M1 Finance Backdoor Roth IRA Instructions, How To w/ Screenshots

Posted on October 26, 2021 // 11 Comments

I recently completed a Backdoor Roth IRA contribution at M1 Finance (my review), so here is a detailed step-by-step walkthrough of the process along with screenshots based on my actual experience. M1 Finance currently has a new customer bonus offer up to $150 for new accounts, based on initial deposit amount. You can also add on the up to $2,500 transfer bonus for moving assets over from another brokerage firm. (Disclosure: I am now an affiliate of M1 Finance, and may be compensated if you click through my link and open a new account.)

Quick background. The Backdoor Roth IRA is a way for individuals to fund a Roth IRA even though their income (modified AGI) exceeds the phaseout limits set for a direct Roth IRA contribution. ($140,000 MAGI for individuals, $208,000 MAGI for married filing joint in 2021.) I won’t go deep into the details, but the general idea is:

  • An individual can contribute to a Traditional IRA without any income limits. However, the contribution is not tax-deductible if you exceed the income limits.
  • An individual can also convert a Traditional IRA to a Roth IRA, also without any income limits. You won’t owe any taxes on those non-deductible IRA contributions, because they are already after-tax.
  • Perform these two steps right after each other, and you have a “Backdoor” Roth IRA.

There are other considerations and details involved, so please do your own research before taking action. Roth conversions cannot be undone. This option may go away in 2022, so if you have any Traditional IRA balances that you have been considering to convert to a Roth IRA, you may want to make your decision before the end of 2021.

M1 Finance Backdoor Roth IRA walkthrough.

Open a new Traditional IRA account and fund it. If you already have an M1 account, click on the name of your portfolio in the top right area, and then click on “Add account”.

Choose “Retirement”, then “Traditional IRA”, then read and accept the terms. Next, you will have the option to select an investment “pie”, but since you are going to convert this quickly to a Roth IRA, it’s fine to just choose something close to cash. One option is the PIMCO Enhanced Short Maturity Active ETF (search for ticker MINT), add it your pie basket, and make it 100%. Finally, you must fund it, probably using your bank account numbers unless you have an existing M1 Finance account or other ideas.

Open a separate Roth IRA account, but do NOT fund it. M1 wants you to have the Roth IRA set up before any conversion request can be made. So start like above and open a new Retirement account, but this time pick Roth IRA. You can now pick your “real” investment portfolio pie, but again don’t fund it! Just think of it as an empty container for now.

Wait for a bit. It may take a few days for your Traditional IRA to get set up, funded, and invested into something. This step is still important. Some people even wait for the Traditional IRA to generate a full monthly account statement so they have paper documentation that they completed this step. Others just wait a day and then move on.

Find both your Traditional and Roth IRA account numbers. It’s conversion time. To find your account numbers, find your name in the top right corner. Click on that, and then click on “View Account Settings”. Then click on the subheading “Accounts”. You should end up with a list of your account nicknames, account numbers, and account types.

Request the conversion, sign and return documents. You can request the conversion via their automated chat bot, secure message, or phone number during business hours. I was able to complete the entire process via chat bot and email without having to use the phone. Here’s my chat transcript with personal details removed:

USER: roth conversion

BOT: M1 Invest can perform IRA conversions. Please keep in mind that due to high volumes, transfers can take 5-7 business days to complete. To get started with this process, please reply with the following information:

BOT: What is the M1 Invest account number of the traditional IRA you would like to convert out of?

USER: XXXXXXXX

BOT: What is the M1 Invest account number of the Roth IRA you would like to convert into?

USER: XXXXXXXX

BOT: What is the amount you would like to convert (if full account conversion, please simply confirm ‘full account’)?

USER: full account

BOT: What is the email address you use to login to M1?

USER: xx@xx.com

Within an hour, they emailed me a PDF form that I had to complete and sign. I uploaded the signed PDF into their secure drop box, and had confirmation that they had sent the request over to their clearing firm within another hour or so.

Jonathan,

We have submitted this conversion to our clearing firm. Both accounts will be paused for the duration of the transfer. We will notify you once the transfer is complete and you will see the funds placed in the correct account.

If you are transferring securities, please make sure the securities you are transferring are located in your Roth IRA portfolio.

This process can take 1-3 business days to complete.

Best,
Brokerage Operations
M1 Team

Once it shows in my M1 Invest dashboard that the funds have been moved into my Roth IRA account, then I’ll be done. I should be sent a form at tax time regarding the amount converted. If I contributed $6,000 to the non-deductible Traditional IRA and the value didn’t change at the time of conversion, then I won’t have any capital gains to pay taxes on. My $6,000 Backdoor Roth IRA contribution will be complete and now I can enjoy tax-free growth and tax-free withdrawals of all future gains. I hope you find this useful for informational purposes.

Filed Under: Deals & Offers, Investing //

Hanscom Federal CU Thrive Review: 5.00% APY Saving Habit Builder and Maintainer

Posted on October 20, 2021 // 80 Comments

savebuttonbankHanscom Federal Credit Union (HFCU) has hiked back up the rate on their CU Thrive account to 5.00% APY, which is a capped certificate of deposit that rewards consistent saving. The rate is set for 12 months, and during those 12 months you can transfer up to $500 every month from a HFCU checking account. No monthly fees. However, you cannot make any withdrawals during those 12 months, or you will be subject to an early withdrawal penalty of 90 days interest.

This product is not meant for big balances. Instead, it is meant to encourage the creation AND maintenance of a modest savings habit. 5.00% APY is more than 10 times what the top “high-yield” savings accounts offer right now.

How much interest can I earn? At 5% APY, if you maxed out this account and set aside the full $500 a month for 12 months, at the end you’d have put in $6,000 and earned about $150 in interest by the end of the year (~$162 if you made every transfer on the 1st of the each month by my quick calculations). $6,000 also happens to be just about the same amount as a full Roth IRA contribution (hint hint) or the foundation of a solid emergency fund.

At the end of the 12 months, all accrued savings plus earned dividends will be transferred into your primary savings account. It will NOT automatically renew at maturity. Each member can only have one CU Thrive account open at one time, but after one 12-month period ends you can open up another one to keep up the savings habit (assuming it is still offered). Full disclosure (PDF).

Eligibility details. To open a CU Thrive account, you must first open an HFCU checking account in addition to the savings account required for all members. HFCU offers a free checking account with no direct deposit and no minimum balance requirement. HFCU membership is open to active duty or retired military along with many other groups (see application), but anyone can also join the Air Force Association, Paul Revere Chapter for a one-time $20 fee and be eligible. On the application, choose the option “I am a member of or will be joining a sponsoring member organization.” You must also keep $25 in the share savings account as long as you are a member.

New refer-a-friend program. HFCU has a referral program which offers an additional $30 cash bonus after your new savings and checking accounts are open and in good standing for 90 days. The referring member gets $30 as well. If you would like a referral from me, please me send your full name, e-mail address, the text “HFCU referral” via my contact form. I will use this information only to fill out their referral form.

Account opening process (from a few years ago). I started the online application and had to provide the usual personal information and then answer questions based on my credit report to verify my identity. Based on my free credit monitoring, they did not perform a hard pull on my credit report. You can fund with an online bank transfer but they also gave me the option to fund with credit card up to $2,000 (not sure if this is still an option today). They didn’t mention if this would be considered a cash advance or not, but it showed up as a purchase for me. Finally, you must print out, sign, and mail in a signature card. You can also open an account in-person. All of their physical branches appear to be located in Massachusetts.

My 1-year experience. I had set the maximum $500 to be transferred every month to my CU Thrive account from my HFCU Checking account. I made 11 transfers but missed one because my checking balance was too low on the date of automatic transfer. My fault. When that happens, the account basically just skips the transfer. There is no penalty, you just don’t get to add that money to the account. I called them but they said there was no way to replace that transfer, even if I moved more money into the checking account a day later. Other than that, everything went very smoothly and I was paid my interest as promised. At the 1-year maturity date, the funds were automatically transferred to my HFCU savings account and the CU Thrive no longer shows up on my online account page. I can now open up another CU Thrive account, if I wish.

I also discovered that Hanscom Federal has paid a Loyalty Dividend to its Credit Union members for over 20 consecutive years. When I had this account, I earned another $1.57 in bonus loyalty dividends on top of my $78.46 of interest earned.

In addition to the CU Thrive and free checking options, HFCU also has a Kasasa Cash Checking account that offers up to 1.00% APY on balances up to $15,000 if you make at least 12 debit card or credit card purchases per month, complete at least 1 ACH Credit/Direct deposit per month, and enroll in online statements. This isn’t the highest Kasasa rate available nationwide, but if you’re already a member, it may be convenient.

Bottom line. The CU Thrive account is a good option for people looking to build up a savings habit, with 5.00% APY for 12 months. However, the system really works best if you use HFCU’s free checking as your primary checking account. (You may also consider their Kasasa Cash checking account with higher interest but debit card activity requirements.) Juggling it as an external savings account is perfectly possible, but you have to keep on top of your transfers to avoid idle cash earning zero interest. I received all of the interest promised, the customer service was nice and polite when contacted, and any errors were my own.

Filed Under: Banking, Deals & Offers, Reviews //

Quontic Bank High Interest Checking Review: 1.10% APY on all Balance Tiers

Posted on October 12, 2021 // 5 Comments

The Quontic Bank High Interest Checking account has recently raised their interest rate and applied it to all balance tiers, with the result being the rare combination of a competitive interest rate with a high balance limit. Here are the highlights:

  • Earn 1.10% APY all balance tiers.
  • APY earned is based on the portion of the daily balance within the specified tiers.
  • No minimum balance requirement.
  • No monthly fees.
  • $100 minimum deposit required to open an account.

In order to qualify for the higher rate, you must complete the following qualifying debit card transactions each statement cycle:

10 debit card point of sale transactions of $10 or more per statement cycle required to earn the maximum APY on the portion of the account daily balance tier.

If you meet those requirements, here is the exact interest rate breakdown:

– the portion of the daily balance $150,000 or less will earn 1.10% APY
– the portion of your daily balance above $150,000 and up to and including $1,000,000.00 earns from 1.10% APY
– the portion of your daily balance above $1,000,000 will earn from 1.10% APY
– If the qualifying activity requirement is NOT fulfilled, the interest rate paid on the entire balance will be 0.01% APY

Note the following details about qualifying point-of-sale (POS) transactions:

The following activities are not considered qualifying POS debit card transactions and do not count toward earning rewards: ATM- processed transactions; transfers between accounts; purchases made with debit cards not issued by our bank; cash over portions of point-of-sale transactions; Peer-to-Peer (P2P) payments (such as Apple Pay Cash*); loan payments or account funding made with your debit card and purchases made using third-party payment accounts.

I’ve shared other checking accounts with debit card requirements, but the main difference here is the rare combination of competitive interest rate and very high eligible balance. 1.10% APY on a $150,000 balance would result in earning $1,650 of interest in a year. The difference between that and an account paying 0.70% APY is $600 more interest over a year. There is also no monthly direct deposit requirement with this account.

Note: Earnings of $1,650 with 1.10% APY and $1,050 with 0.70% APY is calculated based on only those respective balances being maintained in the High Interest Checking account for an entire year, with nothing debited to or credited from the account during its duration.

* APY means Annual Percentage Yield

Updated as of 5/31/22.

Filed Under: Banking, Deals & Offers //

Best Interest Rates on Cash – October 2021 Update

Posted on October 7, 2021 // 6 Comments

via GIPHY

Here’s my monthly roundup of the best interest rates on cash as of October 2021, roughly sorted from shortest to longest maturities. I look for lesser-known opportunities earning at least double what most savings accounts and money market funds are earning while still keeping your principal FDIC-insured or equivalent. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 10/6/2021.

Fintech accounts
Available only to individual investors, fintech companies often pay higher-than-market rates in order to achieve fast short-term growth (often using venture capital). I define “fintech” as a software layer on top of a different bank’s FDIC insurance. These do NOT require a certain number debit card purchases per month. Read about the types of due diligences you should do whenever opening a new bank account.

  • 3% APY on up to $100,000. The top rate is still 3% APY for October through December 2021 (can be 3.5% APY with their credit card), and they have not indicated any upcoming rate drop. HM Bradley requires a recurring direct deposit every month and a savings rate of at least 20%. Due to high demand, you must currently use a referral link to join. If you have any available to share (you get 3), please drop it in the comments of my HM Bradley review.
  • 3% APY on 10% of direct deposits + 1% APY on $25,000. One Finance lets you earn 3% APY on “auto-save” deposits (up to 10% of your direct deposit, up to $1,000 per month). Separately, they also pay 1% APY on up to another $25,000 with direct deposit. New customer $50 bonus via referral. See my One Finance review.
  • 3% APY on up to $15,000. Porte requires a one-time direct deposit of $1,000+ to open a savings account. New customer $50 bonus via referral. Important note: Porte is adding additional restrictions in January 2022. See my Porte review.
  • 1.20% APY on up to $50,000. OnJuno recently updated their rate tiers, while keeping existing customers on the grandfathered 2.15% APY rate. If you don’t maintain a $500 direct deposit each month, you’ll still earn 1.20% on up to $5k. See my updated OnJuno review.

High-yield savings accounts
While the huge megabanks pay essentially no interest, I think every should have a separate, no-fee online savings account to accompany your existing checking account. The interest rates on savings accounts can drop at any time, so I list the top rates as well as competitive rates from banks with a history of competitive rates. Some banks will bait you with a temporary top rate and then lower the rates in the hopes that you are too lazy to leave.

  • T-Mobile Money is still at 1.00% APY with no minimum balance requirements. The main focus is on the 4% APY on your first $3,000 of balances as a qualifying T-mobile customer plus other hoops, but the lesser-known fact is that the 1% APY is available for everyone. Thanks to the readers who helped me understand this. Unfortunately, some readers have reported their applications being denied.
  • Evangelical Christian Credit Union (ECCU) is offering new members 1.01% APY on up to $25,000 when you bundle a High-Yield Money Market Account & Basic Checking. (Existing members can get 0.75% APY.) To join this credit union, you must attest to their statement of faith.
  • There are several other established high-yield savings accounts at closer to 0.50% APY. Marcus by Goldman Sachs is on that list, and if you open a new account with a Marcus referral link (that’s mine), they will give you and the referrer a 0.50% boost on top of the current interest rate for 3 months. You can then extend this by referring others to the same offer. Right now, Marcus is paying 0.50% APY, so with the offer you’d get 1.00% APY currently for your first 3 months.

Short-term guaranteed rates (1 year and under)
A common question is what to do with a big pile of cash that you’re waiting to deploy shortly (plan to buy a house soon, just sold your house, just sold your business, legal settlement, inheritance). My usual advice is to keep things simple and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a fixed interest rate that can never go down, but you can still take out your money (once) without any fees if you want to use it elsewhere. CFG Bank has a 13-month No Penalty CD at 0.62% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 0.50% APY for all balance tiers. Marcus has a 7-month No Penalty CD at 0.45% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Lafayette Federal Credit Union has a 12-month CD at 0.80% APY ($500 min). Early withdrawal penalty is 6 months of interest. Anyone can join this credit union via partner organization ($10 one-time fee).

Money market mutual funds + Ultra-short bond ETFs
Many brokerage firms that pay out very little interest on their default cash sweep funds (and keep the difference for themselves). Unfortunately, money market fund rates are very low across the board right now. Ultra-short bond funds are another possible alternative, but they are NOT FDIC-insured and may experience short-term losses at times. These numbers are just for reference, not a recommendation.

  • The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.01%. Vanguard Cash Reserves Federal Money Market Fund (formerly Prime Money Market) currently pays 0.01% SEC yield.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 0.27% SEC yield ($3,000 min) and 0.37% SEC Yield ($50,000 min). The average duration is ~1 year, so your principal may vary a little bit.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 0.22% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 0.34% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-bill interest is exempt from state and local income taxes. Right now, this section isn’t very interesting as T-Bills are yielding close to zero!

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 10/6/2021, a new 4-week T-Bill had the equivalent of 0.04% annualized interest and a 52-week T-Bill had the equivalent of 0.10% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a -0.06% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a -0.09% (!) SEC yield. GBIL appears to have a slightly longer average maturity than BIL.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. If you redeem them within 5 years there is a penalty of the last 3 months of interest. The annual purchase limit is $10,000 per Social Security Number, available online at TreasuryDirect.gov. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888.

  • “I Bonds” bought between May 2021 and October 2021 will earn a 3.54% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More info here.
  • In mid-October 2021, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time, although we already know that it will be likely higher than 5%!
  • See below about EE Bonds as a potential long-term bond alternative.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with exceptionally high interest rates. The negatives are that balances are severely capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). There is a long list of previous offers that have already disappeared with little notice. I don’t personally recommend nor use any of these anymore, as I feel the work required and risk of messing up exceeds any small potential benefit.

  • Mango Money pays 6% APY on up to $2,500, if you manage to jump through several hoops. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with unique risks. You have to jump through certain hoops which usually involve 10+ debit card purchases each cycle, a certain number of ACH/direct deposits, and/or a certain number of logins per month. If you make a mistake (or they judge that you did) you risk earning zero interest for that month. Some folks don’t mind the extra work and attention required, while others would rather not bother. Rates can also drop suddenly, leaving a “bait-and-switch” feeling.

  • The Bank of Denver pays 2.00% APY on up to $25,000 if you make 12 debit card purchases of $5+ each, receive only online statements, and make at least 1 ACH credit or debit transaction per statement cycle. The rate recently dropped. If you meet those qualifications, you can also link a Kasasa savings account that pays 1.00% APY on up to $50k. Thanks to reader Bill for the updated info.
  • Presidential Bank pays 2.25% APY on balances up to $25,000, if you maintain a $500+ direct deposit and at least 7 electronic withdrawals per month (ATM, POS, ACH and Billpay counts).
  • Evansville Teachers Federal Credit Union pays 3.30% APY on up to $20,000. You’ll need at least 15 debit transactions and other requirements every month.
  • Lake Michigan Credit Union pays 3.00% APY on up to $15,000. You’ll need at least 10 debit transactions and other requirements every month.
  • Find a locally-restricted rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
CDs offer higher rates, but come with an early withdrawal penalty. By finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD to keep the ladder going. Some CDs also offer “add-ons” where you can deposit more funds if rates drop.

  • Abound Credit Union has a 59-month Share Certificate at 1.35% APY ($500 min). Early withdrawal penalty is 1 year of interest (and only with the consent of the credit union, so be aware). Anyone can join this credit union via partner organization ($10 one-time fee).
  • NASA Federal Credit Union has a special 49-month Share Certificate at 1.35% APY ($10,000 min of new funds). Early withdrawal penalty is 1 year of interest. Anyone can join this credit union by joining the National Space Society (free). However, NASA FCU will perform a hard credit check as part of new member application.
  • Lafayette Federal Credit Union has a 5-year CD at 1.26% APY ($500 min). Early withdrawal penalty is 6 months of interest. Anyone can join this credit union via partner organization ($10 one-time fee).
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Right now, I see a 5-year CD at 1.10% APY. Be wary of higher rates from callable CDs listed by Fidelity.

Longer-term Instruments
I’d use these with caution due to increased interest rate risk, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10 years? You can buy long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable early withdrawal penalties. You might find something that pays more than your other brokerage cash and Treasury options. Right now, I see a 10-year CD at 1.65% APY vs. 1.54% for a 10-year Treasury. Watch out for higher rates from callable CDs from Fidelity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a unique guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently 0.10%). I view this as a huge early withdrawal penalty. But if holding for 20 years isn’t an issue, it can also serve as a hedge against prolonged deflation during that time. Purchase limit is $10,000 each calendar year for each Social Security Number. As of 10/6/2021, the 20-year Treasury Bond rate was 2.02%.

All rates were checked as of 9/7/2021.

Filed Under: Banking, Deals & Offers, Investing //

Kabbage Business Checking Review: 1.10% APY + Public $300 Bonus

Posted on October 3, 2021 // 6 Comments

(Update October 2021: Post has been updated to reflect a new public $300 bonus. I posted about a $300 bonus in the past, but it ended up being targeted select AmEx business cardholders. This one is open to the public. You must scroll down a bit to see the bonus info, screenshot below. Note that you may be asked to provide supplemental business documentation like Articles of Incorporation.)

Updated full review:

Kabbage offers financial solutions for small businesses, and was acquired by American Express in late 2020. On top of the very competitive interest rate of 1.10% APY, there is currently a public $300 bonus for their business checking account. Here are the highlights:

  • 1.10% APY on balances up to $100,000
  • No monthly maintenance fees.
  • No minimum balance requirements.
  • Free ATM access. Check app for a map to the nearest in-network ATM.
  • Deposit checks for free via mobile app.
  • Deposit cash at one 90,000 participating retailers nationwide (including Walgreens, CVS, Walmart) for a variable fee up to $4.95. Check app for a map to the nearest location.
  • Need paper checks? $20 fee for one pack of 100 personal-sized checks.

Looks like if you like doing all your business banking via a mobile app, this would be a good fit. If you deal with a lot of physical cash or write a lot of checks… not so much, since you would have to pay a fee for each cash deposit and a $20 fee for every 100 checks. However, at 1.10% APY and no minimum balance requirement, you could just use this as a business savings account.

Other Kabbage products include a business line of credit and a service to send invoices and accept payments. (They also helped dole out a lot of PPP loans.)

Kabbage Checking is provided by Green Dot Bank, member FDIC. The routing number may show up as “GoBank, A Division of Green Dot Bank.”

$300 bonus details.

New accounts earn a cash deposit of $300. Earn a $300 cash deposit into your Kabbage Checking account after you complete a total of 5 debit card purchases within 45 days of account opening. (You must apply and be approved by 12/15/2021. Terms apply.)

This promotion is being offered by American Express Kabbage Inc. (“we”, “us” or “our”). The Kabbage Checking account is provided by Green Dot Bank. Green Dot Bank will deposit a $300 cash deposit into your Kabbage Checking account subject to the terms of this offer as stated below. To be eligible to earn the $300 cash deposit, you must 1) apply and be approved for a Kabbage Checking account opened between October 1, 2021 and December 15, 2021 at 11:59 p.m. ET, and 2) successfully complete 5 debit and/or virtual card purchases within 45 calendar days of the opening of your Kabbage Checking account. Only transactions that clear within 45 calendar days of Kabbage Checking account opening will qualify. Transactions that do not clear within this 45-day period will not qualify. To receive the $300 cash deposit from Green Dot Bank, your Kabbage Checking account must be open and in good standing at the time of fulfillment. Once you have completed all the above eligibility requirements, the $300 cash deposit will be deposited into your Kabbage Checking account between 45 to 90 calendar days from the date your Kabbage Checking account was opened. Limit one offer per new Kabbage Checking account. This offer (i) is not available to existing Kabbage Checking customers, (ii) is non- transferable, and (iii) cannot be combined with any other offer.

This bonus was previously targeted to holders of an American Express business credit card, but a representative messaged me and said this one is now fully open to the public.

Bottom line. Kabbage offers a digital-first business checking account that would work well for small businesses that don’t deal with a lot of physical cash deposits or paper checks (due to the fees involved). I get the feeling that it is only a matter of time before this becomes the “American Express business checking account”. Hopefully the interest rate stays high for a while.

Filed Under: Banking, Deals & Offers //

Porte Banking App Review: 3% APY on up to $15,000

Posted on October 3, 2021 // 30 Comments

Update October 2021: On 10/1/2021, Porte announced that starting on 1/1/2022 they will be adding some significant new requirements to obtain the 3% APY on balances up to $15,000. You must have each of the following during each calendar quarter:

  • Receive at least $3,000 in Qualifying Direct Deposits of payroll, pension, or government benefits payments from an employer or government agency into your Porte Spending Account.
  • Make at least 15 Qualifying Debit Card Purchase Transactions with a merchant for goods or services (excludes transfers and/or cash withdrawals) from your Porte Spending Account.

Again, this goes into effect on January 1st, 2022, so I am not updating my review below. If you meet these qualifications during a quarter in 2022, you’ll get 3% APY for that same quarter (they only pay out interest quarterly). The new requirements aren’t horrible (works out to $1,000 direct deposit and 5 debit purchases per month on average), but definitely makes their offering more hassle and less competitive. If you don’t meet these new requirements, then you’ll only get 0.20% APY on balances under $15,000. All balances over $15,000 will also earn 0.20% APY as of 1/1/2022.

Original full review:

Porte is another banking fintech app, this time with the notable feature of 3.00% APY on up to $15,000 on their attached high-yield savings account. To enable access to this account, you must have a one-time occurrence of $1,000+ of direct deposits within one month. There doesn’t appear to be any ongoing requirements after that.* This makes it a more simple setup than the 3% APY accounts of HM Bradley and One Finance, albeit with a lower balance limit. Thanks to reader Matt for the tip.

Referral bonus. New sign-ups can also earn an additional $50 bonus if you open a new account via referral link (follow the direction if not on a mobile browser) and establish a direct deposit of at least $500. That’s my link and I will also get the same bonus, so thanks if you use it! If you have issues with the bonus posting, please let me know.

Quick 3% APY math. If you were to max out the $15,000 at 3% APY and this interest rate holds for a year (a big if), you would get $450 of interest over that year. Compare with a 0.50% APY savings account that would earn $75 in interest on $15,000 in a year, for a difference of $375 a year. As long as that gap stays wide enough, that could be an ongoing $20 to $30 a month in extra interest income.

Additional features.

  • No monthly fees, no minimum balances.
  • Fee-free access to Moneypass ATM network (32,000+ locations).
  • Free debit Visa card.
  • Mobile check deposit via app.

They have “real human” (their words) customer service available at 800-267-7080. FDIC insurance is provided by their partner bank, MetaBank. This is the same bank behind Netspend, which used to have a more interesting 5% APY prepaid card. Note that interest also posts quarterly.

An important missing feature is that you can’t use their app to link an external bank account to make ACH deposits/withdrawals. You can make one-time deposits via a debit card from one of your other accounts (they use Plaid). You will have to link this account using another online bank as the hub (Ally, CapOne 360, Marcus, etc) to make ACH transfers. Otherwise, you’ll have to use their debit card and use Venmo/Apple Cash or similar. Little things like this show that it is a small start-up.

* Fine print. The wording on the site is a little ambiguous, but if you look through the fine print you’ll see that you only need one direct deposit to open the savings account, and once it is open, everybody gets the higher interest rate (3% APY as of this writing). There are no ongoing hoops listed.

No minimum balance to open Savings Account or obtain the yield(s). However, you must receive direct deposit(s) totaling at least $1,000 within one (1) calendar month to be eligible to open a Savings Account.

If the Average Daily Balance is $15,000.00 or less, the interest rate paid on the entire balance will be 2.97% with an annual percentage yield (APY) of 3.00%.

My experience. I opened the checking account and was allowed to open the savings account immediately after making $1,000 in qualifying direct deposits. (They don’t seem to be highly discerning as to what constitutes a direct deposit, but no guarantees.) You must manually transfer your funds from the checking to savings in order to get the 3% APY, which makes the funds inaccessible to your debit card. Even so, I declined their “Overdraft Service”, as I’d rather they just reject any transaction that would send me into negative territory. It doesn’t appear that the savings can be used as an overdraft source. My routing number is 073972181, which matches MetaBank, NA. I was able to make deposits and withdrawals to this account.

Bottom line. Porte is a new fintech app that offers a notable 3% APY on balances up to $15,000 once you complete a one-time direct deposit of $1,000 within a month. This is currently a much higher interest rate than the competition. The rest of the app is similar to other fintech offerings, but the high-yield savings account may be attractive for savers. There is special sign-up bonus via referral link (see above).

Filed Under: Banking, Deals & Offers //

Reminder: Consider Downgrading Annual Fee Cards Into Their No-Annual-Fee Versions

Posted on September 28, 2021 // 5 Comments

As another year of limited travel passes, this is a quick reminder that many credit cards with an annual fee have another version with no annual fee. You’ve already had the temporary ding on your credit report, and this allows you to keep that account history and credit limit. You’ll get less perks, but you still may retain something useful like the ability to keep earning points/miles on demand. Instead of canceling, you simply ask them for a “product change” or switch to another cards that they offer. I’ve recently converted two cards into their no annual fee versions:

The IHG Traveler Card makes it easy to keep earning a few IHG points here and there for keep my large existing points balance from expiring. I also keep the “Fourth Reward Night Free” perk when redeeming points for any 4+ night stay.

I’ve enjoyed having the Sapphire Reserve for years, as the $300 travel credit used to offset much of the previous $450 annual fee. However, the annual fee is now $550 and a couple years ago they removed the ability to bring my entire family including children into airport lounges with the Priority Pass Select (now limited to two guests) and likely also the new Sapphire Lounges. Converting to the Chase Freedom Unlimited preserves my Ultimate Rewards (UR) points balance, and we grabbed the Chase Sapphire Preferred thanks to their new big 100,000 point bonus. As Chase allows UR points transfers between immediate family members, I still maintain the ability to convert all of our combined Ultimate Rewards points to Hyatt hotel points, which are my preferred conversion value. I did convert some points using their Pay Yourself Back tool and cash out some points at 1.5 cents apiece first (I had a lot of points piling up).

Sometimes the no-annual-fee version of a card is not marketed very much, if at all. You can call the number on the back of your card and simply ask about your options. I usually wait until the annual fee charge shows up on my bill, but before the upcoming due date. They should want to keep your business – you often keep the same account number, but you most likely won’t be eligible for a new account sign-up bonus. You usually have to stay within the same “points” type, like Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou points, Capital One miles, Delta miles, American miles, Marriott Bonvoy, etc. Personal cards must stay personal cards, and business cards must stay business cards.

Note: In some rare cases where the only card downgrade options limit their sign-up bonus to once within a certain period, and you haven’t gotten it yet, then you may wish to simply cancel the card. You may consider moving your credit limit over to another card first.

Filed Under: Credit Cards, Deals & Offers //

Monifi Fintech Bank App: $250 Direct Deposit Bonus Extended

Posted on September 22, 2021 // 8 Comments

Extended through end of November 2021. This $250 bonus has been extended through the end of November 2021. I can also report that I’ve already successfully gotten my $250 rather quickly after my 2nd deposit, for my account opened at the time of my original post (screenshots below). I even received another $25 due to a follow-up targeted offer (for new recent accounts?) for opening a new “Goal” account. Interestingly, both my payroll direct deposit and my external ACH transfers from Ally were both marked as “ACH deposit” by their system.


Monifi is a financial app that promises to blend “saving, spending and personal goals all in one place”. Right now, Monifi is also offering a $250 cash bonus (mobile browser required) for new customers that receive two direct deposits of at least $1,000 each into your Spend Balance. Must open by 11/30/21. Here is the fine print for the bonus:

*Receive $250 when you set up payroll direct deposit to your Spend Balance and receive two payroll direct deposits of $1,000 USD or more within 90 days of opening your Monifi Relationship. Valid for Monifi Relationships opened between June 1, 2021 and November 30, 2021. The payroll direct deposits must be an electronic deposit of the account owner’s paycheck, pension or government benefits, such as Social Security. Limit one incentive per customer. $250 USD paid as a credit to your Spend Balance within 45 days of meeting promotion requirements. Offer may be changed or withdrawn at any time. Monifi Relationship must be open and in good standing to receive promotion incentive.

What you’ll need to set up direct deposit:
Find your account and routing numbers in the Monifi App under Account Details – from the home screen, select your Spend Balance, and tap the icon at the top right.

The new fintech holy grail is an app that takes your entire paycheck and helps you budget, save for a rainy day, save for intermediate goals, and invest for the future. Monifi is a division of MidFirst Bank (Member FDIC), and appears to be expanding aggressively to grow their customer base. Here are more highlights:

  • 0.60% APY on your Save balance.
  • No monthly fee.
  • Free nationwide ATMs through the Allpoint Network.
  • Works with Zelle for person-to-person payments.
  • Free debit card. Free billpay.

$50 referral bonus. There is also a $50 referral bonus link (use mobile browser?) available with different requirements where you just need to reach $300 of account value within 7 days of account opening (no direct deposit requirement). The details and fine print:

Your friend Jonathan Ping wants you to try Monifi! Create and fund a Monifi Relationship with at least $300, and you’ll each receive a $50 credit to your Save Balance!

Download Monifi using referral link: https://monifibank.page.link/aiooseoMnTuAddiQ6

Terms and conditions apply: https://monifi.com/refer-a-friend

Referred customer’s Relationship must meet the following requirements to be considered a completed referral: Relationship Balance: $300 minimum deposit within seven (7) days of account opening and an Available Balance of $300 within seven (7) days of account opening.

Unfortunately, I’m not sure how to stack it with the $250 bonus offer above. As long you as you can manage the two $1,000+ deposits, I would simply go with the larger $250 bonus link above.

Filed Under: Banking, Deals & Offers //

Reader Question: Should I Buy Savings Bonds in September/October 2021 or November 2021?

Posted on September 19, 2021 // 23 Comments

sb_poster

Here’s a timely reader question about Series I Bonds. It’s a good question because I predict that Series I Bonds will be soon getting even more media attention soon due to an even higher inflation-linked rate.

Would it be best to wait till November 1st to purchase I bonds? You mentioned the fixed rate will probably confine at 0. but what about the semiannual inflation rate? Do u think it is likely to be more than 3.54%? I’m new to this please educate me.

Series I Bond rates react every 6 months to delayed inflation reports from the Bureau of Labor Statistics. August CPI-U was already reported in mid-September, and September CPI-U will be reported in mid-October. 5 out of 6 months of data are already in the books, leaving only one month of data left. The 12-month trailing inflation rate as of that August CPI-U update was over 5%. Therefore, unless that data contains a significant amount of deflation, we already know that the next inflation rate on Series I Bonds is going to be higher than the 3.54% from May to October 2021. I roughly estimate the range that the next inflation rate will be between as 5% to 7%. That should be enough accuracy to make a purchase timing decision, earlier than my usual practice of waiting until mid-October.

  • If you buy in September or October 2021, you will receive a total rate of 3.54% for the first six months, then the “new” (estimated 5%-7%) rate for the next 6 months, and then new rates adjusted every six months for inflation onward.
  • If you buy in November 2021, you will receive the “new” (estimated 5%-7%) rate for the first 6 months, and then new rates adjusted every six months for inflation onward.

The takeaway is that either way, you will earn the “new” rate (estimated 5%-7%) eventually. If you buy in September/October, you’ll just have to wait a bit due to the staggered structure. Given that the current rate of 3.54% is still a higher interest rate than nearly any other savings account or CD is paying, I would personally just invest now if I had the cash ready and waiting. Also remember that Series I Bonds do not allow early withdrawals within the first 12 months after purchase date. As long as you complete your purchase by the end of September, it will count as purchased in September 2021 and you will be able to withdraw as of September 1st, 2022 (though subject to a penalty if held less than 5 years). It may take a little bit to set up your TreasuryDirect account, and it may take a couple business days for the withdrawal and purchase to process, so I wouldn’t wait until the last day.

Annual purchase limits. The annual purchase limit is now $10,000 in online I-bonds per Social Security Number. For a couple, that’s $20,000 per year. You can only buy online at TreasuryDirect.gov, after making sure you’re okay with their security protocols and user-friendliness. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888. If you have children, you may be able to buy additional savings bonds by using a minor’s Social Security Number.

As noted in my previous savings bond posts, these Series I bonds are a unique investment opportunity in that they are only available to individuals and are subject to purchase limits. Even if the real yield (fixed rate) is set at zero, that is still significantly higher than that of TIPS that trade on the open market (well negative across the board!). If institutional investors like pension funds or endowments could buy I bonds like you and me, they would buying billions of them.

I plan to purchase up to my annual purchase limit for 2021 as part of my asset allocation to inflation-linked bonds, although you can start with as little as $25. I guarantee that there will be many more articles about Series I bonds in mainstream personal finance sites in November after the new rate is officially announced.

Filed Under: Banking, Deals & Offers, Investing, Savings Bonds //

U.S. Bank Cash+ Plus Visa Signature Card Review – Choose Your 5% Cash Back Categories + $200 Bonus

Posted on September 12, 2021 // 37 Comments

New $200 welcome bonus. Here is a lesser-known card in the world of 5% cash back credit cards. The U.S. Bank Cash+ Visa Signature card actually lets you choose and change the categories in which you can earn 5% and 2% cash back. Here are the highlights:

  • $200 bonus after spending $1,000 in eligible purchases within the first 120 days of account opening.
  • 5% cash back on your first $2,000 in eligible net purchases each quarter on the combined two categories you choose.
  • 5% cash back on prepaid air, hotel and car reservations booked directly in the Rewards Center
  • 2% cash back on one everyday category, like Gas Stations/EV Charging Stations, Grocery Stores or Restaurants
  • 1% cash back on all other eligible purchases
  • 0% Intro APR on purchases and balance transfers for the first 15 billing cycles. After that, a variable APR currently 18.99 – 28.99%
  • Terms and conditions apply.
  • No annual fee.

Here’s how it works. Each quarter, you MUST enroll to choose one 2% back category from a list of three options: gas stations, grocery stores, or drugstores. You also get to choose the two 5% cash back categories every quarter, out of a preset selection of specific categories;

  • Fast Food
  • Cell Phone Providers
  • Home Utilities
  • Ground Transportation
  • Select Clothing Stores
  • Electronics Stores
  • Car Rentals
  • Gyms/Fitness Centers
  • Sporting Goods Stores
  • Department Stores
  • Furniture Stores
  • Movie Theaters
  • TV, Internet, and Streaming Services

You can pick the same categories each quarter, or switch them up once a quarter based on your planned spending. Make sure to choose your categories each quarter! – even if you want them to stay the same. If you do not choose your categories, all purchases revert to only earning 1% cash back for that quarter.

I have added the U.S. Bank Cash+ Visa Signature card to my quarterly-updated list of other 5% cash back cards like the Chase Freedom Flex, Citi Custom Cash, and Discover More cards.

Filed Under: Credit Cards, Deals & Offers //

PFS Buyers Club: New US Mint Coin Deal on 9/13 ($100+ Net Profit, September 2021)

Posted on September 11, 2021 // 30 Comments

Another new coin deal on Monday, September 13th, 2021. PFS Buyers Club has another coin deal on a limited-edition American Eagle 2021 One Ounce Silver Reverse Proof Two-Coin Set Designer Edition. They will pay you a guaranteed fixed profit of $100.05 plus any credit card rewards. See details below.

On September 13th – at 12:00PM ET the US Mint will release the limited edition American Eagle 2021 One Ounce Silver Reverse Proof Two-Coin Set Designer Edition.

There is a purchase limit of 1 Set per household, so you’re able to buy 1 Set.

The cost of each American Silver Eagle Two-Coin Set is $175.00. After including the $4.95 shipping charge, each order’s total will be $179.95

You will have the box shipped to your own house or office and then ship them to PFS Buyers Club with a prepaid FedEx shipping label that we will provide for you.

We will pay you $280.00 – for a profit of $100.05 per order.

This is also a great opportunity to earn valuable points/miles on your credit cards, as well as meet any spending thresholds.

If you are new to this type of deal please the previous similar (but expired!) deal for more background information and answers to most common questions. I have now done multiple deals with them and been paid as promised with no issues.

If you want to jump on this, you can sign up to join PFS Buyers Club here. PFS will provide *very* detailed instructions. Read them ahead of time, and follow them carefully to help you buy the coin before it sells out. If you use that link as a first-time buyer, I will receive a one-time referral fee the first time you successfully sell your coin for a profit. Thanks for those that use it, and for those that already used it in the past. I will be opting in myself as well.

Filed Under: Credit Cards, Deals & Offers //

CVS: $20 off $20+ In-Store Purchase with Paypal or Venmo App

Posted on September 9, 2021 // 7 Comments

Update: This offer has expired due to too many uses. Sorry!

Here is an offer for $20 off a single $20+ purchase at CVS stores, promoting the touchfree “scan to pay” feature of PayPal and Venmo apps. Open up your PayPal or Venmo app and look for the “Scan” option/code logo in the bottom left of the screen. Scan the following QR code below (or try this link). Then just go to a CVS store and pay using the “Show to Pay” option in your app. After completing the purchase at the full price, $20 will later be sent to your account.

Expires soon on 9/10/2021 at 11:59pm ET. One-time use only. Credit to JHClagg at SD. It says to share with friends! 😀

Filed Under: Deals & Offers //
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