CIT Bank Review: Platinum Savings 5.05% APY, 11-Month No Penalty CD 4.90% APY, 6-Month 5.00% APY

July 27, 2023 By Jonathan Ping 49 Comments
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.

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Platinum Savings now up to 5.05% APY. CIT Bank (not to be confused with Citi Bank) is an online-only bank that I keep open and going back to due to their multi-year history of competitive rates. They have a checking account, but their specialty is a variety of savings and CD products with high interest rates. I use their No-Penalty CD regularly for maximum optionality while maintaining a high interest rate (details below). Here are the highlights:

  • 11-Month No-Penalty CD at 4.90% APY with $1,000 minimum to open. The 11-month CD keeps a fixed rate, but has no withdrawal penalty seven days or later after funds have been received. This means (1) high rate now, (2) interest rate will never go down during the term, (3) interest rate can still go up, and (4) all funds stay fully liquid. (If you have an existing No Penalty CD that you want to close and open up a new one, please see my instructions below.)
  • (NEW) Platinum Savings Account at 5.05% APY if you maintain a $5,000 daily balance or higher. 0.25% APY if your daily balance is under $5,000. No monthly fees. If you have any other savings accounts at CIT and can meet the minimum balance, you should consider moving funds over to this account. You can also open this new account without having to open another bank or credit union account.
  • Savings Connect Account at 4.65% APY if you open with $100. No minimum balance and no monthly fees.
  • 6-month Term CD 5.00% APY, 18-month Term CD at 4.60% APY, 13-month Term CD at 4.65% APY.

Check out my rate chaser calculator to see if it makes sense for you to move money over.

New customer? Opening process overview. Here’s my review of the opening process if you are a new customer.

  • The application process was completely online. You provide the usual personal information.
  • You must submit to a credit check, but in my experience it was a “soft” pull which did not harm my credit. None of my various credit monitoring services showed it was a hard pull.
  • You may fund via (1) electronic ACH transfer, (2) wire transfer, (3) mobile check deposit via CIT Bank mobile app (iOS and Android), and (4) mailing in a paper check. There was no option for credit card funding. I picked online ACH funding and you need to provide routing and account numbers, followed by manual verification via micro-deposits after a day or two. There was no instant linking option via login information.

After deposit verification, then your funding will go through.

You have successfully verified your external account. Please allow up to 5 business days for your funds to appear in your CIT Bank account.
No further action is required for this account. Thank you!

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Existing savings or money market customer? Check your rate. If you already have an existing High Yield Savings account, it may remain at a lower interest rate than this money market account. If so, take a minute and upgrade yourself to the better interest rate. Click on “Open an Account” here, then “I have a CIT Bank account”, and then login with your username/password. You can do everything online and even fund your new Money Market account with an instant transfer from your existing Premier High Yield Savings. I wish I didn’t have to do this, but at least it literally only took a minute to complete.

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How to transfer your money from an existing No Penalty CD into an new, higher-rate No Penalty CD (or any other new account). You have the option of moving the funds (with no penalty of course) over to a new CD with a new 11-month holding period if the current rate is higher than your existing rate. Here’s the easiest way to do so:

  • Start a new online application for the 11-Month No-Penalty CD. Click on “Get Started” and sign-in as an existing CIT customer.
  • After signing in, go through the opening process but look for “Existing CIT Bank Account” under “Funding Source”. You should see a list of your existing accounts, including any No Penalty CDs. (Screenshot below.)
  • Note that online, your only option will be to have the entire CD balance (including accrued interest) moved over into the new CD. If you want a different amount, you’ll have to call CIT Bank customer service at 855-462-2652, open M-F 8a-9p ET, Sat 9a-5p ET, Sun 11a-4p ET. Press “0” for operator. Tell them you opened up a new No Penalty CD and you wish to fund it by closing out your old No Penalty CD.
  • That’s it. The online option says it will take 2-3 business days to complete. Your new accounts will show up online.

User interface. While the front-facing website is pretty slick, after you login the backend is run by Fidelity National Information Services (subdomain ibanking-services.com). This is a popular backend software system used by many smaller banks and credit unions who don’t want to create their own software from scratch. It is better than before, but remains more functional than flashy. Similar story with the iOS/Android app.

Bottom line. CIT Bank is a lean bank offering targeted products for folks looking to get higher interest rates on their cash balances. They don’t maintain physical bank branches or fancy apps. However, I have been pleasantly satisfied with their customer service on my accounts with them. Their most compelling products are their Platinum Savings accounts, 11-month No Penalty CD, and often they have a competitive rate on at least one of their Term CDs. The No Penalty CD is unique in that you are always able to move out to a higher rate, even within CIT bank itself, all while maintaining a floor if rates drop (yes, it is still possible for rates to drop!).

Filed Under: Banking, Deals & Offers, Reviews
Last updated: July 27, 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.

Upgrade Rewards Checking $150 Referral Bonus + 4.85% APY Savings

July 23, 2023 By Jonathan Ping 8 Comments
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.

Upgrade is offering a $150 bonus via referral link on their Rewards Checking Plus account (referred gets $50). You just need to setup direct deposits totaling at least $1,000 within 45 days. Note: This promo usually scheduled to end at the end of the current month, but has been getting extended a month at a time.

Good news is the account opening process was very quick and easy, literally under 5 minutes. I did not have to upload any extra documentation and I did not experience any hard credit checks. The account was open and ready the day after application. FDIC insurance through Cross River Bank.

Here are the highlights of the Rewards Checking account, if you maintain that $1,000+ in monthly direct deposits:

  • 2% cash back at restaurants, gas stations, utilities, convenience stores, drugstores, select monthly subscriptions (including Netflix, SiriusXM, Spotify, Disney Plus), and cell phone providers (including AT&T, T-Mobile, Verizon Wireless, Cricket Wireless). Maximum of $500 in 2% rewards per calendar year.
  • 1% cash back on everything else. (unlimited)
  • No minimum balance, no monthly fees (even without direct deposit).
  • ATM fees rebated when charged by another institution for debit card withdrawals in the United States, up to five times per calendar month.
  • Can fund up to $500 instantly via debit card. Some of you may have debit cards that earn rewards.

An “Eligible Direct Deposit” is a recurring deposit to your Account by Automated Clearing House (“ACH”) from your employer, payroll, or benefits provider, or gig economy payer OR a deposit by Original Credit Transaction (“OCT”) from your gig economy payer. One-time direct deposits, including tax refunds, bank ACH transfers, bank verification or trial deposits, peer-to-peer transfers from services, such as PayPal or Venmo, merchant transactions, mobile check deposits, and cash loads or deposits are not Eligible Direct Deposits.

You can also add on their Performance Savings account with the following features, again with $1,000+ in monthly direct deposits into the Rewards Checking Plus:

  • 4.81% APY (lower APY without the direct deposits)
  • No minimum balance, no monthly fees (with or without direct deposits).

A straightforward checking account promotion that doesn’t incur a hard credit check, nor a large number of debit card transactions, nor require joining any partner organizations. Perfect if you can switch over and/or split direct deposits easily. Gig economy payments count.

Another drop in my 2023 IRA challenge bucket.

Filed Under: Banking, Deals & Offers
Last updated: August 23, 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.

Milli Savings Account Review: 5.25% APY (App Only)

July 20, 2023 By Jonathan Ping 15 Comments
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.

Milli is a new app-only savings account that is backed by the FDIC insurance of First National Bank of Omaha (FNBO). iOS and Android apps available. They came out of the gates at 5.00% APY but recently raised to 5.25% APY. Here are the highlights:

  • 5.25% APY as of 7/20/23
  • No monthly fees, no minimum balance required.
  • Ability to split money into multiple “Jars”.
  • App-only. Currently requires iPhone iOS 15.0+, or Android OS 8.0+.
  • Uses the Allpoint ATM network of 55,000 surcharge-free ATMs worldwide.
  • No paper checks. No checkwriting ability. No mobile check deposit.

For you rate chasers. this puts Milli newly at the top for a liquid savings account after my July 2023 interest rate update. We’ll see how long it lasts.

If anyone remembers FNBO Direct, that is still around at 3.75% APY. So there is a history of FNBO going trendy and grabbing some deposits with a competitive APY for a while. The term “online savings account” is now redundant. The new thing is app-only.

Reading through the various app reviews, the most common complaint seems to be getting denied for a new account after going through the whole application process and/or difficulty funding the new account. So be prepared for some account-opening hurdles.

Filed Under: Banking, Deals & Offers
Last updated: July 21, 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.

5.51% APY CDs, 5.30% APY No-Penalty CDs, 5.26% APY Savings via Raisin (Formerly SaveBetter)

July 20, 2023 By Jonathan Ping 16 Comments
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 rates. Raisin (formerly SaveBetter) is a financial marketplace that allows you to access high-interest certificates of deposit and savings accounts from multiple different banks and credit unions without having to open up a new account at each one. Every participation institution is either FDIC-insured or NCUA-insured. The participating banks, product terms, and interest rates change regularly. SaveBetter is now Raisin, to better match the same popular service that runs in Europe. Here are the top Raisin offers as of 8/24/2023:

High-Yield CDs

No-Penalty CDs

  • Up to 5.30 APY for a 4-month No Penalty CD. No early withdrawal penalty. Withdrawals may be made 30 days after opening.
  • View all available rates

Liquid Savings

  • 5.26% APY Savings Account. Minimum opening deposit is $1. No limit on number of transactions.
  • View all available rates

Background on Raisin. Raisin is a marketplace for partner banks and credit unions looking to promote their deposit products. They offer liquid savings account, No-Penalty CDs, and High-Yield traditional CDs. Funds are held in a custodial account at the bank or credit union that is providing your selected savings product(s). The banks are all FDIC-insured and the credit unions are all NCUA-insured. Raisin does not charge any monthly maintenance fees. Raisin’s US operations are a subsidiary of Raisin GmbH, a German financial company that also offers high-interest deposit products across Europe.

The benefit for the consumer is that you can easily access promotional rates at a new bank or credit union without having to open yet another new account (and endure credit checks, identify verification hurdles, join partner organizations, leave funds in share savings accounts, etc). This makes it easier to chase higher savings accounts and CD rates. You must link a single external bank account and make all your deposits and withdrawals electronically through that linked account. You can only have one external bank account linked at a time, so choose carefully.

A drawback is that you do not get direct access to your Raisin sub-accounts via routing number and account number. You must go through the Raisin site to open accounts, make deposits, and make withdrawals. Your single linked external bank is your only access to Raisin, so in a way I mentally name it also as my “Raisin bank account”. Here is a simple illustration I made that helps me visualize this setup:

Here are some more details from the Raisin site:

5. What is a custodial account and how does it work?
Custodial accounts are involved in how Raisin directs the money transfers from customers to the banks and credit unions holding their savings. When a customer makes a deposit through their Raisin account into a savings product offered by a given financial institution, the funds move from the customer’s external bank account (also referred to as the reference account) to an omnibus custodial account held by Lewis and Clark Bank (functioning in the role as a custodian bank) at the financial institution offering the savings product.

6. How does pass-through deposit insurance work?
Although Raisin customers’ deposits are pooled in omnibus accounts, there is no impact on the eligible deposit insurance coverage you receive from the financial institution holding your savings. This is because the government entities providing federal deposit insurance — the FDIC for banks and NCUA for credit unions — permit pass-through coverage. So your money that’s pooled in a custodial account still has the coverage it would have were it held in an individual account in your name.

I suspect this setup is a lower cost structure for the banks as well, which in turn allows higher interest rates. After learning about omnibus accounts, I noticed that other places like Fidelity Investments also use them in their cash sweep accounts as temporary holding accounts. Search for “omnibus” in your terms and conditions. This is also similar to how “brokered CDs” are usually managed when you buy them through a broker like Vanguard and Fidelity – the funds are pooled together at the issuing bank and don’t include individual account numbers.

Referral bonus. Many of their minimum deposits are below $1,000. But if you are new to Raisin and plan to deposit at least $5,000, you can open via a referral link and enter my personal referral code jonathanp31786. You must deposit $5,000 for 90 days to earn $25, and then additional $5 for every subsequent $5,000 deposit past that, up to a max of $125 bonus. Here’s the fine print:

Making $125 has never been so easy or rewarding. Simply enter in the code you received from your friend or family member when you sign up for an account with Raisin. Once you fund your account and maintain an initial balance of $5,000 or more for 90 days, you will earn a minimum bonus of $25 and a maximum bonus of $125 depending on the account balance you maintained after 90 days. The bonus will be paid out within 30 days of qualification. Funds will be deposited into your external bank account linked to Raisin.

Filed Under: Banking, Deals & Offers
Last updated: August 24, 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.

Why Vanguard Money Market Funds Are Still The Best

July 20, 2023 By Jonathan Ping 20 Comments
My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

The term “Vanguard effect” was coined due to the observation that after Vanguard enters an asset class with its low expense ratios, competitors are usually forced to follow and lower their expense ratios as well. However, one area where this effect not being seen is money market funds.

Part of the reason is that the megabanks are still paying basically zero, so the 4% from an average money market fund still looks great in comparison. Here’s a chart showing the nearly half-trillion dollars of bank deposits moving over to money market funds over the past year (source).

Let’s compare S&P 500 index funds. The Fidelity 500 Index Fund (FXAIX) has a tiny expense ratio of 0.015%. The Vanguard 500 Index Fund (VFIAX) has an expense ratio of 0.04%. If you assume that Vanguard is operating “at cost”, Fidelity is actually choosing to lose some money to be a little cheaper than Vanguard. If it matched Vanguard’s expense ratio, at the current size it would earn an extra $10 million. There is such a thing as “indexing skill”, but going forward you could honestly see Fidelity 500 outperforming Vanguard 500 by a slim margin.

Now let’s compare money market funds. The Fidelity Government Money Market Fund (SPAXX) has $270 billion in total assets and an expense ratio of 0.42%. This means this fund generates roughly $1+ Billion of revenue for Fidelity every year.

Meanwhile, the Vanguard Federal Money Market Fund (VMFXX) is nearly the same size at $250 billion of total assets, but only a 0.11% expense ratio. That works out to $275 million of revenue. If you assume again that Vanguard is operating “at cost”, that means Fidelity is earning an extra $800 million a year by not lowering its expense ratio to the same level.

Money market mutual funds are regulated so tightly now, especially those with “government” or “treasury” in their name, that they can pretty much only invest in the same things and thus earn the same yield. The only way that the customer earns more interest is if the mutual fund provider charges less in fees. It’s pretty much a zero-sum game.

Fidelity Government Money Market Fund (SPAXX) pays you 4.73% and pays itself 0.42%. The total yield is 5.15%.

Vanguard Federal Money Market Fund (VMFXX) pays you 5.06% and pays itself 0.11%. The total yield is 5.17%.

The pie is required to be nearly the same for both funds (same ingredients in nearly the same proportions), but with Vanguard the customer gets a much bigger slice. There is nearly zero chance that over time, Fidelity will give you a higher return on Vanguard here.

Now, there are institutional class funds with $50 million minimums that also have low expense ratios, but these are funds that Vanguard uses as their default cash sweep! I could have $100 with Vanguard and get access. The moment any capital gains, dividends, or interest payments are distributed, they are earning a competitive interest rate without any work on my part. You know what Merrill Edge pays me on my default cash sweep? 0.01%.

Vanguard published an interview with their head of taxable money market funds that covers a lot of interesting background details about money market funds: Vanguard’s Nafis Smith on the enduring advantage of low-fee money market funds. (Well, interesting to me.) Here are my highlights:

There are technically four types of money market funds (Treasury, government, municipal, and prime) and each are regulated very tightly by SEC Rule 2a-7, and even more so after the 2008 Financial Crisis.

The primary mandate of any money market fund is to seek both stability and provide current income. In a rising interest rate environment, any of these four types of money market funds—U.S. Treasury, government, municipal, and prime funds—should meet that decree. They all hold high-quality assets, are very liquid, and are subject to the same SEC regulation, Rule 2a-7, which is very prescriptive in terms of how much duration risk a fund can take on and how much liquidity must be maintained.

For example, all “government money market funds” must invest at least 99.5% of their assets in cash, U.S. Government Securities, and/or repurchase agreements that are collateralized solely by U.S, Government Securities or cash.

In terms of duration and liquidity, all taxable funds must hold at least 10% of their assets in investments that can be converted into cash within one day. At least 30% of assets must be able to be converted into cash within five business days. Finally, no more than 5% of assets can take more than a week to convert into cash.

Money market funds have only “broken the buck” (paid out less than the $1 NAV) twice, the worst case for 96 cents on the dollar.

Since their introduction in 1971, money market funds have broken the buck just two times. The first was in 1994, when a fund was liquidated at 96 cents per share because of large losses in derivatives.3 The second was during the financial crisis of 2008, because of assets held with the then recently bankrupt Lehman Brothers.4

In response to the 2008 event, the Securities and Exchange Commission amended Rule 2a-7,5 which increased the resilience of money market portfolios and made them much safer than they used to be. Since then, we’ve seen several additional rounds of reform. In short, breaking the buck was a rare event before, but since the regulations have changed, it’s even less likely to occur.

More detail on repurchase agreements and why they are more popular right now (to reduce interest rate volatility).

Fed repurchase agreements are very common in the money market space. It’s an overnight lending arrangement between us, in this instance, and the Federal Reserve, which is one of the world’s highest-quality organizations in terms of credit risk. We’re lending cash and receiving U.S. Treasuries, which are extremely high-quality securities held on the Federal Reserve’s balance sheet. The Fed buys back the U.S. Treasuries the next day at a higher price based on Fed target rates, which provides income to money markets.

In a rising interest rate environment like the one we’re experiencing, any repurchase agreements are very good at dampening market volatility because they allow us to increase stability by reducing interest rate risk. Repurchase agreements also allow us to pass along the higher interest rate to investors much more quickly.

Vanguard’s low expense ratios allows their customers to get both the highest yield AND the safest assets with a very low minimum balance requirement. This makes them the best money market funds.

Our greatest advantage is our low expense ratio, which allows us to do things differently than some of our competitors. We don’t have to take on unnecessary risk to reach for yield, and we can manage our portfolios with much shorter durations, maintain higher credit standards, and enforce stricter underwriting standards for our repurchase agreements while still offering a competitive return.

Filed Under: Banking, Investing
Last updated: July 20, 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.

$6,500 IRA Contribution Bonus Challenge: $3,804+ in Bonuses (July 2023)

July 16, 2023 By Jonathan Ping 8 Comments
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 progress on July 2023. Each year, I challenge myself to earn the equivalent of the maximum annual IRA contribution limit (up to $6,500 for 2023) using the profits from various finance promotions alone. In 2021, I reached $5,592 in bonuses. In 2022, I reached $6,259 in bonuses. I just went back and tallied up the totals so far for 2023.

I consider it a profitable hobby with serious potential if you add in some disciplined investing. 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 $104,000+ nest egg. You didn’t need to be a genius. Another example of Focus + Long attention span = Surprising results.

That’s worth repeating: An extra 100 grand has been the real-world result of playing this game and investing $500 a month in proceeds for the last 10 years! Not to mention, 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 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 100+ 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.

2023 bonuses and promotions list. The 💵 symbol means I have received and/or cashed out the bonus successfully. The ⌛ symbol means that the promo is still in progress.

If I assume that all bonuses for which I have completed the required activity will eventually post, the total tally so far is $3,804, which is 58% of the $6,500 annual IRA contribution limit for 2023. This puts me a tiny bit ahead of the right pace required to reach my goal.

This is a personal challenge/game that I like to play, and I’ve been doing it for a long time. I enjoy trying out new apps and services. 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 cash-equivalent 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.

Many things I have to 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.

Exclusions. Importantly, this list ignores the additional interest earned from otherwise optimizing my existing cash balances, as well as everyday credit card rewards like 2% to 2.6% cash back on all purchases and 5% cash back on specific categories or 1% or better cash back on rent.

I am also excluding small-business deals like big Chase Ink Business Cash card bonuses, big business checking bonuses, and so on.

Filed Under: Banking, Credit Cards, Deals & Offers, Goals
Last updated: September 14, 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.

Money Market Mutual Funds, Repurchase Agreements, and State/Local Tax Exemptions

July 13, 2023 By Jonathan Ping 3 Comments
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 live in a state that taxes interest income, you may know that can significantly alter the net after-tax yield on your investments. This is because direct U.S. government obligations like Treasury bills and bonds are generally exempt from taxation in most states. For example, if a Treasury bill is yielding 5% but is exempt from a 8% state income tax, that would make it the equivalent after-tax yield of a bank CD at 5.65% APY (assuming 22% federal tax rate). That’s a pretty big difference! See Treasury Bond vs. Bank CD Rates: Adjusting For State and Local Income Taxes for details.

Money market mutual funds (available in most brokerage accounts) usually hold part of their portfolio in securities that count as US government obligations (USGO). (See Vanguard Federal Money Market Fund: How to Claim Your State Income Tax Exemption.)

For the 2022 tax year, Vanguard Federal Money Market Fund (VMFXX) had about 38% in USGOs, but the Vanguard Treasury Money Market Fund (VUSXX) had 100% in USGOs (source). As long as the yields were pretty close, your after-tax yield would be much higher with the Treasury Money Market fund if you were in a high state/local tax bracket. (VMFXX is the default sweep though, so you’d have to manually purchase VUSXX.)

However, these USGO percentages can change from year to year, and it is happening in 2023. A quick rewind – here is a list of what is and is not exempt from state and local taxes.

*Investments in U.S. government obligations may include the following: Federal Farm Credit Banks, Federal Home Loan Banks, the Student Loan Marketing Association, the Tennessee Valley Authority, the U.S. Treasury Department (bonds, notes, bills, certificates, and savings bonds), and certain other U.S. government obligations. GNMA, FNMA, Freddie Mac, repurchase agreements, and certain other securities are generally subject to state and local taxes.

In particular, even though the Vanguard Treasury Money Market Fund has “Treasury” in its name, it doesn’t only hold Treasury Bonds. It can also hold something called repurchase agreements (“repos”). These are often sold on a very short-term basis (overnight or less than 48 hours). While a repo is considered a very, very safe loan backed by government securities, it is not itself a government security, which means the income it creates is taxable at the state and income level.

As of July 2023, here is the percentage of repurchase agreements held by these two example money market funds: 58% for VMFXX and 34% for VUSXX. This would suggest that the USGO number for VUSXX will be significantly less than 100% for 2023, although VUSXX still holds less repos than VMFXX.

For an in-depth comparison, “retiringwhen” of the Bogleheads forum has created a detailed Google Spreadsheet that tracks and calculates the after-tax yields for several different money market funds from Vanguard and Fidelity. I would point out that the low expense ratio of Vanguard funds makes their money market funds consistently better than Fidelity money market funds across the board.

I also hold some Treasury bonds directly and while laddering isn’t that much hassle, recently I have been considering simplifying to VMFXX and VUSXX as the go-to place for my liquid cash savings account. For now, the tax-equivalent yield is higher than nearly all other savings accounts due to my high state-tax situation. I am also looking at ETFs that hold mostly T-bills like SGOV and BIL.

Bottom line. If you want to be precise, the full-geek DIY investor with state/local income taxes has to take into account the percentage of repos in their money market fund portfolios in order to calculate the true tax-equivalent yield to compare against other cash alternatives.

[Top image credit – Wikipedia]

Filed Under: Banking, Investing, Taxes
Last updated: July 13, 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.

Best Interest Rates on Cash – July 2023

July 9, 2023 By Jonathan Ping 5 Comments
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 July 2023, roughly sorted from shortest to longest maturities. There are often lesser-known opportunities available to individual investors. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you could earn from switching. Rates listed are available to everyone nationwide. Rates checked as of 7/8/2023.

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.

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.

  • 5.15% APY ($1 minimum). SaveBetter lets you switch between different FDIC-insured banks and NCUA-insured credit unions easily without opening a new account every time, and their liquid savings rates currently top out at 5.15% APY from multiple banks. See my SaveBetter review for details. SaveBetter does not charge a fee to switch between banks.
  • 5.20% APY (before fees). MaxMyInterest is another service that allows you to access and switch between different FDIC-insured banks. You can view their current banks and APYs here. As of 7/8/23, the highest rate is from Customers Bank at 5.20% APY. However, note that they charge a membership fee of 0.04% per quarter, or 0.16% per year (subject to $20 minimum per quarter, or $80 per year). That means if you have a $10,000 balance, then $80 a year = 0.80% per year. This service is meant for those with larger balances. You are allowed to cancel the service and keep the bank accounts, but then you may lose their specially-negotiated rates and cannot switch between banks anymore.

High-yield savings accounts
Since the huge megabanks STILL pay essentially no interest, everyone should have a separate, no-fee online savings account to piggy-back onto 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. CFG Bank at 5.17% APY. CIT Platinum Savings at 4.95% APY with $5,000+ balance.
  • SoFi Bank is now up to 4.30% 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 4.00%+ 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 4.90% APY with a $1,000 minimum deposit. Ally Bank has a 11-month No Penalty CD at 4.25% APY for all balance tiers. Marcus has a 13-month No Penalty CD at 4.35% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Blue FCU via SaveBetter has a 9-month No Penalty CD at 5.00% APY. Minimum opening deposit is $1. No early withdrawal penalty. Withdrawals may be made 30 days after opening.
  • First Internet Bank has a 12-month certificate at 5.48% APY. $1,000 minimum. 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 losses.

  • Vanguard Federal Money Market Fund is the default sweep option for Vanguard brokerage accounts, which has an SEC yield of 5.04%. Odds are this is much higher than your own broker’s default cash sweep interest rate.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 5.43% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 5.47% 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 7/7/23, a new 4-week T-Bill had the equivalent of 5.27% annualized interest and a 52-week T-Bill had the equivalent of 5.43% annualized interest.
  • The iShares 0-3 Month Treasury Bond ETF (SGOV) has a 5.12% SEC yield and effective duration of 0.10 years. SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 4.98% 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 May 2023 and October 2023 will earn a 4.30% 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 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.

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 5.50% APY on up to $10,000 if you make 15 debit card purchases, opt into 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 $25,000 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 5.30% APY on up to $15,000 if you make 10 debit card purchases each monthly cycle with online statements.
  • Presidential Bank pays 4.62% APY on balances between $500 and up to $25,000 (3.625% 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.

  • NASA FCU has special 49-month CD at 4.85% APY and 15-month CD at 5.45% APY and 9-month at 5.65% APY. $10,000 minimum of new money. The early withdrawal penalty for the 5-year is 365 days of interest. Anyone can join this credit union via partner organization.
  • Lafayette Federal Credit Union has a 5-year certificate at 4.68% APY ($500 min), 4-year at 4.73% APY, 3-year at 4.84% APY, 2-year at 4.89% APY, and 1-year at 4.99% 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 see a 5-year non-callable CD at 4.50% APY (callable: no, call protection: yes). Be warned that both Vanguard and Fidelity will list higher rates from callable CDs, which importantly 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. 4.06% 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 2.50% for EE bonds issued from May 2023 to October 2023. As of 7/7/23, the 20-year Treasury Bond rate was 4.27%.

All rates were checked as of 7/8/2023.

Filed Under: Banking, Deals & Offers, Investing
Last updated: July 10, 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.

Oxygen Fintech App: $100 Bonus for Personal Accounts, Free LLC Incorporation for Business Accounts

June 29, 2023 By Jonathan Ping 4 Comments
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.

Oxygen is a fintech app that offers “tools and services for extraordinary entrepreneurs and business owners”, letting you have one app that easily alternates between personal and business bank accounts. Banking services are through The Bancorp Bank, Member FDIC. The app design is very modern and slick, but let’s be honest, I’m here for the features and perks.

For personal accounts, you can get a $100 bonus if you open a new account via referral link (please contact me if you’d like one) and then:

  • Receive a payroll direct deposit of $500 or more, and
  • make 5 debit card purchases within 60 days of opening an account.

The sign-up process is on the app, so you should either open the link via mobile device, or scan the QR code. The opening process was very easy and fast more me, I did not have to upload any additional scans of photo ID or similar. There was no credit check. I expect to knock out the debit card purchases quite easily between parking fees, Target Drive-Up orders, and Amazon reloads. I was able to sign-up and had my account and routing numbers in under 5 minutes. The referrer gets $100 as well for each successful referral, up to $1,000.

For business accounts, they offer a free LLC/S-Corp/C-Corp incorporation service, which can be worth $100+ as well. No special link required. Here are a few significant quotes of what they include:

  • “Incorporate your new business right from the Oxygen platform wherever you are in the US. We take care of the hard stuff, so you can focus on what matters. Building your business.”
  • “Choose between LLC, C-Corp and S-Corp. Get the setup that is right for your business type and size.”
  • “Our team of formation experts will verify your business name availability, prepare your Articles of Organization, coordinate filing all required documents with your Secretary of State, and digitally return all confirmations directly to your personalized dashboard.”
  • “Incorporation services include Articles of Organization, Federal Tax ID (EIN), one year free registered agent service, and a custom operating agreement.”

I don’t think I’ve seen free LLC formation as a “perk” before, so that is interesting.

Filed Under: Banking, Deals & Offers
Last updated: August 21, 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.

Best Interest Rates on Cash – June 2023

June 6, 2023 By Jonathan Ping 3 Comments
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 June 2023, roughly sorted from shortest to longest maturities. There are often lesser-known opportunities available to individual investors. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you could earn from switching. Rates listed are available to everyone nationwide. Rates checked as of 6/6/2023.

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.

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.

  • 5.05% APY ($1 minimum). SaveBetter lets you switch between different FDIC-insured banks and NCUA-insured credit unions easily without opening a new account every time, and their liquid savings rates currently top out at 5.05% APY from multiple banks. See my SaveBetter review for details. SaveBetter does not charge a fee to switch between banks.
  • 5.10% APY (before fees). MaxMyInterest is another service that allows you to access and switch between different FDIC-insured banks. You can view their current banks and APYs here. As of 5/1/23, the highest rate is from Customers Bank at 5.10% APY. However, note that they charge a membership fee of 0.04% per quarter, or 0.16% per year (subject to $20 minimum per quarter, or $80 per year). That means if you have a $10,000 balance, then $80 a year = 0.80% per year. You are allowed to cancel the service and keep the bank accounts, but then you may lose their specially-negotiated rates and cannot switch between banks anymore.

High-yield savings accounts
Since the huge megabanks STILL pay essentially no interest, everyone should have a separate, no-fee online savings account to piggy-back onto 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. Salem Five Direct at 5.01% APY. CIT Platinum Savings at 4.85% APY with $5,000+ balance.
  • SoFi Bank is now up to 4.20% 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 3.85%+ 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 4.90% APY with a $1,000 minimum deposit. Ally Bank has a 11-month No Penalty CD at 4.25% APY for all balance tiers. Marcus has a 13-month No Penalty CD at 4.25% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Blue FCU via SaveBetter has a 9-month No Penalty CD at 5.00% APY. Minimum opening deposit is $1. No early withdrawal penalty. Withdrawals may be made 30 days after opening.
  • CFG Bank has a 12-month certificate at 5.28% APY. $500 minimum. 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 losses.

  • Vanguard Federal Money Market Fund is the default sweep option for Vanguard brokerage accounts, which has an SEC yield of 5.04%. Odds are this is much higher than your own broker’s default cash sweep interest rate.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 5.25% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 5.36% 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 6/6/23, a new 4-week T-Bill had the equivalent of 5.09% annualized interest and a 52-week T-Bill had the equivalent of 5.23% annualized interest.
  • The iShares 0-3 Month Treasury Bond ETF (SGOV) has a 4.96% SEC yield and effective duration of 0.10 years. SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 4.75% 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 May 2023 and October 2023 will earn a 4.30% 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 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.

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 5.50% APY on up to $10,000 if you make 15 debit card purchases, opt into 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 $25,000 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 5.30% APY on up to $15,000 if you make 10 debit card purchases each monthly cycle with online statements.
  • Presidential Bank pays 4.62% APY on balances between $500 and up to $25,000 (3.625% 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.

  • NASA FCU has special 49-month CD at 4.85% APY and 15-month CD at 5.45% APY and 9-month at 5.65% APY. $10,000 minimum of new money. The early withdrawal penalty for the 5-year is 365 days of interest. Anyone can join this credit union via partner organization.
  • Lafayette Federal Credit Union has a 5-year certificate at 4.68% APY ($500 min), 4-year at 4.73% APY, 3-year at 4.84% APY, 2-year at 4.89% APY, and 1-year at 4.99% 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 see a 5-year non-callable CD at 4.50% APY (callable: no, call protection: yes). Both Vanguard and Fidelity will list higher rates from callable CDs, which importantly 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. 3.70% 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 2.50% for EE bonds issued from May 2023 to October 2023. As of 6/6/23, the 20-year Treasury Bond rate was 4.02%.

All rates were checked as of 6/6/2023.

Filed Under: Banking, Deals & Offers, Investing
Last updated: June 6, 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.

PSECU Level Up Promo: Up to $300 Checking Bonus

June 5, 2023 By Jonathan Ping 7 Comments
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.

Pennsylvania State Employees Credit Union (PSECU) has a $300 new checking account bonus that is broken up into three “levels” of $100 each. That is also my referral link as I am also doing this deal. PSECU is a digital-first credit union with a very open membership. In fact, they will cover your dues to join the required partner organization in order to qualify for membership. It’s all part of the sign-up process.

In order to take advantage of PSECU’s products and services, you must be a member of PSECU. Pennsylvania Recreation and Park Society (PRPS) members are eligible for PSECU membership. You have the option to join PRPS at the Friend level. PSECU will cover the $20 dues. To continue your relationship with PSECU, you do not need to maintain PRPS membership.

They will even cover the required $5 initial deposit into a share savings account. I did however experience a hard credit check on Experian, which is (unfortunately) common amongst credit unions. Here are the details on the bonus requirements:

$100 Checking Bonus (Level 1)

  • Become a PSECU member using promo link and promo code LEVELUP (should be automatically applied) and add a free checking account with debit card.
  • Log into digital banking (online or mobile).
  • Activate your PSECU debit card.
  • Must be completed in the first 30 days of establishing your membership.

$100 Checking Bonus (Level 2)

  • Do the above, and establish one or more qualifying payroll direct deposits that together total $200 per calendar month.
  • Must be completed within 90 days of establishing your membership.

$100 Checking Bonus (Level 3)

  • Do the above, and maintain the qualifying payroll direct deposit(s) for 90 days after initial deposit.

Full terms and conditions:

From 1/1/2023 to 12/31/2023, PSECU is running a new member incentive bonus. To receive up to $300, new members must sign up with a promotional code and satisfy each of the requirements listed below. PSECU will deposit member incentive bonus into the Regular share within 45 days after the requirements are satisfied. Promotion open to U.S. Residents who are 18 years of age or older at the time the account is opened. Limit one (1) new member Level Up bonus per tax identification number used to open a new PSECU account. You will not be eligible for the Level Up bonus if you are a current PSECU member, have closed an account within the past 12 months, or have received a previous new member incentive bonus within the past 12 months. Members who open accounts and/or loans by fraudulent, suspicious, or illegal means, including but not limited to providing PSECU with fraudulent or fabricated information, are not eligible to participate in this bonus offer. PSECU may adjust the deposited bonus or remove the deposited bonus at any time if PSECU suspects accounts and/or loans were opened by fraudulent, suspicious, or illegal means, including but not limited to providing PSECU with fraudulent or fabricated information. $5 is required to open and maintain a Regular share account. This $5 share deposit is also required to be eligible to receive the $300, and the member must be in good standing as defined by PSECU’s Bylaws Article II, Section 1. A $5 minimum share purchase will be made on behalf of the new member by PSECU. If the member account is closed within the first year of membership, the initial $5 share will be retained by PSECU. The Annual Percentage Yield on PSECU’s Regular share account is 0.50%. This variable rate is current as of 2.1.23 and may change. Withdrawals and fees may reduce earnings on the account. The recipient of the bonus (up to $300) is solely responsible for payment of applicable taxes on that amount. If you have any questions, please seek the advice of a qualified tax professional. All decisions of PSECU regarding this promotion are final. PSECU may terminate or change the terms and conditions of this promotion without notice. Subject to all applicable federal, state, and local laws and regulations.

My application process went smoothly and similar to other credit unions. I did have to upload a scan of the front and back of my driver’s license to help verify my identity (which is a good thing in my opinion) as well as answer some identity verification questions based on my credit report. The application took a couple days to process but I was able to get my account information and online access without any phone call or paperwork required. I did have to call them briefly to get my checking account number (didn’t want to wait on the free checks to arrive) in order to set up my direct deposit.

Filed Under: Banking, Deals & Offers
Last updated: June 29, 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.

Andrews FCU 7.5-Month Certificate at 5.75% APY

June 4, 2023 By Jonathan Ping 5 Comments
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.

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Andrews FCU is celebrating their 75th anniversary with a special 7.5 month certificate at a very competitive 5.75% APY. $1,000 minimum opening deposit, $250,000 maximum. Limit one certificate per membership. Early withdrawal penalty is 90 days of interest, per their Truth in Savings disclosure.

Previous short-term special term certificates have automatically been set to renew at the 12-Month share certificate rate and term upon maturity. You must manually tell them if you want to simply withdraw, be sure to do so within the grace period of 10 days after the date of maturity.

Credit union membership eligibility. From their page on membership eligibility:

Our field of membership includes Washington, DC, civilian and military personnel of Joint Base Andrews, Joint Base McGuire-Dix-Lakehurst, and military installations in central Germany, Belgium, and The Netherlands; as well as over 200 employer groups throughout Maryland, Virginia and New Jersey. We also have nationwide membership eligibility through the American Consumer Council.

As I do not live the in DC area and do not qualify otherwise, I joined the American Consumer Council (ACC), a non-profit organization dedicated to consumer education, advocacy and financial literacy. Sounds like something worth supporting! You can join through the website. I believe the cost is a one-time $8, although there is a promo code “consumer” that has worked in the past to get the membership fee waived. They will send you an e-mail shortly with your ACC membership number, which you can use to join Andrews FCU.

Note that applying for this credit union will result in a hard credit inquiry. Andrews FCU has useful promos from time to time and you may find their other financial loan products useful. I am already a member from a previous promotion.

Filed Under: Banking, Deals & Offers
Last updated: June 4, 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.

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