CBC Federal Credit Union 5-Year CD at 5.25% APY (Expired)

Posted on April 12, 2023 // 2 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

(Update: This offer is no longer available, but the credit union was very customer-friendly and did honor their rate for those that opened the account during the period when the offer was displayed on their website. You just had to call them up and ask. They are a small credit union with limited resources, and I commend them for acting honorably and in a friendly manner. The rate has now dropped, and they no longer open CDs over the phone; you must open in-branch. )

CBC Federal Credit Union is a small credit union that is offering some top certificate rates as of 4/12/23. NCUA-insured. Here are the rate highlights:

  • 5-year certificate at 5.00% APY ($500 minimum).
  • 5-year certificate with Epic Premium Checking account: 5.25% APY ($500 minimum).
  • Early withdrawal penalty for 5-year certificate is 365 days of dividends (will eat into principal if needed).
  • The rates on their 1-year, 2-year, 3-year, and 4-year certificates are also competitive, with and without the Epic Premium Checking Account.

Their Epic Premium Checking Account offers various perks including a discount on loan interest and also a boost of 0.25% to 0.50% on certain Term Share Certificate Rates. However, it does charge an $8/month fee that cannot be waived. If you close the Epic Premium checking account or it becomes inactive, then you lose the rate boost AND the interest rate on your CD might drop to the current rate. Whether the extra rate boost is worth the monthly fee and maintaining activity on the checking account depends on the amount deposited and your own preferences.

Unknown if there is a credit pull with a new membership application. This is common with credit unions, but I did not see anything come up on my credit monitoring alerts after my application. Must keep $5 minimum in Share Savings account as long as you are a credit union member. Hat tip to DepositAccounts.

Membership eligibility. Although in Southern California with only four physical branches, their eligibility criteria is actually open to anyone nationwide. You can:

  • Live, work, worship, or go to school in Ventura County
  • Participate in programs to alleviate poverty or distress in Ventura County
  • Participate in associations, businesses, or other legal entities headquartered or located in Ventura County
  • Maintain a facility located in the Ventura County
  • Have a family member that is an existing CBC member
  • Importantly… one of the eligible associations is the American Consumer Council, which you can join as part of the sign-up process and CBC FCU will cover the membership fee.

My thoughts. I wasn’t sure if I should post about this, as the last time I posted a CD deal from a smaller credit union, the rate dropped in only two days. These small credit unions usually offer up these high APYs when they have specific funding needs and then they will drop the rate once that dollar amount has been met. However, the purpose of this blog is to share what I am up to, and this is an example of a motivated individual being able to access a much better interest rate than even a billionaire hedge fund manager.

For comparison, as of 4/11/23, the 5-year Treasury bond rate is 3.54%. For retirees and semi-retirees with large cash/bond balances, this is a meaningful rate difference. I don’t know where rates will go in the future, but I like to build a ladder and this is one of the best rates for my “5-year rung” in a while.

If you wish to get in on this rate, you should act quickly and temper your expectations. It’s a good enough deal that it is quite possible that there will be enough new applications to overwhelm their limited staff. You might go through the application process, possibly take a credit pull hit, and have the rate fall before you can fund the certificate. I’m not saying this will happen, but it is possible. Of course, it is also possible that this is only the start of multiple places offering long-term 5% APY CDs.

In terms of best practices, I would recommend taking extra care when applying online and uploading a very clear picture of your photo ID. You want to avoid any hiccups that would require human intervention. If you do have to call, be polite and patient. Once you get your Share Savings account number, use it to transfer funds over online within a few days. (Some people choose to wire funds as that is instant.) Then you must call up CBC FCU and open up the certificate over the phone as an existing member with funds ready to go.

Based on their website, they appear to be using the same backend software as many other credit unions.

Filed Under: Banking, Deals & Offers //
Last updated: November 8, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

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

Posted on April 11, 2023 // 10 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

disc_osaBonus still available in 2023. Discover Bank has an ongoing deposit bonus for new customers for their online savings account. If you open a new account through this link (currently shows promo code SAVE323W2 with expiration date 5/31/23) or this link (currently shows promo code GOBP223 with expiration date 6/15/23), you can receive one of the following bonuses:

  • Deposit at least $15,000 within 30 days of opening to earn a $150 bonus, or
  • Deposit at least $25,000 within 30 days of opening to earn a $200 bonus.

This offer has been available off and on for over 5 years and is always only for first-time Discover Savings account customers, but if you haven’t grabbed it yet it’s a solid bonus.

*To get your $150 or $200 Bonus: What to do: Apply for your first Discover Online Savings Account, online, in the Discover App or by phone. Enter Offer Code GOBP223 when applying. Deposit into your account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Deposit must be posted to account within 30 days of account open date. Maximum bonus eligibility is $200.

What to know: Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded, or affinity accounts provided by Discover. Eligibility is based on primary account owner. Account must be open when bonus is credited. Bonus will be credited to the account within 60 days of the account qualifying for the bonus. Bonus is interest and subject to reporting on Form 1099-INT. Offer ends 6/15/2023, 11:59 PM ET. Offer may be modified or withdrawn without notice.

The Discover Online Savings Account has a current interest rate of 3.60% APY as of 4/11/23, which is sort of a competitive rate although not the highest available. There are no minimum balance requirements and no monthly fees. Interest is compounded daily and paid monthly.

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

I did not experience a hard credit pull when opening my Discover bank account on a previous bonus. Historically, their rates are competitive but not the rate leaders. Their overall feature set is not exceptional (average speed transfers), so it is not my primary savings account at this time. Maybe it is convenient if your primary card is the Discover It credit card?

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

Filed Under: Banking, Deals & Offers //
Last updated: April 11, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Chime Fintech App Review: $100 Simple Bonus

Posted on April 6, 2023 // 31 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Simple $100 bonus. Chime is a popular fintech app with a simple $100 cash bonus (up from $50) after a single direct deposit of $200+ within the first 45 days of new account opening. To get this offer, you must be referred by an existing user. Here is a Chime $100 referral link. Here is a screenshot of my bonus (when it was only $50) appearing nine minutes after my initial deposit:

Here is the fine print:

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

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

Why is Chime so popular? Chime is the second-most popular online-only bank in the US (only behind Ally) with over 13 million customers and a recent valuation of $25 billion as of September 2021. I learned that Chime is very attractive to those who are “unbanked” or underbanked”, those people who don’t like traditional banks due to their monthly fees and $35-a-pop overdraft charges. Instead, Chime offers:

  • No monthly fees. No minimum balance. No minimum opening deposit.
  • No credit check. No Chexsystems check.
  • Access to paycheck 2 days early. If you usually get paid on Friday, you can spend the money on Wednesday.
  • No overdraft fees, and they may even “spot” you up to $100 until you pay them back.
  • Free ATM withdrawals at 38,000+ MoneyPass and Visa Plus Alliance ATMs.
  • No foreign transaction fees.

For many folks that have a lot of activity but maintain a low balance, this fee structure is better getting 4% APY or even 10% APY. The key is avoiding those crazy overdraft charges from the big banks and also the various $2 fees hidden inside many prepaid cards. Chime’s only major fee is a $2.50 fee if you make a cash withdrawal at an out-of-network ATM. Chime earns revenue via interchange fees when you buy things on your debit card.

As I opened an account, I noticed that Chime treats you like have never had a checking account before. The sign-up is easily done completely on your phone in a few minutes. You don’t need to deposit a single cent to open. They send basic “Chime 101” emails explaining the effect of bank holidays and how to set up direct deposit.

There is no credit check, so you can have bad credit and even a bad Chexsystems record (meaning you probably left another bank with a negative balance). Nearly every major bank uses Chexsystems to screen new customers. Otherwise, they are referred to as a “second chance” bank account. Chime might have the lowest fees of all such “second chance” banks.

Savings account at 2.00% APY. Once you open the main Chime checking account, you can also open a separate savings account. No minimum balance and no monthly fees on the savings account, either.

Chime has the most of other bank stuff as well. Debit card. Paper check deposit via mobile app. FDIC-insured via partner banks, either Stride Bank or The Bancorp Bank. The only major thing missing besides bank branches is that they don’t provide paper checks. Depositing cash is available, but the third-party physical stores may charge a fee.

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

Bottom line. Chime is an interesting bank startup that targets the underbanked and unbanked by offering a much better fee structure to those with access to direct deposit. No overdraft fees, no credit checks, no Chexsystems. Currently, there is a $100 bonus available via referral link.

Filed Under: Banking, Deals & Offers //
Last updated: April 6, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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 – April 2023

Posted on April 6, 2023 // 16 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Here’s my monthly roundup of the best interest rates on cash as of April 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 could earn. Rates listed are available to everyone nationwide. Rates checked as of 4/5/2023.

TL;DR: 5% APY available on liquid savings, with some wrinkles. 5% APY available on multiple short-term CDs. Compare against Treasury bills and bonds at every maturity. 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.

  • 4.85% 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 4.85%. This fintech makes it easier for you to maintain a top rate even if one bank decides to drop out of the “rate race”. 😉 SaveBetter does not charge a fee to switch between banks.
  • 5% 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 4/5/23, the highest rate is from BrioDirect (Webster Bank) at 5.06% 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.
  • 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. This fintech has crypto exposure, 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 JONATHAP228. Please see my Current app review for details.

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. UFB Direct at 5.02% APY, although note their incoming ACH hold times. CIT Platinum Savings at 4.75% APY with $5,000+ balance.
  • SoFi Bank is now up to 4.00% 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 3.75%+ 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 4.80% APY with a $1,000 minimum deposit. Ally Bank has a 11-month No Penalty CD at 4.35% 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.
  • Marcus has a special 10-month CD at 5.05% APY with a $500 minimum deposit. Early withdrawal penalty is 90 days of interest.
  • BrioDirect has a 12-month certificate at 5.25% APY. $500 minimum. Early withdrawal penalty is 90 days of interest.
  • Western Alliance Bank via SaveBetter has a 12-month certificate at 5.01% APY. $1 minimum. Early withdrawal penalty is 270 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 4.77%. Odds are this is much higher than your own broker’s default cash sweep interest rate.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 4.72% SEC yield ($3,000 min) and 4.82% 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 5.00% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 4.98% 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 4/5/23, a new 4-week T-Bill had the equivalent of 4.61% annualized interest and a 52-week T-Bill had the equivalent of 4.53% annualized interest.
  • The iShares 0-3 Month Treasury Bond ETF (SGOV) has a 4.60% SEC yield and effective duration of 0.10 years. SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 4.52% 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.

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 4.80% APY on up to $15,000 if you make 10 debit card purchases each monthly cycle with online statements.
  • Presidential Bank pays 4.625% 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.

  • Credit Human has 24-month to 35-month CDs at 5.50% APY. $500 minimum to open. The early withdrawal penalty is 365 days of interest. Anyone can join this credit union via partner organization (no fee).
  • Sallie Mae Bank via SaveBetter has a 27-month CD at 5.15% APY. $1 minimum. Early withdrawal penalty is 180 days of simple interest.
  • 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 4.40% APY (callable: no, call protection: yes). 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. 3.67% 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 4/5/23, the 20-year Treasury Bond rate was 3.72%.

All rates were checked as of 4/5/2023.

Filed Under: Banking, Deals & Offers, Investing //
Last updated: April 6, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Free Kids Book About the Banking System (PDF/EPub)

Posted on March 26, 2023 // 2 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Are your kids curious about the banking system? Are you? Law professor Mehrsa Baradaran wrote A Kids Book About Banking and it is currently available free via download in either PDF or EPub format. Physical copies (not free) are available on Amazon. Found via Axios.

Silicon Valley Bank (SVB) collapsed overnight and we found ourselves wishing we knew more about how banks worked… so, we made a book!

When you think of a bank, what comes to mind? A building? A safe, filled with gold? What if we told you banks weren’t any of these things? And (get ready for this)…most money isn’t even kept in the bank! Banking is a system that allows money to move from one place to another, creating opportunities and growth. And banks only work with a shared belief in the magic of money.

It’s a good way to start a conversation, but be warned, it might be kind of scary to YOU as an adult to be reminded that all your bank deposits, the result of possibly decades of hard work, are just a bunch of 1s and 0s on a computer database somewhere. There is no gold in a vault. There are just banks taking your money and creating even more money via fractional-reserve banking. But it all collapses if we don’t collectively trust the system, or “believe in magic”. Every time I read about this system, I reconsider buying a plot of land nearby that I can see and walk on.

I tried reading it to my youngest kid, but she preferred talking vegetables and listening to The Cool Bean for the 87th time instead. I think she’s still in the trading strange metal coins for candy phase of learning about money.

Filed Under: Banking, Book Reviews, Deals & Offers //
Last updated: March 26, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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 Bank 11-Month No Penalty CD Review: 4.75% APY (No Minimum)

Posted on March 20, 2023 // 40 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Rates now up to 4.75% APY. It’s always nice when you can get a higher rate without having to move your money to a whole new bank. Ally Bank raised the rate on their 11-month No Penalty CD to 4.75% APY for all balances with no minimum deposit. If you have older No-Penalty CDs, you may want to take advantage of this higher rate.

The 11-month No Penalty CD is unique in that while the rate is locked in at deposit, you can still withdraw your principal and interest without penalty at any time (well, you must wait at least 6 days from the deposit date). In other words, your interest rate can never go down, but you can still jump ship if rates rise or if there is a better promo elsewhere.

For comparison, the Ally Online Savings account is currently at 3.60% APY (as of 3/20/23) for all balances. The interest rate on the savings account can go up or down. The Ally 12-month CD is at 4.50% APY and 18-month CD is at 5.00% APY, which is fixed but if you withdraw early there is a penalty of 60 days of interest for both CDs.

If you recently opened one of these, remember that Ally Bank offers a “Ten Day Best Rate Guarantee”:

When you fund your CD within 10 days of your open date, you’ll get the best rate we offer for your term and balance tier if our rate goes up within that time. The Ally Ten Day Best Rate Guarantee also applies at renewal.

If you have an existing No Penalty CD past the 10-day rate guarantee, this means you may consider closing it and then opening up a new one at a higher rate. You will have to withdraw everything at once – there are no partial withdrawals allowed on this type of CD. If you have an Ally savings or checking account, you can close the old CD, see the deposit in your savings/checking, and open up a new CD all in minutes online. (Note that savings accounts are limited to 6 withdrawals per month, so use your checking if possible.) You will be extending the term out another 11 months, but since you can always close it at any time it isn’t much of a concern.

Here’s an (old) screenshot of my withdrawal showing no penalty and instant availability when withdrawn directly into an Ally account:

ally_np_withd

You can use my Ultimate Rate-Chaser Calculator to get an idea of how much additional interest you’d earn if you switched over.

Bottom line. The Ally No Penalty CD is unique in that you are always able to move out to a higher rate, but you’ll never get a lower one. This means you can even break the No Penalty CD simply to get another No Penalty CD if/when the rate rises again.

Filed Under: Banking, Deals & Offers //
Last updated: March 20, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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.

Ask the Readers: How to Get Cash from Balance Transfers in 2023? (Credit Card Arbitrage)

Posted on March 14, 2023 // 28 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Recent events have reminded us that banks make money by taking in deposits at low interest rates and reinvesting those deposits at higher interest rates (either bonds or directly making loans themselves). When you see a credit union have a certificate special, that usually means it needs more deposits to fund commercial, residential, or personal loans to its members. This is a form of arbitrage. (Usually this works just fine, as long as your depositors don’t try to ask for all their money bank at once.)

With short-term interest rates now at 5% again, this brings back the possibility of credit card arbitrage to individuals. Borrow money with a no or low-fee 0% APR balance transfer, invest it in FDIC-insured banks at 5%, and you have significant rate spread. At that spread, borrowing $10,000 will make $500 a year, while borrowing $50,000 will make $2,500 a year.

Back around 2005, I was pretty heavy into this game as it was the equivalent of a 10%+ increase in my annual income. I knew all the ways that I could turn a balance transfer into cash. Some issuers gave out balance transfer checks, other issuers let you direct deposit a balance transfer into your bank account, and finally I could also transfer a balance larger than my actual balance and then request a credit refund via check. For example, I might have a $2,000 average recurring monthly balance as a regular customer at Bank A but then request a $12,000 balance transfer from Bank B. That would leave a negative $10,000 credit balance at Bank A, which they would send back to me as a check.

Interest rates have been very low for a very long time, and I haven’t used a balance transfer for a very long time. (There is a reason why credit card companies will give you 0% APR for 21 months, and it isn’t because they are nice people who enjoy giving out free loans. It’s because they get to charge you 24% interest after that introductory period.)

So, I ask you kind and intelligent readers: Has anyone tried to obtain cash directly via a credit card balance transfer recently? If so, what was your experience? What worked, what didn’t, and with which card issuer?

Filed Under: Banking, Credit Cards, Deals & Offers //
Last updated: March 14, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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.

FDIC Insurance: Don’t Waste This Valuable Insurance

Posted on March 12, 2023 // 8 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

The big financial news over the weekend was the failure of both Silicon Valley Bank and Signature Bank. They failed, the FDIC took over and fulfilled its duties, and then the uninsured business owners convinced the Fed to backstop everything (aka “bail them out”).

As a simple individual investor trying to keep his family assets safe, my first takeaway was simply that you can’t expect to see a bank failure coming. Silicon Valley Bank was the cool kid for a long time. Here’s a chart from Avios of its stock price vs. an index tracking bank stocks overall:

Most of Silicon Valley Bank’s deposits were from start-up businesses, but individual households had accounts with them as well. I don’t mean to pick on DepositAccounts, but they are a respected site and they gave Silicon Valley Bank a Health Grade of A:

How is the average investor supposed to do any better? This is why I don’t care about health grades for banks from anyone. I don’t need to examine their investment portfolio, underwriting standards, or stock price. As a depositor, either they have FDIC insurance, or they don’t.

Big name banks can fail even if their assets are greater than their deposits. Silicon Valley Bank and Signature Bank are now the second and third largest bank failures ever (even inflation-adjusted), and only behind to Washington Mutual during the financial crisis. From WSJ:

I wonder how the list will look in a year?

As an individual, there is no reason to exceed the FDIC insurance limits.. FDIC insurance provides great peace of mind. Don’t waste it.

Got anywhere close to $250,000 in a single bank account? Know that the FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category. You may actually achieve more than $250,000 of total coverage at a single bank, depending on how you have titled your accounts. Here are the official online calculators:

NCUA Electronic Share Insurance Calculator (ESIC)
FDIC Electronic Deposit Insurance Estimator (EDIE)

Filed Under: Banking, Insurance //
Last updated: March 13, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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 – March 2023

Posted on March 7, 2023 // 12 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Here’s my monthly roundup of the best interest rates on cash as of March 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 could earn. Rates listed are available to everyone nationwide. Rates checked as of 3/7/2023.

TL;DR: 5% (fintech only) or 4.55% APY available on liquid savings. 5% APY available on multiple short-term CDs. Compare against Treasury bills and bonds at every maturity (12-month now above 5%). 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.

  • 4.45% 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 4.45%. This system makes it easier for you to maintain a top rate even if one bank decides to drop out of the “rate race”. 😉 There is usually another bank waiting in the wings that is still looking for deposits.
  • 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, 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. UFB Direct at 4.55% APY. All America/Redneck Bank is at 4.25% APY for balances up to $75,000 ($500 to open, no min balance). Primis Bank dropped their rate, but grandfathered existing customers for the time being.
  • 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 4.00% 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.
  • Western Alliance Bank via SaveBetter has a 12-month certificate at 5.01% APY. $1 minimum. Early withdrawal penalty is 270 days of interest.
  • 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. Offer ends 3/14/23. 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 losses.

  • Vanguard Federal Money Market Fund is the default sweep option for Vanguard brokerage accounts, which has an SEC yield of 4.51%. Odds are this is much higher than your own broker’s default cash sweep interest rate.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 4.54% SEC yield ($3,000 min) and 4.64% 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 4.71% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 4.79% 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 3/6/23, a new 4-week T-Bill had the equivalent of 4.68% annualized interest and a 52-week T-Bill had the equivalent of 5.06% annualized interest.
  • The iShares 0-3 Month Treasury Bond ETF (SGOV) has a 4.41% SEC yield and effective duration of 0.10 years. SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 4.34% 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.

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 4.625% 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.

  • Credit Human has 24-month to 35-month CDs at 5.50% APY. $500 minimum to open. The early withdrawal penalty is 365 days of interest. Anyone can join this credit union via partner organization (no fee).
  • 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 3/6/23, the 20-year Treasury Bond rate was 4.14%.

All rates were checked as of 3/7/2023.

Filed Under: Banking, Deals & Offers, Investing //
Last updated: March 8, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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.

Elements Financial CU: 4.25% APY Savings Until 10/31, 5.00% APY Rewards Checking for 12 Months ($20k Max)

Posted on March 2, 2023 // 20 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

New promos with rate guarantees. Elements Financial Credit Union has a new rate of 4.25% APY on their High-Yield Savings on balances of $10,000+ (different from their Helium Savings). The promo rate is guaranteed until October 31, 2023. (Technically, it lasts until the 1st of the 12 month after you initial month, so actually between 11 and 12 months.)

There is also a promo rate of 5.00% APY on their High Interest Checking account, only valid on balances up to $20,000. Also for new accountholders only, with the promo APY fixed for 12 months from account opening date. Requires 15 qualifying transactions (such as using your debit card) every statement cycle. No monthly fee with electronic statements.

Note that their definition of qualifying transactions is also less strict than others. The following are qualifying transactions: Debit card purchases, checks, bill payments, ATM withdrawals and ACH withdrawals.

Per DepositAccounts, anyone can join with one-time $5 membership in Tru Direction, a not-for-profit organization dedicated to improving financial literacy. However, I couldn’t find anything about this on their membership page, other than Elements will provide you with $5:

Open an Elements checking or savings account or apply for a loan or credit card. During the application process, we will open you an Elements savings account (that’s the part that makes your membership official). We’ll even put $5 in to get you started — no need to transfer funds from an existing account!

I’m not sure how I feel about this one. 5.00% APY on $20k is a nice number ($1,000 a year in interest), but I don’t like having to remember the hoops for an entire year. They don’t seem to treat their existing customers nearly as well as new ones. Some of you may have signed up back in September 2022 when they offered a guaranteed 3.25% APY for a year on their Helium Savings. Right now, that account would only pay 1.00% APY once the promo ends.

Filed Under: Banking, Deals & Offers //
Last updated: March 2, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

HMBradley Bank Review: 4.50% APY w/ New Credit Card Spend Requirements

Posted on March 2, 2023 // 234 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Update May 2023: Rate tiers are now up to 4.50% APY. You may be grandfathered from the activity requirements until 6/30/23 if you were an existing user.

Older review, last updated October 2022:

HM Bradley announced several significant changes to their product (again). I’ve updated the review completely and removed all the historical changes as it was just getting too long.

HM Bradley (HMB) is a fintech software layer on top of a partner bank’s infrastructure. They are terminating their initial relationship with Hatch Bank at the end of October 2022 and changing completely over to New York Community Bank (NYCB). Existing HMB customers will need to open up a new account at NYCB before the end of October. HMB is also changing up their interest rate structure, but is offering a special intro offer to existing HMB customers. Detailed review below.

Rate tiers. Interest is earned on balances up to $250,000 with NYCB (up from $100,000 with Hatch Bank) and the rate you earn is set for the next month based on the current month’s activities. Here are the current rate tier and requirements:

  • 1.00% APY. All customers who open an HMBradley Deposit Account with NYCB will be rewarded with 1.00% APY. No other requirements.
  • 2.00% APY. Customers who make a direct deposit of at least $500 per month to their HMBradley Deposit Account with NYCB and maintain positive monthly cash flow (meaning that monthly deposits exceed monthly withdrawals, not including HMBradley Credit Card payments) will earn 2.00% APY in the following month.
  • 3.00% APY. Customers who fulfill the 2.00% APY requirements AND also spend $500 per month on their HMBradley Credit Card will earn 3.00% APY in the following month.

Limited-time offer to switch for existing customers. HM Bradley is waiving some of the requirements for new customers that signed up to switch by 10/31/22:

Any customer who opens an HMBradley Deposit Account with New York Community Bank (NYCB) before November 1, 2022, will receive Level 2 Annual Percentage Yield (APY) until April 30, 2023.

Any customer who opens an HMBradley Deposit Account with NYCB and has an HMBradley Credit Card in good standing before November 1, 2022 will receive Level 3 APY on the balance of the HMBradley Deposit Account with NYCB until April 30, 2023.

You’ll have to start doing the requirements in April to get the higher rates in May 2023.

Requires a “real” direct deposit every month. You must receive some sort of direct deposit each month, as defined below:

For our accounts, we define direct deposits as those deposits made by the customer’s employer, a federal or state government agency, or retirement benefits administrator. These generally include payments made by corporations and other organizations. We do not consider deposits to an account that are made by an individual using online banking or other payment provider such as PayPal or Venmo as direct deposits. HMBradley shall make the final determination as to whether a deposit qualifies as a direct deposit for purposes of qualifying to earn interest.

Based on my experience, they do have a system for filtering incoming deposits, but it is not 100% accurate and your direct deposit may have to be reviewed manually. Their online account interface should clearly indicate whether you have made the required direct deposit for the current month. I had to contact them in order for them to manually check and mark the transfer as a direct deposit. Having it marked properly is required to get the top rate.

Positive monthly cash flow is based on ALL deposits and withdrawals (except HMB credit card spend). For the calculation of “positive monthly cash flow”, all deposits are considered including incoming transfers from another personal bank account. At the same time, your “spending” will also include any transfer out of your account, even if it’s just to another bank account that you own. They don’t count purchases made on your HMB credit card, which incentivizes you to use it – but conveniently they don’t care about your credit card spending habits as long as you’re using their card…

Basically, money has to keep coming into HMBradley and not go back out on a net basis every month. That’s a very unique requirement, but also hard to keep up forever. Even if you are a diligent saver, you will want to redirect some of those funds into other assets like stocks, ETFs, real estate, etc.

Credit card details. The HMBradley credit card is invite-only and partially based on their estimate of your income (which is in turn based on the size of your deposits, although you can attempt to self-report). Invitations are not guaranteed. You must opt in to their “One Click Credit” service which basically checks your TransUnion credit report so they can market stuff to you (soft inquiries). If your TransUnion credit file is frozen, they will not offer you an invite. But once you officially apply, you will have a hard inquiry.

Starting at the October 2022 monthly billing cycles, the HM Bradley credit card is basically a flat 1.5% cash back credit card with no annual fee. Prior to this, it used to be a more complicated 3/2/1% rewards card with tiered categories and a $60 annual fee (waived for first year). 2% cash back would have been nice, but now it’s just another vanilla mediocre rewards card.

Additional features. It’s still not exactly clear how other basic features will change with the new NYCB accounts. ATM rebate policy? Well, right now, they don’t even give you a debit card! This change seems a bit rushed.

Once you accept the new NYCB deposit account agreement and disclosures, we will ask you to agree to allow us to transfer your funds (including any funds in a Plan and accrued interest) from your deposit account at Hatch Bank to your new deposit account with New York Community Bank (NYCB). We will also provide you with your new account and bank routing numbers. You will want to use this information to change your direct deposit and recurring ACH transfers as soon as you can.

Unfortunately, we are unable to offer debit cards for new deposit accounts at this time. You will still be able to make ACH transfers, and we will let you know when a new debit card is available.

My thoughts. Interest rate changes are happening very quickly these days, and it is unknown how aggressively HM Bradley will keep up. If I didn’t already have an HMB account, I wouldn’t bother opening one up as the positive monthly cashflow requirement can get complicated if you save your money in different ways. I will be looking for them to raise their rates at least a bit more above the competition if I am going to keep jumping through that many hoops.

Filed Under: Banking, Deals & Offers //
Last updated: May 4, 2023
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Sports Betting vs. Investing: Slight Edges Adding Up in Very Different Ways

Posted on February 16, 2023 // 6 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

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.

Filed Under: Banking, Investing //
Last updated: February 17, 2023
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. 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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