Update: CIT Bank has closed its RampUp CDs to new customers. Please visit this page for current CIT Bank products and rates.
Previously, CIT Bank offered CDs with some unique features including a “rate bump” option that allows to you raise your rate in the future if the interest rate increases. The second unique feature was that you could add more money to your CD one time at any point you choose throughout the term.
What is the best place to lower your interest rates and consolidate credit card debt in order to pay it all off? The first thing to try is to call up your credit card company and negotiate your existing rate down. If that isn’t satisfactory, you could switch issuers and do a balance transfer to a new card with a low introductory rate. If you have qualifying credit, you can take advantage of no fee 0% APR balance transfer offers for up to 15 months.
I would say the next option to consider is P2P lending, which in my experience has lower rates than personal unsecured loans from banks. P2P is gradually becoming an accepted source of loans as shown by announcements of new institutional money coming in from hedge funds. Prosper has been around since 2006 and has done over $300 million in loan volume since inception, and LendingClub has been around since 2007 with over $500 million in loans. Both are now registered with the SEC.
Alternatively, you may be considering paying off your credit card debt with a home equity loan. This would change your unsecured debt into a secured debt. The danger is now if you don’t pay off that loan, you could lose your house. If that added risk doesn’t make a difference to you, then a home equity loan or line of credit will probably offer you a lower rate.
Their full criteria for determining what rate you’ll pay is not disclosed but is based on a number of factors. Really, the best way to see which one will give you the best deal is to ask each one for a free quote. In both cases, getting a rate quote will involve looking at your credit report, but it will not result in a credit inquiry and will not hurt your credit score. If you do decide to move forward and get the loan, only then it will show up on your credit report.
My experience. I applied for a $10,000 debt consolidation loan at both places. I was offered a 1-year loan at 8.17%, a 3-year loan at 7.49%, or a 5-year loan at 10.85% annual interest rates at Prosper. I was offered a 3-year loan at LendingClub at 6.62% interest rate. For a $10,000 loan over 3-years and including all fees, my LendingClub payment was $307 per month and Prosper payment was $311 per month. So even though the interest rates seem rather different, the final monthly payments ended up closer than expected (though still a $150 difference in total payments over the whole 3 years).
SunTrust Bank is offering 30,000 Delta Skymiles for opening a new checking account by 6/30 with qualifying direct deposit and choosing the Delta SkyMiles World Check Card. Available in AL, AR, FL, GA, MD, MS, NC, SC, TN, WV, VA and Washington, D.C. The debit card does have a $75 annual fee but do you get 1 mile per $1 spent (for those that avoid credit cards). However, you don’t get the free checked bags or Priority Boarding of the Delta American Express credit card.
Still it’s not a bad deal, $75 for 30k miles if you live near a SunTrust branch. Some of the text suggests that you can get 15k of those miles with just the new checking account and no debit card, but it’s not entirely clear. Direct deposit must be $100 or more. The “Balanced Banking” checking account option has a $12 monthly fee, waived with a $3,000 minimum balance across Suntrust accounts. Selected fine print below:
Chase Exclusives is a program that encourages you to open a Chase checking account whenever you have any other relationship with Chase. I closed my Chase (formerly WaMu) account a while back after they slowly started making it harder to keep as a secondary account, but some of these perks actually seem pretty good. I remember hearing something about them, but never actually took a good look at the details until now.
10% Extra Cash Back on Chase Freedom
The Chase Freedom® – $150 Bonus is a popular cash back card that features 5% cash back on rotating categories and 1% back on everything else. This quarter you’ll get 5% back on all purchases at gas stations and on local commuter transportation. (up to $75 cash back a quarter based on $1,500 in purchases). Check out my page on 5% cash back credit cards for more info.
However, if you have a Chase checking account, they will add an additional 10 points. Since 100 points is worth $1, that’s basically saying every purchase on the Chase Freedom earns 1.10% cash back and every 5% category purchase earns 5.1% cash back. For someone like me that puts everything on their credit card for easy expense tracking, that can add up especially with smaller purchases. Currently, the Chase Freedom has a promotion offering a $150 Bonus after you make $500 in purchases in your first 3 months from account opening and an additional $25 Bonus after you add your first authorized user and make a purchase within this same 3-month period.
1% Mortgage Cash Back program
If you have both a Chase checking account and a Chase mortgage, you can earn 1% cash back on your mortgage payments (principal + interest). You have to have the checking account open before the mortgage closing, and enroll in automatic payments from said account within 60 days of closing. If you take the option of having your 1% cash back applied towards your loan principal, that works out to shortening a 30-year fixed mortgage by 9 months if you stick with it. (They really should make this an option on other mortgages, paying just 1% extra instead.)
I don’t know how good Chase mortgage rates are, but I’d probably get a quote now from Chase just to see if they are competitive. Overall though, it would probably be better to just get a better interest rate and pay extra towards your principal as if you had a higher mortgage (takes discipline).
$150 New account opening bonus
Thinking about opening a new account? You can also get a $150 bonus through this link if you open a Chase Total Checking account with $100 and set up direct deposit (new customers only). To avoid monthly service fees, you must do any one of the following each statement period:
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Interest rates looks to remain tiny for a long time, so if you want to boost your interest earned while keeping your money safe in banks, taking advantage of sign-up bonuses is one way to do it. Earning 1% APY on $10,000 is just $100 a year, and it’s even hard to get 1% APY now! Why not double or triple that with some new accounts.
Citibank $50 bonus if you open a Citibank account with $1,000 and complete 1 direct deposit and 1 electronic bill payment for 2 consecutive months. New checking account customers only. There’s no monthly service fee if you maintain a $15,000 combined average monthly balance requirement in eligible products; otherwise $20.00 monthly service fee is applied. Eligible products are linked deposits, loans, mortgages, and investment accounts. $100 bonus available with Citigold account.
Chase Bank $150 bonus when you open a Chase Total Checking account and set up direct deposit (new Chase checking customers only). This account is free if you make a $500+ direct deposit each month, or have $1,500 minimum daily balance.
M&T Bank $100 bonus when you open a MyChoice checking account and set up direct deposit within 90 days. This account is free if you maintain a direct deposit each month or have $500 minimum daily balance. $125 and $150 bonuses also available with upgraded accounts (and higher requirements).
Capital One $100 bonus when you open a Interest Online Checking account by 1/31/2012 using offer code CHEC168DF and make a direct deposit of $250 or more within 90 days. No monthly service fee, and pays 0.75% APY on balances less than $100k.
Despite the Treasury’s obvious dislike for the small investor, Series I Savings Bonds still offer a relatively good interest rate. As of January 1st, 2012, you will no longer be able to buy paper savings bonds other than a small window using your tax refund. The only option left is buying electronic savings bonds via TreasuryDirect.gov. This brings me to the following reader question:
Was just reading Mel Lindauer’s comments in the Bogleheads forum about I-Bonds and the trouble with Treasury Direct. Seems a great many folks hate the system to the point that they would rather not use it. 2012 is/was to be the year that I first began purchased I-Bonds, having finally got to the point of maxing out all other tax deferred and tax free methods. Now I am not so sure…what is your experience with TD?
First, let’s get to what I see as the main reason why most people choose not to use the online service at TreasuryDirect (TD). TD is not a bank and does not fall under Regulation E and the Electronic Fund Transfer Act that establishes consumer protections for loss or theft of money from your account.
If your paper savings bonds are stolen or lost, the Treasury has a process in place to reclaim your bonds. However, if somehow your electronic savings bonds were stolen, you would stuck with the loss with no liability from TD. It doesn’t seem to make sense, but it’s true.
So what do you do? The easiest thing to do is not use TreasuryDirect. But it remains a good investment, so in my case I looked into what security measures were in place to prevent such theft. In November 2011, TD instituted some security changes to their login process. What would a thief have to do in order to cash in your savings bonds?
Personally, I deemed it exceedingly unlikely for an actual theft to occur and made the decision to go ahead and use the website. My holdings there are significant, but under 5% of total net worth. I know that others have also had technical issues with accessing their account, but I have not experienced anything like that. In the end, TreasuryDirect definitely has its flaws, and I would not fault someone for not using it as a result. You have to weight the risks and benefits for yourself.
Regular readers will know that I like using credit cards for the cashback or travel rewards, even though I never carry a balance from month to month or pay any interest. However, I also accept that many people prefer debit cards as they suck money straight out of your checking account. If that sounds like like you, you’re not alone – when it comes to a charge card purchase, nationally it’s just as likely to be a debit card as a credit card. I get it – debit cards more psychologically similar to spending cash and there is no change of racking up a balance (although there are overdraft fees).
The best way to describe Perkstreet Financial is that it’s the best checking account if you don’t like using credit cards. They offer the best cashback rewards on debit cards by far:
As long as you have some sort of activity each month (billpay, deposit, withdrawal, cleared check, debit card purchase) then there is no monthly fee. Some other improvements they’ve made are that you can deposit checks sent overnight for free at UPS Stores or Mailbox Etc. (or via free prepaid envelopes). They don’t offer ATM rebates like some other places like my account at Ally Checking, but they do offer 42,000 free ATMs across the country; use their ATM locator to see if there are convenient ones to you.
Right now, you can get an extra $25 bonus cash back when you apply for an account online by December 25th, fund with $25 or more, and use your card at least 3 times in the first month. (Ironically, last time I started an application they let me fund with with a credit card up to $500 and promised it would go through as a purchase and not a cash advance.) – This promo is now expired.
There has been a lot of commotion about banks and debit card fees recently. Fees were tested, added, announced, removed, and probably soon, added back indirectly. However, megabanks still have the power of inertia and convenience. I am betting that most people did not move their accounts just yet. But maybe I’m wrong?
For this poll question, I want you to think about your current primary checking account. This is the account where the bulk of your paycheck or other income is deposited, and out of which you pay your bills on a regular basis.
Loading ...I have a lot of accounts, but my primary checking account is online-only Ally Bank, as previously reviewed. I do keep a megabank account for the occasional need for in-branch services like a signature guarantee, cashier’s checks, bank wires, large checks that I can’t use eDeposit, and so on.
Citizens Bank and Charter One bank have an interesting CollegeSaver bank account for those with children. However, it is only open to residents of certain states in the Eastern and Northeastern US (CT, DE, IL, IN, KY, MA, MI, NH, NJ, NY, OH, PA, RI, VT; enter zip code to verify). Thanks to reader Justin for the tip.
You must open a bank account before the child’s 12th birthday with a minimum amount, and then save a minimum amount every month until the child is 18. (You’re allowed to miss one payment per year.) If you satisfy the requirements, you’ll get a $1000 bonus on the 18th birthday. Here are the details:
The best case scenario would be if your kid is just under 12 years old right now. That’s still a 6-year commitment, but if you contribute the minimums then with the bonus that’s a 6.40% annual rate of return on your money (per savings calculator). Since the bonus is constant, the rate of return drops the younger your kid is (longer contribution period). At just over 6 years old, you’d be locked in for 12 years and your annualized return would be 1.9%.
I would say if your child is 10-12 years old and you have patience, this is not a bad deal. But as this is not a 529, you will owe taxes on the interest. However, the upside is that you don’t have to use the funds to pay for college. The account is opened as a custodial account (UTMA), and thus the account can be opened for the child by anyone. However, depending on the state, the child will get control of the account at 18 or 21.
Citibank is offering new checking account customers a bonus of either a 20,000 or 40,000 ThankYou points, worth $200 or $400 in gift cards. You must:
ThankYou Point Value Recap
There are a decent number of options for these poitns. 10,000 ThankYou points = $100 Wal-mart Gift card, which you can sell for a $95.55 Amazon.com gift certificate or $91 cash at PlasticJungle.com. Alternatively, can be worth $100 towards Expedia travel, a student loan, or paying down your mortgage. More details in the Citi $500 ThankYou card post.
Citibank Account: 20,000 ThankYou Point Bonus (Easier)
Citigold Account: 40,000 ThankYou Point Bonus (Harder)
For most people, I think the 20,000 ThankYou point offer will be the easier one to qualify for if you have $6,000 to move over there instead of an online savings account earning only 1% APY. $6,000 would only earn $60 over an entire year, at that rate. Even it takes 6 months to get your $200 bonus, that’s a 6.67% annualized return.
I thought that the Citigold might be doable since the monthly fees are waived for the first two months, but I saw in the fine print that the points might take another 90 days to post and your account must be open until then. This option would only work well if you have a mortgage with Citi.
The bonus ThankYou Points will be credited to your ThankYou Member Account within 90 days from the end of the statement period in which you satisfy all offer requirements. New checking account must be open and in good standing at the time the bonus ThankYou Points are posted to your ThankYou Member Account.
Afterwards, if you wish, you can downgrade to the Basic Account which offers a way to avoid monthly fees with no minimum balance, if you make 5 “qualified transaction” activities per month (direct deposits, debit card purchase, bill payment, ACH payments, checks paid, ATM withdrawals).
Update: Citibank has updated their checking account to have different restrictions starting with statements ending on 12/9/2011.
Chase Bank is offering a $125 bonus for new customers if you open a new Total Checking account with $100 and set up direct deposit within 60 days of account opening. They state that the direct deposit must be “an electronic deposit from your employer or the government of your paycheck, pension or government benefits (such as Social Security)”, but I’m not sure if they manually check. You must keep the account open for 6 months. To avoid a monthly fee, you must do one of the following each statement period:
Otherwise, a $12 monthly Service Fee will apply ($10 monthly Service Fee in CA, OR and WA). Per the fine print, if are not a current customer and you’ve closed an account more than 90 days ago, you count as a “new” customer again. However, you can only receive one checking account-related bonus per calendar year. Thanks to reader Andy for the tip. Offer expires 10/7/11.
As part keeping the interest rate on my emergency fund as high as possible, I’ve shared my like of rewards checking, savings bonds, and the Ally Bank 5-Year CD. Ally CDs have a small 60-day interest withdrawal penalty, so the liquidity is still quite good. As long as you hold it for 6 months, you’ll be earning more interest than the highest rate from an online savings account even after the penalty is factored in. After that, the effective rate just keeps getting better until you reach maturity at the full rate.
With no minimum balance requirements, you can also buy them in whatever size chunks you want. And I have. But I checked the rates again today, and was sad to see they’ve been dropping quite fast recently. The current Ally Bank 5-year CD rate is 1.60% APY (as of 10/25/13). I decided to compile the rate history from as far back as I’ve been tracking them.
There have been a few small rate hikes, but for the most part the rate has been gradually dropping due to market conditions. If you’ve been thinking about buying, I would buy now before rates drop even farther. When opening a CD, remember they have a “10 Day Best Rate Guarantee” in which you get the best rate they offer within 10 days of opening. You can now also find slightly better rates elsewhere, for example Alliant Credit Union has their 5-year certificate at 2.35% APY (2.45% for $25k+), but with a larger 6-month interest penalty. I’ll probably still buy a little more at 2.17%, but if the rate drops below 2% then I’m looking elsewhere.
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