Here is an updated link to the Best Cash Rates for 2019. But with the growing popularity of “robo-advisors” that manage your retirement portfolio using automated software, what if there was a robo-advisor for rate chasing?
That’s the basic idea behind MaxMyInterest.com (Max). You set a Target Value you’d like to keep in your standard “brick-and-mortar” checking account. Max will then sweep any excess funds into whatever online savings bank has the highest yield. If their rates change, Max can move your money again. If your checking account balance gets low, Max will move money back into your checking account for you. The ole’ hub and spoke graphic:
If your balance exceeds the FDIC insurance limits of $250,000 per account type, Max will move the rest into the bank with the next-highest yield, and so on. T
What banks does it work with? They officially support checking accounts from the following big banks. Their application suggests that they may support other checking accounts. (The official list has also expanded a bit since their launch.)
- Bank of America
- Citibank
- First Republic Bank
- JPMorgan/Chase
- Wells Fargo
- Charles Schwab Bank
- US Bank
Max will use one of these five online banks as your spokes (others may be added in the future, but only these work right now):
- Ally Bank
- American Express
- Barclays
- Capital One 360
- GE Capital
You can have them open already, or you can only open a few, or you can use their “common application” to apply for all of them at once.
The cost? 0.02% per quarter, or 0.08% per year.
You can get an idea of their target audience from their marketing materials. I didn’t even know Hermes sold ties, let alone that they cost $200 a pop!
Recap. I certainly think the idea is a neat one. But considering the cost and restrictions to the specific five online banks, the greatest appeal of MaxMyInterest is probably to people with $250,000+ balances that want the maintain the safety FDIC-insurance without having to juggle multiple accounts on their own. For most people that don’t have that much sitting around in cash, simply picking a single online savings account with a good track record of offering high interest rates should be good enough.
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Probably not worth the cost for the service for most everyone. They charge you 0.08%. That sounds trivial but its significant compared to the spread between the savings rates for the accounts in question.
Rates are currently : Ally 1%, Amex 0.9%, Capital one 0.75%, GE cap 1.05%, Barclays 1%.
If we cross Capital one off the list then the spread between best and worst there is just 0.15%. Best case this service will move you from Amex into GE cap. Saving you 0.15% but charging you 0.08%. Thats a 0.07% increase in interest. Thats $70 a year on $100k balance. And its the best case. More likely you’d be in Ally or Barclays at 1% and they’d move you to GE cap at 1.05% gaining just 0.05% and charging you 0.08% for that service? Thats LOSING 0.03% or costing you $30 a year on 100k.
Jonathan,
What are your thoughts on earning the higher interest rates with prepaid accounts like Mango Money (6%) and NetSpend (5%)? Have you had any experience with them?
I just posted up my NetSpend card review, which I’ve had for about 6 months now:
https://www.mymoneyblog.com/netspend-card-savings-review.html
Everbank will do 1.6% for the first 6 months on up to 100K
https://www.everbank.com/banking/checking
I’m also not convinced that the return justifies the cost. But the bigger problem for me is keeping so much cash on hand to even consider using such a service.
I am a believer in holding a substantial cash cushion for emergencies, upcoming expenditures, and for added flexibility; but, unless you have significant working capital needs, a large cash position will dilute your returns. Better to find a higher yielding solution.
If you think I’m missing something, please let me know.
I’ve signed up for Max, it DOESNT WORK! I’ve tried to link my BOFA account, but it won’t stay linked. I receieved an email after submitting a support ticket saying engineers resolved it. NOT TRUE! I’ve wasted two weeks of earning a higher interest.
I recommend Discover Bank. only 1/2 point less in interest from what Max claims, but Discover is reputable and delivers. Max is a fail for me.
I had an extremely disappointing experience with this company/service. During sign-up, they only requested basic information such as name, address, email, and phone number. Despite my publicly available information showing that I’ve owned my home(s) for nearly ten years, they rejected my application.
When I reached out to the provided email address, they simply informed me that they would not offer their services to me. They did not provide any specific criteria or conditions for denying me service, citing “security” as the reason.
I am left wondering if this service is exclusive to high net-worth individuals or if they only accept applications from those who own million-dollar homes. The situation is unclear and frustrating.
The same thing happened to me! I’m sitting here baffled and honestly feeling a bit “profiled”. My co-workers recommended the site and no one I know has had issues but I was denied, seemingly for no reason.