Skip to content
Hanover Mortgages

Hanover Mortgages

The Refined Mortgage Lending Company & Home Loan Lenders

Tag: money market

Posted on February 11, 2021

How, Where, and Why to Use a High-Yield Savings Account

As you become more and more mature in your financial position, you’ll increasingly want to diversify your accounts. When you’re first starting your financial journey, it’s fine to just have one checking account, but the more money that you start accumulating, the more you will want to start holding it in different types of accounts. IRAs, 529s, Roths, 401ks, checking, savings — these are all different types of accounts and they all serve different purposes. 

Knowing where to put your money and how much should go in each type of account is a bit of a matter of personal preference. It will depend on your own unique situation, including your age, number of kids, family status, and how close you are to retirement. In this article, we’ll talk a little bit about how to best use a high-yield savings account.

What is a high-yield savings account?

Most people are familiar with the basic concepts of a checking account and a savings account. A high-yield savings account is not actually different from a regular savings account — it’s simply a designation indicating that it is paying a “high” amount of interest. There is no official designation of how much interest a savings account needs to pay out in order to be considered “high-yield”.

The interest that any savings account pays out varies mostly with macroeconomic conditions like the federal reserve interest rate. The Fed interest rate has a direct impact on the amount of interest that companies pay out. Another term that is similar to a high-yield savings account is a money market account. You can compare a money market account with a high-yield savings account here.

What kind of money should you put in a high-yield savings account?

Now that you know a bit about what a high-yield savings account is, it’s time to talk about how much money (and what kind of money) you should keep there. We’ve written before about how much money you should keep in your checking account, and a good rule of thumb is not very much. You should keep only enough to pay your regular monthly bills, with a little bit extra to avoid overdraft fees (Mint can help with this).

The reason for this is that most checking accounts pay hardly any interest at all. So excess money that you want to keep liquid is a good candidate for a high-yield savings account. 

One type of account that fits very well in a high-yield savings account is your emergency fund. You want to keep your emergency fund in a separate account from where you pay most of your bills (typically a checking account). And putting that money into something that at least earns a decent amount of interest is a smart financial move. 

Watching out for inflation

The other thing that you want to watch out for is to not put TOO much money into a savings account. While it might sound nice to be earning 0.5% or 1% or 2% on your money, you have to take into account inflation. If you earn 1% on your money but inflation causes your cost of living to go up 2%, then you’ve actually had a reduction of 1% in your actual purchasing power. 

So while it’s a good idea to keep some money in an emergency fund that is easy to access in case of an emergency, you don’t want to keep too much in there. $1000 is a good place to start for an emergency fund, but you’ll want to gradually increase that to a couple of months’ worth of expenses if you can. Any more than that should be invested in assets like the stock market that have inflation-beating returns.

Where to find a good savings account?

If you’re looking for where you can find a good high-yield savings account, you can check out our curated lists of the best checking account offers and the best savings accounts. 

One thing that’s important to realize is that in a time of fairly low-interest rates, the actual differences between two different rates are minuscule. If you have $2,000 invested in a high-yield savings account, the difference between a bank paying 0.5% and one paying 0.75% is only five dollars. So if there are other (non-financial) reasons for choosing one bank over another, keep that in mind.

You might also look at bank account signup bonuses. Many banks and credit unions give a bonus for signing up for a new account. Like credit card signup bonuses, banks do this in hopes of keeping you as a long-term customer. Getting $150 or $250 from signing up for a new account can dwarf the actual interest received from keeping your money in the bank. Just make sure to read the fine print, terms, and conditions of the offer to make sure that you earn your bonus.

Learn more about security

Mint Google Play Mint iOS App Store

Post navigation

Source: mint.intuit.com

Posted on February 5, 2021

Compound Interest Calculator

Compound interest is one of the most important concepts to understand in investing. It’s something about investing that many people aren’t familiar with, but it plays an essential role in making investments profitable. 

If you’re curious about compound interest and how it works, good for you — you’re on the right track. In this post, you’ll find a compound interest calculator that can quickly and clearly show you how much money you might make by investing in an account that delivers compound interest. 

Use the calculator below to get a sense of your potential earnings, then read the sections below to gain more insight into how you can make money through compound interest. 

.select2-containerbox-sizing:border-box;display:inline-block;margin:0;position:relative;vertical-align:middle.select2-container .select2-selection–singlebox-sizing:border-box;cursor:pointer;display:block;height:28px;user-select:none;-webkit-user-select:none.select2-container .select2-selection–single .select2-selection__rendereddisplay:block;padding-left:8px;padding-right:20px;overflow:hidden;text-overflow:ellipsis;white-space:nowrap.select2-container .select2-selection–single .select2-selection__clearposition:relative.select2-container[dir=rtl] .select2-selection–single .select2-selection__renderedpadding-right:8px;padding-left:20px.select2-container .select2-selection–multiplebox-sizing:border-box;cursor:pointer;display:block;min-height:32px;user-select:none;-webkit-user-select:none.select2-container .select2-selection–multiple .select2-selection__rendereddisplay:inline-block;overflow:hidden;padding-left:8px;text-overflow:ellipsis;white-space:nowrap.select2-container .select2-search–inlinefloat:left.select2-container .select2-search–inline .select2-search__fieldbox-sizing:border-box;border:none;font-size:100%;margin-top:5px;padding:0.select2-container .select2-search–inline .select2-search__field::-webkit-search-cancel-button-webkit-appearance:none.select2-dropdownbackground-color:#fff;border:1px solid #aaa;border-radius:4px;box-sizing:border-box;display:block;position:absolute;left:-100000px;width:100%;z-index:1051.select2-resultsdisplay:block.select2-results__optionslist-style:none;margin:0;padding:0.select2-results__optionpadding:6px;user-select:none;-webkit-user-select:none.select2-results__option[aria-selected]cursor:pointer.select2-container–open .select2-dropdownleft:0.select2-container–open .select2-dropdown–aboveborder-bottom:none;border-bottom-left-radius:0;border-bottom-right-radius:0.select2-container–open .select2-dropdown–belowborder-top:none;border-top-left-radius:0;border-top-right-radius:0.select2-search–dropdowndisplay:block;padding:4px.select2-search–dropdown .select2-search__fieldpadding:4px;width:100%;box-sizing:border-box.select2-search–dropdown .select2-search__field::-webkit-search-cancel-button-webkit-appearance:none.select2-search–dropdown.select2-search–hidedisplay:none.select2-close-maskborder:0;margin:0;padding:0;display:block;position:fixed;left:0;top:0;min-height:100%;min-width:100%;height:auto;width:auto;opacity:0;z-index:99;background-color:#fff.select2-hidden-accessibleborder:0!important;clip:rect(0 0 0 0)!important;-webkit-clip-path:inset(50%)!important;clip-path:inset(50%)!important;height:1px!important;overflow:hidden!important;padding:0!important;position:absolute!important;width:1px!important;white-space:nowrap!important.select2-container–default .select2-selection–singlebackground-color:#fff;border:1px solid #aaa;border-radius:4px.select2-container–default .select2-selection–single .select2-selection__renderedcolor:#444;line-height:28px.select2-container–default .select2-selection–single .select2-selection__clearcursor:pointer;float:right;font-weight:700.select2-container–default .select2-selection–single .select2-selection__placeholdercolor:#999.select2-container–default .select2-selection–single .select2-selection__arrowheight:26px;position:absolute;top:1px;right:1px;width:20px.select2-container–default .select2-selection–single .select2-selection__arrow bborder-color:#888 transparent transparent transparent;border-style:solid;border-width:5px 4px 0 4px;height:0;left:50%;margin-left:-4px;margin-top:-2px;position:absolute;top:50%;width:0.select2-container–default[dir=rtl] .select2-selection–single .select2-selection__clearfloat:left.select2-container–default[dir=rtl] .select2-selection–single .select2-selection__arrowleft:1px;right:auto.select2-container–default.select2-container–disabled .select2-selection–singlebackground-color:#eee;cursor:default.select2-container–default.select2-container–disabled .select2-selection–single .select2-selection__cleardisplay:none.select2-container–default.select2-container–open .select2-selection–single .select2-selection__arrow bborder-color:transparent transparent #888 transparent;border-width:0 4px 5px 4px.select2-container–default .select2-selection–multiplebackground-color:#fff;border:1px solid #aaa;border-radius:4px;cursor:text.select2-container–default .select2-selection–multiple .select2-selection__renderedbox-sizing:border-box;list-style:none;margin:0;padding:0 5px;width:100%.select2-container–default .select2-selection–multiple .select2-selection__rendered lilist-style:none.select2-container–default .select2-selection–multiple .select2-selection__clearcursor:pointer;float:right;font-weight:700;margin-top:5px;margin-right:10px;padding:1px.select2-container–default .select2-selection–multiple .select2-selection__choicebackground-color:#e4e4e4;border:1px solid #aaa;border-radius:4px;cursor:default;float:left;margin-right:5px;margin-top:5px;padding:0 5px.select2-container–default .select2-selection–multiple .select2-selection__choice__removecolor:#999;cursor:pointer;display:inline-block;font-weight:700;margin-right:2px.select2-container–default .select2-selection–multiple .select2-selection__choice__remove:hovercolor:#333.select2-container–default[dir=rtl] .select2-selection–multiple .select2-search–inline,.select2-container–default[dir=rtl] .select2-selection–multiple .select2-selection__choicefloat:right.select2-container–default[dir=rtl] .select2-selection–multiple .select2-selection__choicemargin-left:5px;margin-right:auto.select2-container–default[dir=rtl] .select2-selection–multiple .select2-selection__choice__removemargin-left:2px;margin-right:auto.select2-container–default.select2-container–focus .select2-selection–multipleborder:solid #000 1px;outline:0.select2-container–default.select2-container–disabled .select2-selection–multiplebackground-color:#eee;cursor:default.select2-container–default.select2-container–disabled .select2-selection__choice__removedisplay:none.select2-container–default.select2-container–open.select2-container–above .select2-selection–multiple,.select2-container–default.select2-container–open.select2-container–above .select2-selection–singleborder-top-left-radius:0;border-top-right-radius:0.select2-container–default.select2-container–open.select2-container–below .select2-selection–multiple,.select2-container–default.select2-container–open.select2-container–below .select2-selection–singleborder-bottom-left-radius:0;border-bottom-right-radius:0.select2-container–default .select2-search–dropdown .select2-search__fieldborder:1px solid #aaa.select2-container–default .select2-search–inline .select2-search__fieldbackground:0 0;border:none;outline:0;box-shadow:none;-webkit-appearance:textfield.select2-container–default .select2-results>.select2-results__optionsmax-height:200px;overflow-y:auto.select2-container–default .select2-results__option[role=group]padding:0.select2-container–default .select2-results__option[aria-disabled=true]color:#999.select2-container–default .select2-results__option[aria-selected=true]background-color:#ddd.select2-container–default .select2-results__option .select2-results__optionpadding-left:1em.select2-container–default .select2-results__option .select2-results__option .select2-results__grouppadding-left:0.select2-container–default .select2-results__option .select2-results__option .select2-results__optionmargin-left:-1em;padding-left:2em.select2-container–default .select2-results__option .select2-results__option .select2-results__option .select2-results__optionmargin-left:-2em;padding-left:3em.select2-container–default .select2-results__option .select2-results__option .select2-results__option .select2-results__option .select2-results__optionmargin-left:-3em;padding-left:4em.select2-container–default .select2-results__option .select2-results__option .select2-results__option .select2-results__option .select2-results__option .select2-results__optionmargin-left:-4em;padding-left:5em.select2-container–default .select2-results__option .select2-results__option .select2-results__option .select2-results__option .select2-results__option .select2-results__option .select2-results__optionmargin-left:-5em;padding-left:6em.select2-container–default .select2-results__option–highlighted[aria-selected]background-color:#5897fb;color:#fff.select2-container–default .select2-results__groupcursor:default;display:block;padding:6px.select2-container–classic .select2-selection–singlebackground-color:#f7f7f7;border:1px solid #aaa;border-radius:4px;outline:0;background-image:-webkit-linear-gradient(top,#fff 50%,#eee 100%);background-image:-o-linear-gradient(top,#fff 50%,#eee 100%);background-image:linear-gradient(to bottom,#fff 50%,#eee 100%);background-repeat:repeat-x.select2-container–classic .select2-selection–single:focusborder:1px solid #5897fb.select2-container–classic .select2-selection–single .select2-selection__renderedcolor:#444;line-height:28px.select2-container–classic .select2-selection–single .select2-selection__clearcursor:pointer;float:right;font-weight:700;margin-right:10px.select2-container–classic .select2-selection–single .select2-selection__placeholdercolor:#999.select2-container–classic .select2-selection–single .select2-selection__arrowbackground-color:#ddd;border:none;border-left:1px solid #aaa;border-top-right-radius:4px;border-bottom-right-radius:4px;height:26px;position:absolute;top:1px;right:1px;width:20px;background-image:-webkit-linear-gradient(top,#eee 50%,#ccc 100%);background-image:-o-linear-gradient(top,#eee 50%,#ccc 100%);background-image:linear-gradient(to bottom,#eee 50%,#ccc 100%);background-repeat:repeat-x.select2-container–classic .select2-selection–single .select2-selection__arrow bborder-color:#888 transparent transparent transparent;border-style:solid;border-width:5px 4px 0 4px;height:0;left:50%;margin-left:-4px;margin-top:-2px;position:absolute;top:50%;width:0.select2-container–classic[dir=rtl] .select2-selection–single .select2-selection__clearfloat:left.select2-container–classic[dir=rtl] .select2-selection–single .select2-selection__arrowborder:none;border-right:1px solid #aaa;border-radius:0;border-top-left-radius:4px;border-bottom-left-radius:4px;left:1px;right:auto.select2-container–classic.select2-container–open .select2-selection–singleborder:1px solid #5897fb.select2-container–classic.select2-container–open .select2-selection–single .select2-selection__arrowbackground:0 0;border:none.select2-container–classic.select2-container–open .select2-selection–single .select2-selection__arrow bborder-color:transparent transparent #888 transparent;border-width:0 4px 5px 4px.select2-container–classic.select2-container–open.select2-container–above .select2-selection–singleborder-top:none;border-top-left-radius:0;border-top-right-radius:0;background-image:-webkit-linear-gradient(top,#fff 0,#eee 50%);background-image:-o-linear-gradient(top,#fff 0,#eee 50%);background-image:linear-gradient(to bottom,#fff 0,#eee 50%);background-repeat:repeat-x.select2-container–classic.select2-container–open.select2-container–below .select2-selection–singleborder-bottom:none;border-bottom-left-radius:0;border-bottom-right-radius:0;background-image:-webkit-linear-gradient(top,#eee 50%,#fff 100%);background-image:-o-linear-gradient(top,#eee 50%,#fff 100%);background-image:linear-gradient(to bottom,#eee 50%,#fff 100%);background-repeat:repeat-x.select2-container–classic .select2-selection–multiplebackground-color:#fff;border:1px solid #aaa;border-radius:4px;cursor:text;outline:0.select2-container–classic .select2-selection–multiple:focusborder:1px solid #5897fb.select2-container–classic .select2-selection–multiple .select2-selection__renderedlist-style:none;margin:0;padding:0 5px.select2-container–classic .select2-selection–multiple .select2-selection__cleardisplay:none.select2-container–classic .select2-selection–multiple .select2-selection__choicebackground-color:#e4e4e4;border:1px solid #aaa;border-radius:4px;cursor:default;float:left;margin-right:5px;margin-top:5px;padding:0 5px.select2-container–classic .select2-selection–multiple .select2-selection__choice__removecolor:#888;cursor:pointer;display:inline-block;font-weight:700;margin-right:2px.select2-container–classic .select2-selection–multiple .select2-selection__choice__remove:hovercolor:#555.select2-container–classic[dir=rtl] .select2-selection–multiple .select2-selection__choicefloat:right;margin-left:5px;margin-right:auto.select2-container–classic[dir=rtl] .select2-selection–multiple .select2-selection__choice__removemargin-left:2px;margin-right:auto.select2-container–classic.select2-container–open .select2-selection–multipleborder:1px solid #5897fb.select2-container–classic.select2-container–open.select2-container–above .select2-selection–multipleborder-top:none;border-top-left-radius:0;border-top-right-radius:0.select2-container–classic.select2-container–open.select2-container–below .select2-selection–multipleborder-bottom:none;border-bottom-left-radius:0;border-bottom-right-radius:0.select2-container–classic .select2-search–dropdown .select2-search__fieldborder:1px solid #aaa;outline:0.select2-container–classic .select2-search–inline .select2-search__fieldoutline:0;box-shadow:none.select2-container–classic .select2-dropdownbackground-color:#fff;border:1px solid transparent.select2-container–classic .select2-dropdown–aboveborder-bottom:none.select2-container–classic .select2-dropdown–belowborder-top:none.select2-container–classic .select2-results>.select2-results__optionsmax-height:200px;overflow-y:auto.select2-container–classic .select2-results__option[role=group]padding:0.select2-container–classic .select2-results__option[aria-disabled=true]color:grey.select2-container–classic .select2-results__option–highlighted[aria-selected]background-color:#3875d7;color:#fff.select2-container–classic .select2-results__groupcursor:default;display:block;padding:6px.select2-container–classic.select2-container–open .select2-dropdownborder-color:#5897fb
.iv-calculator *font-family:Avenir,”Helvetica Neue”,Helvetica,Arial,sans-serif.iv-calculatormax-width:650px;width:100%;margin:0 auto;margin-top:20px;margin-bottom:20px;background:#fff;padding:20px;position:relative;box-shadow:1px 5px 11px 2px rgba(162,162,162,.2);border-radius:7px;border-bottom-left-radius:5px;border-bottom-right-radius:5px;border-top:20px solid #00cda9.ivc-titledisplay:flex;align-items:center;border-bottom:1px solid #e5e5e5;padding-bottom:25px;padding-top:5px.ivc-title .ivc-title_textflex:5.ivc-title_textfont-size:40px;font-weight:700;line-height:46px;color:#3a3a3a;padding-left:20px.ivc-wrapperdisplay:flex.ivc-wrapper .ivc-outputsflex:2;padding:10px.ivc-inputs_memocolor:#686868;font-size:15px;line-height:20px;margin-bottom:20px;font-weight:400.ivc-inputs_memo spanfont-weight:700;text-decoration:underline.ivc-wrapper .ivc-inputsflex:1.2;padding:25px 10px 10px 0;border-right:1px solid #e5e5e5.ivc-inputs_titleborder-bottom:1px solid #e5e5e5;font-weight:700;font-size:18px;color:#444;padding-bottom:10px;margin-top:20px.ivc-inputs_namecolor:#444;font-weight:600;font-size:13px;margin-bottom:5px.select2-dropdown margin-top: 32px;.ivc-inputs_icobackground-image:url(data:image/svg+xml;base64,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);background-repeat:no-repeat;width:15px;height:15px;cursor:pointer;position:absolute;top:3px;right:0.ivc-inputs_labelposition:relative.ivc-inputs_boxmargin-top:15px;margin-bottom:15px.ivc-inputs_valposition:relative.ivc-inputs_val input[type=text]color:#bdbdbd;font-weight:500;border:1px solid silver;border-radius:5px;width:100%;padding-left:10px;padding-top:5px;padding-bottom:4px;font-size:16px;outline:0.ivc-inputs_val input[type=text]::-webkit-input-placeholdercolor:rgba(174,174,174,.65).ivc-inputs_val input[type=text]:-moz-placeholdercolor:rgba(174,174,174,.65);opacity:1.ivc-inputs_val input[type=text]::-moz-placeholdercolor:rgba(174,174,174,.65);opacity:1.ivc-inputs_val input[type=text]:-ms-input-placeholdercolor:rgba(174,174,174,.65).ivc-inputs_val input[type=text]::-ms-input-placeholdercolor:rgba(174,174,174,.65).ivc-inputs_val input[type=text]::placeholdercolor:rgba(174,174,174,.65)span.ivc-inputs_signposition:absolute;color:#444;left:10px;top:6px;font-size:16px;font-weight:700span.ivc-inputs_sign.ivc-inputs_sign_percentleft:auto;right:10px.ivc-inputs_tooltipposition:absolute;z-index:2222;background:#fff;color:#3a3a3a;padding:10px;border-radius:3px;font-size:11px;line-height:14px;width:200px;box-shadow:1px 1px 5px #545454;display:none;text-transform:none;font-family:Arial,sans-serif.select2-container–default .select2-selection–single .select2-selection__arrowposition:absolute;top:3px;right:-1px;background-image:url(data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABgAAAAYCAYAAADgdz34AAAA3klEQVRIS+3VMU9CMRTF8d8zBL+aizoQFhx0kUk33RzdYMNFXUFnYeGrYYyaJiUxJHDLSxodbNKpfeffc9/pbaPyaCrr+3OA++z4rtT5Pg5GuMnCY9yWQEoBE1xhlUUP8YDrCBIB0vojLvGO0yz4hm4JJAKcYYoPHGOZAUdYoIMBXrc5iQAHeMlzviFygj7O8dkWEJU4XI8chALRhn9AVKHf70VRTHu4wFfbmKZLNKt50dLBnna0imcMd/2I0phWa3Y/D1e1Xa9BCZJG0VuQNpaWKMx72xS1Fl5/WN3BN+AgJhnZQlq4AAAAAElFTkSuQmCC);background-position:calc(100% – .5rem),100% 0;background-size:1.5em 1.5em;background-repeat:no-repeat.select2-container–default .select2-selection–singlebackground-color:#fff;border:1px solid #aaa;border-radius:5px;outline:0.select2-container .select2-selection–singleheight:33px;padding-top:2px.select2-container–default .select2-selection–single .select2-selection__arrow bdisplay:none.ivc-inputs_val.ivc-inputs_val_longdisplay:flex.ivc-inputs_val.ivc-inputs_val_long div:nth-child(1)margin-right:5px;flex:1.4.ivc-inputs_val.ivc-inputs_val_long div:nth-child(2)flex:2.ivc-outputs .ivc-title_textfont-size:20px;line-height:22px;padding-left:5px.ivc-outputs .ivc-titleborder-bottom:none;text-align:center;padding-bottom:15px.ivc-total_rowtext-align:center.ivc-total_row .ivc-total_colbackground:#f4f5f8;border-radius:2px;padding:20px 0 20px 15px;font-weight:400;color:#444;line-height:20px;font-size:14px;display:flex;align-items:center;text-align:center;justify-content:centerspan#ivc_return_resultcolor:#00cda9;font-size:22px;font-weight:700;margin-left:10px.ivc-result_rowdisplay:flex;align-items:center;justify-content:space-between;padding-top:5px.ivc-result_row .ivc-result_coltext-align:center;background:#f4f5f8;border-radius:3px;border-bottom-left-radius:0;border-bottom-right-radius:0;padding:10px;padding-top:10px;padding-bottom:15px;width:calc(1/3*100% – (1 – 1/3)*5px);height:95px.ivc-result_icomin-height:36px.ivc-result_row>.ivc-result_col:nth-child(3n)margin-right:0.ivc-result_valcolor:#444;font-weight:700;font-size:18px;padding-bottom:15px;padding-top:10px.ivc-result_textcolor:#444;font-size:10px;line-height:12px;font-weight:400.ivc-chart_titletext-align:center;color:#444;font-size:15px;margin-top:25px;margin-bottom:10px;font-weight:500.ivc_chart_pie_legend_itemcolor:#7b7a7a;font-size:10px;text-align:left;margin-bottom:6px;position:relative.ivc_chart_pie_legend spanbackground:#000;display:inline-block;border-radius:50%;width:9px;height:9px;position:absolute;left:-15px;top:2px.ivc_chart_pie_legend .ivc_chart_pie_legend_item:nth-child(1) spanbackground:#00cda9.ivc_chart_pie_legend .ivc_chart_pie_legend_item:nth-child(2) spanbackground:#1b8381.ivc_chart_pie_legend .ivc_chart_pie_legend_item:nth-child(3) spanbackground:#7df8c4.ivc_chart_pie_legendposition:absolute;right:5px;top:25px.ivc_chart_pie_wrapposition:relative;padding-left:15px.ivc-chart_title.ivc-chart_title_borderedborder-top:1px solid #e5e5e5;padding-top:20px;margin-top:15px.ivc-inputs_valposition:relative;display:flex@media all and (max-width:700px).ivc-wrapperdisplay:block.ivc-total_rowdisplay:block.ivc-total_row .ivc-total_col:nth-child(1)margin-right:0;margin-bottom:5px.ivc-result_rowdisplay:block.ivc-result_row .ivc-result_colwidth:100%;margin-top:10px.ivc_chart_pie_legendposition:relative;right:auto;top:auto.ivc_chart_pie_legendmargin:0 auto;width:135px;text-align:center#ivc_chart_piemargin:0 auto

Compound Interest Calculator
First, tell us about your investment plan by filling in the fields below.
Investment Plan:
Starting Amount:

Years to Accumulate:

Contribution Amount:

Rate of Return:

Compound Frequency:

Years to Accumulate:

Your Investment Results:
Ending Amount: $0
Total Investment
Compound Interest Earned
Simple Interest Earned
Investment Growth Over Time
Investment Breakdown
Total Investment
Compound Interest Earned
Simple Interest Earned

How to use a compound interest calculator

Using the compound interest calculator is simple. Follow these steps to see what you might earn through compound interest investing. 

  1. Enter your initial investment. It can be any value that you like, but it’s helpful to make it a realistic amount. For instance, if you’re saving up to invest right now, you can put the amount that you plan on investing once you’ve saved up enough. 
  2. Next, enter the amount you plan on adding to your investment portfolio each month. This can also be any value you like, but it’s most useful if you enter an amount that you can budget for. Even if that’s just an extra $10 a month, it makes a difference. 
  3. Choose whether you want your interest compounded annually, compounded monthly, or compounded daily. (If you don’t know what that means, stay tuned for the definitions below.) 
  4. Input the estimated rate of return. This can vary considerably, but index funds and similar investment vehicles can yield between 2% and 10% returns. 
  5. Input your time horizon — the amount of time until you withdraw or use your investments. 

Once you’ve filled out the calculator, you should see an estimate of the amount you’re likely to have when the period of compound investing is up. If you’re a little confused about how we got this number, or what you need to do to grow your money in this way, check out the definitions, guide, and FAQs below. 

Investment definitions

  • Compounding: This occurs when the money that is made from an investment is reinvested, increasing the total amount of interest yielded the next time your interest is compounded. 
  • Index fund: Index funds are bundled investments that roughly track the growth of a market index, which is a collection of publicly-traded companies. They are often considered lower-risk investments.
  • Interest: The money you make on your investments; essentially, the money you earn for investing in the success of a company, a government bond, or a fund.
  • Principal: The amount of money that you start out with when you begin investing.
  • Rate of returns: The rate at which you accrue interest — for example, 3% returns would mean that, for every $100 invested, you would earn $3. 
  • Returns: The money that you earn on your investments. 
  • Time horizon: The amount of time that you plan on investing.

Now that you have a few key compound interest definitions in mind, we can explain how it works. 

How does compound interest work

Having more money can help make you more money — that’s the principle behind compound interest. Here’s how that breaks down. Let’s say that you have $1000 to invest. You put it in an account (let’s say a money market account) that yields 2% interest, compounded monthly. At the end of the first month, you’d have $1020. So far, so good.

But here’s where it gets really interesting. That 2% rate of return now applies to the $1020 total, not just the principal investment of $1000. So, after the end of month 2, you’ll have $1040.40 — an added $0.40 compared to the previous month. 

That might not sound like a lot, but it starts to add up. Have you ever rolled a snowball down a hill? The same idea applies. As your money grows and adds to itself, the amount that it can add to itself the next time your interest compounds is more. It may not be a get-rich-quick scheme, but it’s a reasonably secure way to start building your net worth in the long term. 

Plus, you’re not limited to money market accounts with rates as low as 2%. If you’re willing to put a little more risk on the line, you can get returns as high as 10% in some cases. We’ll cover that more in a later section. But first, time for a little math homework (just for those who are curious!). 

Compound interest formula

Compound interest is really mathematically interesting. Here’s the formula: A = P(1 + r/n)(nt)

If you want to try to see what’s going on behind the scenes in our calculator, here’s how to do the math yourself using the compound interest formula. 

  • The A in the formula is the amount you’ll end up with; this comes last. 
  • The P in the formula above stands for your principal, that’s the amount that you start with. 
  • Multiply P by 1 + your interest rate r (given in a decimal; so 4% would be 0.04) divided by n, the number of times your interest is compounded in a given period. 
  • Raise all of that to the power of n times t, where t is the number of time periods elapsed. 
  • For example, if you’re investing for 12 months, and your account interest is compounded daily, n would be roughly 30, and t would be 12 if you want to know how much you’ll have in a year. 

Try the formula out yourself, and see what result you get compared to the result in our calculator to check your work!

Compound interest accounts

Now that you understand the basics of compound interest, you’re probably wondering how you harness it to increase your net worth. The key is to use accounts that offer compound interest. Here are a few examples:

  • High yield savings and money markets. These are essentially savings accounts. They aren’t investment accounts (which we’ll discuss in a minute), but they do use a similar principle to grow your money. Rates on these can be fairly low compared to other options, but your money remains accessible, so you won’t have to worry if you need access to your cash fast in an emergency.
  • Retirement accounts. If you have a 401k or IRA opened right now, good news: you’re already accessing the power of compound interest. Most retirement accounts use a diversified and stable portfolio to grow your money over time, investing in index funds, government bonds, and dividend stocks to help you build your nest egg. 
  • Investments. Of course, one of the most aggressive and effective ways to utilize the power of compound interest is to start investing. There are a number of different ways you can invest — be sure to read our guide to investing for beginners for a more thorough explanation — but all can involve compound interest. For example:
    • Dividend stocks sometimes allow you to reinvest the payout from your dividends, increasing the amount of your dividend the next time there is a payout. 
    • Index funds, like mutual funds and ETFs, also often allow investors to reinvest their earnings, harnessing compound interest in their favor. 
    • If you invest directly in stocks, you can always use the money that you earn to reinvest or invest in another stock — be aware that this is a riskier option, however. 
    • Whether you choose an in-person brokerage or a trendy new robo-advisor, you’ll likely be able to use the power of compound interest to grow your capital. 

Compound interest is a mathematical force that can help you build your net worth over time. You can get started today by finding the right investing or saving vehicle for your personal finances. And don’t forget to download the Mint app, where you can conveniently track your investments all in one place. 

Compound interest FAQs

How do I calculate compound interest?

You can calculate compound interest in one of two ways: you can use the formula listed above to calculate it by hand, or you can use the compound interest calculator to figure out your total more quickly. Just be sure you know the necessary variables:

  • The principal amount
  • Your interest rate
  • How often it’s compounded
  • The number of compounding period that will occur

What will $10,000 be worth in 20 years?

That totally depends on how much interest your account produces and whether you invest more as time goes on. 

Let’s assume an average return rate of around 7%, and assume that you don’t add in any more money. In that case, your $10,000 could turn into $40,547 — still an impressive amount. That’s the power of compound interest. 

How do you calculate compound interest monthly?

To calculate compound interest monthly, simply set the “compounding frequency” setting on the calculator above to “monthly.” Alternatively, you can use the formula above and set n equal to 1 and t equal to 12 to find out how much money you’ll have if interest is compounded monthly for a year. 

Sources

Wealthsimple | Investor.gov

Learn more about security

Mint Google Play Mint iOS App Store

Post navigation

Source: mint.intuit.com

Posted on February 5, 2021

BBVA Reviews for [year] (Checking, Savings, CDs, & More)

BBVA USA (formerly BBVA Compass) has physical locations in seven states, but their online banking features make them available to anyone in the entire country. BBVA is known for a number of financial products and services, including their second chance checking accounts.

BBVA

Even if you don’t need a non-ChexSystems bank, you can benefit from BBVA’s digital-friendly services. In fact, their mobile banking app has won a national Javelin award for three years in a row.

Are you in the market for more personalized service?

All checking account holders get access to a team of remote personal bankers — for free. You get to avoid the hassle of going to a branch and can instead call, text, email, or chat with one of your bankers to take care of your business.

BBVA USA has a lot going for it, so learn about some of the most popular bank accounts and programs to see how you can most benefit from working with this leading bank.

BBVA Checking Accounts

There are a few different checking accounts available from BBVA so that just about anyone can find a good fit.

Here are the highlights of each one:

Online Checking

With no monthly service charge and just a $25 minimum opening deposit, this is an incredibly accessible account.

When you open an account, you get access to all the benefits like online and mobile banking and can opt-in for online statements instead of paper statements to avoid monthly service charges. Plus, you don’t have to worry about ATM fees at both BBVA and Allpoint ATMs.

You get a Visa debit card that’s personalized with a photo of your choice. Plus, you can opt-in for overdraft protection if you’d like. You’ll have to pay a fee if you use it, but you might prefer that over have a declined purchase due to a temporary shortage of funds in your account.

As a second chance bank account, you can also use your account as a way to rebuild your banking history.

Apply for a BBVA Online Checking Account

Free Checking

Like the Online Checking account, the Free Checking account comes with no monthly service charge and just a $25 opening deposit minimum. As an added bonus, you get unlimited check writing with this account, which is helpful if you still mail in certain bills like your rent.

You get free statements of your choosing, either paper or digital and no ATM fees. Additionally, you can customize text alerts for free so you’re always up to date on your account status.

There’s also the opportunity to earn free cash back:

All you have to do is enroll in the Simple Cash Bank Rewards program and shop at eligible retailers. The neat thing is that the offers are based on places where you’re already spending money, so you can participate without making purchases that are out of the ordinary.

Apply for a BBVA Free Checking Account

Interest Checking

If you’re ready to have your money start working for you, then take a look at this checking account.

There’s a $25 monthly service charge. However, you can avoid paying it with one of these options:

  • Hold an average daily collected balance of at least $5,000
  • Have at least $25,000 across your checking account and money market account
  • Enroll in the Premier Personal Banking Program
  • Maintain BBVA Global Wealth client status

You also get to avoid the charges on one money market account from BBVA USA.

Apply for BBVA Online Checking

BBVA Savings Accounts

BBVA, Member FDIC, also offers standard savings accounts with a few different distinctions. Here’s how they stack up.

BBVA Online Savings Account

This is a great starter option because you earn interest on your entire balance and it only has a minimum opening deposit of $25. There’s a quarterly service charge of $15 but you can have it waived in one of two ways.

The first is to set up an automatic, recurring transfer each month of at least $25 from any BBVA checking account. The second option is to maintain at least $500 as your daily balance in your account.

Apply for BBVA Savings

BBVA Money Market Accounts

If you have a bit more money to place in a savings account and want to increase your interest returns, consider a BBVA money market account. You only need that low $25 opening deposit.

The catch?

There’s a $15 monthly service charge so make sure your earnings at least cover that amount, otherwise, it’s not worth it. You can also waive the charge by either:

  • Maintaining $10,000 as your minimum daily balance
  • Set up a recurring $25 transfer from your BBVA checking account each month

Apply for BBVA Money Market Account

BBVA Certificates of Deposit

With a minimum deposit of $500, a CD is a more sophisticated savings account. But with no maintenance fees, it can help build your savings over time.

Rates vary based on your geographic location and the term length you choose. They offer 11 to 36 month CDs.

Their CD rates are better compared to some other savings accounts, but you won’t be able to access your cash until the term ends — unless you want to incur a penalty.

So while a CD can be a great part of your savings plan, make sure it fits in with your overall strategy so that you have easy to access cash as well.

Apply for a BBVA CD

BBVA Credit Cards

In addition to checking and savings accounts, BBVA offers a variety of credit products as well. Whether you’re already a customer or looking for a new bank, check out what they offer.

BBVA USA has three different credit cards to choose from:

ClearPoints Card

This is a straightforward card that is fee-free and earns you cashback on purchases you choose from certain categories. You may also qualify for a low introductory APR period (which can be as little as 0%).

After the period is over, rates range between 12.24% and 30.24% APR. BBVA USA also runs promotional offers such as giving new cardholders a $100 statement credit when you spend $1,500 in the first 90 days.

Apply for a BBVA ClearPoints Credit Card

Select Card

A strong option for frequent travelers, this card comes with a hefty $125 annual fee — although it’s waived for the first year. Make sure the benefits you receive outweigh the cost.

You can earn 3x points in your select categories and also get your foreign transaction fees waived. Plus, you get concierge service that includes perks like roadside assistance, lost luggage reimbursement, and travel assistance services.

Apply for a BBVA Select Credit Card

Optimizer Card

If you’re looking to rebuild your credit score, this secured credit card gives you the chance you need. You’ll have to place cash in a savings account as collateral and can then use it just as you would any other credit card. You can increase your credit line whenever you’d like by depositing more money into that savings account.

Apply for a BBVA Optimizer Credit Card

BBVA Loans

You also have a couple of different loan options available through BBVA Bank whenever you need funds for a major purchase.

Express Personal Loans

If you need a personal loan quickly, BBVA can provide funding as fast as the same day. You don’t need to provide any collateral and can get a loan for as little as $2,000 or as much as $35,000 when you apply online.

Loan limits are much higher at branches:

You can borrow up to $100,000 if you apply in person. To save money on your interest rate, consider setting up automatic payments each month from your BBVA checking account. You’ll get a 1.00% discount on your interest rate, which can add up to significant savings over time.

APRs start at 6.07% and go up to 35.06% so depending on your credit and other factors, you could spend a lot less on interest compared to using a credit card. Plus, you typically have a much higher limit with a fixed timeline for repayment.

Auto Loans

Need to buy a new car? BBVA also provides auto loans with fixed interest rates. Terms can be as fast as 12 months or go all the way up to 72 months, giving you the flexibility you need to pay back the loan.

Auto loans can be as small as $5,000 but you’ll get a better interest rate if you borrow $15,000 or more. Rates start as low as 3.49% APR and vary depending on your credit, loan amount, term length, and type of car purchased (new or used).

BBVA Mortgages

BBVA also has you covered when it comes to a selection of mortgage products. New purchase mortgage options include both conventional and jumbo home loans. You can also select either a fixed rate or adjustable rate mortgage or get a loan for new construction properties as well.

Are you an existing homeowner with equity in your home?

You can tap into that equity a few different ways with BBVA USA. One option is to open a home equity line of credit (HELOC). These typically offer extremely low interest rates and you can simply borrow what you need, when you need it. Alternatively, you can get a home equity loan for $10,000 or more.

Both options provide tons of flexibility in how you use your funds and mortgage rates across the board are still at near historic lows.

BBVA Self-Directed and Full-Service Investments

No matter how savvy you are with the stock market, BBVA has two types of investment platforms to meet your needs.

Ready to do some hands-on investing?

Consider their self-directed investments. You can open an account in just a few minutes and then perform your own trades. Available investments include:

  • Equities
  • ETFs
  • Mutual funds
  • Options
  • Margin accounts

Fees vary for each type of trade, so review the terms carefully before getting started. Some types, like ETFs, have a flat fee of $9.95 per trade. Others trades, like options, charge a flat fee (in this case, $9.95), plus an additional fee. So on top of the per-trade fee for options, you’d also pay $0.75 per contract.

BBVA’s self-directed accounts also charge an inactivity fee, an annual fee for retirement accounts, and a termination fee. Bottom line: compare your options before you choose an investment platform.

If performing your own trades doesn’t sound right for you, BBVA also has a full-service investment program. You can select both retirement plans and personal investment opportunities. To prepare for your future retirement, you can select accounts such as IRAs, fixed annuities, and variable annuities.

Additionally, you can choose shorter-term investments like:

  • Mutual funds
  • Universal investment funds
  • Equity-linked CDs
  • Mutual fund portfolios
  • College savings programs (like 529)
  • Fixed income securities

BBVA’s investment arm also helps you choose comprehensive insurance plans as well as retirement solutions for business owners.

BBVA Reviews

One of the best ways to find a great bank is by reading third-party reviews. You can discover what actual customers are saying about them before you choose to do business with them. The Better Business Bureau (BBB) currently gives BBVA an ‘A+’. The account is listed under their old name BBVA Compass. You will find many 4- and 5-star BBVA Compass reviews at several other customer review sites as well.

BBVA Customer Service

BBVA’s customer service team can be contacted via phone, mobile app, or at a local branch. They have over 600 physical branches in the states of Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas.

BBVA Customer Service Phone Number: (844) BBVA-USA

Bottom Line

When looking for a full-service bank with great customer service that provides plenty of online solutions, BBVA really offers a slew of options. Perhaps most attractive are the bank’s opportunities for second chance accounts and secured card.

But even if you’re well on your way to saving, there are a lot of smart ways to manage your money through BBVA.

Source: crediful.com

Posted on February 4, 2021

6 Free Online Checking Accounts: No Opening Deposit Required

A checking account is a must-have tool, but these accounts can come with monthly maintenance fees that can quickly add up. Many banks also require that you make a minimum initial deposit when you open a new account.

The following six checking accounts are free to open and don’t require an initial deposit, so they’re ideal if you’re just getting started and don’t have much money to put down. They also come with other benefits, like higher than average interest rates and early direct deposit options.

Chime Spending Account

Chime, a mobile bank, offers a Chime Spending Account that you can open in less than two minutes. This account is completely free and available to U.S. citizens ages 18 and up.

With the Chime app, you’ll be able to manage your banking and can sign up for this Spending Account (and a Chime Savings Account, if you’d like). Your Spending Account will come with a free Visa debit card. You can even set up direct deposit to further streamline your banking.

Benefits of the Chime Spending Account:

  • No initial deposit
  • No minimum balance and no monthly maintenance fees
  • Fee-free overdraft
  • Get paid up to 2 days early with direct deposit
  • Access to more than 38,000 fee-free ATMs

Axos Bank Essential Checking

Axos Bank is an FDIC-insured bank that’s been in business for 20 years. NerdWallet recognized Axos as offering the best checking account, and Go Banking Rates awarded Axos the title of the Best Online Bank.

With the Essential Checking account, you’ll be able to bank entirely online. Axos’ innovative banking platform integrates with apps like Mint and Venmo and allows you to aggregate multiple accounts into a single, simplified view. If you invite a friend to join, you and your friend can get $20 for every referral.

Benefits of the Axos Essential Checking Account:

  • No opening deposit requirement
  • No minimum balance requirement and no monthly maintenance fees
  • No overdraft fees
  • Unlimited ATM reimbursements
  • Early direct deposit up to 2 days ahead of payday
  • Free checks and Visa debit card when you open an account

Discover Cashback Debit

While Discover is traditionally known for its credit cards, this online bank also offers a Cashback Debit checking account that’s full of perks. Opening an account is simple and requires no initial deposit.

The real value of this account lies in its debit card rewards, though. You can receive 1% cash back on up to $3,000 in purchases every month. If you open a Discover Online Savings Account, you can elect to have those rewards automatically deposited into the savings account. Or, just opt to get the rewards back as cash.

Benefits of the Discover Cashback Debit Account:

  • Get 1% cash back on up to $3,000 of debit card purchases every month
  • No initial deposit
  • No monthly fee and no minimum balance requirement
  • No fee for transfers to external banks
  • No fee online bill pay and no fee check orders
  • Access over 60,000 no-fee ATMs

Capital One 360 Checking

With its 360 Checking account, Capital One offers many perks and versatile options. It’s possible to open and maintain this account entirely online, but Capital One’s local branches also offer in-person assistance if you should need it. The 0.10% APY on all account balances is above average, and there’s no fee for foreign transfers.

Capital One also offers a network of more than 40,000 ATMs plus mobile check deposit for convenient banking. You can also choose from three overdraft coverage options depending on what’s best for you.

Benefits of the Capital One 360 Checking Account:

  • No minimum balance or initial deposits
  • No monthly maintenance fees
  • 0.10% APY on account balance
  • No fee for foreign transactions
  • Mobile check deposit with the Capital One app
  • Multiple overdraft protection options
  • 40,000 fee-free ATMs

Ally Interest Checking Account

Ally’s Interest Checking Account offers some of the highest interest rates in the industry. Balances of less than $15,000 are eligible for 0.10% APY, while balances of $15,000 and up are eligible for a 0.25% APY. With no minimum opening deposit and no monthly maintenance fees, it’s easy to open an account, and

Ally is very transparent about its fees. Be aware that Ally does have an excessive transaction fee. This fee goes into effect if you exceed six transactions with money market accounts (like online and mobile banking transfers) per statement cycle.

Benefits of an Ally Interest Checking Account:

  • No minimum opening deposit
  • No monthly maintenance fees
  • 0.10% APY on less than $15,000 minimum daily balance, and 0.25% APY on $15,000 minimum daily balance
  • Ally eCheck Deposit allows for check deposits from your smartphone
  • Free use of 43,000 Allpoint ATMs and up to $10 reimbursement for other ATM fees per cycle

Chase College Checking

The Chase College Checking account offers many perks for college students. Designed for students ages 17 to 24, there’s no monthly service fee for up to five years while the student is in college. Alternatively, the account carries a $6 monthly fee, or that fee is waived for a monthly direct deposit or if the account holds an average ending day balance of at least $5,000.

The Chase Mobile app allows for convenient banking, but Chase also has almost 4,900 branches nationwide. Chase also offers many other products that are ideal for college students, like the Chase Freedom Student Card.

Benefits of the Chase College Checking Account:

  • No initial deposit
  • Monthly service fee is waived for college students ages 17 to 24
  • Access to 16,000 ATMs and almost 4,900 branches
  • Chase Mobile app allows for mobile deposits
  • Quickly and easily send and receive money to friends and family with Chase QuickPay

Choosing the Right Account

The above checking accounts don’t require initial deposits, and each offers slightly different benefits. When choosing the account that’s right for your needs, consider how you’ll use the account, the type of balance you plan to carry, and what types of features you most value. Be sure to pay attention to details like overdraft protection, fees for excessive transactions, and other potential expenses you could face.  

Source: crediful.com

Posted on February 3, 2021

The Roth IRA vs. the 401(k) Plan – Which One is Best For Your Retirement Plan?

Good Financial Cents
required minimum distribution (RMD) rules.

Those rules require you begin taking distributions from a retirement plan beginning at age 70 ½. You are required to withdraw a percentage of the plan that is based on your remaining life expectancy in each year you are retired, after reaching that age.

But Roth IRAs are not subject to RMD requirements so you can quite literally allow your plan to continue growing for the rest of your life. This has two major advantages:

  1. It allows you to maximize the amount of money you will have available in your estate in order to pass on to your heirs, and
  2. It dramatically lowers the possibility you might outlive your money.

The second point is a major issue with most retirees. Since people are now routinely living into their 80s and 90s, the possibility of outliving your money is a real concern. RMD’s force you to draw down on your retirement assets.

But you can leave the money in your Roth IRA until the later years in your life when other assets have been depleted. In that way, a Roth IRA can function as an excellent late retirement income source.

Self-directed investing.

As is the case with any IRA, you can choose both the plan trustee and the investments held within your account. That gives you complete freedom to choose the investment platform which works best for you, and then to develop your own portfolio allocations.

You can choose to invest in stocks, bonds, mutual funds, exchange traded funds (ETFs), real estate investment trusts (REITS), futures and options, and even managed accounts, like robo-advisors.

Roth IRA Funding

You can contribute up to $6,000 per year to a Roth IRA, or $7,000 if you are 50 or older (for 2020 and 2021). One of the disadvantages is this is a relatively low rate of contribution. In fact, it is less than one third the size of the allowable annual contributions you could make the 401(k) plan.

But there’s still another option you have for funding a Roth IRA, and that is to do a Roth IRA conversion. We’ll discuss that topic specifically toward the end of this post.

Suffice it to say, a Roth IRA conversion is a real opportunity to move some serious money into the plan.

Roth IRA Tax Advantages

The biggest drawback to doing a Roth IRA is the contributions you make to the plan are not tax-deductible. Even though a Roth IRA generally works the same way a traditional IRA does, this is one of the big differences between the two. With the traditional IRA, your contributions are usually tax-deductible, which is one of the main benefits.

Roth IRA contributions are never tax-deductible, but the good news is that’s a big part of the reason why withdrawals can be taken tax-free. For most people, forgoing the tax break on contributions will be a small price to pay for the benefit of tax-free income in retirement.

But much like a traditional IRA, the investment income you earn in a Roth IRA is also tax-deferred. That can actually be a bit confusing. After all, tax-deferred implies that taxes will be due and payable at a later date, right?

That’s actually partially true with a Roth IRA. Roth IRA distributions become tax-free if you are at least 59 ½ years old, and have participated in a Roth IRA for a minimum of five years. However, if you take distributions from your plan before those events happen, you will have to pay ordinary income tax on the amount of the distribution that represents investment earnings.

And as is the case with our retirement plans, early distributions are also subject to the 10% early withdrawal penalty.

Now here’s another important distinction…thought investment earnings withdrawn prematurely are taxable, the withdrawal of your contributions are not. This works well with Roth IRAs, since they have a special distinction of allowing you to first withdraw your contributions – which can be taken tax-free – before withdrawing the portion that represents your investment income.

This is the reason why some financial bloggers advise using a Roth IRA as an emergency fund. You can keep the money in the plan invested, but withdraw your contributions without creating a tax liability.

As indicated earlier, as long as you are at least 59 ½ years old, and have been in a Roth IRA for at least five years, the distributions from the plan can be taken tax-free.

Roth IRA Income Limits

Traditional IRAs have income limits that limit the tax deductibility of your contributions. If either you or your spouse is covered by an employer-sponsored retirement plan, and your income exceeds a certain threshold, contributions to a traditional IRA will not be tax-deductible. However, you’ll still be allowed to make a contribution. This is referred to as a non-deductible IRA contribution.

Roth IRAs also have income limits. However, if you exceed those limits, you will not be permitted to make a Roth IRA contribution at all.

For your 2020 tax return, the Roth IRA income limits look like this:

  • Married filing jointly, or qualifying widow(er) – allowed up to an income of $196,000, partially allowed between $196,000 and $206,000, after which no contribution is allowed.
  • Married filing separately – partial contribution on an income up to $10,000, after which no contribution is allowed.
  • Single, head of household, or married filing separately AND you did not live with your spouse at any time during the year – allowed up to an income of $124,000, partial allowed between $124,000 and $139,000, after which no contribution is allowed.

For 2021 tax return, the Roth IRA income limits look like this:

  • Married filing jointly, or qualifying widow(er) – allowed up to an income of $198,000, partially allowed between $198,000 and $208,000, after which no contribution is allowed.
  • Married filing separately – partial contribution on an income up to $10,000, after which no contribution is allowed.
  • Single, head of household, or married filing separately AND you did not live with your spouse at any time during the year – allowed up to an income of $125,000, partially allowed between $125,000 and $140,000, after which no contribution is allowed.

I’m oversimplifying the income requirement here. According to the IRS, your income is determined by your modified adjusted gross income, or MAGI. Exactly what MAGI is is a bit complicated. You can refer to the IRS definition for exactly what it’s.

Roth IRA income limits are different from traditional IRA income limits in one other important respect. You can make a Roth IRA contribution, up to the income limit permitted, even if you’re covered by an employer-sponsored retirement plan.

The 401(k) – How it Works and How it Helps

401(k) Benefits

High contribution limits.

The biggest benefit of the 401(k) plan is the amount of money you can contribute to the plan. For 2021, you can contribute up to $19,500, or $26,000 if you’re age 50 or older. This is much more generous than the $6,000/$7,000 limits for both the traditional and Roth IRA.

Employer matching contribution.

Employers frequently match 50% to 100% of your own contributions, up to a certain contribution percentage. For example, an employer might make a matching contribution of 60% on your contribution of up to 10% of your pay. The combination of the two contributions will enable you to contribute 16% to the plan each year.

Employer matching contributions are subject to vesting requirements, which means your ownership of the match is phased in over several years. You may have to be employed with the company for at least five years before you are 100% vested in the employer match.

Very high total contributions.

In theory at least, the combination of your own contributions, plus the employer match could be as high as $57,000, or $63,500 if you’re 50 or older in 2020, and $58,000, or $64,000 if you’re 50 or older for 2021. And of course, your total contributions can’t exceed 100% of your earned income.

401(k) Funding

One of the biggest advantages of the 401(k) plan is, since it is employer-sponsored, your contributions to the plan come right out of your paycheck. Which means the entire process is automatic. There is no need to do any calculations or to write a check or make an online transfer to a broker.

In addition, 401(k) plans are held by a trustee that has been appointed by your employer. This means all administrative functions and management of the account are handled by that trustee.

The downside of employer control of the trustee is that you may not be entirely satisfied with either the trustee or the investment choices offered. As well, some trustees charge much higher fees than what you might find if you were to choose your own investment platform.

While some employers choose large investment brokers as trustees, offering you unlimited investment choices, most have more limited options. For example, if your plan is held with a mutual fund family, your investment choices will be limited to the funds offered by the company.

Some other plans work with a very limited number of funds. For example, they may have a US growth fund, an international fund, an emerging markets fund, a bond fund, and a money market fund. But you won’t be able to invest in individual stocks, other mutual funds, or less traditional investments, such as REITS or sector funds.

401(k) Tax Advantages

In addition to the fact 401(k)s allow you to make very large contributions, there are no income limits that restrict those contributions. That means the $19,500 or the $26,000 you contribute to the plan will be a direct reduction in your income, lowering your tax liability. Meanwhile, the employer matching contributions won’t affect your tax liability at all.

The investment income in your plan accumulates on a tax-deferred basis. You can begin taking withdrawals from your plan beginning at age 59 ½. At that time, you will have to begin paying ordinary income tax on those distributions (this gets back to the tax-deferred vs. tax-free issue).

If you take withdrawals before reaching that age, you will not only have to pay ordinary income tax on the distributions but also the 10% early withdrawal penalty.

Some 401(k) Plans Offer a Roth 401(k) Provision – Problem Solved!

This has been a growing trend in recent years. The IRS allows employers to provide a Roth 401(k) within a 401(k) plan, and you can contribute to both, as long as combined contributions don’t exceed the $18,000/$24,00 401(k) maximum.

That is, you can contribute up to $19,500/$26,000 to a Roth 401(k), or allocate the total between the regular and Roth portions.

But again, just like a Roth IRA, your contributions to the Roth 401(k) are not tax-deductible, while distributions after age 59 ½ can be taken tax-free, as long as you have been in the plan for at least five years.

An employer offering a 401(k) plan with a Roth 401(k) will segregate the plans, giving you both plans, where you can split your contributions between the two.

An employer match may also be available on a Roth 401(k). However, in order to preserve the tax-free distribution aspect of a Roth 401(k), the employer’s matching contributions cannot go into the Roth 401(k) itself. Instead, the employer match is put into your regular 401(k) plan. That means if you have a Roth 401(k), you will also have a regular 401(k) plan, even if you designate all of your contributions to the Roth portion.

The 401(k)/Roth 401(k) combination gives you many of the benefits of having both plans simultaneously. However, since a Roth 401(k) is still a 401(k), you’ll still be limited to the employer’s choice of trustee, as well as the options available with the plan.

RMDs DO apply to Roth 401(k) plans. Remember how I said that Roth IRAs are not subject to RMDs? That doesn’t apply to Roth 401(k) plans. They are subject to RMD’s, beginning at age 70 ½. This is one reason why, while a Roth 401(k) is a good benefit to have, it’s not quite as good as having a Roth IRA.

You Don’t have to make a Choice – You can Usually Have Both – and Why You Should

You can still contribute to a Roth IRA even if you have a 401(k)/Roth 401(k), as long as you are within the income limits to make a Roth IRA contribution. That means that you can contribute up to $19,500/$26,000 to the 401(k)/Roth 401(k), plus $6,000/$7,000 to a Roth IRA.

This will be a major advantage if you’re not satisfied with your 401(k) plan for any reason, especially if you are not happy about the limited range of investment options offered.

You can continue contributing to your 401(k) plan, to take advantage of the high contribution limits, while also putting money into a Roth IRA, where it will be self-directed.

If your 401(k) plan also offers a Roth 401(k), then you will be able to load up with Roth money by also adding a Roth IRA to the mix. For example, let’s say that you decide to contribute $9,750 of your $19,500 annual 401(k) contribution to the Roth 401(k) portion. If you also have a Roth IRA, and contribute $6,000, that will give you a total Roth contribution of $15,750 per year.

If you’re contributing to both a 401(k) and a Roth IRA, don’t exceed the total retirement plan contribution limits for all plans combined. Those are $57,000 (or $63,000 if you’re 50 or older) for 2020, and $58,000 (or $64,000 if you’re 50 or older) for 2021.

But there is one more option still.

That’s the Roth IRA conversion. It’s a sad fact that workers today are likely to hold several jobs during their work lives. The average worker may hold six, seven or eight different jobs before reaching retirement. If each one of those jobs also includes a 401(k) plan, then you will have to decide what to do with that plan once you leave the employer.

The Roth IRA Conversion

I’m just going to go over the basics of the process here. You can get a more in-depth explanation on my Roth IRA conversion article.

But here are the basics…

After you leave an employer, you will have a 401(k) plan that you are no longer contributing to. You generally have one of three choices as to what to do with it:

  1. Leave the money in the plan,
  2. Take a distribution of the funds from the plan, which will require the payment of taxes on the amount distributed, or
  3. Roll the plan over into another retirement plan.

#3 has three options as well:

  1. Roll the funds into the 401(k) plan of your new employer,
  2. Roll the funds into a self-directed traditional IRA account, or
  3. Do a Roth IRA conversion.

When you do Roth IRA conversion, you’re taking your 401(k) plan – which may have a very large balance – and rolling it over into a Roth IRA plan. When you do, you’ll have to pay ordinary income tax – but not the 10% early withdrawal penalty – on the amount that’s converted to the Roth IRA.

Once the money is in the Roth IRA, it will accumulate investment earnings on a tax-deferred basis. If you don’t take distributions from the Roth IRA until you’re at least 59 ½ years old, and at least five years have passed from the date of the year of the conversion, you will be able to take those distributions on a tax-free basis.

In other words, you will be able to convert the old employer 401(k) plan into a Roth IRA, and enjoy all of the same benefits that you would from a Roth IRA funded by regular contributions.

It’s a popular way to move large amounts of money into a Roth IRA, and it’s being done by millions of people every year.

So that’s the long and short of the Roth IRA vs. the 401(k) plan. The two plans are different from one another. But when used together, they can provide a powerful retirement strategy.

If you’re ready to invest in a Roth IRA, here are the best places to open a Roth IRA.

Reader Interactions

Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.

You Might Also Enjoy

Source: goodfinancialcents.com

Posted on February 2, 2021

Are Roth IRA Contributions Tax Deductible?

Good Financial Cents
Roth IRA funding rules established by the IRS, all of your contributions must be made with after-tax dollars.

For example, let’s say you earn $40,000, and you’re in the 25% tax bracket. If you want to make a $6,000 tax-deductible 401(k) contribution, you’ll put $6,000 in your 401(k) first and then you pay your taxes, which leaves you with $25,500 (75% of $34,000).

However, if you make a $6,000 non-deductible Roth IRA contribution, you’ll pay your taxes first, which leaves you with $30,000 (75% of $40,000). By making that $6,000  Roth IRA contribution with after-tax dollars, you’ll be left with $24,000 in disposable income.

Although stashing that money away in your Roth IRA is certainly a smart move, it’ll leave you with less money to spend throughout the year.

The complexity of the situation doesn’t end there. Just because your Roth IRA contributions aren’t tax-deductible doesn’t mean you can’t take advantage of certain provisions that provide a benefit similar to a deduction.

Yes, you read that right. You can potentially get a tax benefit by using a Roth IRA. How is this possible? Keep reading to learn more.

The Saver’s Tax Credit

Although your Roth IRA contributions are not tax-deductible, you can claim the Retirement Savings Contributions Credit (also known as the “Saver’s Tax Credit”). 

Using IRS Form 8880, you can receive a credit of up to 50% on your first $2,000 in Roth IRA contributions, if you’re single and your income falls within the income limits. The credit applies to a contribution amount of $4,000 if you’re married, filing jointly. 

Here’s how the numbers and income limits worked out for the 2021 tax season:

You can receive a 50% tax credit on your qualified contribution amount if you’re:

• Single with an adjusted gross income (AGI) of $19,500 or less

• Married filing jointly with an AGI of $39,000 or less

• Head of Household with an AGI of $29,250 or less

You can receive a 20% tax credit on your qualified contribution amount if you’re:

• Single and earn between $19,501 and $21,250

• Married filing jointly and earn between $39,001 and $42,500

• Head of Household and earn between $29,250 and $31,875

You can receive a 10% tax credit on your qualified contribution amount if you’re:

• Single and earn between $21,251 and $32,500

• Married filing jointly and earn between $42,501 and $65,000

• Head of Household and earn between $31,876 and $48,750

Claiming Roth IRA Losses

Although some taxpayers were once able to develop a workaround to claim Roth IRA losses, this provision was removed as part of the Tax Cut and Jobs Act of 2017. Whether this will become an option again in the future remains unclear.

In the past, while Roth IRA contributions were not tax-deductible, you could claim losses under certain circumstances. These losses were in relation to your original Roth IRA contribution, not simply a declining balance.

For instance, if you contributed $25,000 to your Roth IRA over the years, but your account is now only worth $20,000, then you experienced a $5,000 loss of your original contribution. In this situation, you could claim that loss on your tax return, but only if all of the following applied:

  • You closed all of your Roth IRA accounts,
  • You claimed your loss on an itemized tax return,
  • The loss exceeded 2% of your Adjustable Gross Income (AGI), and
  • You were not subject to the Alternative Minimum Tax (AMT).

Assuming your situation met each of the above factors, you were eligible to claim a loss on your tax return. However, there’s another caveat — you could only claim the amount that was above 2% of your AGI as a tax deduction.

Since the above provision is no longer in effect, the Saver’s Tax Credit is likely the next best option.

Benefits of Investing in a Roth IRA

Now that we’ve covered the most viable option to score a tax break through a Roth IRA, let’s highlight the many instances in which opening this type of account makes sense.

A Roth IRA offers one more way to save for retirement.

If you’re building a hefty nest egg for retirement, a Roth IRA offers another option to do so. The best part is, you can contribute to a Roth IRA (or traditional IRA) even after you max out your company-sponsored retirement or 401(k) plan. 

For the 2021 tax season, the contribution limits for both your Roth IRA and traditional IRAs combined is $6,000, although individuals age 50 and over can contribute up to $7,000 as a “catch-up contribution.”

Roth IRAs allow you to diversify your exposure to taxes.

When you contribute to a 401(k) or other tax-advantaged accounts, you save money on taxes now with the promise to pay them when you begin taking withdrawals. A Roth IRA, on the other hand, requires the opposite approach. By investing in a Roth IRA with after-tax dollars, you can look forward to tax-free withdrawals when you reach retirement age. 

If you believe you might be in a higher tax bracket upon retirement, investing in a Roth IRA is also one way to shield yourself from higher taxes in the future.

You can withdraw your contributions at any time with no penalty.

Unlike other retirement plans, the Roth IRA offers some pretty generous rules when it comes to removing your funds from an account. You can withdraw any contributions from your Roth IRA at any time without penalty. 

You’ll notice I said contributions, and not earnings, however. Let’s say you contributed $6,000 to your Roth IRA the last few years for a total contribution of $12,000, but managed to accumulate $3,000 in earnings during that time. Per Roth IRA rules, you can only take out your initial contribution without penalty, which includes the original $12,000 you put in.

You won’t be forced to take distributions once you reach a certain age.

One reason so many people love the Roth IRA is that it offers flexibility in retirement. Not only can you take out your contributions early if you need to, but you aren’t forced to take distributions once you reach a certain age, either. 

A 401(k) and traditional IRA, by comparison, force you to take distributions at age 70 1/2 or pay a penalty. If you want as many financial options as possible when it comes to riding out your retirement, this is a huge benefit.

You might not be able to contribute in the future if your income grows.

If you think you might earn more money in the future, contributing to a Roth IRA now is a very smart move. Even though a high income might preclude you from using this investment vehicle in the future, any funds you stash away in a Roth IRA will continue growing until you need them.

How to Qualify For a Roth IRA

You might be wondering what it takes to qualify for a Roth IRA, to begin with. Here are the main factors to consider when figuring out whether or not you can contribute to a Roth IRA this year:

  • You must have taxable, earned income. During the year you want to contribute to a Roth IRA, you must’ve earned income from a full-time or part-time job, self-employment, or a small business. 
  • Your contribution limits are based on your age. If you’re under the age of 50, you can contribute a maximum of $6,000 combined to a Roth IRA or traditional IRA account. If you’re over age 50, the maximum you can contribute is $7,000.
  • You must meet income guidelines. Depending on your income, you might be able to contribute up to the maximum limit, be allowed to contribute a reduced amount, or might not be eligible to contribute to a Roth IRA.  Also keep in mind that, if your income fluctuates, you might be able to contribute to a Roth IRA in certain years and not others.

For 2021, married couples filing a joint return must earn less than $196,000 to make the maximum contribution. Between $196,000 and $205,999, the maximum contribution begins phasing out. 

For single filers, heads of household, or married filing separately without living with their spouse that year, the phase-out range starts at $124,000 and ends at $138,999. Anyone who falls into that category and earns less than $124,000 can contribute the maximum contribution for the year.

Where to Open a Roth IRA

  • $0 per trade
  • $0 mutual fund
  • $0 set up
  • 0.25% – 0.40% account balance annually
Get Started

Opening a Roth IRA is always a good idea, but if you fall into one of the above income categories then going without a Roth IRA could cost you a huge break on your taxes. The beautiful thing about tax credits is they’re a direct reduction in the amount of tax you owe, whereas tax deductions only lower your taxable income.

If you can benefit from funding a Roth IRA and getting a Saver’s Tax Credit, there are plenty of ways to get a Roth IRA account activated. 

Before opening an account, ask about any account maintenance fees. Also, you’ll want to get an idea of how each provider handles customer service. Here’s where you can find a Roth IRA.

Credit Union

Credit unions are not-for-profit institutions that offer their members financial services. Since their mandate is to serve their members, credit unions are often known for having lower fees than traditional banks or brokers. If you’re not already a member of a credit union, you can search the federal credit union database to get started. 

Online Brokerage

For investors who want to take a do-it-yourself approach to their finances, using an online brokerage or robo-advisor can take the pressure out of the process. Make sure to find one with a low management fee. It’s wise to also pay attention to other services and features that would benefit you, like educational tools, and automatic rebalancing which adjust your investments at set intervals.

Traditional Bank

If you prefer to stick with a traditional method, you can open your Roth IRA at a bank. When you open a Roth IRA at a bank, your money typically goes into a highly secure, low-risk investment vehicle, like a Certificate of Deposit or money market account. Keep in mind, these types of investments typically have lower returns.

Reader Interactions

Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.

You Might Also Enjoy

Source: goodfinancialcents.com

Posted on February 2, 2021

What Is a Money Market Account? (+ Our Top 5 Picks for 2021)

If you’ve built up your cash reserves and simply have it all sitting in a traditional savings account, it may be time to reconsider how you’re storing your money. Opening a money market account is a step up from a savings account once you’ve accumulated a certain amount of cash.

savings

There are certain pros and cons with this type of account, so it’s important to understand what it is and how it works. You just might find that your money can better work for you when it’s in a more growth-oriented account such as an MMA. Ready to learn more?

What does a money market account do?

The most appealing aspect of opening a money market account, particularly compared to a savings account, is that it typically offers a higher interest rate. At the same time, it still provides you with the flexibility to access your money as you need it.

Money market accounts are FDIC-insured up to $250,000, so they’re considered a low-risk way to store your money, just like a regular savings account. If you open an account through a credit union, your funds are similarly insured by the National Credit Union Administration.

Depending on your financial institution, your interest can accrue daily, monthly, quarterly, or annually. The more frequent the accrual, the more money you’ll earn over time because of the effects of compounded interest.

How to Set Up a Money Market Account

To deposit cash into your money market account, you can use any method you use with other savings accounts, including electronic transfer. If your account is with a financial institution that has physical branches near you, you can also make cash and check deposits.

You will usually receive both a debit card and a checkbook that are linked to your account. This will allow you to make withdrawals at your convenience. That is another benefit that a savings account doesn’t usually offer.

This keeps your funds extremely liquid so you can quickly access them during a financial emergency. There are some limitations on how often you can make withdrawals, so keep reading to familiarize yourself with the restrictions that occur when you have a money market account.

Limitations of a Money Market Account

While a money market account does offer a degree of flexibility, there are some restrictions as well. Most notably, you may not make more than six withdrawals each month. This is a federal rule, not one made up by the banks. You could receive a fine if you exceed this limit.

On top of that, you’ll start to receive formal warnings from your financial institution. If you continually exceed the withdrawal limit after being warned, the bank is eventually required to move your funds into a checking account, so be aware of your behavior and plan accordingly.

Account Minimums

Another restriction imposed by some banks (but not necessarily all of them) is an account minimum. Many banks require that you open an account with at least $10,000. On top of that, you may also be required to maintain a certain balance threshold. If you don’t, you could again be subject to a fee from the bank.

If you don’t meet the minimum to open an account but still want one, you may be able to pay a monthly fee to bypass the deposit minimum. Just check to make sure it’s worth it.

There’s no sense in paying an expensive fee that exceeds the interest you accrue each month. If that happens, you’re probably better off keeping your cash in a free savings account or other similar product. Take the time to do the calculations to know exactly how much you’re earning (or paying) to determine if the money market account makes financial sense for your funds.

Is a money market account right for you?

There are a lot of factors involved in whether or not a money market account is right for you. Start off by looking at your holistic financial picture. Do you have a healthy buffer in your checking account or other savings account?

Money markets are often used for savings that don’t need to be accessed regularly, so make sure you have cash stored somewhere if you need it more frequently. Once you start to save on a larger scale, you can consider opening a money market account.

Money Market Rates

Another thing to think about with a money market account is how competitive the yield rate stands. Years ago, MMA rates were much more competitive than a standard savings account. But today, interest rates across the board are extraordinarily low.

money market rates

While this is great if you’re borrowing money, it’s not so great when you’re trying to save money and benefit from a high yield account. Many money market accounts today are below 1% and are oftentimes even less than that. It’s definitely worth some research to determine which banks are currently offering better rates.

The bottom line is that a money market account does have its limitations. If you can’t meet the minimum threshold without paying a fee or you need to withdraw your funds frequently throughout the month, then you might look for another type of account.

But if you want to diversify your savings while still receiving a nominal return, then consider a money market account. It’s low-risk and easy to access, so you get that flexibility to make withdrawals when you need to — just not every day.

What are the best money market accounts for 2021?

Check out our in-depth guide to 2021‘s best money market accounts. There’s a great variety of banks offering different minimum deposits and some of the most competitive APYs on the market. Here is a brief overview of each of our top picks to help get you started.

CIT Bank

CIT Bank offers one of the lowest minimum balances among the online money market leaders. Open your account with at least $100 and enjoy a 0.85% APY. Plus, there are no fees at opening or for monthly servicing.

Sallie Mae

With no minimum deposit with an MMA from Sallie Mae, you can earn a 0.90% APY on your funds. They also have a slightly more flexible overdraft policy compared to other financial institutions.

AbleBanking

This is a money market account with a low minimum deposit of just $250. Paired with a 0.80% APY, it’s ideal for beginning savers. An added bonus is that you get same-day transfers if you have another AbleBanking account.

Ally Bank

Ally offers a money market account with 0.50% APY and daily compounding interest. And unlike most MMAs, there’s no deposit minimum, no monthly fee, and the APY applies to all balance tiers.

TIAA Bank

With one of the higher APYs, money market account holders at TIAA Bank (formerly EverBank) earn 0.75% for the first year. To qualify, you need a $1,500 initial deposit from a non-TIAA Bank account. After the first year, your interest rate drops to just 0.70%.

Alternatives to Money Market Accounts

While a money market account can be a great savings tools, it’s smart to familiarize yourself with similar options. A savings account usually offers less interest than an MMA, but this isn’t always the case — it really depends on the financial institution.

Savings Accounts

A savings account doesn’t let you write checks like a money market account does, but you don’t generally need a minimum deposit. Both types of account are considered low risk and insured by the FDIC up to $250,000. They also have the same withdrawal restrictions of up to six times per month.

CDs

Another comparable product is a certificate of deposit, or CD. The savings rate with a CD is generally higher than that of a money market account, but here’s the catch: you have to commit to a certain time frame before withdrawing funds from a CD.

Unlike an MMA, you’ll receive a penalty for making a withdrawal from your CD before the term matures. You can choose your term length, typically lasting between six months and five years.

While placing funds in a CD could certainly be a part of your savings strategy, it’s not meant to replace liquid cash assets. You probably shouldn’t put any money in a CD that you would expect to need before the maturity date. But the longer term you commit to, the more interest you can expect to earn, so there are definitely merits involved as long as you have a holistic savings plan.

Money Market Accounts vs. Money Market Funds

These two financial products are actually completely different, so be careful not to confuse a money market account (MMA) with a money market fund (MMF). While an MMA serves as a low-risk account for savings, an MMF is an investment in a mutual fund, which is typically done through a broker.

While an MMA is insured by the FDIC, an MMF is not. There’s no guarantee that you’ll even receive back your entire principal, let alone any earnings. Still, they are low-risk on the spectrum of investments, but there’s no financial safety net in terms of insurance.

So what exactly do money market funds invest in? Most commonly, they focus on U.S. Treasury bills, commercial paper, and other short-term debt securities. These aren’t turbulent investments by any means, and they’re starting to see higher yields as the Federal Reserve begins to raise rates.

Final Thoughts

Like all savings vehicles these days, savers aren’t seeing dramatic differences among many of these products. Whether you’re considering a money market account or anything else, be sure to check on exactly what terms the financial institution is offering and don’t be afraid to shop around.

If you’ve been saving since before the recession of the mid-2000s you might remember APYs that actually made you a decent return. But today’s markets are different as the country still sifts through economic recovery. For all savers, that means taking a closer look at what kind of interest you can expect to receive.

It also means making sure you don’t actually end up losing money by paying hefty fees or tying up money in low-yield accounts with too many restrictions. In many cases, a money market account could be the next step up in your overall savings plan.

Source: crediful.com

Posted on January 27, 2021

What Is a Savings Account & What Are the Different Types?

Instead of keeping all of your money in an easily accessed checking account where you’re more apt to spend it, it’s smart to spread some of the excess into a savings account.

piggy bank

There are a few restrictions, but you have the chance to earn interest on the money within the account. That’s why it’s better to place your cash reserves in this type of account rather than simply letting it sit in your checking account.

When deciding on your savings account, it’s important to know that you’ll have three different types to choose from. We’ll go into those in greater detail, as well as other factors you should consider during the selection process.

You’ll also learn more about how interest accrues and how to open either an online savings account or one at a physical bank. When you’re finished reading, you’ll have a solid understanding of how savings accounts work and the best way to use one for your own finances.

How does interest accrue in a savings account?

Interest on a savings account doesn’t accrue once per year; instead, it’s compounded over multiple intervals. The exact frequency depends on the specific account you choose. The best option, assuming all other features are equal, is a daily compounding rate.

Other options include monthly or quarterly compounding. So how exactly does compounding interest work? You earn interest on your account for each interval.

Annual vs. Daily Compounding Rate

Let’s say you open a savings account with $5,000 that earns a 1% interest rate. If your interest-only compounded annually (once per year), you’d earn just $5 at the end of the year.

But when the interest on the same account compounds daily, your money starts to earn a bit more. Your 1% interest is divided up over every day of the year, technically amounting to 1/365th of a percentage point daily.

Over the course of the year in this scenario, it becomes the difference between making $50 in interest with an annual compounding rate and $50.25 with a daily compounding rate. The difference may seem laughable, but over time, that change can really add up.

Adding More Money & Rising Interest Rates

This is especially true when considering two variables. The first is that you’ll continue adding more money to your savings account. By doing so, you’ll continue the snowball effect that small additional amounts of interest will accrue into much larger amounts over time.

The other variable is that interest rates will rise over time. While earning even 1% interest right now is a rarity, savings account rates have historically been much higher.

As the years progress and the economy hopefully continues to strengthen, so too will the benefits of compounding interest. As with most things, patience is a vital component of your financial longevity.

Are there any restrictions on a savings account?

Yes, there are restrictions on savings accounts. Some apply across the board to all accounts, while others depend on the specific account you choose.

Broadly, the federal government imposes a limit on how many transfers or withdrawals you can make each month, specifically ones that are deemed “convenient.” This includes any type of transfer, whether it’s online or by check or debit card.

ATM Withdrawal Limits

An ATM withdrawal from a savings account, however, does not count as a convenient transfer. You may only perform six such transfers each month, otherwise, you’ll be hit with a fee from your bank.

Unfortunately, there’s no way around the transfer and withdrawal restriction, so try to plan your monthly needs in advance. Think ahead about what major financial events you have coming up in the next few weeks, and try to batch your withdrawals together.

Say you’ll need money from your savings account to buy a wedding gift for a friend one weekend, then take an out of town trip the next. Go ahead and take out all of the money from your account at once, even though the two events are spread out.

Minimum Balances

On top of federal restrictions, other rules regarding your savings account may come directly from your financial institution. Some may require that you maintain a minimum daily balance. This is especially true with accounts that have higher interest rates or other features associated with it.

Before signing up for a particular account, be sure to understand these and any other requirements, along with the penalty for breaking them. You don’t want to rack up fees because you constantly dip below the minimum daily balance. A bit of knowledge can go a long way in keeping your finances in order.

What kind of savings account can you choose from?

As we mentioned earlier, banks and credit unions offer three types of savings accounts: basic savings, money market, and CDs.

Each one has different pros and cons associated with it, so it’s good to learn about all of them to find the best fit for you. Some people even prefer to spread out their savings over several different types of accounts.

It all depends on what you plan on doing with your money and when you want to access it. Understanding all of the details of each plan type can prevent you from getting stuck in a financial pinch later down the road.

Basic Savings Account

A basic account is just that — an easily accessible account that allows you to store your money separate from your checking account. While you do earn interest with it, don’t expect it to be much.

In fact, on the low end, you’ll receive just 0.01% while a high yield account still only earns about 1% APY. Still, the dismal interest rates are compensated by easy to access funds. You can withdraw them directly from your bank’s ATM with a debit card if you have a physical branch near you.

Even if you save through an online bank, an electronic transfer can go through as quickly as the same day. It may take a bit longer in certain situations, like if you complete the transaction late at night or on a weekend or holiday.

Another advantage is that they come with low or no balance minimums. If you’re just starting to save, this is a convenient and cost-effective way to store your money. Saving money is easy and fast for beginners and seasoned savers alike with a basic high-yield savings account.

Check Out Our Top Picks:

Best Savings Accounts of 2021

Money Market Account

For a slightly more sophisticated savings product, consider a money market account. You’ll need a higher deposit to get started than you would with a basic account, but you’ll benefit from a better interest rate.

You’ll likely be able to find a money market account with an APY ranging between 0.75% and 1.2%. Just like a regular savings account, you can access your money anytime you’d like — as long as you maintain the minimum balance requirements.

Check Out Our Top Picks:

Best Money Market Accounts of 2021

These accounts are also subject to the federal withdrawal and transfer limits, so plan accordingly. To get an account started, expect to commit to an initial deposit of $1,500 or more.

Many banks tier their deposit levels so that the more cash you put into your account, the better interest rate you’ll receive. If you have larger levels of savings that you don’t anticipate digging into too much in the near future, it could be a good option for you.

Certificate of Deposit

To get the highest rate on a savings account, you can consider a certificate of deposit, also called a CD. Depending on the bank or credit union, rates start at 0.5% and can go just above 1.0%. There’s typically no fee to open an account and the risk is low since most banks issuing CDs are FDIC-insured. So what’s the catch?

When you open a CD, you must select a commitment period in which you won’t make any withdrawals. The longer term you select, the better rate you’ll receive. Most CD terms range anywhere between six months and five years, so you definitely need to have a financial plan.

If you do decide to withdraw the money early, you’ll be hit with a fee charged as a deduction of interest from a certain amount of time. For example, if you take out money early, your bank might withhold the interest earned from the last three months.

How should you choose a savings account?

There are a few different considerations to think about before jumping into a savings account. Start off by thinking about your savings as a whole and how you might need to access your money.

If you’re just starting to save, keep those emergency funds in an accessible account that doesn’t take time or accrue fees whenever you make a withdrawal. As you save more, consider diversifying your account types and putting funds in a higher yield fund — even if it means larger deposits or a term limit commitment.

Maintaining a large minimum balance might sound difficult, but if you’re setting aside money for a long-term goal, it may keep you from the temptation to spend the funds on something else. And unless there’s a term limit, you can always close the account when it’s time to withdraw so you don’t have to pay a maintenance fee.

Moving Money Around

Don’t worry about getting it all right the first time. That’s the great thing about most savings accounts — you can open and close them as needed to suit your needs.

You might look for signup bonuses and simply move your money around once or twice a year. Or you could purchase CDs in varying lengths so that you get on a schedule of having the term end consistently.

While choosing your savings account does take planning, it also takes regular adjusting. Make a decision, and in a few months, check-in with yourself and see how it’s working.

How do you open a savings account?

Depending on the bank or credit union, you can either open an account online or in-person. Most places allow you to do this over the Internet, but smaller banks and credit unions may require you to go in person.

Either way, the process is simple. You just need your ID, social security number, personal information, and the required minimum deposit. The process is even simpler if you already have an online savings account with the bank since they already have your basic information.

Online & Mobile Banking

Once you’ve opened your bank account, you can sign up for online banking and download an app if the bank offers one. This can make it easy to access your account on the go, plus scan and deposit checks from anywhere. You can also link your savings account to your checking account so that you can transfer money easily.

Opening one or more savings accounts can be an extremely useful tool in managing your finances. It can help you stay on top of your savings goals while also having easy access to your money when you need it. Take a few minutes to consider your options, then get started with the best choice today — there’s no reason to wait.

Source: crediful.com

Posted on January 26, 2021

12 Best Money Market Accounts of 2021

A money market account is a type of savings account that typically requires a higher minimum deposit and daily balance, yet it offers higher interest rates than most standard savings accounts.

Ready to get started saving? Check out our top picks for this year’s top money market accounts.

Top 12 Money Market Accounts

CIT Bank

If you don’t have a large nest egg but still want to take advantage of high money market rates, consider CIT Bank.

The minimum opening balance is just $100 and the APY is 0.50%. With no opening fee or monthly service fee, you’ll only pay fees for wire transfers, overdrafts, excessive transactions, and stop payments.

Interest compounds daily so you can maximize your already-high yield. When you’re ready to make a transaction, simply use People Pay online or through the mobile app. Like other money market accounts, you’re allowed to make six withdrawals or transfers from your CIT Bank account for each statement cycle.

With minimal fees and an extremely competitive yield, CIT Bank’s money market accounts are ideal for savers of all kinds, especially those starting off with smaller amounts of funds.

BBVA

BBVA offers a competitive introductory APY for their money market account, with no minimum balance required.

You just need $25 to open your account. For the first 12 months, you’ll earn a 0.15% APY on the funds in your account. Once the introductory period ends, you’ll receive a standard rate on your account.

When you open a money market account with BBVA, you’ll have to pay a $15 monthly fee, unless you meet one of two exemptions.

The first is if you maintain a daily minimum balance of at least $10,000 each quarter. The other option is to set up a minimum $25 monthly transfer into account. The funds must come from your BBVA checking account.

You can also link it to your checking account to serve as overdraft protection. With most savings accounts, you can make up to six withdrawals each month.

Axos Bank

Earning 0.60% APY, Axos Bank is another example of a money market account with no minimum monthly balance.

There’s not even an initial deposit required to open the account, so you get access to the benefits without having to save a lot ahead of time.

Axos Bank’s money market account allows you to earn more interest than it’s high-yield savings account, and it also offers more flexibility in accessing your cash. For example, you get limited free check writing abilities and a free Visa debit card.

These two features let you use your savings as a checking account while still earning interest. Of course, if you’re likely to overspend on your savings when it’s unnecessary, you may not want such easy access to your funds.

They offer automatic bill pay directly from your account, as well as mobile banking and mobile deposit services.

That makes saving even easier because you can deposit checks into your account straight from your smartphone. Axos is a great choice if you like to have quick, easy access to your funds while still earning interest on what you have.

Sallie Mae

Did you know Sallie Mae doesn’t just service student loans? It has a whole area of banking features. One of these is a money market account with a 0.55% APY.

There’s no minimum deposit required so you can either start saving from scratch or transfer over existing funds when you open your account. Plus, you get to write checks directly from your account. Add to that no monthly fees and you have a strong contender for your savings goals.

To make a deposit, simply choose one of four convenient options: depositing a check electronically through your mobile phone, setting up a direct deposit, transferring funds electronically, or mailing in a check.

You can easily transfer funds from your money market account to your linked bank account and the process only takes 2-3 business days to post to your other bank.

If you overdraw your account due to insufficient funds, Sallie Mae charges a $19 fee, or whatever funds are remaining in your account so that your balance doesn’t go below zero.

This is quite a generous policy compared to many other financial institutions. For quick transfers and relatively low overdraft penalties, Sallie Mae is worth considering for your money market needs.

AbleBanking

AbleBanking’s money market account offers a 0.50% APY with a below standard $250 minimum deposit to open your account.

This is a really accessible threshold for a money market account, so it’s a great way to get your foot in the door without needing an extremely high opening balance.

However, you can only link your account to one external U.S. bank, so you must be comfortable with transferring money from only one location.

On the plus side, transfer times are quick, with same-day transfers occurring before 5:00 p.m. on your AbleBanking money market accounts. Plus, it’s just a 2-3 day wait when transferring to and from an external bank. Compare that to a 5-10 day wait with other banks, and it’s not really that long.

On top of that, they also make it easy for charitable giving. In fact, every time you open a new account, AbleBanking donates $25 to the charity of your choice. It must be a 501c(3) organization, but other than that, you can pick whatever non-profit you’d like.

Also, if you refer a friend to open an account with AbleBanking, you get an additional $25 to donate on top of your friend’s donation as a new customer.

You also can donate to non-profits directly from your money market account without incurring any hidden fees. AbleBanking is a great choice if you’re looking for a strong money market account with a good dash of altruism.

UFB Direct

UFB Direct is a division of Axos bank, and it offers an online money market and savings accounts for consumers. And like many online banks, UFB is able to offer much higher rates than what traditional brick-and-mortar banks can offer.

For instance, the UFB Premium Money Market boasts an APY of 0.20%. Customers have limited check-writing privileges, and the account comes with a complimentary debit card.

It’s free for customers to transfer money between accounts. And UFB Direct’s mobile app makes it easy to manage your money and deposit checks.

However, you’ll need to have a minimum balance of $5,000 to open the account. And you’ll only earn the 1.90% APY if you maintain an account balance of $25,000 or higher. If your account balance is less than $25,000, you’ll receive a 0.50 APY.

And if you have other accounts through Axos Bank, you’ll need to check to make sure you don’t exceed FDIC guidelines.

Discover Bank

Discover Bank is mostly known for offering credit cards, but it also provides a host of online banking products, including a money market account. One of the best things about opening a money market account through Discover is that there are no account fees.

If you have more than $100,000 to save, then you can earn a 0.40% APY. For balances that are under $100,000, you can still receive a 0.35% APY. And with Discover, you’ll have access to over 60,000 ATMs across the country.

Discover also offers a mobile app that makes it easy to track your funds even when you’re on the go. The app lets you deposit checks, temporarily freeze your debit card if it’s lost or stolen, and keep track of your account balance.

TIAA

TIAA Bank (formerly EverBank) offers a high APY of 0.45% to new customers in the first year, but there is a maximum balance of $250,000 to receive that rate.

After the 12-month introductory period is over, your APY depends on your account balance.

Another interesting feature by TIAA Bank is its pledge to keep its APY in the top 5% of money market rates offered by its main competitive accounts.

To open a money market account with TIAA Bank, you must have an initial deposit of $1,500, and you only qualify for the 0.70% introductory APY if those funds are transferred from a non-TIAA Bank account. Still, there’s no monthly fee for this high interest rate, so if you have the money available, it could be a wise move.

You also get a pretty wide range of ATM freedom with TIAA Bank. You can use your Visa debit card at any TIAA Bank ATM throughout the country for free. Any non-TIAA Bank ATM fee you incur is reimbursed in full when you keep your balance above $5,000.

If you’re frequently on the go and want easy access to your cash, it’s a benefit worth remembering while making your decision.

Betterment

Betterment is best-known as a robo-advisor, but they also offer a high-yield savings account. There’s no minimum balance required to open the account, and you can earn a rate of 0.40% APY.

When you bank with Betterment, there are no monthly fees, and any ATM fees you incur will be reimbursed. You can transfer money between your accounts as much as you need to. And your account is eligible for up to $1 million in FDIC insurance.

And best of all, Betterment is planning to release a checking account and debit card very soon. So this could be the perfect complement to your Betterment savings.

However, you won’t have access to any branch locations, which some people may consider a downside. And you won’t be able to write checks from your account.

Capital One 360

Capital One 360 money market accounts earn 0.50%. There’s no minimum deposit required, but you must have some type of balance to consider the account officially ‘opened’ (even if it’s just a penny).

Currently, Capital One doesn’t offer debit cards or personal checks for the money market account, but you can take advantage of mobile check deposits through your smartphone. Deposits can also be made via electronic transfer, over the phone, by mail, or through approved wire transfers.

Additionally, you can access your account online or through the mobile app. As for withdrawals, you can request them either online or over the phone.

There are no monthly or annual fees charged. However, you should note that there is no overdraft protection offered and you must agree not to withdraw more than your current balance.

As long as you consistently keep track of your balance and don’t mind having a few restrictions in accessing your funds, then the Capital One 360 money market account could be a good option to consider.

Ally

Ally offers a low entry money market account that gives you quick and easy access to your money. Unlike the bank’s traditional savings account, you can access your money with both a debit card and personal checks.

And if you maintain a minimum daily balance of $25,000 or more, you can qualify for a higher savings rate of 0.50% APY. This option is tailored to those just getting started saving and who need easy access to the funds in their money market accounts.

Ally doesn’t charge any monthly maintenance fees and has some nice ATM benefits. Any Allpoint ATM in the country is available for use free of charge, and even if you use another ATM, Ally will reimburse your fees up to $10 each cycle.

Some common fees include a $25 charge if you overdraw from your account (but that is limited to one per day) and a $10 excessive transaction fee if you take out funds over the federal monthly maximum of six times.

Santander

You’ll have to come in with a strong deposit to take advantage of Santander Bank’s best money market rates.

While the opening deposit is just $25, you’ll need a minimum balance of at least $100,000 to qualify for a high interest rate of 0.10% APY. If your balance is less than $10,0000, you’ll earn on a tiered basis:

  • $1 to $9,999.99: 0.10% APY
  • $10,000 to $49,999.99: 0.22% APY
  • $50,000 to $99,999.99: 0.30% APY

You’ll also need that $10k balance to avoid a $10 monthly fee assessed on your account. The other way to avoid that monthly fee and not worry about your minimum balance is to open a checking account at the bank.

So if you are in need of a new bank altogether for both checking and savings, or you need a high yield account for your larger savings fund, Santander Bank is certainly a great place to start looking.

What is a money market account?

A money market account is a savvy way to save, especially if you’ve already accumulated a fair amount of funds to put away.

You also get to retain the convenience and flexibility of a regular savings account by making withdrawals as you need them without the wait time of other savings accounts. You might even be able to write a few checks from your account, depending on the bank.

This makes your funds much more accessible compared to an account like a CD with a predetermined term. There are never any penalties so you can get your money when you need it while still earning above-average yields.

lady on laptop

Bottom Line

Money market accounts certainly have more restrictions than your typical savings account but because they generally come with better interest rates, it can be a great way to save money.

As with any account, it’s essential to make sure you find the best money market account for your needs that banks and credit unions have to offer.

Source: crediful.com

Posted on January 25, 2021

14 Best Small-Business Checking Accounts of 2021

Small-business owners know that business banking is a little different from consumer banking. Our master list of the best online banks around is surprisingly short on business checking accounts with no monthly maintenance fees, minimum balance requirements, or monthly transaction limits. Most business bank accounts do impose transaction limits and demand hefty minimum balances to waive high monthly maintenance fees.

That puts microbusiness owners and solopreneurs at a distinct disadvantage. And it’s a stark contrast to the consumer banking world, where the best free consumer checking accounts cater to individuals and joint account holders who aren’t swimming in cash.

But the picture isn’t uniformly bleak.

The best small-business checking accounts have low minimum balance requirements to waive their monthly maintenance fees (or no monthly maintenance fees at all) and enough fringe benefits to keep things interesting for account holders. Some pay interest as well. All are FDIC-insured.

And once you know where to look, you’ll find ample small-business checking options to choose from.


1. Chase Business Complete Checking

$300 Bonus for New Account Holders Who Open With Qualifying Activities

Chase Business Complete CheckingChase Bank Logo has a category-leading bonus opportunity for new account holders: $300 when you open a new account (with no minimum deposit required) and complete the required qualifying activities.

Moving forward, you can avoid the $15 monthly maintenance fee in multiple ways, including maintaining a minimum daily balance or making qualifying purchases on your Chase Ink Business credit card. Plus, enjoy unlimited electronic deposits, ACH, and mobile check deposits via Chase QuickDeposit.

Chase has ATMs and branches in the following states: AZ, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, KY, LA, MA, MI, NV, NJ, NY, OH, OK, OR, TX, UT, WA, WV, WI. This offer is available online nationwide, except for residents of AK, HI, and PR.

  • Minimum Deposit and Balance Requirements: There’s no minimum deposit or ongoing balance requirement.
  • Yield: None.
  • Rewards and Incentives: Open a new Chase Business Complete Checking account and complete qualifying activities to earn a $300 bonus. This offer expires April 15, 2021.
  • Possible Fees: Chase offers multiple ways to waive the $15 monthly maintenance fee.

Apply Now


2. BlueVine Business Checking

No Fees; Earn 1.00% APY on All Balances

Bluevine Business CheckingBlueVine Business Checking is a branchless free business checking account with an excellent yield for account holders and no transaction limits, in-network ATM fees, or NSF fees. It’s also one of the few branchless business bank accounts that comes with free checkbooks. But setting up one-time and recurring payments is a snap with BlueVine too. 

  • Minimum Deposit and Balance Requirements: There’s no minimum balance requirement or monthly maintenance fee.
  • Yield: Earn 1.00% APY on all balances up to $100,000.
  • Rewards and Incentives: BlueVine does not impose transaction limits, unlike many business bank accounts. Each new account comes with two free checkbooks. Withdrawals are free at about 38,000 in-network ATMs.
  • Overdraft Options: BlueVine may decline overdraft or NSF transactions at its sole discretion but does not impose overdraft or NSF fees.
  • Possible Fees: BlueVine has virtually no fees.

Learn More


3. Axos Bank Basic Business Checking

Earn a $100 Account Opening Bonus With Qualifying Activities

Axos Bank LogoWith no monthly maintenance fee, unlimited ATM fee reimbursements, a fantastic welcome bonus for newly incorporated businesses and long-incorporated businesses alike that open accounts by the stated offer end date and a nice remote deposit feature that you can use just about anywhere, Axos Bank Basic Business Checking is a fantastic alternative to Axos Bank Business Interest Checking. Apply 100% online (no paper forms required) and enjoy paperless statements once you’re signed up.

  • Minimum Deposit and Balance Requirements: The minimum opening deposit is $1,000, but there’s no monthly maintenance fee.
  • Yield: None.
  • Rewards and Incentives: Here’s how to earn the $100 welcome bonus: Apply for your new Axos Bank Basic Business Checking account by the stated offer end date, then maintain an average daily balance of at least $5,000 during the first three months (new funds only). This offer is subject to change or revocation at any time at Axos Bank’s sole discretion.
  • Overdraft Options: Axos Bank customers can opt into an overdraft line of credit that covers overdrafts the bank would typically return unpaid. The interest rate is variable but comparable to a high-interest credit card, and payment of at least 5% of the balance (or $25, whichever is greater) is due each statement cycle.
  • Possible Fees: $0.30 per item processed after the first 200 items each month.

For more information, read our Axos Bank review.

Learn More


4. Lili

Totally Free Checking With Automatic Tax Savings and Financial Insights

Lili LogoThe Lili Account is a truly free, all-in-one checking solution that’s built with freelancers in mind. In practice, it appeals to a much broader audience: side hustlers and gig workers supplementing W-2 income, established solo professionals (one-person businesses), and full-time freelancers.

With Lili, these folks don’t need separate bank accounts for personal and business needs — just Lili. Its signature benefits include a sub-account that simplifies tax savings, early payday for qualifying account holders, instant expense categorization, and a powerful cache of financial insights and expense management tools to help you spend (and save) smarter. Plus, its “emergency bucket” feature enables savings transfers as small as $1 a day.

  • Minimum Deposit and Balance Requirements: Lili has no account fees or minimums.
  • Yield: Lili doesn’t pay interest. Check back often for the latest offers.
  • Rewards and Incentives: Lili’s referral program pays $25 per successful referral to Lili and promises a bonus of $1,000 when you deliver 10 successful referrals. Plus, Lili makes it easy to set aside funds earmarked for tax payments, has helpful expense management and categorization tools (like quarterly expense reports), promises an early payday for account holders with direct deposit (up to 2 days early), enables cash deposit at more than 90,000 locations around the U.S., and delivers real-time alerts about transactions and other account activities.
  • Possible Fees: Lili charges no account fees.

Learn More


5. Wise

Earn Up to 1% on Deposits With Qualifying Spend; Get $100 Credit After Sign-up

Wise5e961d64942a2f00f64d30dc Primary P 800 is a mobile-friendly business banking and payments solution with no hidden fees and a juicy cash back rate that’s more than enough for active users to offset the $10 monthly fee.

All Wise balances earn a 0.5% base incentive, credited monthly, and purchases earn an additional cash back incentive of 0.1% per $1,000 spent (up to 0.5% maximum on a $5,000 monthly spend). Wise has an impressive offer for new account holders as well: a $100 credit in your Wise account after you sign up and spend $1,000 on your Wise card within the first 30 days.

  • Minimum Deposit and Balance Requirements: There’s no minimum deposit or ongoing balance requirement.
  • Yield: Wise balances earn a 0.5% base incentive.
  • Rewards and Incentives: For a limited time, earn a $100 credit in your Wise account when you sign up and spend $1,000 on your Wise card during the first 30 days. Moving forward, earn 0.1% cash back incentive per $1,000 purchased on your card, up to a maximum of 0.5% ($5,000 spend) per month.
  • Possible Fees: See Wise’s fee disclosure for a full accounting of possible fees.

Learn More


6. Brex Cash

50,000 Bonus Points After Account Approval; No Fees or Minimums

Brex LogoBrex Cash is a user-friendly cash account for growing businesses. With no fees or minimums, a generous welcome offer and ongoing rewards program, and an expansive lineup of value-added perks worth $150,000, it’s difficult to find fault here. Take full advantage of the powerful mobile app and don’t miss the super-simple advance payment scheduling tools, either.

  • Minimum Deposit and Balance Requirements: Brex Cash has no account fees or minimums.
  • Yield: None.
  • Rewards and Incentives: Spend $1,000 after your account is approved and open to earn 50,000 bonus Brex Rewards points. Plus, earn points on every purchase and enjoy perks worth $150,000.
  • Possible Fees: Brex Cash has no account fees.

Learn More

*Brex Treasury LLC is not a bank; Brex Cash is not a bank account.


7. Novo Powerfully Simple Business Banking

Thousands of Dollars in Exclusive Perks Available to Account Holders

Novo Bank LogoNovo’s Powerfully Simple Business Banking product is another maintenance fee-free option for small-business owners and self-employed people. An easy application process, nice account opening bonus, robust mobile features, integrations with other useful small-business tools, and virtually no fees all count as standouts here. If you’re done with branch-based business banking, put Novo at or near the top of your list.

  • Minimum Deposit and Balance Requirements: The account opening minimum is $50, but there’s no ongoing minimum balance requirement and no monthly maintenance fee.
  • Yield: None.
  • Rewards and Incentives:  Enjoy thousands of dollars in exclusive perks — see Novo’s website for details.
  • Overdraft Options: If Novo chooses to honor an overdraft, there’s a $27 insufficient funds fee per item. The returned-item fee is also $27 per item.
  • Possible Fees: Other than its insufficient funds and returned-item fees, Novo has virtually no fees.

Learn More


8. Radius Bank Tailored Checking

1% Cash Back on Debit Card Transactions for Qualifying Customers; 0.10% APY on Balances Above $5,000

Radius Bank Tailored CheckingRadius Bank Rewards Checking doesn’t have the best yield in the business checking space, but 0.10% APY on balances over $5,000 is better than nothing. Pair that yield with no limits or fees on transactions — ever — and you have an excellent account for active businesses able to keep some cash on hand. Mobile check deposits and a powerful debit card app (which includes a card-locking feature) simplify banking on the go.

  • Minimum Deposit and Balance Requirements: The minimum opening deposit is $100. The $10 monthly maintenance fee is waived with a minimum daily balance of $5,000 or more.
  • Yield: 0.10% APY on balances over $5,000.
  • Rewards and Incentives: After your Tailored Checking account has been open for at least 30 days, keep an average balance of $10,000 or more in the account to qualify to earn 1% cash back on signature-based debit card purchases online and in-store. Cash back is automatically credited to your Tailored Checking account at the end of the month following the earning period.
  • Overdraft Options: If you opt in to overdraft protection, there’s a $5 daily overdraft fee as long as your account remains overdrawn (up to 30 days). Fees begin accruing on the fifth calendar day after the first overdraft item hits.
  • Possible Fees: Radius Bank charges between $10 and $40 for wire transfers, depending on origin and destination.

Learn More


9. NorthOne Business Banking

Unlimited Payments, Deposits, Transfers & Debit Card Usage

NorthOne Business BankingNorthone Logo 11 2 20 is a refreshingly simple business banking platform that prides itself on “radically transparent pricing”. Just $10 per month unlocks its full slate of features, including unlimited payments, transfers, deposits, and debit card transactions; more than 300,000 in-network ATMs; mobile check deposit (and a slew of other mobile-friendly features); and unlimited sub-accounts for payroll, taxes, and more.

  • Minimum Deposit and Balance Requirements: The minimum opening deposit is $50.
  • Yield: None.
  • Rewards and Incentives: NorthOne Business Banking is chock-full of useful features, including more than 300,000 ATMs in-network, unlimited sub-accounts for taxes and payroll (and other functions), mobile check deposit, and unlimited transactions.
  • Overdraft Options: NorthOne charges a one-time overdraft fee when your account balance drops below $0. See pricing terms for more details.
  • Possible Fees: The monthly maintenance fee is $10. NorthOne may also charge for wire transfers, overdrafts, NSF transactions, and ACH/PAD returns.

Learn More


10. Axos Bank Business Interest Checking

Up to 0.81% APY on Eligible Balances

Axos Bank Business Interest CheckingAxos Bank Logo is the highest-yielding small-business checking account on this list — paying up to 0.81% annual percentage yield (APY) on qualifying balances. Throw in a low minimum opening deposit requirement, and you’ve got a solid choice for business owners looking to earn a real return on working capital.

  • Minimum Deposit and Balance Requirements: The minimum opening deposit is $100. You must maintain a $5,000 minimum average daily balance to waive the $10 monthly maintenance fee.
  • Yield: Earn 0.81% APY on balances up to $49,999.999. Earn 0.50% APY on balances between $50,000 and $249,999.999 and 0.20% on all balances above $250,000.
  • Rewards and Incentives: Enjoy unlimited domestic ATM fee reimbursements and 50 free checks when you open your account.
  • Overdraft Options: Axos Bank customers can opt into an overdraft line of credit that covers overdrafts the bank would typically return unpaid. The interest rate is variable but comparable to a high-interest credit card, and payment of at least 5% of the balance (or $25, whichever is greater) is due each statement cycle.
  • Possible Fees: $0.50 per item processed after the first 50 items each month.

For more information, read our Axos Bank review.

Learn More


11. Citizens Bank Clearly Better Business Checking

No Monthly Maintenance Fees, Ever

Citizens Bank LogoCitizens Bank Clearly Better Business Checking is one of the only business checking accounts that never charges a monthly maintenance fee. That’s excellent news for business owners working on thin margins.

This account also boasts a relatively high monthly limit for free transactions and generous overdraft options. On the negative side of the ledger, it doesn’t pay interest and isn’t available in all areas — Citizens Bank’s trade area is limited to the East Coast. But if you do live in an area served by Citizens Bank, you can hardly do better.

  • Minimum Deposit and Balance Requirements: The minimum opening deposit is $100. There’s no ongoing balance requirement.
  • Yield: None.
  • Rewards and Incentives: None.
  • Overdraft Options: Citizens Bank offers two overdraft options, both opt-in: an overdraft line of credit and an overdraft savings transfer program. Both charge $12 for each day an overdraft transfer occurs, regardless of the number of transfers on that day. The savings transfer option is otherwise free, but the line of credit costs $30 per year. The required credit line payment is the greater of $20 or 2% of the balance.
  • Possible Fees: $0.50 per item above the 200 monthly transaction limit.

Learn More


12. NBKC Business Checking Account

Virtually No Fees and No Balance Requirements

Nbkc bankThe NBKC’s business checking account has no balance requirements, no monthly maintenance fees, and no transaction fees. As part of the MoneyPass ATM network, it offers fee-free withdrawals at more than 32,000 ATMs in the U.S. and Puerto Rico. And its simple Desktop Deposit feature — with added support from a robust mobile banking app — makes it easy to deposit checks remotely.

  • Minimum Deposit and Balance Requirements: There’s no minimum balance requirement.
  • Yield: None.
  • Rewards and Incentives: Get up to $12 in monthly refunds for ATM fees charged by any other banks worldwide, plus mobile-friendly features like bill pay.
  • Overdraft Options: NBKC offers a courtesy overdraft sweep option. See account disclosures for details on how this works.
  • Possible Fees: Other than domestic and international wire fees — $5 to send a domestic wire and $45 to send or receive an international wire — NBKC has virtually no fees.

Learn More


13. Huntington Bank Unlimited Business Checking

Access to Exclusive, Potentially Valuable Business Perks

huntington bank logoHuntington Bank Unlimited Business Checking is for established businesses with relatively large cash stockpiles and relatively frequent transaction needs. Other than a $10,000 monthly limit on free cash deposits (after which a fee applies), there’s no limit on transaction frequency. And customers can select one from a menu of exclusive money-saving perks, such as discounts on payroll services.

  • Minimum Deposit and Balance Requirements: Avoid the $40 monthly maintenance fee with $50,000 or more in combined average deposits across all eligible accounts. See Huntington Bank’s website for additional details.
  • Yield: None.
  • Rewards and Incentives: Choose from one of several exclusive perks, such as 10% off Paychex payroll services.
  • Overdraft Options: Huntington Bank offers two opt-in overdraft protection options: an overdraft protection account (with a transfer fee but no annual fee) or deposit-to-deposit overdraft protection (which does charge an annual fee but no transfer fee).
  • Possible Fees: $0.30 fee for each $100 in cash deposits above the $10,000 monthly limit. Other fees may apply.

Learn More


14. TIAA Bank Business Checking

High Monthly Transaction Limit

TIAA Bank’s business checking accountTiaa Bank Logo boasts low- or no-cost overdraft protection options and a robust suite of mobile-friendly features. It’s ideal for customers who can make the $1,500 minimum opening deposit and keep enough cash on hand ($5,000 or more) to waive the monthly maintenance fee. A reasonably high monthly transaction limit appeals to businesses with active cash flows.

  • Minimum Deposit and Balance Requirements: The minimum opening deposit is $1,500. You’ll avoid the $14.95 monthly maintenance fee if you have a minimum daily balance of $5,000 or more.
  • Yield: None.
  • Rewards and Incentives: None.
  • Overdraft Options: There’s no monthly or per-item fee for TIAA Bank’s overdraft protection services, which include money market transfers (with a qualifying linked account) and a credit line. If you enroll in an overdraft protection line of credit, the late payment fee is $25.
  • Possible Fees: $0.25 per item above the 200 monthly transaction limit; $0.50 per item above the 10 monthly online bill payments limit.

Learn More


Final Word

These small-business checking accounts aren’t always the stars of the show at their respective online banking institutions. Most of these banks offer multiple personal and business deposit accounts. Several make our lists of banks with the best CD rates and the best money market rates, and some offer enticing high-yield savings accounts to boot.

So even if you come for the low-cost small-business checking, you could find yourself staying for more. There’s something to be said for doing all your banking under one roof — and your bank certainly won’t mind.

Source: moneycrashers.com

Posts navigation

Page 1 Page 2 Page 3 Next page

Archives

  • February 2021
  • January 2021
  • October 2020

Categories

  • Apartment Communities
  • Apartment Decorating
  • Apartment Hunting
  • Apartment Life
  • Apartment Safety
  • Auto
  • Auto Insurance
  • Auto Loans
  • Bank Accounts
  • Banking
  • Borrowing Money
  • Breaking News
  • Budgeting
  • Building Credit
  • Business
  • Car Insurance
  • Careers
  • Cash Back
  • Celebrity Homes
  • Checking Account
  • Cleaning And Maintenance
  • College
  • Commercial Real Estate
  • Credit 101
  • Credit Card Guide
  • Credit Card News
  • Credit Cards
  • Credit Repair
  • Debt
  • DIY
  • Early Career
  • Education
  • Estate Planning
  • Extra Income
  • Family Finance
  • Financial Advisor
  • Financial Clarity
  • Financial Freedom
  • Financial Planning
  • Financing A Home
  • Find An Apartment
  • Finishing Your Degree
  • First Time Home Buyers
  • Fix And Flip
  • Flood Insurance
  • Food Budgets
  • Frugal Living
  • Growing Wealth
  • Health Insurance
  • Home
  • Home Buying
  • Home Buying Tips
  • Home Decor
  • Home Design
  • Home Improvement
  • Home Loans
  • Home Loans Guide
  • Home Ownership
  • Home Repair
  • House Architecture
  • Identity Theft
  • Insurance
  • Investing
  • Investment Properties
  • Liefstyle
  • Life Hacks
  • Life Insurance
  • Loans
  • Luxury Homes
  • Making Money
  • Managing Debts
  • Market News
  • Minimalist LIfestyle
  • Money
  • Money Basics
  • Money Etiquette
  • Money Management
  • Money Tips
  • Mortgage
  • Mortgage News
  • Mortgage Rates
  • Mortgage Refinance
  • Mortgage Tips
  • Moving Guide
  • Paying Off Debts
  • Personal Finance
  • Personal Loans
  • Pets
  • Podcasts
  • Quick Cash
  • Real Estate
  • Real Estate News
  • Refinance
  • Renting
  • Retirement
  • Roommate Tips
  • Saving And Spending
  • Saving Energy
  • Savings Account
  • Side Gigs
  • Small Business
  • Spending Money Wisely
  • Starting A Business
  • Starting A Family
  • Student Finances
  • Student Loans
  • Taxes
  • Travel
  • Uncategorized
  • Unemployment
  • Unique Homes
  • VA Loans
  • Work From Home
hanovermortgages.com
Home | Contact | Site Map
Proudly powered by WordPress