Fed Funds Rate Drop Update: Locking In Higher Bank Yields Now

Posted on December 22, 2008 // 22 Comments

Given the recent drop in the Fed Funds rate to nearly zero, bank have been adjusting their interest rates accordingly. Now that the dust has settled a bit, I suppose it is time to see what rates we can get now for our FDIC-insured cash. It may be a good idea to lock in some CDs based on your time horizon, and/or if you are willing to give up the liquidity.

Liquid Savings Accounts

  • DollarSavingsDirect remains the top overall rate, holding steady at 4.0% APY for now, although it could change at any time. See my quickie review here.
  • The Everbank Yield Pledge Money Market Account is offering 4.00% for 3 months guaranteed as long as you open by 12/31/08. (Balances up to $50,000.) See my review of the application process here. 4% for 3 months is actually better than any other banks’ top 3-month CD rate, while still allowing withdrawals.
  • If you signed up for the WT Direct $250 bonus, just a reminder that today (12/22) now December 31st is the last day to initiate your transfer. So you still have time, and it works out to be a good deal for a couple months of commitment.

Shorter Term (1-2 Year) Certificates of Deposit

  • FNBO Direct is offering a 9-month CD at 3.75% APY, a 1-Year CD at 4.0% APY, and a 2-Year CD at 4.26% APY. These are all very competitive for their respective lengths. The FNBO Direct liquid savings account (my review) also holds steady at 0.85% APY.

Longer Term (3+ Year) Certificates of Deposit

  • Pentagon Federal Credit Union is offering 3-year, 4-year, and 5-year CDs at 4.75% APY. If you aren’t a member, you can join the NMFA for a one-time fee of $20.
  • WaMu actually has a 5-year CD at 5% APY. Not bad if your mortgage is under 5%. Their liquid savings account continues to drop steadily (as we were afraid of) and is now only paying 1.50% APY.
Filed Under: Banking, Deals & Offers //

Free Lift Ticket To Park City Utah Ski Resort

Posted on December 20, 2008 // 13 Comments

Planning a trip to Park City, Utah? I am for a conference coming up, and I found a promotion where you can get a free lift ticket to any Park City ski resort on the day that your arrive. You’ll need to bring your boarding pass and fill out a voucher form online. Looks like I need to book a flight that arrives early!

You will need to bring the completed, required redemption voucher, along with your same-day boarding pass and out of state photo I.D., to the resort ticket window, to receive your same-day lift ticket. Quick START offer valid: Respective resort opening – 12/24/08, 1/4/09 – 2/13/09, and 3/29/09 – 4/12/09.

Other than that, the lift tickets seem pretty pricey. $85 during peak season? Ouch. I found some potential discounted tickets at Liftopia and Canyon Sports. Any other tips for skiing on the cheap at Park City? I also need to figure out how much Delta Airlines charges to check in ski bags nowadays.

Filed Under: Deals & Offers //

Lending Club P2P: Review of New Post-SEC Changes

Posted on December 14, 2008 // 21 Comments

Now that LendingClub has finished their SEC filing and is one of the only P2P lenders currently operating (everyone else either shut down or is in an SEC quiet period), let’s take a look at some of the changes. You are now officially “investing” in notes offered by LendingClub, as opposed to directly “lending” to private individuals. The bad news is that this also means some new restrictions that have been added. The good news that now these notes can be traded on a secondary market, offering liquidity for loans that used to be a 3-year commitment.

Borrowers

I have always found borrowing from LendingClub to be very straightforward to borrowers. You get a 3-year, unsecured loan at a fixed rate. If you qualify (see below), you simply submit an free application and they tell you what rate you get. Then you can simply compare this rate with your other options – credit cards, home equity loans, whatever – before deciding if you want to attempt a listing. However, which the current credit conditions, remember that credit cards can only guarantee 6-12 months of a low rate, and home equity loans have gotten a lot more strict (and also put your house at risk).

Eligibility. However, be aware LC is only seeking “prime” borrowers. Borrowers must be a US citizen or permanent resident, and at least 18 years old with a valid bank account and a valid Social Security number. You can’t be from the following 8 States: Idaho, Indiana, Iowa, Maine, Nebraska, North Carolina, North Dakota, and Tennessee. You have to have good-to-excellent credit in addition to satisfying additional requirements. From their FAQ:

In order to qualify for listing a loan request, you will need a FICO score of at least 660 with a debt-to-income ratio (excluding mortgage) below 25%. In addition, your credit history must show that you are a responsible borrower:

* at least 1 year of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or collections account in the past 12 months,
* no more than 10 inquiries on your credit report in the last 6 months,
* a revolving credit utilization of less than 100%, and
* more than 3 accounts in your credit report, of which more than 2 are currently open.

Put together, these minimums are actually relatively strict. However, as a lender I would say that crafting a convincing loan listing showing your income, expenses, and exactly how you plan to pay off the loan is still very critical to get your loan funded.

Fees. Borrowers pay an upfront fee that is a percentage of the loan amount. The fee ranges from 0.75% to 3.50% based on the credit grade given.

Lenders

The interest rates charged by LendingClub currently vary from 7.37% to 20.11% (6.69 to 19.37% after fees) based on the credit grade assigned by LC after reviewing the borrower’s overall profile. There is no eBay-like bidding here. You see the rate, you read the listing and credit grade, and you decide either to fund it or not. Remember the minimum requirements above. The rates are higher than before, probably to counter potentially higher future defaults and to match increasing rates in the overall market.

Default Rates. You can see all the stats on existing LendingClub loans here. Up to this point, I have only investing in top-grade “A” loans. Out of 332 A loans, only 2 have been late since they started in June 2007. That’s a 0.6% late rate, with no defaults yet. Across all their loans, they have had a default rate of less than 3%. This includes a few loans that were of slightly lower quality than their current minimum requirements.

Looking at the overall late and default rates as compared to credit grades, it would appear the “sweet spot” is currently B and C grade loans. However, I personally still like minimal risk and plan on sticking mainly to A grade loans.

Finally, it is interesting to note that out of the $23 million of issued loans, there was also $199 million of “declined” loans. I’m not sure if this is due to rejection by LendingClub, or simply prospective lenders deciding that the loans were unsatisfactory. It also could be due to a lack of funds by lenders, so only the “best” loans were funded.

Eligibility. After the SEC filing, you must now meet certain minimum income and net worth requirements. You must also be a resident of on these 25 states (new states are added as they are approved):

California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Minnesota, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.

Liquidity. All loans you take on can now be sold on a secondary market at FOLIOfn, so if you need your money back it is possible. As an existing lender, I had to fill out some additional information, but my application was approved in a day and I can now view a listing of loans that people want to sell. FOLIOfn charges the seller a 1% trading fee.

Fees. Lenders pay a 1% service charge on all interest payments. Due to reasons that I haven’t worked out, this reduces the APR by less than 1%.

My Experience

In general, my use of LendingClub has been limited to some experimental investing. I like the idea and I like trying out new financial services, but as I mentioned, I’m also very risk-averse. My loans have to have an A-grade (I choose them myself and don’t use LendingMatch). Also, they have to outline a clear plan for repayment. My main problem so far is a lack of such high quality loans. I’ve only funded about 8 loans so far, but the volume seems to be picking up. I’ve been earning about 7% (8% minus fees) with no lates or defaults. The movement of money back and forth between my bank is smooth, just like with an online bank. I only wish there was an “instant funding” feature, as I don’t like to keep idle cash sitting there, but I like the ability to fund attractive loans quickly before they fill up.

In fact, although I usually don’t care about this sort of thing, yesterday I used their loan map mashup and actually found a loan by a local store that I have shopped at before. After reading it over, I am now moving some funds in to help fund that loan. Should be interesting.

How are your experiences with Lending Club?

Filed Under: Deals & Offers, Investing //

WT Direct $250 Winter Bonus Update + Application Review

Posted on December 12, 2008 // 32 Comments

This is a follow-up about the WT Direct Winter Bonus promo good for up to $250 on top of their standard interest rate of 3.06% APY, if you open a new account and maintain a certain average balance for January and February. There is still time to participate, the deadline is to fund via ACH transfer initiated by 12/22 now 12/31/08.

I’ve decided to participate, since I get to remain liquid and interest rates look to only be dropping lower. 3-month Treasury Bills were yielding a negative interest rate for a while! See my previous post about this offer for details about the fine print. Below is some more info gathered after applying myself.

Application Process and Setup

The application process was pretty standard, with this bar above the application providing a good overview. First, they gather the personal info. Second, they use the now-popular Equifax ID check questions to verify your identity. Third, you can fund electronically with account and routing numbers, although you must come back and verify trial deposits later (you don’t have to fund all at once for the bonus). Finally, you can electronically sign the application and disclosures. There were no physical forms to send in, although a welcome packet does arrive by mail. They state explicitly that there is no credit check:

This information will be used only to verify your identity and will not be used for any other purpose. We do not perform a credit check and your answers to these questions will not affect your credit rating.

If you count Day 0 as the application day, the trial deposits should arrive either Day 1 or 2. If you verify them immediately, then your deposit should be sucked out on Day 3. Ignoring weekends, your funds should show up on Day 5, at least based on my experience.

If you are linking with other savings account, WT Direct may show up as Wilmington Trust Bank, which is what the WT stands for. Your account number is given to you at the end of the application, and the routing number is 052173464. WT Direct’s online transfer system allows unlimited linked banks, and transfers to external accounts are free both in and out with a 2-3 day transfer time.

Last time, WT Direct offered people who signed up under their promotion an 0.50% extra APY for 4 months after it ended. Hopefully they’ll do that again.

Filed Under: Banking, Deals & Offers //

Blockbuster & PayPal Promo: Pay For 1 Month, Get $25

Posted on December 7, 2008 // 45 Comments

Blockbuster Online is running a new PayPal promotion where new members can get a $25 rebate for signing up for any Blockbuster movie subscription trial and keeping (and paying) it for at least on month. Any plan qualifies. Their cheapest plan is only $3.99 per month, which allows you one video out at a time via mail only, with a maximum total of two per month. So you could see it as “lots of free movies” or “$21 + two free movies”. Just in time for some movie watching over the holidays!

  1. When signing up, be sure to click on “See all available plans” to see all your options. Make sure you click the right radio button for the plan you want.
  2. Click “Checkout with PayPal” and log in to PayPal. Agree to Blockbuster monthly subscription plan. Confirm date that you’ll be charged and fill out your Blockbuster profile.
  3. Remember date and wait to be charged for one month, and then you can cancel. $25 bonus should arrive 6-8 weeks after 12/22 (promotion end date).

Here are selected portions of the fine print:

Eligibility: You must be a new BLOCKBUSTER Online subscriber in order to take advantage of the free trial to BLOCKBUSTER Online and this Offer. Eligible Purchase: To receive the $25 Cash Back Offer, simply stay on as a paying BLOCKBUSTER Online subscriber, using PayPal as your payment method, for one (1) monthly billing cycle. Any BLOCKBUSTER Online plan qualifies for the $25 Cash Back Offer, so long as you remain a paid subscriber for one monthly billing cycle. Offer Period: The $25 Cash Back Offer starts on November 19, 2008 at 12:01 am Central Time and ends on December 22, 2008 at 11:59 pm Central Time. Cash Back Payment: The cash back payment will be deposited into your PayPal account within 6-8 weeks after the promotion ends.

Filed Under: Deals & Offers //

Capital One 360 Referral Giveway (Expired)

Posted on December 3, 2008 //

Do you have an Capital One 360 savings account with unused referrals? I usually have lots of $25 bonus links available, but have been falling behind again. The first 25 people who comment below tonight and leave a working contact e-mail (real name not required, e-mail will not be shared publicly) will get one filled by me for free, which is $10 for you. I’m good for now, but will probably ask in a month or so. Thanks!

Due to comment moderation, your comment may not show up right away. One referral per person. You cannot have had a “freebie” before. Look for a message from me to your e-mail address with further instructions later on.

Filed Under: Deals & Offers //

WTDirect Bank: 3.06% APY + Up To $250 Sign-up Bonus

Posted on December 1, 2008 // 15 Comments

Here’s another decent deal with hopefully minimal drama. Online bank WTDirect is offering up to a $250 cash bonus for opening a new account and keeping a certain minimum average balance for January and February. WT stands for Wilmington Trust FSB, which is FDIC-insured and all that good stuff. Your bonus depends on your average balance:

$10,000 = $50 bonus
$20,000 = $100 bonus
$30,000 = $150 bonus
$40,000 = $200 bonus
$50,000 = $250 bonus

Must be funded by ACH transfer initiated by 12/22. You must type in the promotion code WTG3DNC, or simply apply.

This offer is available to new WTDirect clients only. To receive the bonus, clients must enter the promotion code “WTG3DNC” at the time of account opening. There is no minimum balance required to open the account. WTDirect account must be funded via electronic (ACH) transfer which must be initiated by 12/22/08. Clients may transfer funds in and out of the WTDirect account during the promotion period (1/1/09 – 2/28/09) and the bonus will be based on the average balance level during that time. Account must remain open and in good standing through the end of the promotion period. Bonus will be credited to client’s WTDirect account on or about the second week of March. WTDirect reserves the right to cancel or modify this promotion at any time without notice.

How good is this bonus? To start, you are already guaranteed 3.06% APY for the first 60 days, which using my APY to APR calculator gives you roughly 3% APR. On $10,000 for two months, that’s 10000 x 0.03/12 x 2 = $50 in interest. Since the bonus is also $50 for a $10,000 balance, you’re basically getting double the interest, or roughly 6% APR during these two months.

Alternatively, if you’re trying to see how much more interest you’re earning as opposed to DollarSavingsDirect or FNBO Direct, even compared to 4% APY you’re looking at least $30 extra interest for every $10k invested ($150 on $50k).

So if you’ve got the cash, I’d put in $50k to max out what is basically a 6% APR 2-month CD. There is supposed to be no hard pull. I’d also do it sooner rather than later, as you still have to verify some trial deposits to set up the ACH by the 12/22 deadline.

Filed Under: Deals & Offers //

MyCorporation Corporation/LLC Filing: Free For All Of December

Posted on December 1, 2008 // 12 Comments

If you missed it last month, MyCorporation is offering their incorporation filing services for free again for the entire month of December for a “limited time” with the coupon code MYGIFT. Usually this costs $149. Tip: You can also check out now but delay the official filing of your corporation or LLC until 2009 if you want.

Must use coupon MYGIFT to obtain discount. Document shipping, state fees, publication fees, and additional product fees are additional. Discount valid for orders placed for a new corporation or limited liability company only.

More info in this previous post.

Filed Under: Deals & Offers //

OptionsExpress Brokerage $500 Sign-up Bonus (Expired)

Posted on November 30, 2008 // 111 Comments

OptionsXpress brokerage is offering a $500 bonus if you open up with $500 with promotional code C3. You just need to keep $500 in it for 6 months*, and complete at least one trade. You’ll get the $500 on May 15th, 2009. That’s a while from now, but I’ll remind you. 😉 Well, it looks like I’m going to have to open up another brokerage account this month… I can’t pass this up. The deadline is today, November 30th!

Thanks to readers Roger and Anonymous. Selected fine print:

*Offer limited to one $500 bonus for each newly activated, funded optionsXpress account meeting the terms and conditions of the offer. To qualify for the $500 bonus, the account must be opened through [link] or with promo code C3 by 11/30/08, a per account average balance of $500 must be maintained for 6 months, and the account must trade at least once. The $500 bonus will be deposited into the account on May 15th, 2009 if terms and conditions are met. A customer can only qualify for the $500 bonus a total of one time. Deposits of new funds or securities from existing optionsXpress accounts are not eligible for this offer. Qualified (IRA), linked and shared accounts are not eligible for this offer.

* Since the average account balance required is $500, and you need to make one trade, I’d deposit a bit more than $500 to make sure you qualify, since a trade costs $14.95 and your investment’s value might also drop. You can decide what to buy, but you’re already getting 100% ROI on $500. A possible low volatility choice is BSV, the ticker for Vanguard’s short-term bond ETF.

Filed Under: Deals & Offers //

Free Dr. Pepper Coupon on Sunday 11/23

Posted on November 22, 2008 // 22 Comments

I don’t quite know why Dr. Pepper cares about Guns and Roses, but…

Beginning Sunday at 12:01 a.m., coupons for a free 20-ounce soda will be available for 24 hours on Dr Pepper’s Web site. They’ll be honored until Feb. 28.

Via AP Article, thanks to readers Kerri and Billy.

Filed Under: Deals & Offers //

Free $25 FXCM Micro Currency Trading Account

Posted on November 17, 2008 // 25 Comments

You can apparently get a free currency trading with $25 in it when you sign up for this CNBC Portfolio Challenge, with no upfront money required from you. At first I thought it was play money but they even have a requirement before you can cash out:

You must complete five (5) round-turn trades in your new FXCM Micro account, and your account must be in good standing before you are eligible to withdraw any funds from your account. Existing FXCM account holders are not eligible to receive the promotion.

Thanks to reader Andres for the tip. I’m still in Spain so I haven’t tried it myself. I’m just happy the Euro/USD conversion rate is much better than a few months ago! (I’d just gamble with the $25 and cash out, personally.) Please share any experiences or new discoveries in the comments.

Filed Under: Deals & Offers //

CA Residents: $50 Gift Card For ScholarShare 529 Plan

Posted on November 15, 2008 // 8 Comments

Here is another 529 account bonus, but only open to California residents. If you open a California ScholarShare 529 College Savings Plan today and sign up for automatic investing of at least $50 per month on the account, and you’ll receive a $50 Target GiftCard.

From the fine print:

To receive a $50.00 Target GiftCard (a “Gift Card”), eligible individuals must (a) open a new account under the ScholarShare Plan (a “ScholarShare Account”) within 30 days of registering for the Gift Card offer between August 15, 2008 and December 31, 2008 and (b) establish an automatic investment plan for the ScholarShare Account of at least $50 per month, with the initial $50 automatic investment contributed and invested within 90 days after the ScholarShare Account is opened. Limit: two (2) Gift Cards per person. Each ScholarShare Account must have a different designated beneficiary and be individually owned (no trust, custodial or other ownership arrangements).

Filed Under: Deals & Offers, Investing //
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