CIT Bank Review: Platinum Savings 4.35% APY, 11-Month No Penalty CD 3.50% APY

Posted on July 27, 2023 // 49 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.

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Platinum Savings now at 4.35% 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 have used their No-Penalty CD for maximum optionality while maintaining a high interest rate (details below). Here are the highlights:

  • 11-Month No-Penalty CD at 3.50% 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.)
  • Platinum Savings Account at 4.35% 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 4.00% APY if you open with $100. No minimum balance and no monthly fees.
  • 13-month Term CD at 3.50% 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 and their 11-month No Penalty CD (thought not very competitive at the moment). 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: December 20, 2024
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.

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

Posted on July 20, 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.

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 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.

Why Vanguard Money Market Funds Are Still The Best

Posted on July 20, 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.

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 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.

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

Posted on July 13, 2023 // 3 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.

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 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 – July 2023

Posted on July 9, 2023 // 5 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 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 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.

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

Posted on June 29, 2023 // 4 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.

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 (example, please contact me if you’d like a fresh 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: October 16, 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 – June 2023

Posted on June 6, 2023 // 3 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 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 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.

Andrews FCU 7.5-Month Certificate at 5.75% APY

Posted on June 4, 2023 // 5 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.

afcu_logo

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 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.

SaveBetter No-Penalty CD Review: How To Cancel No-Penalty CDs

Posted on May 25, 2023 // Leave a Comment
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.

No-Penalty CDs try to offer the best of both worlds – the liquidity of a savings account, and the higher fixed interest rate of a term CD. If rates go up, you can still move to the new higher rate. If rates drop, you are covered because the interest rate you earn can never go down during your term (usually around a year). When a financial crisis and/or recession hits, interest rates can drop quite quickly. Below is a historical chart of the Fed Funds rate since 1990. (Other times, a bank may just decide for any reason to drop their rate on a savings account.)

SaveBetter consistently offers some of the top interest rates on No-Penalty CDs. See my full SaveBetter review for more details on SaveBetter overall. Here are some details on the No Penalty CD specifically; their product is a bit unique in both good and bad ways.

  1. You cannot make any withdrawal within the first 30 days of opening a No Penalty CD, which is longer than usual. At CIT Bank, you can withdraw after 7 days. At Ally Bank, it’s six days.
  2. However, the minimum opening amount is only $1, which is much smaller than usual. At CIT Bank, it is $1,000. Ally also has no minimum. This means you can open multiple No-Penalty CDs in whatever amount you want, and only “break” the ones you need to. If, for example, the minimum at a competitor bank was $5,000, then you’d have to break an entire $5,000 CD even if you only needed $500.

Finally, I noticed that the website does not offer details about the actual process of how to make an early withdrawal from SaveBetter No-Penalty CD. I asked the Live Chat feature and this was the official reply provided:

Please email service@savebetter.com using the email address that you use to log into SaveBetter.com

In your email be sure to include the bank or credit union’s name and the current balance of the CD. If you have more than one CD from the same institution with the same balance, please specify the number of CDs you would like us to cancel.

Once we have processed your cancellation you will receive a note from the team letting you know the process has been completed.

If you have any questions please call Customer Service at (844) 994-3276. The team is available weekdays 9AM-4PM Eastern Time (excluding holidays).

So I sent them the following simple e-mail late on a Friday night:

Hello,

This is a request to close my No Penalty CD from Sallie Mae Bank with a current balance of $XXXX.XX.

Thank you,

Jonathan

On Saturday morning, I received the following reply:

Your cancellation request has been processed.

All available funds will be transferred to your linked bank account within 3 business days.

Please reach out if we can be of further service.
Regards,

Mio
SaveBetter Customer Service
service@savebetter.com

The withdrawal amount arrived in my linked bank account on the third business day (Wednesday), but they did credit me with at least one additional day of interest because the final amount was higher than my Friday closing balance (I figure they initiated on the next business day of Monday, cash came out Tuesday).

I was still satisfied that a simple 100% online-only option exists. I just sent a single e-mail. I did not have to call in, go through a complicated confirmation process, or answer any “Are you sure?” type of questions.

With SaveBetter, all deposits and withdrawals have to go in and out through your linked external bank account. You can’t just transfer the money internally directly into another type of account at another partner bank. That means that if you wanted to cancel one No Penalty CD and immediately open another “new” No Penalty CD at a higher rate, you might lose a business day or two of interest on the way out to your linked account before transferring the money back in to purchase the new CD.

This contrasts with CIT Bank, where I you can directly fund a new No-Penalty CD (at higher rate) with an existing No-Penalty CD. Of course, if you were to move funds between two different banks, you’d also have to deal with some days of lost interest in transition.

Their No-Penalty CD rates are currently above 5% APY, but the specific rates and the banks offering them change all the time, so I won’t list it in this review. Click here to see current No-Penalty CD rates at SaveBetter.

Filed Under: Banking //
Last updated: May 25, 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.

AllAmerica and Redneck Bank: 4.40% APY Money Market (up to $100k), 4.65% APY Rewards Checking (up to $15k)

Posted on May 23, 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.

Update 10/14/24: Rates dropped to 4.40% APY on up to $100,000 for Mega Money Market and 4.65% APY on up to $15,000 for Rewards Checking (debit card usage and other requirements apply). Details below.

Update 7/9/24: Rates dropped to 4.75% APY on up to $100,000 for Mega Money Market and 5.00% APY on up to $15,000 for Rewards Checking (debit card usage and other requirements apply). Details below.

All America Bank and Redneck Bank are sister internet banks that offer the same types of accounts (with different marketing shtick). Looking back in my archives, I actually opened an account with them way back in 2009 (later closed), as they offer a simple product lineup and have intermittent periods where they are very competitive with interest rates. (There are also some periods where they choose to lag.) Looks like they are looking to attract deposits again, recently raising both their interest rates and their balance caps.

Mega Money Market

  • 4.75% APY on up to $100,000. Amounts over $100,000 earn 0.50% APY.
  • No debit card transactions required.
  • $500 minimum to open an account. No ongoing minimum balance requirement.
  • Must agree to receive online statements only.
  • Limit of one Mega Money market account allowed per individual. (I believe you can have one account at each bank, though.)
  • Technically a money market checking account which means it includes a debit card (you can pay for checks too) but is still limited to six withdrawals per month. This limits its functionality to more like a savings account.

Rewards Checking

  • 5.00% APY on up to $15,000. Amounts over $15,000 earn 0.50% APY.
  • 10 debit card transactions required per monthly statement cycle. Monthly statement cycle ends on the 20th of each month. If the 20th falls on a Saturday, the cycle will end on Friday the 19th. If the 20th falls on a Sunday, the cycle will end on Monday the 21st. ATM and ACH transfers don’t count.
  • $500 minimum to open an account online. No ongoing minimum balance requirement.
  • Must agree to receive online statements only.
  • Limit of two (2) Rewards Checking Accounts allowed per individual. (I believe you can have two accounts at each bank.)
  • A full-featured checking account with online billpay, ATM rebates (up to $25 per month), and mobile check deposit abilities.

Note that both are under the FDIC insurance certificate of All America Bank (#20093), so you should be careful not to exceed the $250,000 limit across both banks (a reminder that the $250k limit is per depositor, per insured bank, for each account ownership category).

Filed Under: Banking, Deals & Offers //
Last updated: October 15, 2024
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.

Reader Questions: Worried About Debt Limit? Worried About Smaller Banks?

Posted on May 16, 2023 // 5 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.

I’m probably dating myself using the image above. How old do you have to be to remember when MAD magazine was popular? In retrospect, the magazine served a very important purpose, which was basically to show kids the many tricks out there and how to be less gullible. From Robert Boyd of the LA Times (source):

The magazine instilled in me a habit of mind, a way of thinking about a world rife with false fronts, small print, deceptive ads, booby traps, treacherous language, double standards, half truths, subliminal pitches and product placements; it warned me that I was often merely the target of people who claimed to be my friend; it prompted me to mistrust authority, to read between the lines, to take nothing at face value, to see patterns in the often shoddy construction of movies and TV shows; and it got me to think critically in a way that few actual humans charged with my care ever bothered to.

As I’m old and a bit under the weather this week – though temporarily lucid thanks to behind-the-counter pseudoephedrine – if I end up rambling… that’s my excuse. Anyhow, I’ve been getting emails from two different camps in the past few months:

  • Don’t put your money in US Treasury bills, that’s risky. Haven’t you heard about the debt limit crisis?
  • Don’t put your money in non-huge banks, that’s risky. Haven’t you heard of those bank failures? You should keep your money in US Treasury bills.

Am I worried about the US debt limit?

No and yes. No, I am not worried that my Treasury bonds (and money market funds based on Treasury bonds) will fail to be paid back with interest. In fact, I’ve thought about buying some of those affected short-term T-Bills, but it wouldn’t be much additional benefit for my small amounts.

Yes, I am worried that this signals a high level of disfunction between our elected officials. Imagine my partner and I already previously agreed to a mortgage for the house, an auto loan for both our cars, and put shared household bills on the credit card. Is the best way to make ourselves more financially responsible to threaten not to pay the debt that we have already agreed to take on? We should certainly examine our future expenses closely, and government spending is an important topic. But what is the point of threatening to ruin our collective credit score by not paying our existing bills? Is it honorable to openly consider defaulting on your debts? The US enjoys a lot of benefits from its top credit rating. I’m disappointed.

Am I worried about having my personal money deposited at non-huge banks?

No. As long as they are under the covered FDIC-insurance limits of $250,000 per depositor, per insured bank, for each account ownership category. Both of these things (NCUA/FDIC-insured bank deposits and US Treasury bonds) are backed by the US government, which has the power to create as much fiat currency as it likes. The FDIC is quite good at transitioning if a bank failure does occur. So I’m personally not worried about either thing. I just opened a relatively large 5-year CD at 5.00% APY at a small, friendly credit union in Oxnard, CA with only a few physical branches (deal expired). I hope they in turn lend it out to some small businesses in their area.

If you can get past the paywall, read this interesting Bloomberg article (close alternative) about the smallest bank in the US. One full-time employee (the CEO), a part-time teller, no ATM, no website. I kind of want to open an account.

The thing is, for a business with a huge cash balance that is over the FDIC-insured limits, then it indeed might be rational to move that money into the safest possible bank. You’d think that these sorts of problems would be solved by now. Berkshire Hathaway rolls billions of Treasury bills every month. But that’s how it works sometimes. Problems are only faced after it becomes a painful issue. I believe they’ll figure it out.

Filed Under: Banking, Investing //
Last updated: May 17, 2023
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CIT Bank Platinum Savings Review: 4.35% APY ($5,000 Minimum Balance)

Posted on May 9, 2023 // Leave a Comment
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.

CIT Bank is another bank where I maintain an ongoing relationship because they tend to offer competitive rates. They are one of those banks that likes to run unique promotions and/or start new types of accounts, and their newest savings account is the Platinum Savings that pays 4.35% APY on balances of $5,000+ as of 11/13/24.

Here are the details:

  • 4.35% APY on daily balances of $5,000 or more (as of 12/20/24).
  • 0.25% APY on daily balances of less than $5,000 (as of 9/25/24).
  • $100 minimum to open.
  • No monthly fees. No minimum balance requirement.
  • Member FDIC.

If you are also a CIT Bank customer, you should consider moving your funds from other CIT bank accounts into this one. It’s not hard, but you do have to take the initiative and it’s certainly worth spending the few minutes to do it. Here is a comparison of the best CIT Bank account options. They have also recently bumped the rate on their No Penalty CD slightly if you are worried rates might drop and want to ratchet up instead.

Filed Under: Banking, Deals & Offers //
Last updated: December 20, 2024
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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