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Don't Fret About the Interest Rate on Your Savings Account


Monday, October 19, 2015

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

I know. I know. It’s painful to see your money sitting in that savings account earning virtually nothing. You’d really like to earn more, or at least something. Anything at all to make that money work as hard as you did to save it. Trust me. I know. I feel the exact same way.

But here’s the harsh truth: you need to stop worrying about the interest rate on your savings account.

Right now.

You need to stop feeling like it’s not doing anything for you. You need to stop looking for the new savings account with the better interest rate. You need to stop wondering if you could eek out just alittlemore return if you could just find the right tactic. You need to stop. Because the more you worry about it, the harder it is to actually reach your financial goals.

Here’s what you should be doing instead.

You Wouldn’t Earn That Much Anyways

Let’s say you have $10,000 your savings account.

First off, nice work! That’s a lot more than most people.

Now let’s say you have the opportunity to switch savings accounts and earn an extra 0.10%. How much extra money will that earn you?

That will earn you $10 per year.

Even if you can find an interest rate that’s a whopping 1% better than your current savings account, that still only gets you an extra $100 per year.

Helpful? Yes.

Life changing? No.

So before you invest a lot of time trying to find a better interest rate, remind yourself that even if you’re successful the impact will almost certainly be very small.

Keep the Goal in Mind

A savings account is not meant to make you rich. That’s what your long-term investments are for.

A savings account is for money that you need to know will be there no matter what.

This is an incredibly important purpose! Whether it’s an unexpected car repair, a temporary job loss, or next summer’s family vacation, there are many big life events where certainty is more important than anything else.

And no matter what the interest rate is, every single savings account serves this purpose.

So, What Should You Do?

Instead of spending a ton of time stressing out about your interest rate, here’s what I would recommend.

1. Pick a “Good Enough” Savings Account

I certainly don’t think you should ignore interest rates completely. Since you have the option, you might as well earn something on all that money you’re saving.

Use our tool to find a savings account with a competitive interest rate, minimal fees, and easy access to your accounts.

Don’t worry about finding the best rate. Just find one that’s reasonably competitive and easy to use and move on.

2. Focus on Saving

The truth is that your savings rate will have a much bigger impact on your ability to reach your goals than your interest rate.

This is especially true with short-term goals. The sooner you want the money, the more important your savings rate is and the less important your interest rate.

So instead of spending your time trying to find a better interest rate, spend it figuring out how to save more money. That could mean finding ways to increase your income. Or it could mean finding creative ways to reduce your spending. However you do it, increasing your savings rate is the real key to long-term financial success.

3. Get on with Your Life

Get to work on your other financial goals. Spend time with friends and family. Travel. Do work that matters.

As long as your bank maintains a reasonably competitive interest rate and you’re happy with the service, there’s really no reason to change.

So you can stop worrying about it.

TAGS: Earning Interest, Savings Account

Friday, March 10, 2017

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated March 10, 2017

If you are looking for a better yield on your savings, a high rate CD (certificate of deposit) offered by an online bank could be a good option. Internet-only banks offer much better interest rates than traditional banks. For example, a 12-month CD at Bank of America would require a $10,000 minimum deposit and would pay only 0.07%. At an online bank, you could earn 1.35% with only a $2,000 minimum deposit. (If you would rather get a savings account with no time restriction, look at the best savings accounts).

This list is updated monthly.  Here are the accounts with some of the best CD rates:

  • 1-Year CD: CIT – 1.32% APY, $1,000 minimum deposit

CIT Bank offers a wide range of online savings and CD options. In March, CIT has increased its rates and is now leading the market. With only a $1,000 minimum deposit, you can enjoy 1.32% for one year. The deposit will be FDIC insured up to the legal limit of $250,000 per depositor per institution. In February, the best rate was 1.25% with a $2,000 minimum balance – so competition is intensifying. Although you might not have heard of it, CIT was founded in 1908 and has more than $65 billion of assets. It uses these deposits to fund its large commercial lending business.

  • From 1 year to 10 years: Discover Bank – 1.15% – 2.20%; $2,500 minimum deposit

Discover is known for cash back credit cards. However, Discover has also quietly built a leading internet bank that offers checking accounts, savings accounts and CDs. Discover has invested in a mobile banking app (not found with other companies, like Synchrony) and strong on-shore customer service. Although Discover does not always have the highest rate, it is very close (within basis points) across all durations. If customer service and digital tools (like apps) are important to you, Discover is an excellent consideration.  Note:  you can even get a CD rate with a duration as short as 3 months. However, you would be better off opening a high yield savings account if you plan on saving the money for less than a year.

  • 1-Year CD: EverBank – 1.42% APY, $5,000 minimum deposit

EverBank, which is based in Florida, was recently acquired by TIAA-Cref. EverBank has become very competitive with CD rates. If you have at least $5,000 you can get an incredible (in these times) rate of 1.42%. Like all banks listed in this article, your deposits will be FDIC insured (up to the FDIC limits). There is no monthly fee with this account.

  • 1-Year CD (from a credit union): PenFed – 1.26% APY, $1,000 minimum deposit – must become a credit union member

PenFed is a credit union that offers very competitive interest rates. You need to join the credit union in order to benefit from their products. If you have a military or government affiliation, it is free to join. Otherwise, you would need to join an organization like Voices for America’s Troops, which costs $14.00. Once you are a member, you can open PenFed products (including this certificate) online. Your deposit would be insured by the NCUA, which is the National Credit Union Administration. There is a $1,000 minimum deposit for the one-year certificate.

  • 2 Year CD: ConnectOne – 1.51% APY, $500 minimum deposit

ConnectOne is a bank in New York and New Jersey that has just recently re-branded and quietly starting offering some of the highest CD rates on the market. We don’t know if this is an on-going strategy, or just a temporary marketing activity to coincide with the new name. Regardless, it is a good time to take advantage of the high interest rates available at a very low deposit level. Your deposit will be FDIC insured, and the bank has a reasonable digital consumer experience.

  • 2-Year CD: EverBank – 1.60% APY, $5,000 minimum deposit

EverBank offers good rates at all terms, and has the best rate that we could find at 2 years. You need a higher minimum deposit in order to qualify for the higher interest rate at EverBank. If you have $5,000 to deposit, 1.60% is the highest rate we were able to find at a two year term. EverBank is based in Florida.

  • 3-Year CD: EverBank – 1.81% APY, $5,000 minimum deposit

EverBank has aggressively raised rates on the 3-year CD. It has been a while since we have seen 1.81%. at 3 years. Just remember that your FDIC insurance limit is per institution, per depositor. If you build a CD ladder that exceeds $250,000 you should consider finding alternatives to EverBank (and we list one of the better options below).

  • 3-Year CD: Ally Bank – 1.50% APY, no minimum deposit (1.55% at $5,000 and 1.60% if you have $25,000)

Ally Bank has a long history of paying some of the best rates online. If you can part with your money for three years, you can earn 1.50% (and up to 1.60% if you have at least $25,000). Even better, Ally often gives preferential renewal rates to customers. Although this is not a guarantee, Ally has been doing it for a long time – which means Ally will reward long-term customers with even better rates.

  • 5-Year CD: EverBank – 2.30% APY, $5,000 minimum deposit

Once again, EverBank has the highest rate we could find. At 2.30%, this is one of the highest CD rates on the market. Just like the other terms, EverBank does require a $5,000 deposit. As mentioned previously, deposits at EverBank are FDIC insured.

3 Questions To Ask Before You Open A CD

1. Should I just open an online savings account instead? 

With a CD, the saver and the bank make stronger commitments. The saver promises to keep the funds in the account for a specified period of time. In exchange, the bank guarantees the interest rate during the term of the CD. The longer the term, the higher the interest rate – and the higher the penalty for closing the CD early. With a savings account, there are few promises. You can empty the account without paying a penalty and the bank can change the interest rate at any time.

If you have a high level of confidence that you do not need to touch the money for a specified period of time, a CD is a much better deal. However, if you think you might need to use the money in the next couple of months, a savings account is a much better idea.

You can earn a lot more interest with a CD. Imagine you have $10,000 and know that you do not need to touch the money for two years. In a high-yield savings account earning 1.10%, you would earn $221 over two years. If you put that money into a 1.50% CD, you would earn $302. Given the ease of switching to an online CD, the extra interest income is easy money.

2. What term should I select? 

The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days is a typical penalty. And on 2 and 3 year CDs, a 6-month penalty is common. The impact of the penalty on your return can be significant. If you opened a one-year CD with a 1.25% APY and closed it after six months, you would forfeit half of the interest and earned only 0.63%. You would have been better off with a savings account paying 1.05%.

The worst case scenario is with the longest CDs. 5-year CDs usually have a one-year penalty for taking out funds early. If you open a 5-year CD and close it quickly, you could actually end up losing money.

Given the early penalties, you need complete confidence that you will not need to withdrawal the money early. Ask yourself this question: “do I have 90% confidence that I will not need access to the cash during the CD term?” If you don’t have confidence, go for a shorter term or a savings account.

3. Should I consider my local bank or credit union? 

The interest rates shown in this article are all from online banks that offer products nationally. Our product database includes traditional banks, community banks and credit unions. If traditional banks offered better rates, they would have been featured in this article. The internet-only banks have dramatically better interest rates. That should not be surprising. Because internet-only banks do not have branches, they are able to pass along their cost savings to you in the form of higher interest rates.

However, you can always visit your local bank or credit union and ask them to beat the rates listed in this article. The chance of getting a better deal is extremely low (remember that Bank of America is only paying 0.07%), but you can try.

How To Find The Best Account

If you don’t find an account that meets your needs in this article, you can use the MagnifyMoney CD tool to find the best rate for your individual needs. Input your zip code, deposit amount and term. The tool will then provide you with CD options, from the highest APY to the lowest.

TAGS: Savings Account

Friday, March 10, 2017

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated March 10, 2017

Are you a super saver? Sure, anyone can save money in a typical savings account. A typical savings account often comes packaged or suggested with your checking account from a local bank branch and only pays 0.01%. These savings accounts usually don’t offer the best terms or interest rates, which is why it’s best to keep shopping around.

The best accounts offer perks like no minimum balance, ATM access and much higher interest rates than the average savings account. Here are the best online savings accounts so you can super charge your savings.

1. Top Choice: Synchrony Bank – 1.05% APY, No minimum balance and ATM access

Synchrony Bank pays a healthy 1.05% APY. There is no minimum balance requirement and no monthly fee. What makes this account unique is the ATM card. Most internet-only banks require you to transfer funds electronically, which can take a few days. If you ever need quick access to your funds, the ATM card makes access easy. You might not recognize the Synchrony brand, but it is a large, well-capitalized business. Synchrony used to be a part of General Electric (GE), and was spun out as a separate company. Unfortunately the digital experience is not the best, and there is no app.  

Special Deal: Discover – $100 Bonus* + 0.95% APY

Discover Bank is famous for its credit cards. But it also has an online consumer bank. The savings account pays 0.95% APY. And now there is a special deal: if you deposit $15,000 into your first Discover online savings account, you will  receive a $100 bonus.  During the first year, you would earn $100 on top of the 0.95% APY, making this one of the most lucrative savings accounts on the market. The bonus offer is easy to get (no need to visit a branch), and you get all of the other benefits associated with Discover’s online bank on top.*

*To get your $100 Bonus:

What to do: Apply for your first Discover Online Savings Account (OSA) by 5/31/17. Enter Offer Code MM217 when applying. Deposit at least $15,000 by 6/15/17.

What to know: Offer not valid for existing or prior Discover savings customers. Account must be open when bonus is credited. Bonus will be credited to the account by 6/30/17. Bonus is considered interest and will be reported on IRS Form 1099-INT. Offer may be modified/withdrawn without notice.

3. Top Choice: Ally Bank – 1.00% APY, no minimum balance and a free checking account

Ally is a bank without branches that has consistently been paying high interest rates on savings accounts. Ally has no minimum balance requirement and will pay 1.00% APY. Even better, you can open a free checking account (also with no minimum balance requirement). This makes access to your savings account incredibly easy – because you can transfer funds online (or via the app) and have immediate access via checks, debit cards and ATMs.

4. Highest Rate Without A Minimum: Goldman Sachs Bank – 1.05% APY, no minimum balance (and no ATM access)

GS Bank, the new consumer bank of Wall Street giant Goldman Sachs, now offers a 1.05% interest rate on deposits. There is no minimum balance and no transaction fees. Upon opening the account you can deposit funds via electronic transfer, wire transfer or deposit by check. You can get access to your funds via electronic transfer or wire transfer.

The maximum deposit is $250,000.

5. Top Rate: Barclays Bank – 1.00% APY, No minimum balance and no monthly fees

Barclays Bank is one of the largest banks in the world, and it is based in London. In the United States, Barclays operates a very large credit card business (Barclaycard). If you have an American Airlines credit card, you might have a Barclaycard. In order to fund its card business, Barclays raises deposits online. You can earn a 1.00% APY return, which is one of the best rates out there. You do not have to pay a monthly fee, there is no minimum deposit and Barclays has a great digital experience. Even though this is a British bank, your deposits are FDIC insured.

6. Highest Rate From A Credit Union: Alliant – 1.00%, $5 to open and ATM access.

People love credit unions. Because credit unions are owned by their members, you can get a higher interest rate on your savings (and lower interest rates when you borrow). Alliant is one of the best credit unions in the country, offering some of the best rates on your savings. In addition, Alliant has a great website and digital experience. Anyone can join the credit union and you only need $5 to open the account.

7. Highest Overall Rate: PurePoint – 1.25%, $10,000 to open

You need at least $10,000 to open this account. If your balance falls below $10,000 you will only earn 0.25% APY – so you should only open this account if you are confident that your balance will never dip below $10,000. There is no monthly fee for the account. One warning: the fine print states that “we reserve the right to require 7 days’ advance written notice prior to withdrawal.” In addition there is no debit card availability. If you need immediate access to your funds, this account is not a good choice. PurePoint is a part of Mitsubishi UFJ Financial Group, which is one of the largest financial institutions in the world (with over $2.4 trillion). Your deposits will be FDIC insured.

8. Good Rate And Low Minimum: SalemFive Direct – 1.10%, $100 minimum

You need $100 to open this account. But once the account is open, there is no minimum balance and no monthly fee charged. Unlike many other banks, SalemFive guarantees the interest rate until January 1, 2017. There is no ATM card with this account, but you can access your funds via electronic transfer.


Runner-Up: SFGI – 1.06%, $500 minimum

You need $500 to open an account at SFGI, which is a division of Summit Community Bank. Summit operates 15 branches across Virginia and West Virginia. The bank created the online account (through SFGI Direct) to raise more deposits nationally. All deposits are FDIC insured.


How to Find the Right Account For You

Take a moment to calculate how much you could earn using our free saving account comparison tool. Enter your zip code and how much you have to save and you’ll see the best savings accounts for you and save more this year. If you have a large balance, the tool might find better options than the no minimum balance options we’ve listed here.

If you are willing to lock your money into a longer term, consider a certificate of deposit. You can find the best CD rates here.

Your money deserves more than 0.01%. At that rate you’re basically giving a free loan to the bank, not a favor they’d return to you!

We’ll receive a referral fee if you click on the “Apply Now” buttons for Synchrony Bank. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

TAGS: Interest Rates, online banking, online savings account, Savings Account

Tuesday, May 17, 2016

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Tired of banking the traditional way, having to run to a local branch to deposit a check, or dealing with too many fees and minimum requirements? Then opening an online checking account could be your solution.

Most online banks offer checking accounts with little to no minimums, and little to no fees to worry about. They also have some of the best mobile apps, making banking on-the-go easier than ever.

While you shouldn’t be keeping a ton of money in your checking account, online accounts offer great annual percentage yields (APY), especially when compared with regular savings accounts.

These are the five best online checking accounts available in 2016:

1. Charles Schwab – High Yield Investor Checking Account (unlimited free ATMs)

We recommend Charles Schwab’s High Yield Investor Checking Account to those that enjoy traveling, as there are no foreign fees associated with this account. You’re free to use your debit card anywhere in the world without worrying about being charged. Any fees incurred from an ATM are reimbursed.

This account offers 0.10% APY, and there are no minimums or monthly service fees.

You do need to get overdraft protection; otherwise you’ll get hit with a $25 fee (maximum of $100 in fees per day) each time you try to charge something without having the funds in your account.

Another account that rivals Schwab with no ATM fees worldwide is the Aspiration Summit account. However the mobile app is still in development, there is no bill pay feature, and you can’t yet open a joint account.

2. Bank of Internet USA – Rewards Checking (good rate, free ATMs)

Bank of Internet USA’s Rewards Checking Account also offers a completely free checking account: there are no overdraft fees and no monthly maintenance fees. It also has one of the best mobile apps we’ve seen, and all ATM fees in the U.S. are reimbursed.

There is a $100 minimum required to open a rewards checking account.

Its rewards system is a bit different than the typical checking account, as there’s a tiered structure to the APY. The maximum APY available is 1.25%, higher than what most banks offer.

The bank’s site explains tiered interest like this: “This is a tiered, interest earning variable rate account. All daily collected balances up to and including $150,000 will earn interest based on the combined rate rewards. All daily collected balances greater than $150,000 will not earn interest. Your interest rate can be as high as 1.25% based on the following combined rate rewards: direct deposits totaling $1,000 or more will earn .4166%; at least ten (10) debit card purchases will earn .4166% and fifteen (15) or more debit card purchases will earn an additional .4166%.”

3 Ally – Interest Checking Account

Ally is a great all-around online bank with no fees for a transfer from savings to checking and no minimums. The Interest Checking Account is completely free if you opt to have overdraft protection, and Ally also offers an excellent savings account if you want to keep your accounts with the same institution.

It offers 0.10% APY on balances less than $15,000, and .060% APY on balances of over $15,000.

Banking with Ally also gives you 24/7 access to customer service, which is just a phone call or chat session away.

4. Fidelity Cash Management Account

Fidelity’s Cash Management Account is great for those that have larger balances, as there is a $1,250,000 insurance limit, but there is no minimum balance required.

Similar to Charles Schwab, there are no ATM fees to worry about – they’ll reimburse you the same day if you’re charged. There are also no monthly or overdraft fees to worry about.

Fidelity currently offers 0.07% APY, but it is a brokerage account rather than a “regular” checking account. They offer cash management tools so you can set up custom alerts when you reach a certain balance that will remind you it’s time to invest.

Unfortunately, there’s no option to open a line of credit – you have to link a savings or brokerage account to your Fidelity account in case you overdraft and want items to clear.

5. Capital One 360

Capital One 360’s checking account does offer a line of credit, and there are no minimums and no monthly fees.

Instead of worrying about overdraft fees, you’ll be responsible for paying interest on the money borrowed if you charge anything over your available balance.

If you’re not fully sold on the convenience of online checking accounts, Capital One 360 is allowing certain Capital One ATMs to accept cash deposits. (Typically, Capital One 360 is an Internet-only bank and separate from Capital One branches.)

The downside is that they don’t reimburse ATM fees, though there are a host of Allpoint Network ATMs available to use throughout the United States.

On balances of $49,999.99 or less, they offer 0.20% APY; on balances ranging from $50,000 – $99,999.99, they offer 0.75% APY; and on balances of $100,000.00 or more, they offer 0.90% APY.

Why You Shouldn’t Hoard Money in a Checking Account

There are two main reasons your money would be better off not sitting in checking.

1) Interest Rates
2) Fraud

Interest rates on checking accounts are typically pretty pitiful and even when they seem high (perhaps 0.60% or even 1.000%) there are often a lot of hoops to jump through in order to secure that interest rate. Instead, you can jump through zero hoops and just put the bulk of your money that’s in the bank into savings instead of checking. There it can earn 1.00% or more and you don’t have to worry about making a certain amount of charges to a debit card or keeping a minimum in the account.

Fraud is another reason you want a minimal amount in checking. Credit card fraud is so prevalent you’ll likely get smacked by it at some point, but it isn’t as worrisome because the money charged to a credit card isn’t coming directly out of your bank account. Debit card fraud means a crook gains direct access to your money and can be draining your actual funds. You’ll reduce the damage a thief can do by not keeping a ton of money in checking. Even if you bank reimburses you for the funds, it’s still a hassle to go through not having the money for a period of time.

It’s Probably Time to Ditch Your Bank

Ditch your brick-and-mortar bank in favor of fewer fees, less hassle, more convenience, and higher interest rates. All of these banks offer mobile apps that let you deposit checks by taking a photo, so you don’t have to worry about running out to a local branch. These apps also make it easier to transfer money between your accounts, pay bills online, or send money to family and friends in a pinch.

If you want your money to do more for you with less maintenance, online checking is the way to go.

TAGS: Checking account, Eliminating Fees, interest, online bank

Friday, May 13, 2016

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

There are so many credit card companies on the market today and many of them also offer multiple products, which can make choosing the right credit card an even more difficult decision for you.

For example, Capital One is a company that currently offers 12 different credit cards from which consumers can choose. Two of the most popular options offered by Capital One are the Capital One Platinum card and the Quicksilver card. But which one is right for you? Here are some facts to help you decide.

Capital One Platinum

According to the Capital One website, the Capital One Platinum card is specifically tailored toward those who have an “average” credit score. Capital One defines average as someone who has defaulted on a loan in the past five years, or someone with limited credit history, meaning they’ve only had credit accounts

open for less than 3 years.

The Capital One Platinum card has no annual fee, a $0 fraud liability (which is pretty standard), and all of the traditional Platinum MasterCard benefits, such as:

  • Extended warranty on purchases made on your credit card.
  • Auto rental insurance if you rent a car with your credit card.
  • Travel accident insurance for loss of life or limb when you use your credit card to purchase your travel fare.
  • 24-hours travel assistance. If your credit card is lost or stolen while traveling, you can get an emergency card replacement and a cash advance.
  • 24-hour roadside assistance if your car breaks down or you are locked out.
  • Price protection to reimburse you the difference in price on eligible items if you find a lower price for the same item within 60 days of your purchase when you use your credit card.

The Capital One Platinum card is also eligible to be used with Apple Pay.

Because this card is for those with average credit, it’s not surprising that this is not a rewards credit card. However, it does offer access to a higher credit line after you make your first 5 monthly payments on time. Plus, as a cardholder you also have access to CreditWise to help your monitor your credit score. (Although the fine print reveals that CreditWise is a free program that is available to everyone, even if you are not a Capital One cardholder.)

As expected, this credit card does have a high variable interest rate at 24.99% APR on purchases and balance transfers. However, there is no fee for balance transfers and provides the option to select your own monthly payment due date.

Quicksilver

Another popular product offered by Capital One is the Quicksilver card. Capital One’s website shows that this credit card is for people with “excellent” credit, which is defined as someone who:

  • Has never declared bankruptcy or defaulted on loan
  • Has not been more than 60 days late on any credit card, medical bill, or loan in the last year, and
  • Has had a loan or credit card for over three years with a credit limit over $5,000.

The Quicksilver card is a rewards credit card that offers 1.5% cash back on all purchases with no limits and no rotating “bonus” categories to keep track of. Quicksilver also offers a $100 cash bonus if you spend $500 on new purchases within 3 months of opening a new credit card account. The rewards earned with Quicksilver don’t expire and are eligible to be redeemed at any amount with no minimum threshold for a statement credit or a check.

Quicksilver is a Visa Signature card and thus offers all of the standard benefits that come with that designation, such as:

  • Travel upgrades and savings
  • Shopping discounts
  • Complimentary concierge service
  • Extended warranty
  • Special access to events
  • 24-hour travel assistance services

There is no annual fee on the Quicksilver card.

Pros and Cons

Capital One Platinum Card

Pro: Allows cardholders to re-build credit. The Credit Steps program allows cardholders access to a higher credit line after they make their first 5 monthly payments on time.

Con: No rewards.
This card offers cardholders no chance to earn rewards for their spending.

Pro:
No annual fee. There’s no annual fee to contend with as you use this card to build your credit.

Con:
High APR. As people with an “average” credit score are more of a risk to credit card companies, the APR on the Capital One Platinum card is high.

Pro: Ability to select your own monthly payment due date.
This option will allow you to pick what day of the month your payment is due so you can make sure you have the cash flow available to pay your bill.

Quicksilver

Pro: 1.5% cash back. Cardholders can earn 1.5% cash back on all purchases made with their Quicksilver card with no limit on rewards.

Con: Requires “excellent” credit to qualify.
In order to open a Quicksilver credit card account, you have to meet Capital One’s definition of someone with excellent credit.

Pro: No annual fee.
Earning cash back is free, with no annual fee.

Pro: 0% Introductory APR.
At the time of publication, new cardholders were eligible for a 0% introductory APR on purchases and balance transfers until January 2017.

Con: 3% balance transfer fee.
There is a fee to transfer a balance from another credit card, so this is not the best balance transfer card available to help you pay off debt.

Pro: No rewards cap and rewards never expire.
Many rewards credit cards require a minimum threshold be met before you can redeem your cash back rewards, but the Quicksilver card doesn’t. Plus, rewards never expire as long as you remain a cardholder in good standing.

Other Options

Another rewards credit card to consider if you have excellent credit is the Citi Double Cash card. It offers double rewards all purchases. 1% is earned up front when you make purchases and another 1% is earned when you pay off your bill.

Fidelity Rewards Visa Signature card is similar to the Citi Double Cash card and gives you unlimited 2% cash back on all purchases when you deposit cash back into an eligible Fidelity account. Eligible Fidelity accounts include:

  • Brokerage accounts
  • Fidelity Cash Management Accounts
  • Fidelity-managed 529 College Savings plans
  • Retirement accounts like the Traditional IRA, Roth IRA, Rollover IRA and SEP IRA

In order to redeem points for a cash deposit, your point balance has to reach 5,000 or $50. You can redeem points for travel, merchandise, gift cards or statement credit starting at 2,500 points. The Fidelity Rewards Visa Signature does not have an annual fee.

Which Card is Best For You?

Deciding between the Capital One Platinum credit card and the Quicksilver card really comes down to a couple of factors.

One thing to consider is your current credit score. If you fall into the range of “average” as defined by Capital One, you would be better off applying for the Capital One Platinum card to help you improve your credit score instead of applying for the Quicksilver card and being denied.

However, if you already have “excellent” credit, the Quicksilver card is the way to go. It offers cash back rewards on all purchases, a $100 cash back bonus, a 0% introductory interest rate, and a lower APR afterwards. Consider your credit history and all of the options available carefully before you make your credit card selection.

TAGS:

Friday, May 6, 2016

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated May 6, 2016: Goldman Sachs has launched its savings account

1.05% Interest Rate with No Minimum Balance

Goldman Sachs has launched its long awaited online savings account. The bank, long known for serving the wealthiest individuals and corporations, is now offering a high yield savings account that requires only $1 to open. Here are the details of the product:

  • 1.05% Annual Percentage Yield (APY)
  • No minimum deposit – you can open the account with just $1
  • There is a deposit limit – you can only deposit a maximum of $250,000
  • You can access your money by electronic transfer, wire transfer or by check.
  • Note:  Synchrony Bank pays 1.05% but also provides an ATM card for easier access to your funds. The minimum deposit is $30 (instead of $1), but we think the ATM card makes it a superior offer.

You should shop around. Interest rates as high as 1.20% are available for people with big balances. MagnifyMoney has a list of the best savings accounts here.

Goldman Sachs Purchased GE’s Savings Accounts

Goldman Sachs purchased $16 billion of GE Capital Bank’s consumer deposits. $8 billion of the deposits are online savings accounts and CDs, and the other $8 billion are brokered certificates of deposit. In addition to the deposits, the employees of GE Capital responsible for the deposit business have been transitioned to Goldman Sachs.

The acquisition accelerates two big trends in consumer banking. General Electric has decided to exit the consumer financial services market, and has been rapidly shedding businesses all over the world. Goldman Sachs is building out a consumer banking strategy as it diversifies its business. Earlier this year, it announced that it will be entering consumer lending. And now, with a meaningful consumer deposit business, it will be active on both sides of the balance sheet.

Without the cost of a branch network, Goldman Sachs is able to pay higher interest rates to consumers while still obtaining funding advantages. Goldman Sachs is looking to diversity its funding, and sticky consumer deposits can be attractive. As interest rates increase, consumer deposits, due to their inertia, are typically not as responsive to increases in interest rates.

Goldman Sachs: Building The Consumer Bank Of The Future

FinTech companies, largely in the Silicon Valley, have started to change the way financial services are delivered to consumers. Marketplace lending has brought a better product and experience to consumers, a higher return to investors and more advanced credit risk analytics to lending decisions. Internet banks, by avoiding branch networks, are providing savers with higher interest rates and banks with low-cost funding sources. Goldman Sachs is out to prove that even a large, existing bank can take advantage of these trends.

Goldman Sachs will be launching a digital lending business. It has hired a former senior executive at Discover to lead the expansion. With the acquisition of the GE deposit franchise, Goldman Sachs will be a formidable competitor to the large incumbent banks. Why receive 0.01% on your savings account from Bank of America, and pay 19% interest on your credit card to Citibank, when you can get 1% on savings and pay 12% on loans to Goldman Sachs? Because Goldman does not have a legacy business to defend or cost structure to rationalize, it is uniquely positioned to challenge the large consumer banks in America.

At the moment, the marketplace lenders are taking advantage of ultra-low interest rates to grow. Investors are pouring money into any investment that offers yield. However, as interest rates increase, having access to low-cost consumer deposits will become a competitive advantage. Deposit rates for consumers do not increase as rapidly as interest rates in general. Goldman Sachs could end up with a funding cost advantage in a rising rate environment. Not only would the large consumer banks suffer, but the Silicon Valley start-ups may find it harder to compete.

Good News For Consumers

Many people have an immediate, negative reaction when they hear the name Goldman Sachs. However, in the consumer deposit and lending space, Goldman Sachs will be a challenger brand. In order to win as a challenger, you need a better product, experience, or both. Consumer loans and savings accounts remain entrenched with four big lenders who became even bigger after the financial crisis. Consumers will benefit by having well-funded new entrants looking to steal market share. Goldman Sachs is both large and well-funded. Consumer should expect better rates on savings accounts and loans in the years to come, as competition intensifies.

TAGS: Saving

Friday, April 1, 2016

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

SalemFiveDirect’s eOne Savings account is an online-only savings account currently offering 1.10% APY until January 2017. The account requires no minimum balance, and has no fees associated with general maintenance. It does require a $100 minimum initial deposit to open, and any activity that is performed outside the Internet, a phone line, or an ATM will result in a service charge.

The 1.10% APY is only available to those who do not currently have an account with Salem Five. The only exception is if you have an eOne Checking account. In this case, you can still open an eOne Savings account with the arguably competitive APY, but you cannot pull that initial $100+ deposit to your savings account from the eOne Checking account. It must come from an outside source.

How to Open an Account

In order to open an eOne Savings account, you must apply online. The process takes about 10-20 minutes. SalemFiveDirect complies with Know Your Customer regulations, requiring you to provide the following information:

  • Full Name
  • Social Security Number
  • Date of Birth
  • Driver’s License Number
  • Address
  • Email Address
  • Appropriate Information for any Joint Owners

Funding the Account

Because this account is online only, all funding must be completed via electronic transfer, or direct deposit. Before initiating a transfer, you will need to fill out ACH information, providing SalemFiveDirect with:

  • The Name of the Financial Institution
  • Your Account Number
  • The Routing Number

Once this is set up, you will be able to pull in funds from outside bank accounts. To avoid fees, when you are withdrawing money from your eOne Savings you will want to initiate the transfer with the outside financial institution to which you are transferring the money.

Fine Print

While the eOne Savings account boasts no maintenance fees, there are some service charges you should be aware of. In addition to fees associated with funding your account at a physical branch, you will also be charged $2.75 per month if you do not elect to receive your statements electronically within 30 days of opening your account.

Federal regulation dictates that savings accounts can only have six outgoing transfers within a statement period. Go beyond this, and you will be charged a fee as your account is simultaneously converted to a transaction account. SalemFiveDirect follows this federal mandate.

For high rollers, any amount in your account over $500,000 will be automatically transferred to a Statement Savings account which has a much lower APY of 0.05%. The 1.00% APY on its eOne Savings, like most savings accounts, is subject to change at the financial institution’s discretion. When there is a change, SalemFiveDirect puts it in affect on Tuesdays.

When you apply, you will be required to give SalemFiveDirect permission to pull your credit score. It does not always do so, but when it decides it is necessary as a part of the application process, it will do a hard pull on your credit report, which may affect your credit score.

Finally, an eOne Savings account can only be used for consumer purposes. That means that you cannot use it as a business account.

Who It’s Best For

Because this account is only accessible online, it is best suited for the computer literate, and those who feel comfortable managing their finances via the Internet. Because of SalemFiveDirect’s restrictions, it is also best for those who do not already hold other accounts with the institution. Aside from the eOne Checking, having any other account open with Salem Five or SalemFiveDirect will disqualify you from taking advantage of the 1.10% APY.

How it Stacks Up

SalemFiveDirect’s eOne Savings does have one of the highest APY options on the market right now, but it comes with quite a few strings attached; notably, the 1.10% APY ending in January of 2017.

Synchrony Bank offers 1.05% APY with no monthly fees if you keep a $30 minimum balance. The unique feature of this savings account is ATM access to your funds. If you need fast access to cash, then you can use your ATM card instead of needing to transfer the money electronically, which can take a few days.

GE Capital Bank also offers 1.05% with no monthly fees, no minimums but no ATM access. This is a simple to use, no frills savings account that offers decent APY with no end date attached.

Ultimately, the eOne Savings account is fairly standard as far as online savings accounts are concerned. While the interest rates won’t blow you out of the water, they are considerably higher than the common 0.01% APY you’ll be able to get at a traditional brick-and-mortar bank branch. As long as you are aware of the potential service charges, the lack of maintenance fees is an attractive draw.

TAGS: Savings Account

Friday, March 11, 2016

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This site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on certain links posted on this website

Changing bank accounts can be painful, but lucrative. Chase understands that some people will only go through the hassle of changing banks if they are paid to do it. To encourage people to switch, Chase has introduced a bonus offer that will pay customers up to $250.

In the rest of this post, we will explain the details:

  • Get up to $250 when you open a Chase Total Checking® account* with Direct Deposit and/or open a Chase SavingsSM account*, deposit $10,000 or more in new money and maintain a $10,000 balance for 90 days
  • Get a $150 bonus when you open a Chase Total Checking® account* and set up direct deposit
  • Get a $100 bonus when you open a Chase SavingsSM account*, deposit a total of $10,000 or more in new money within 10 days, and maintain a $10,000 balance for 90 days
  • Access 15,500 Chase ATMs and 5,300 branches
  • Chase QuickDepositSM  lets you deposit checks almost anytime, anywhere with the ease of taking a picture. Just point, snap, and deposit.

The checking account does have a monthly service fee of $12. However, that fee is waived if you have direct deposits totaling $500 or more made to the account. If your direct deposit is less than $500, there are two other ways to avoid the fee. You can either keep a minimum daily balance of $1,500 or more in your checking account or keep an average daily balance of $5,000 or more in any combination of qualifying and linked Chase deposit or investment accounts. You should speak to a branch employee to understand in more detail.

The savings account has a $5 monthly fee. That monthly fee can be waived with one of the following during a monthly statement period:

  • $300 or more minimum daily balance
  • OR, at least one repeating automatic transfer of $25 or more from your personal Chase checking account (available only through Chase Online Banking)
  • OR, account owner is younger than 18
  • OR, when linked to a Chase Premier Plus CheckingSM, Chase Premier Platinum CheckingSM or Chase Private Client CheckingSMaccount

How To Get The Bonus

You will need to visit a Chase branch in order to open the account. Here is how the process works.

  1. Visit the Chase website and sign up to receive your bonus offer coupon by email. You will be asked for your email address, and a coupon will be sent to you.
  2. When you receive the coupon, print it out and take the coupon to your local branch.
  3. Sit down with a banker and open the account. You will need at least $25 to open the checking account.
  4. Make sure you set up the direct deposit with your employer. After you open the account, you will have your routing number and account number that can be used. And don’t forget to deposit $10,000 (or more) within 10 business days of account opening to be eligible for the savings account bonus.

Is Chase Right For Me?

Chase is one of the largest banks in the country. The bank has been investing aggressively in its mobile app, and was recently named the Best Mobile Banking App for Large Banks by MagnifyMoney. But Chase is not right for everyone. Here are the pros and cons.

Pros

  • There are over 15,500 Chase ATMs and 5,300 branches. When Chase enters a region, it tries to be everywhere. In places like New York and Florida, it is very easy to find either a branch or an ATM, to avoid fees.
  • Chase’s mobile banking app has the highest level of user satisfaction among big banks.
  • It is easy to avoid a monthly account service fee, with a low direct deposit requirement of $500 per month.
  • Chase also offers some of the best credit cards in the market, like Chase Slate and Chase Freedom. You might find combining your accounts into one place to be convenient.
  • Chase has developed a wide range of alerts to keep you in control and manage the risk of fraud. You can receive customized text messages, email messages or even push messages to your iPhone whenever there is activity on your account.

Cons

  • The savings account only pays 0.01% interest. It can be a convenient place to keep money, but interest rates at internet-only banks are much higher. You can find the best online savings accounts, which are paying more than 1.00% APY, here.
  • The checking account can be expensive if you do not live or work near a Chase branch. Although you might be reading about this deal online, it does not make sense if you do not live near a branch. Chase will charge you $2.50 for any withdrawal from a non-Chase ATM in the US, Puerto Rico and the US Virgin Islands. The fee for international withdrawals is $5. If you do a lot of international travel, you might want to consider a bank (like Charles Schwab) that waives and reimburses all ATM fees.
  • If you do not link your savings account or credit card for overdraft protection, it can get expensive quickly. You would be charged $34 per incident, up to three times per day. This is an easy charge to avoid if you link your savings account or credit card.

The Final Verdict

If you live and work near Chase branches, it can be a good choice for your everyday banking needs. Changing accounts can be painful, but that is why Chase is offering up to $350 for the trouble. It will take you less than an hour to get the accounts open and give it a try.

Other Key Terms

  • Chase Savings APY: 0.01% effective as of 3/15/16. Interest rates are variable and subject to change
  • Minimum Balance to Open: $25 Chase Total Checking®, $25 for Chase SavingsSM
  • Monthly Service Fee: $12 for Chase Total Checking® and $5 for Chase SavingsSM
  • NSF Fee: $34
  • ATM Surcharge: $2.50 (in US), $5 (outside US)

TAGS: Checking account, savings, Savings Account

Tuesday, November 3, 2015

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Ridgewood Savings Bank is a physical bank that services the Bronx, Manhattan, Kings County (Brooklyn), Queens County, Nassau County, Staten Island, Suffolk County, and Westchester County. You must live or work in one of these communities to be eligible for Ridgewood Savings Bank products, including the Smart Move Online Savings.

The account offers 1.05% APY, requires no minimum deposit to open, no monthly fees with $100 monthly balance, and access to your money via phone, internet, or ATM.

How To Open An Account

Opening the Smart Move Online Savings account only take about 10 minutes. In order to be prepared, you will need:

  • Valid Identification: Driver’s License, Passport, Military ID, or State ID
  • Social Security number
  • If no Social Security Number, must have proof of valid citizenship in the form of Resident Alien Status
  • External account information, if you wish to fund the account from an external account

Funding the Account

Deposits to the account can be made via mail, ATM, or by electronic transfer from an external account. There are no fees for deposits, no matter how you make them, and there are no limits to the number of deposits you can make per statement cycle.

The Fine Print

Interest on the Smart Move Online Savings Account is compounded daily and credited monthly on the last business day of the month. If the interest accrued at the end of the period is $25.00 or greater, you can request a check be mailed to you by submitting a mailed request at least 10 days before the end of the period.

The 1.05% APY is the current rate offer, but is subject to change at any time. Additionally, the 1.05% APY is only valid up to balances of 250,000.00. Balances of 250,000.01 or greater will be subject to the current Ridgewood Savings Bank Savings Account APY, which is 0.20% at the time of writing.

Because of federal regulations regarding savings accounts, you are limited to 6 free withdrawals per statement cycle. Withdrawals or transfers beyond 6 are charged a $10 fee.

Ridgewood Savings Bank also charges a $2.00 monthly account maintenance fee on all of its savings accounts, including the Smart Move Online Savings, which is waived with a $100 minimum balance.

Finally, Ridgewood Bank charges a $30 fee for each withdrawal or transfer initiated against insufficient funds. This includes transfers made online, by phone, by ATM, or by wire transfer.

Pros

  • Competitive, 1.05% APY
  • Can fund the account for free from an external account, mail, or wire transfer
  • No minimum deposit to open
  • No monthly fee with $100 balance
  • Interest compounded daily
  • Support by phone Monday – Friday: 7am to 7pm (ET), and Saturday: 9am to 3pm (ET)

Cons

  • $2.00 monthly account maintenance fee if balance is not $100 or greater
  • $10 fee for withdrawals or transfers over 6 per statement cycle
  • $30 insufficient funds fee
  • 05% APY is valid on balances up to $250,000.00 and subject to change at any time
  • Balances of $250,000.01 and greater are subject to 0.20% APY
  • Interest is credited monthly, even though it is compounded daily

Who It’s Best For

Even though the Ridgewood Bank Smart Move Savings Account is online it’s similar to a credit union in that it only services a select area.

How It Stacks Up

Even though the interest rate on the Smart Move Online Savings is competitive at 1.05%, there are other online accounts that offer higher APYs and lower, less complicated fees.

Another savings account option with no minimums and no fees is the GE Capital Online Savings. The APY is the same, at 1.05%. There is no minimum balance to open, and no transaction fees. Deposits can be made by electronic transfer, wire transfer, or mail.

Despite some of the negatives to the Smart Move Online Savings account, such as the monthly maintenance fee for balances less than $100, 1.05% APY is a highly competitive rate if you can qualify for the account.

TAGS: interest, Savings Account

Tuesday, November 3, 2015

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated November 17, 2015

If you’re looking for a savings account with a high promotional interest rate, the Palladian PrivateBank Savings Account might be the right choice for you.

About the Palladian PrivateBank Savings Account

The Palladian PrivateBank Savings Account is an online savings account that provides a promotional interest rate of 1.30% for 6 months, then a non-promotional variable APY on the entire account balance. It’s stated as 1.10% in the comparison table, but 0.90% in the fine print. Interest is compounded daily but credited to your account on a monthly basis. Account holders are limited to six withdrawals per month, which is standard for all savings accounts.

However, there are quite a few restrictions on the account. The account requires a $1,000 minimum initial deposit. You also must be a U.S. Citizen with a current U.S. address.

Deposits and Withdrawals

Deposits can be made through an internal transfer for existing account holders of the PrivateBank, an ACH debit from another financial institution, or a cashier’s check or personal check mailed to The PrivateBank. Initial account funding must be received within 10 days from the date of completing the application. Check deposits also have a 10-business day holding period.

Withdrawals are limited. Accounts holders can have a check sent to the address on file by calling customer service or sending a written request to the bank. Account holders can also call or write to initiate a transfer to a Palladian PrivateBank checking account. Withdrawal requests made within the first 90 days of account opening will be sent back to the originating account via ACH if they were initially funded by ACH.

Many other online banks offer much simpler ways to deposit and withdraw funds through mobile banking and online transfers.

How Does the APY Compare?

The promotional APY of 1.30% is one of the highest interest rates available in the market, even in comparison to other online savings accounts. As promotional interest rates can provide an even higher return, the Palladian PrivateBank Savings Account is a great way to earn interest for your savings.

The Application Process

If you’d like to apply, the application can be completed online. The account application does request information such as your Social Security number, driver’s license number with date of issue and date of expiration, and employment information to verify your identity. Some states do not have the date of issue printed on their licenses, but customer service can help you fill in the information if necessary. This process is a bit longer than other online savings accounts, but still doesn’t take too long to complete.

Beware of the Fine Print

The Palladian PrivateBank Savings Account does have a number of fees not seen in all online savings accounts. These fees include: