10-year Treasury. Watch out for higher rates from callable CDs where they can call your CD back if interest rates drop.
  • 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, currently 2.10% for EE bonds issued November 1, 2022 to April 30, 2023. As of 2/10/23, the 20-year Treasury Bond rate was 3.96%.

All rates were checked as of 2/12/2023.

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

Merrill Edge + Preferred Rewards = Up to $1,000 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 $1,000 for moving “new money” or assets over to them from another brokerage firm. The offer code is 1000PR. 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 have to worry about price changes, lost dividends, or tax consequences. Any cost basis should transfer over as well. Make a qualifying transfer and/or deposit
to your new account within 45 days and maintain your balance for at least 90 days. The fine print version:

  • You must enroll by entering the offer code in the online application during account opening or by providing it when speaking with a Merrill Financial Solutions Advisor at 877.657.3847 or at select Bank of America® financial centers. You are solely responsible for enrolling or asking to be enrolled in the offer.
  • Fund your account with at least $20,000 in qualifying net new assets within 45 days of enrolling in the offer. 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.
  • You must be enrolled in Preferred Rewards as of 90 days from meeting the funding criteria described in Step 2.
  • After 90 days from meeting the funding criteria described in Step 2, 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:
  • $100 bonus with $20,000+ in new assets
  • $200 bonus with $50,000+ in new assets
  • $400 bonus with $100,000+ in new assets
  • $1,000 bonus with $250,000 or more in new assets

This offer includes “instant” Preferred Rewards status, which does require a Bank of America checking account:

Promotional Early Enrollment in Preferred Rewards: Until May 26, 2023, when you enroll in the Preferred Rewards $1000 More Cash Offer, you consent to early enrollment in the Preferred Rewards Program. Once you satisfy the funding requirement for the offer, you will be enrolled in Preferred Rewards within 45 days based on your current balances at that time rather than the usual requirement of three month average combined balances. You also must have or open an eligible Bank of America personal checking Advantage Banking account to be enrolled in Preferred Rewards. All Preferred Rewards benefits available in the tier associated with your combined balance level will be active within 30 days of enrollment.

More 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.

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

Offer valid for new and existing individual Merrill IRAs or Cash Management Accounts (CMA) opened September 1, 2022 through May 26, 2023. 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 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 $250,000 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, as their default cash sweep pays nearly zero interest. Don’t leave too much cash there!

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 waived checking and ATM fees.

Bottom line. Merrill Edge is currently offering up to $1,000 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.

Alliant Credit Union $400 Banking Bonus ($300 For Existing)

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.

Alliant Credit Union has a new FastPass promo worth up to $400 total, broken up as follows:

  • $100 for Savings Account. Open a savings account by March 31, 2023 plus have a minimum $1000 savings average daily balance on April 30, 2023 to earn a $100 bonus.
  • $100 for Checking Account. Open a checking account by March 31, 2023 plus have a minimum $100 checking average daily balance on April 30, 2023 to earn a $100 bonus
  • $100 for Certificate Account. Open a certificate by March 31, 2023 plus maintain a minimum $1000 certificate balance on April 30, 2023 to earn a $100 bonus
  • $100 for $10,000 in total deposits. Deposit a minimum of $10,000 total across any of these three accounts by March 31, 2023 and maintain this minimum balance until April 30, 2023 to earn a $100 bonus.

Useful fine print from the promo FAQ:

Did I open my account(s) correctly to be eligible for the promotion?
If you opened your Alliant account(s) by clicking on the link within a promotional email you received or the myalliant.com/fastpass webpage, you will be eligible for the promotion.

Are current Alliant members eligible for this promotion?
Yes, current Alliant members can still be eligible by opening a checking account and/or certificate and meeting the balance requirements, and/or by incrementally adding $10,000 to their total balance by April 30, 2023.

When is the payout for the promotion?
Accounts will be reviewed after April 30, 2023 to determine eligibility. If all requirements have been met, the bonus payment you earned will automatically be deposited into your savings account within 4-6 weeks after April 30, 2023.

When do I need to make my deposit(s) to qualify for the balance requirement?
For the savings account, the deposit should be made by March 31, 2023 and maintained through April 30, 2023. For Checking and Certificate products, balance should be met by April 30, 2023. Please ensure you allow enough time to open account and receive approval (accounts may be in pending status for 2-5 business days depending on pending reason or documentation needed).

There is a mention later on that “This promotion is for new and existing members of Alliant Credit Union (“Alliant”) who are current or retired employees from one of the many businesses and organizations Alliant partners with in the U.S.” However, this conflicts somewhat with their FAQ, which suggests that as long as you apply through the correct page and use the FASTPASS promo code, you are eligible.

Alliant CU membership eligibility. Alliant CU is one of the top 10 largest US credit unions by assets and their membership eligibility is very open. If you start the online membership application, it will walk you through their various eligibility options. Here are their membership groups:

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

When I applied previously, I found not only does it only cost $5 to join Foster Care to Success, but Alliant will pay that fee on your behalf.

If you are not eligible through another option you can become a member of Foster Care to Success (FC2S) and become eligible for Alliant membership. FC2S serves thousands of foster teens across the United States, focusing on those who are aging out of the foster care system. FC2S awards grants and scholarships for higher education and provides care packages, mentoring and internships. (Alliant will pay the one-time $5 membership fee to FC2S on the member’s behalf.)

Quick thoughts. This is a solid bonus. $100 for a $1,000 deposit to a certificate is a 10% bonus. Even holding $10,000 there for a couple of months for another $100 is not bad, since it is on top of their interest rates. Their High Yield Savings pays 2.95% APY as of 2/4/23. A 12-month certificate pays 4.60% APY as of 2/4/23.

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.

Capital One 360: 11-Month CD at 5.00% APY

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Capital One 360 has a new special 11-month CD at 5.00% APY. Note that unlike many other 11-month CDs, this one does have an early withdrawal penalty of 3 months of interest, and it looks like they will eat into principal if you withdraw in the first 3 months. There are also no partial withdrawals:

Can I withdraw my money before the CD term is over?

You can always decide to withdraw your money early. However, like with any CD account, there is a penalty for withdrawal prior to the end of your CD term. For 12 month CD accounts (or less), the penalty for withdrawing early is 3 months of interest. For CD accounts longer than 12 months, the penalty for withdrawing early is 6 months of interest. You also cannot make a partial withdrawal during your CD term.

Can I lose money in a CD account?

CD accounts like a 360 CD grow at a fixed rate over a set period of time called a term. This “set it and forget it” approach, and the fact that your money is FDIC-insured up to allowable limits, make CD accounts among the lowest-risk investments and they will not lose value. The only risk of losing money is if you make an early withdrawal from your 360 CD, where you would face a penalty of 3 to 6 months of interest depending on the term of your account.

I don’t know what the future holds for interest rates, up or down, but right now it is a top rate for a CD where you are locked in for about a year. For comparison:

Thanks to the readers that sent this one in. Rates quoted as of 2/2/23.

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Project Free IRA 2022 Year-End Results: $6,259+ in Total Bonuses

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.

2022 Year-End Update. Each year, I have a side goal of earning the equivalent of the maximum annual IRA contribution limit ($6,000 for 2022) using the profits from various finance 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 (2013-2022) and invested in a simple Target Date retirement fund, you would have turned small, weekly deals into a $87,000+ nest egg.

That’s worth repeating: An extra 87 grand has been the real-world result of regularly investing $500 a month for 10 years! A couple could double these numbers.

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.

Note: I am also excluding the $900 bonus from Chase Ink Business Cash card, since it is meant for small businesses.

2022 bonuses and promotions list. The 💵 symbol means I have received and/or cashed out the bonus successfully. The ⌛ symbol means the promo is still in progress.

Bonuses that required significant assets to max out (but not necessarily participate)

2022 final results. The total tally for bonuses not requiring significant assets was $6,259 total for 2022, which was 104% of the $6,000 annual IRA contribution limit for 2022. This excludes the three bonuses (Public, SoFi, and Ally) that paid out bigger bonuses for larger asset transfers or cash deposits. I acknowledge not everyone has enough assets to max those out, but they were certainly an efficient use of time if you did. If you add in the $3,500 that I received from those bonuses, the total would be $9,759.

Additional background stuff. This is a personal challenge/game that I like to play. I enjoy trying out new apps and services. I look for the best payoff/effort ratio for my situation; your choices won’t look like my choices. In addition, some things I will skip simply because I’ve already done them. For those new to this hobby, I would first grab the low-hanging fruit like the Chase Sapphire Preferred or the Chase Sapphire Reserve and build up a nice stash of flexible Ultimate Rewards points. After that, I would recommend looking at the Citi Premier (ThankYou points), Capital Venture X (Capital One Miles), and American Express Gold (AmEX Membership Rewards points) to jumpstart your points stashes.

These numbers included fixed bonuses for short-term asset transfers, but ignore higher interest rates overall from buying US Treasury bonds or 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 or 1% or better cash back on rent.

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, bonuses that are hard to convert to real value, 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 get off your butt and take decisive action when an opportunity shows up, because they won’t last forever.

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.

Primis Bank: Premium Checking and Saving 4.35% APY (5.03% APY for Grandfathered Customers)

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Update 2/17/23: Primis announced that new customers will only get 4.35% APY. Existing customers who got in while it was 5.03% APY will be grandfathered in for the time being (duration unknown).

You were one of the first – and you deserve the best.

Thanks for being one of the first customers to take advantage of our Primis Premium Checking. You’re earning the top-notch annual percentage yield (APY) of 5.03% and we’re glad you’re here.

Soon, you may see on our website that our APY is changing to 4.35%. This will not apply to you. As an early adopter of our digital platform, you will continue to earn 5.03% APY. While our rates are always subject to change, we want to currently hold your rate at the highest level possible.

Original post:

Primis Bank is relatively unknown, but is sure to gather some new deposits with their 5.03% APY Premium checking and 5.03% APY Primis savings accounts (rate as of 1/31/23).

Premium Checking details:

  • 5.03% APY as of 1/30/23.
  • No minimum balance requirement.
  • Open with just $1.
  • Must open online.
  • Free cashier’s checks and starter pack of checks.
  • Free ATM rebates.

Primis Savings details:

  • 5.03% APY as of 1/30/23.
  • No minimum balance requirement.
  • Open with just $1.

This is notable as it breaks the 5% barrier as a non-“rewards” checking account and there are no minimum debit card usage requirements. Found via DepositAcccounts. I don’t see any maximum deposit limit on the APY either, but keep in mind that there is no rate guarantee on these checking and savings so the rate can change at any time in the future.

Added: Reader Adam says to make sure to download the “Primis Digital Mobile App” and not the other one which applies to their physical branch accounts (their two systems are currently separate). You may have issues syncing your existing bank (or Personal Capital) with Primis because they try to log into the physical branch account interface and not their online-only accounts.

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.

Vanguard Federal Money Market Fund: How to Claim Your State Income Tax Exemption

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As the brokerage 1099 forms for 2022 are coming out, here is a quick reminder for those in states with local income taxes. If you earned interest from a money market fund, a significant portion of this interest may have come from US Treasury bills and bonds, which are exempt from state and local income taxes. However, in order to claim this exemption, you’ll have to manually enter it on your tax return after digging up a few extra details.

Let’s take the default cash sweep option for Vanguard brokerage accounts, the Vanguard Federal Money Market Fund (VMFXX), which has an SEC yield of 4.29% as of 1/24/23. Vanguard has recently released the U.S. government obligations income information for 2022 [pdf] for all their funds, which states:

This tax update provides information to help you properly report your state and local tax liability on ordinary income distributions you received from your mutual fund investments in 2022. On the next page, you’ll find a list of Vanguard funds that earned a portion of their ordinary dividends from obligations of the U.S. government. Direct U.S. government obligations and certain U.S. government agency obligations are generally exempt from taxation in most states.*

To find the portion of Vanguard dividends that may be exempt from your state income tax, multiply the amount of “ordinary dividends” reported in Box 1a of your Form 1099-DIV by the percentage listed in the PDF. Note that on the IRS Form 1099-INT, there is a special Line 3 that includes “Interest on US Savings Bonds & Treasury obligations”. However, for the Vanguard funds, they report on 1099-DIV and not 1099-INT. My Vanguard 1099-INT was all zeros.

For the Vanguard Federal Money Market Fund, this percentage was 37.79% in 2022. Therefore, if you earned $1,000 in total interest from VMFXX in 2022, then $377.90 was exempt from state and local income taxes. If your marginal state income tax rate was 10%, that would be a ~$38 tax savings for every $1,000 in total interest.

Note that several other Vanguard funds have a significant percentage of dividends from US government obligations, including the popular Vanguard Target Retirement Income funds:

I don’t believe that TurboTax, H&R Block, and other tax software will do this automatically for you, as they won’t have the required information on their own. (I’m not sure if they ask about it in their interview process.) If you use an accountant, you should also double-check to make sure they use this information. Here is some information on how to enter this into TurboTax:

  • When you are entering the 1099-DIV Box 1a, 1b, and 2a – click the “My form has info in other boxes (this is uncommon)” checkbox.
  • Next, click on the option “A portion of these dividends is U.S. Government interest.”
  • On the next screen enter the Government interest amount. This will be subtracted from your state return.

In the same way, municipal bond and money market funds will usually have their federally tax-exempt interest listed on the 1099-DIV, but they should also break down their interest down to the state-specific level elsewhere. This data was provided as part of my Vanguard 1099 forms. Your muni bond interest might be 100% exempt from federal income taxes, but most states also don’t tax their own municipal bond distributions. For example, dividends from the Vanguard Intermediate Tax-Exempt Fund was roughly 15% from New York, 10% from California, and 7% from Illinois.

[Image credit – Wikipedia]

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

CreditUnion1 High Yield Savings Plus $1,000 Deposit 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.

CreditUnion1 is offering a $1,000 bonus on its High Yield Savings Plus account. This promo requires a $100,000 minimum deposit held for 12 months, so it has a limited audience, but it does provide an opportunity to understand why some of these flat deposit bonuses aren’t as great as they might seem. Thanks to the readers that sent it in. Let’s start with the fine print:

2 This is a limited time offer available only from 1.17.23 to 3.15.23 and cannot be combined with any other offers. The $1,000 bonus (Bonus) will be deposited into your CU1 High Yield Savings Plus (HYS+) account at the end of the business day on the day you open the HYS+ account by making a minimum $100,000 deposit balance of new money from a competitor financial institution to earn dividends. The $1,000 bonus will start earning interest immediately but not be eligible for withdrawal until the account has a balance of $100,000 or greater for twelve (12) consecutive calendar months from the date of opening of the HYS+ account. Bonus is considered interest and will be reported on 1099-INT. Offer may be cancelled at any time without notice. Account Closure: If the HYS+ account is closed by the member or Credit Union1 or balance drops below $100,000 within 12 months after opening, Credit Union1 will deduct the Bonus from the HYS+ account at closing.

You must deposit a minimum of $100,000 in new money and keep it there for at least 12 months. If you go below $100,000 at any time during those 12 months, you lose the entire $1,000 bonus. Therefore, this is in effect a 12-month certificate with a early withdrawal penalty.

Separately, the base interest rate of 3.75% APY currently is not guaranteed or fixed, as it is a savings account. The rate can change at any time at their sole discretion. What if the Fed lowers rates or CU1 goes through some financial struggles and they decide to make it non-competitive a few months from now? They could drop it to 0% or 1%, but you’ll still be stuck there for 12 months if you want the $1,000 bonus. Note also that the High Yield Savings Plus account is a special account that has a minimum balance of $100,000. It’s different from their “High Yield Savings” account, so they could drop one rate and not affect the others. Not saying they will, but they could.

If the savings account rate does stay at 3.75% APY and you do get the $1,000 bonus on $100,000 held for 12 months, that is the equivalent of a 1-year CD paying 4.75% APY. That is a good rate, but many other banks and credit unions have similar term CDs at similar APYs that are guaranteed. Technically, if rates rise, you could even get more, but you could also easily get less. Personally, if I’m going to be locked in, I want a guaranteed payoff in return. I would rather have a straight-up 12-month CD paying 4.75% APY.

In the end, this is not a bad offer if the term length and deposit size fits your needs, I would personally put my money elsewhere given current options due to the way the promo is structured. Hopefully it is useful as an example of the different variables that go into comparing these offers. I have been a happy CU1 customer so far and look forward to see what other special offers they come up with.

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

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

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Marcus by Goldman Sachs is offering a $100 bonus if you deposit $10,000+ in new funds into their online savings account within 10 days of enrollment at this special offer page. Valid for both new and existing customers. You must enroll by 2/15/2023 and maintain the new $10,000+ deposit for 90 days (after the end of the 10-day funding period). You then get the $100 after another 14 days. No offer or promo code required. They have done a similar promotion in past years (and it’s nice that you can keep doing it).

After enrolling, you must deposit $10,000 or more in new funds from an external account into your Account within 10 calendar days of enrollment (the “Funding Period”). The Account balance plus a minimum of $10,000 in new funds (the “Required Dollar Amount”) must be maintained in your Account for 90 consecutive days from the end of the Funding Period. The Account balance is based on the starting current balance reflected on your account at 12 am ET the day you enroll. Once the Funding Period has ended, your Account balance may not drop below the Required Dollar Amount at any point until after the 90 consecutive days have passed. You may make multiple deposits within the Funding Period to reach the Required Dollar Amount. Internal transfers do not count for purposes of this Offer.

Offer available to new and existing customers. Each customer is limited to one cash bonus under this Offer. This Offer can only be applied once to an account. If an Account has multiple owners, the Account is limited to being enrolled for this Offer under only one of the Account owners and receiving only one cash bonus. Remaining Account owners may be eligible to use another eligible Account to enroll in this Offer. This Offer may be combined with other promotional offers available to Marcus Online Savings Account customers.

New customer referral offer. If you don’t have a Marcus account yet, if you open with a Marcus referral link from an existing customer, you will get an extra 1.00% on all your balances for 3 months. Right now, that means 3.30% APY + 1.00% for the first 3 months. That’s my referral link, thanks if you use it! I’d open and get the referral offer first, and then later enroll in this $100 offer as an existing customer.

Bonus math. This is a 1% bonus on $10,000 if you keep it there for 90 days, which makes it the equivalent of ~4% APY annualized. The bonus is on top of the standard interest rate, currently 3.30% APY as of 1/20/2023. (3.40% APY for AARP members.) Rates can change, but a total of roughly 7.30% APY over 90 days makes it a great short-term rate at that balance size when compared to my January 2023 update of best interest rates. I have gotten the bonus in the past with no issues.

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

Chase Bank $900 Bonus w/ Coupon Code: Total Checking + Savings

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Chase Bank has a Total Checking + Savings account promotion offering up to $900 total for new customers that open both a checking and savings account with them along with additional specific requirements. This is a limited-time offer and significantly bigger than their usual bonus amounts. I recommend the e-mail option where you get an e-mail with confirmation subject “Your $900 coupon from Chase is here!” along with a unique 16-character coupon code. Otherwise, make sure you click on the correct online link on the $900 page to apply the proper code to your application. Current shown expiration is 4/19/2023, but it may end earlier.

The notable requirements are that you must switch over a “real” direct deposit to the checking and you’ll need a $15,000 deposit for 90 days in the savings. You enter your e-mail address, and you will get a unique code for your online application. Some of the language suggests you should reside near a physical Chase branch, but the link lets you apply online and it should work from anywhere (you will know via instant approval). If you already have a Chase credit card, the application can be pre-filled.

Chase Total Checking $300 bonus details. Checking offer is not available to existing Chase checking customers, those with fiduciary accounts, or those whose accounts have been closed within 90 days or closed with a negative balance. You must:

  1. Open a new Chase Total Checking account, which is subject to approval;
  2. Have your direct deposit made to this account within 90 days of coupon enrollment. Your direct deposit needs to be an electronic deposit of your paycheck, pension or government benefits (such as Social Security) from your employer or the government.
  3. After you have completed all the above checking requirements, [Chase will] deposit the bonus in your new account within 15 days.

Avoid monthly service fees on Total Checking when you do at least one of the following each statement period. Otherwise a $12 Monthly Service Fee will apply.

  • Have monthly direct deposits totaling $500 or more made to this account; OR
  • Keep a minimum daily balance of $1,500 or more in your checking account; OR,
  • Keep an average daily balance of $5,000 or more in any combination of qualifying Chase checking, savings and other balances.

Chase Savings $200 bonus details. You must:

  1. Open a new Chase Savings account, which is subject to approval.
  2. Deposit a total of $15,000 or more in new money into the new savings account within 30 days of coupon enrollment;
  3. Maintain at least a $15,000 balance for 90 days from the date of coupon enrollment. The new money cannot be funds held by Chase or its affiliates.
  4. After you have completed all the above savings requirements, we’ll deposit the bonus in your new account within 15 days.
  5. 0.01% effective APY as of 1/18/23, in the zip codes I checked.

Avoid monthly service fees on Chase Savings when you do at least one of the following each statement period. Otherwise a $5 Monthly Service Fee will apply.

  • Keep a minimum daily balance of $300 or more in your savings account; OR,
  • Have at least one repeating automatic transfer from your Chase checking account of $25 or more. One-time transfers do not qualify; OR,
  • Chase College CheckingSM account linked to this account for Overdraft Protection, OR,
  • Account owner who is an individual younger than 18, OR
  • Have a linked Chase Premier Plus Checking, Chase Premier Platinum Checking, or Chase Private Client Checking account.

To receive the $400 extra bonus: You must open the checking and savings account at the same time and complete all requirements above for BOTH the checking bonus and savings bonus. After you have completed all requirements, [Chase] will deposit the remaining bonus due in your new account within 15 days.

I have read no reports of a “hard” credit check, and did not experience one myself on a previous offer years ago. Note that that to receive any of the above bonuses, the enrolled account must not be closed or restricted at the time of payout.

This is the highest bonus I’ve seen for this Chase combo. Earning $900 on $15,000 in 90 days is the equivalent of a 24% annualized return. The bonuses are considered interest and will be reported on IRS Form 1099-INT.

Bottom line. Chase is offering a big bonus to try out their checking and savings accounts (a convenient account, but also one that notably pays nearly zero interest). With a total opening deposit of $15,000 in new money, you can open both accounts and avoid both monthly fees. You’ll also need to change your direct deposit (any amount). Earning $900 on $15,000 in 90 days is the equivalent of a 24% annualized return.

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.