Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
If you’re nearing retirement or already there and aren’t particularly happy with your current bank, TD Bank 60 Plus Checking is built for you. It’s one of the few checking accounts specifically marketed to older Americans, with increasingly rare features like free paper checks, free paper statements, and discounts on TD loans (including for second homes).
TD Bank 60 Plus Checking isn’t appropriate if you live outside TD’s home region, which extends up and down the East Coast. Before opening an account, make sure you understand its other potential downsides as well.
What Is TD Bank 60 Plus Checking?
TD Bank 60 Plus Checking is a checking account built for users over age 60. It has a $10 monthly maintenance fee that’s waived with a balance of $250 or more. It also has a nominal yield on balances, though your balance has to be quite substantial for interest to pile up.
Other notable features of TD Bank 60 Plus Checking include free paper checks and statements, optional overdraft protection with no overdraft fees, and a 0.25% rate discount on eligible TD home loans and other credit products. This account has some high-tech features too, including contactless debit cards, rapid person-to-person transfers through Zelle, and a robust mobile app.
What Sets TD Bank 60 Plus Checking Apart?
TD Bank 60 Plus Checking has some features and capabilities worth noting at any age:
No opening or ongoing balance requirements. There’s no minimum balance to open or maintain this account. However, yoo need to maintain a $250 minimum daily balance to waive the maintenance fee.
Easy to waive the maintenance fee. The $10 monthly maintenance fee is relatively easy to waive, even if this isn’t your primary checking account. Just keep $250 in the account at all times.
Free paper checks and statements. This account comes with unlimited free paper checks and paper statements. Both are rare in the banking world these days, so this is a perk for users who prefer to keep checks on hand and physically handle their transaction records.
Rate discounts on eligible TD loans. Eligible TD personal and home equity loans qualify for 0.25% rate discounts as long as you keep this account open and in good standing.
Key Features of TD Bank 60 Plus Checking
TD Bank 60 Plus Checking has all the core features you’d expect from a traditional bank account, plus some add-ons that might pique your interest.
Account Fees & Requirements
This account has a $10 monthly maintenance fee. It’s waived as long as you maintain a daily balance of at least $250 in the account.
Account Yield
This account yields 0.01% APY on all balances. This rate hasn’t changed in years, even as savings account yields have skyrocketed, and as a result isn’t particularly notable.
ATM Access
TD Bank has several thousand ATMs up and down the East Coast. These machines charge no withdrawal fees, but there’s a $3 withdrawal fee (plus any third-party fees TD can’t control) for out-of-network withdrawals.
Paper Checks & Statements
This account comes with free paper checks and paper statements. There’s no limit to the number of free check reorders you can make, and you won’t pay a surcharge if you elect to receive paper statements instead of electronic ones.
Free Money Orders
TD Bank 60 Plus Checking waives customary fees on money orders picked up at TD Bank branch locations. This is a significant and rare perk if you routinely use money orders instead of personal checks for larger transactions.
Savings-Linked Overdraft Protection
If you have a TD Bank savings account, you can link it to your 60 Plus Checking account and pull from it to cover transactions that would normally result in negative balances. There’s no fee for this optional service.
If you don’t have a TD Bank savings account or don’t opt into free overdraft protection, the overdraft fee is $35 per occurrence (limit three per day).
Loan Discounts
You automatically receive a 0.25% interest rate discount on eligible TD loans with this account, including unsecured personal loans and home equity products. However, primary mortgages aren’t eligible.
Mobile Features
TD Bank has a mobile-responsive website and mobile apps for Android and iOS. Notable mobile features include:
Mobile check deposit
Digital bill payments
Person-to-person transfers through Zelle
Personalized account alerts
Credit and debit card controls, including one-touch card lock if your card is misplaced or stolen
Deposit Insurance
This account comes with FDIC insurance up to the current limit of $250,000. Should TD Bank fail, you’ll be reimbursed for account balances up to that amount.
Pros & Cons
TD Bank 60 Plus Checking is an above-average checking account designed specifically for older users. It has some noteworthy drawbacks though.
Pros
TD Bank 60 Plus Checking has some simple benefits that are in increasingly short supply elsewhere in the banking world.
Easy to waive the monthly maintenance fee. This account has a $10 monthly maintenance fee, but it’s waived with a $250 minimum daily balance. That’s no problem for most prospective account holders.
Free paper checks and statements. This account comes with free paper checks and statements. These simple perks are difficult to find in similar accounts.
Free money orders and bank checks. TD Bank charges no fees for money orders and bank checks drawn from a 60 Plus Checking account. Many other banks tack on small but annoying fees to these products.
Complimentary overdraft protection with a linked savings account. Link your TD Bank savings account and never again worry about overdrawing your account. There’s no fee for the privilege either.
Interest rate discounts on eligible TD Bank loans. Eligible TD Bank personal loans and home equity products qualify for a 0.25% interest rate discount, which can add up to hundreds or thousands of dollars over the life of a longer-term loan.
Cons
Though there’s more to like than dislike here, 60 Plus Checking falls short on key measures of accessibility and return on investment.
Not available nationwide. TD Bank has branches and ATMs across much of the eastern United States, but it’s more or less absent elsewhere and doesn’t accept applications from states outside its home territory.
Poor yield. TD Bank plays up this account’s yield, but it’s not much to write home about: just 0.01% APY on all balances. That’s only slightly better than nothing.
Small ATM network. TD Bank only has a few thousand ATMs in its network. If you don’t live near a TD Bank branch, there’s probably no TD Bank ATM in your neighborhood either.
No account opening bonus. TD Bank 60 Plus Checking has no bonus offer for new account holders. That’s a drawback relative to two other popular TD Bank accounts that do have account opening promotions: Beyond Checking and Convenience Checking.
How TD Bank 60 Plus Checking Stacks Up
Before you apply for a 60 Plus Checking account, make sure it’s the right fit for you. You might find a superior alternative without going too far in TD Bank’s Beyond Checking account. See how the two compare.
60 Plus Checking
Beyond Checking
Minimum Deposit
$0
$0
Monthly Fee
$10
$25
Monthly Fee Waiver
$250 minimum balance
Multiple options, but more difficult
Free Checks
Yes
Yes
Paper Statements
Yes
Yes
Out-of-Network ATM Fees
Not waived
Waived with $2,500 balance
Overdraft Protection
Yes, via savings account
Yes, via savings account plus two non-savings fee reimbursements per year
TD Bank 60 Plus Checking and TD Bank Beyond Checking have a lot in common, but Beyond Checking is more generous overall. The main reason to stick with 60 Plus Checking is it’s much easier to waive the monthly maintenance fee with a qualifying balance.
Final Word
TD Bank 60 Plus Checking goes the extra mile to accommodate older users who appreciate little (but important) things like free paper checks, free money orders, and discounts on home equity loans. There’s nothing groundbreaking about it, but that’s fine: It covers a lot of bases and does what it promises.
That said, there are even better checking account options for discerning older customers. And you might not have to look far: TD Bank Beyond Checking has an even more generous lineup of perks, albeit with a harder-to-waive monthly maintenance fee.
The Verdict
Our rating
TD Bank 60 Plus Checking
TD Bank 60 Plus Checking is one of the few checking accounts designed specifically for older users. With low minimums, an easy-to-waive maintenance fee, and complimentary paper checks along with access to more than 1,000 TD Bank branches and several thousand ATMs, it’s flexible and easy to use. Just don’t put too much stock in the promise of interest — the rate is near zero.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Most business bank accounts aren’t built with very small businesses in mind, let alone freelancers and solo entrepreneurs. If you have big plans for your company or independent professional practice but haven’t grown to the point where a traditional business bank account makes sense, you’re probably a bit frustrated by your options.
If that’s the case, look to the NorthOne Deposit Account. It’s a flexible business account with a reasonable monthly fee, no minimums, and some useful built-in tools. It can’t do everything and might not be appropriate for every growing business, but it’s definitely worth a closer look.
What Is the NorthOne Deposit Account?
Also known as the NorthOne Business Account or simply the NorthOne Account, the NorthOne Deposit Account is a small-business checking account. It has a flat $10 monthly fee that can’t be waived but has few additional fees, which makes it a lower-cost alternative to most traditional business bank accounts.
The NorthOne Deposit Account is a fully online bank account. NorthOne itself is a financial technology app; banking services and FDIC insurance come courtesy of The Bancorp Bank, NorthOne’s banking partner. The NorthOne Deposit Account is NorthOne’s only deposit account product.
Despite having no physical branches, NorthOne offers a comprehensive lineup of business banking services, including remote check deposit and bill payments, same-day ACH transfers, built-in budgeting tools, and external integrations with third-party accounting and payroll apps. Other benefits include no NorthOne ATM fees at any ATM in the United States (though third-party fees may still apply) and virtual debit cards on demand.
What Sets the NorthOne Deposit Account Apart?
The NorthOne Deposit Account stands out from other business accounts for several reasons:
No ATM fees charged by NorthOne. You can use your NorthOne debit card to withdraw cash at any U.S. ATM without paying any fees to NorthOne. Some ATMs may charge third-party fees that NorthOne can’t control, but this is still a big advantage over most business banks.
Built-in budgeting tools. NorthOne has a built-in envelope budgeting system that makes it easy to track and control business expenses through the month.
Unlimited virtual card numbers for account owners. You can create unlimited virtual card numbers on demand, which is a huge plus if you make a lot of online purchases with vendors you don’t fully trust.
Few additional fees. This account comes with some additional fees, like for wire transfers and instant ACH transfers, but it’s a far cry from the long, convoluted fee schedules found at most traditional business banks.
No way to avoid the $10 monthly fee. This account’s biggest downside: there’s no way to avoid the $10 monthly maintenance fee. But you get what you pay for.
Key Features of the NorthOne Deposit Account
The NorthOne Deposit Account is simple enough as business bank accounts go, but do take the time to understand its core features and capabilities before opening an account.
Account Fees & Minimums
The NorthOne Deposit Account has a $10 monthly fee that can’t be waived. There’s no minimum opening deposit or ongoing balance.
Debit Card & ATM Access
This account comes with a free Mastercard debit card accepted wherever Mastercard is. You can use it to deposit or withdraw cash at any U.S. ATM with no fees charged by NorthOne. ATM owners may still charge fees that are out of NorthOne’s control.
Envelope Budgeting
NorthOne has a built-in envelope budgeting tool that lets you create pools of cash earmarked for specific expenses or goals, such as payroll, rent, and debt service. Each envelope remains part of your main account, but you can pay bills directly from them to avoid commingling funds.
Payments & Transfers
The NorthOne Deposit Account allows you to cut physical checks to third-party payees directly from your account. There’s no fee for this service.
Standard ACH transfers also cost nothing. However, same-day ACH transfers cost 1.5% of the transaction amount (maximum $15) and domestic wire transfers cost $20 to send.
Third-Party Software Integrations
The NorthOne Deposit Account integrates directly with more than a dozen business and consumer software apps:
Accounting tools like QuickBooks
E-commerce platforms like Amazon, Etsy, and Shopify
Payment processors like Square, Stripe, PayPal, and Venmo
Payroll processors like Gusto
There’s no cost to link your NorthOne account to any external platform, though all charge fees for their services.
Mobile Features
NorthOne has a comprehensive mobile app that’s well-reviewed (over 4.5 stars) by thousands of verified users and has a long history of reliability and usability. Anything you can do with the desktop interface, you can do with the mobile app.
Deposit Insurance
This account comes with FDIC insurance coverage up to $250,000. If NorthOne or its banking partner go out of business, the federal government reimburses you up to this amount.
Pros & Cons
There’s more to like than dislike about the NorthOne Deposit Account, but no business bank account is perfect.
No minimum balance
No NorthOne ATM fees
Built-in budgeting capabilities
Numerous third-party software integrations
No way to avoid the $10 monthly fee
No interest on balances
Extra fees for certain account activities
Pros
The NorthOne Deposit Account is a flexible, relatively low-cost deposit account for small, growing businesses.
No minimum balance requirement. This account has no minimum deposit or ongoing balance requirement. You can fund your account in any amount and keep as little cash in it as you wish.
No ATM fees charged by NorthOne. NorthOne charges no ATM fees at any U.S. machine. ATM owners may still charge fees that NorthOne can’t control, but your overall cash withdrawal costs should still be lower than with a traditional bank.
Free remote check deposit and payments. You can deposit checks on your phone with NorthOne and cut physical checks to send to vendors right in the app. There’s no fee for either action.
Built-in budgeting capabilities. NorthOne has a built-in envelope budgeting system that helps you keep your expenses straight and identify potential problem spending areas. Many business accounts have nothing similar.
Easy integration with third-party business software. The NorthOne Deposit Account integrates with more than a dozen third-party business apps, including QuickBooks, Shopify, Stripe, Square, and Gusto.
Cons
The NorthOne Deposit Account has an unavoidable monthly cost and some important limitations that could give you pause.
No way to avoid the $10 monthly fee. This account’s $10 monthly fee is unavoidable. There’s no way to avoid it with a minimum balance or transaction activity.
No interest on balances. This account pays no interest on balances. This is a big downside if you’re looking to put your company’s cash reserves to work.
Fees for some account activities. NorthOne doesn’t charge a ton of extra fees, but it does charge for activities like instant ACH transfers and wire transfers, both of which you may need to do as your business grows.
How the NorthOne Deposit Account Stacks Up
Before you open a NorthOne Deposit Account, see how it stacks up against other popular business bank accounts. One popular alternative is Bluevine Business Checking, which also has no minimums and relatively low fees.
NorthOne Deposit Account
Bluevine Business Checking
Monthly Fee
$10
$0
Minimum Balance
$0
$0
Subaccounts
No, but Envelopes have similar function
Yes, up to five
Yield
None
2.00% APY on eligible balances
ATM Access
Unlimited
120,000+
NorthOne beats Bluevine on ATM access and subaccount availability (if you count Envelopes as subaccounts, which they basically are). But it falls short on the monthly fee (Bluevine is free month-to-month) and account yield (NorthOne doesn’t pay interest).
Final Word
The NorthOne Deposit Account is a flexible, user-friendly account for independent professionals and small businesses. While it’s not appropriate for larger companies, or even for small businesses with really complex finances, it nevertheless appeals to millions of people who aren’t well-served by traditional bank accounts.
If you’re among them, the NorthOne Deposit Account isn’t your only option. But it’s one of the better ones.
The Verdict
Our rating
NorthOne Deposit Account
The NorthOne Deposit Account is a flexible, easy-to-use business bank account for small, growing businesses and sole proprietors, including freelancers. Although it has an unavoidable monthly maintenance fee, capabilities like built-in budgeting and external software integrations justify the price tag. Just don’t expect to earn any interest on your balance.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
A brokerage account is a type of investment account typically opened with a brokerage firm. Brokerage accounts allow owners to invest their money, and buy, sell, or trade stocks, bonds, and other types of financial securities. There are different types of brokerage accounts, and they’re offered by a range of financial firms.
For prospective investors, knowing what a brokerage account is and how they work is important. For seasoned investors, learning even more about them can help deepen their knowledge, too.
How Does a Brokerage Account Work?
As noted, brokerage accounts allow owners to invest in stocks and other financial securities. They’re offered by different types of financial firms, too. In fact, there are many brokerage firms that investors can choose from. While all offer brokerage accounts, they usually come with different fees and services:
• A full-service brokerage firm usually provides a variety of financial services, including allowing you to trade securities. Full-service firms will sometimes provide financial advice and automated investing to customers.
• A discount brokerage firm doesn’t usually provide any additional financial consulting or planning services. Thanks to their pared down services, a discount brokerage firm often offers lower fees than a full-service firm.
• Online brokerage firms provide brokerage accounts via the internet, although some also have brick and mortar locations. Online brokers often offer the lowest fees and give investors freedom to trade online with ease. They also tend to make information and research available to consumers.
Opening a brokerage account generally starts out as a similar experience to opening any other type of cash account. Consumers can simply start an account either online or in person.
Some brokerage firms require investors to use cash to open their accounts and to have enough funding in their account to cover the cost of stocks or bonds, as well as any commission fees. There are some however, that don’t require any initial deposit.
In order to make their first investment however, consumers usually need to deposit money. They can do this by moving money from another account, such as from their checking or savings accounts. From then on, the brokerage firm can help individuals execute buy or sell orders on stocks, exchange-traded funds (ETFs), bonds, or mutual funds.
Unlike a retirement account, there are generally no restrictions on how much money a consumer can put in. There are also typically no restrictions on when individuals can withdraw their cash from brokerage accounts. Investors do need to claim any profits — or “capital gains” — as taxable income.
Here’s a closer look at how brokerage firms differ from other types of money accounts.
Brokerage Accounts vs Retirement Accounts
The primary difference between a retirement account and a brokerage account is if there’s any tax advantage at play.
For stocks, bonds, exchange traded funds, mutual funds, options etc, brokerage account holders are liable to pay capital gains taxes on most of their profits from trading these securities. That’s why brokerage accounts are also known in the industry as “taxable accounts.”
Retirement accounts are set up with money that has some kind of tax advantage and can be used to buy securities. For example, 401(k)s are set up by an employer and funded with money that comes from an employee’s paycheck before taxes and can be matched by an employer.
These accounts, which also include traditional and Roth IRAs, have specific rules about the amount that can be contributed and when money can be withdrawn. Meanwhile, with brokerage accounts, there are few limits on funding or withdrawals.
Brokerage Accounts vs Checking Accounts
Brokerage accounts and checking accounts have one important thing in common: they can both have cash in them. Sometimes brokerage accounts will “sweep” your cash into a money market fund managed by that same brokerage, allowing you to earn interest. Meanwhile, in a traditional bank checking account, you don’t earn any interest but you do have easy access to your cash.
An important distinction between brokerage and checking accounts is the level of protection you get from them. A checking account offered by a bank will typically have insurance provided by the Federal Deposit Insurance Corporation (FDIC), which protects the first $250,000 deposited at a bank that has a charter from the FDIC. This means that $250,000 deposited can be withdrawn even if the bank itself goes out of business.
Brokerage accounts, on the other hand, typically have insurance provided by the Securities Investors Protection Corporation (SPIC), which unlike the FDIC, is not a government agency. What SIPC insurance does is protect the custody of stocks, bonds, and other securities as well as cash in a brokerage account, not their value.
This means that if a brokerage fails, the SIPC insurance will protect cash deposited in a brokerage account up to $250,000 and securities and cash combined up to $500,000.
This simply means you get your cash deposited in the account and the securities back, not that you have insurance from the value of those securities going down.
Brokerage Accounts vs Checking and Savings Accounts
Cash management accounts are something of a hybrid between checking and brokerage accounts.
They are not offered by banks but can, on a case by case basis, partner with banks and other financial service providers to give clients access to ATMs and even FDIC insurance.
Pros and Cons of Opening a Brokerage Account
Brokerage accounts can be powerful financial tools, but they can have their advantages and drawbacks, too.
Pros of Brokerage Accounts
The most obvious advantage of a brokerage account is that it allows its owner to trade financial securities and invest their money. They tend to have a high degree of liquidity, too, meaning that it’s relatively easy to buy and sell securities. There are also no general requirements for contributions or withdrawals.
Cons of Brokerage Accounts
Cons of brokerage accounts include the fact that they can’t be used for traditional transactions, like, say, a checking account. While your account may have a cash balance, you can’t use it to purchase a soda from the corner store.
Further, getting your money in and out of a brokerage account may take some time. There are often fraud checks and other elements at play when transacting a cash balance in or out of an account, and it may take a couple of days. There are also no tax advantages — something that may be present for certain retirement accounts.
Pros and Cons of Brokerage Accounts
Pros
Cons
Ability to trade securities
Can’t be used for transactions
High liquidity
Slow transaction times
No limits on contributions and withdrawals
No tax advantages
A couple of other things that may be worth considering, especially if you’re interested in investing for beginners.
Before you consider opening a brokerage account, make sure you have sufficient money set aside for an emergency fund. Common financial advice recommends setting aside three to 12 times your streamlined monthly expenses. It’s also good practice to contribute to your 401(k) or IRA before opening a brokerage account.
If you have an emergency fund stashed away and are making regular contributions to a retirement account, think about what types of assets you plan on investing in. A brokerage account would only be required if you plan to buy stocks, bonds, or other securities. If you only plan on investing in mutual funds, you might not need a brokerage account.
4 Types of Brokerage Accounts
There are also a few distinct types of brokerage accounts, though they all work in a similar fashion — trading securities, after all, is what brokers do. They are cash brokerage accounts, margin accounts, joint brokerage accounts, and discretionary accounts.
1. Cash Brokerage Accounts
A cash brokerage account is the “vanilla” option. If you open a cash brokerage account, you deposit money and start trading securities.
2. Margin Brokerage Accounts
A margin brokerage account may require approval from a brokerage. These types of accounts let owners use “margin” when trading. That means that they can effectively borrow money to trade with from the brokerage. These obviously come with a higher degree of risk, too.
3. Joint Brokerage Accounts
Joint brokerage accounts are more or less cash brokerage accounts that are opened by more than one person. It’s like a joint bank account, in many respects.
4. Discretionary Accounts
Another type of account that some brokerage firms offer is a discretionary account. This type of brokerage account, sometimes referred to as a managed account, allows an authorized broker to make trades on behalf of the client. The client usually must sign a discretionary disclosure with the broker. Many brokerage firms require account minimums for this type of account.
How To Open a Brokerage Account
Most firms allow you to set up a new account online. You’ll need to provide basic personal information, and most firms will ask about your net worth, your employment status, what assets you currently own, and what you have defined as your investment goals.
Requirements for Opening a Brokerage Account
There may be some requirements for opening a brokerage account.
Initial Investments
Depending on the type of brokerage account you are opening, most firms let you open an account with about $1,000 but some require an initial investment of $2,500 or more.
Account Minimums
You will need to have enough money in your account to pay for one or more shares of the stock you want to buy plus the commission fee (if applicable). Each account and brokerage firm is different, so check with your preferred company to determine what the account minimums are.
Agreeing to Terms and Conditions
You’ll need to play by the rules, and a brokerage firm will likely have you agree to certain terms and conditions for using your account. That may include agreeing to certain fee schedules, too.
Funding a Brokerage Account
There are at least five ways to transfer money from your bank account into your brokerage account:
• Electronic funds or wire transfers involve moving money electronically from one’s bank account into another account. Individuals typically have to go to their bank and fill out the required information and direct where the money should be transferred.
• Deposit a check: Customers can withdraw money via a paper check from their checking, savings, or another existing brokerage account. They can then mail the check to the brokerage account they’d like to deposit the funds at.
• Transfer an existing investment from another broker. Customers can typically transfer funds between brokerage accounts through an automated process known as the Automated Customer Account Transfer Service (ACATS). Customers usually fill out a form. Transfers involve assets such as cash, stocks, bonds, or listed options.
• Deposit an existing paper stock certificate: Paper stock certificates are much rarer today in the age of electronic trading, but if a customer does have one, they can mail it to their broker to be deposited. Inheriting a certificate may require additional verification and paperwork, and in general, mailing with insurance is recommended.
Brokerage Account Taxes
Another important thing to remember is that there are taxes associated with brokerage accounts. Specifically, any interest or dividends earned from your brokerage account will be taxable.
If you sell an investment and earn a profit, you will have to pay a capital gains tax. However, if you sell a stock at a loss, that becomes a capital loss and you could get a tax break from that sale which could lower your taxable income.
Investing with SoFi
Brokerage accounts allow owners to buy and sell investments and financial securities. They are offered by a number of financial institutions, and come in a few different types. By and large, though, they’re a very popular choice for investors looking to get their money in the markets.
They do have their pros and cons and associated risks, however. It may be beneficial to speak with a financial professional to learn more about how you can use a brokerage account to your advantage in pursuit of your financial goals.
Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.
FAQ
How do I open a brokerage account?
Most brokerage firms allow prospective customers to open an account online or in person. Opening a brokerage account generally requires some personal information related to identity and financials, and some money to make an initial deposit.
Is there a minimum deposit to open a brokerage account?
Different brokerage firms will have different rules regarding minimum deposits, but there are many that don’t require a minimum deposit. Again, it’ll depend on the specific firm.
Do brokerage accounts have fees?
Yes, most brokerage accounts have some sort of associated fees. There may be commission fees involved, though they’re less common today than they once were, but there can be other types of fees to be aware of, too.
SoFi Invest® The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results. Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below. 1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
Cash App, a digital money transfer service, has transformed the way we manage our finances. From sharing restaurant bills with friends to paying your gig economy contractor, this app packs a punch beyond the basics of money transfer. Think of it as your mobile money manager, where you can easily check your Cash App balance, do direct deposits, cash out, and even manage your taxes. Yes, you heard right, Cash App taxes can also be managed within the app.
History of Cash App
In 2013, the minds at Square Inc. introduced the world to Cash App. With a vision to simplify monetary transactions, they created a platform that has become a key player in the fintech revolution. It’s fascinating to observe how the app evolved from a basic peer-to-peer payment service to a fully-fledged financial solution.
How Cash App Works
Imagine this: your nephew needs quick money for school supplies. He’s in another city, and you have no idea how to send him cash without physically being there. Enter Cash App.
Once you’ve installed the app and linked your bank account, transferring money is as simple as choosing a contact, entering an amount, and hitting ‘Pay.’ The money will instantly move from your Cash App account to theirs. And voila, crisis averted!
Here are the steps to use Cash App
Step 1: Download and Install
Cash App is available for both iOS and Android devices. You can find it in the App Store or Google Play Store. Once you’ve located the app, download and install it on your device.
Step 2: Create Your Account
Open the app, where you’ll be prompted to enter your mobile number or email address. You’ll then receive a confirmation code, which you need to enter in the app. This process verifies your account and helps protect your personal information.
Step 3: Link a Bank Account
Next, you’ll be asked to link a bank account. Enter your debit card details associated with your bank account. By linking your bank account, you’ll be able to transfer funds to and from your Cash App account seamlessly.
Step 4: Create a $Cashtag
A $Cashtag is a unique identifier for your Cash App account. This is what you’ll give to people when you want to receive money, and what you’ll use when you’re sending money to others. It can be up to 20 characters long and should be something you’re comfortable sharing with others.
Step 5: Understanding the Interface
Once you’re set up, you’ll notice that the main screen is split into two main sections:
The “Cash & BTC” section displays the current balance in your Cash App account. If you’ve chosen to invest in Bitcoin via the app, your balance will be reflected here too.
The “Banking” section allows you to add cash to your balance, cash out your balance to your bank account, view transactions, or invest in stocks and Bitcoin.
Step 6: Sending Money
To send money, tap the “$” symbol at the bottom center of the screen. Enter the amount you want to send, then press “Pay.” You’ll be asked to enter the recipient’s $Cashtag, email, or phone number. Add a note to remind them what the payment is for, then press “Pay” again.
Step 7: Receiving Money
When someone sends you money, it will appear in your Cash App balance. You can keep the funds in the app for future transactions, or cash out to your bank account.
To cash out, tap the “Banking” button at the bottom of the screen, then tap “Cash Out.” You can choose to cash out instantly for a small fee, or to cash out to your bank account within 1-3 business days for free.
Step 8: Using the Cash Card
Cash App offers a free debit card called the Cash Card. You can use this card to spend your Cash App balance at any store that accepts Visa. For individuals who frequently use their credit card for purchases, the Cash App can be a great way to boost savings toward chosen goals without much work. To request a card, tap the card-shaped icon on your Cash App home screen and follow the steps.
Step 9: Investing
Cash App allows you to buy stocks or Bitcoin directly from your account. From the main screen, tap the Investing tab (looks like a chart). Here you can view your investing portfolio, search for stocks, and make trades.
Remember, investing involves risks, and it’s important to understand these before you start.
The beauty of Cash App is its simplicity. It’s a secure and versatile platform that’s ideal for quick mobile payments, money transfers, and even dabbling in investments. Whether you’re a parent paying for piano lessons or a college student splitting rent with roommates, Cash App is an option worth considering.
Cash App Features
Cash App isn’t just a money transfer service. It’s so much more. You can link it to Apple Pay or Google Pay, pay with the custom Visa debit card (known as the Cash Card), and even buy Bitcoin cryptocurrency. Cash App also offers a feature called ‘Cash App Investing.’ With it, users can invest in stocks, making the world of Wall Street accessible right from your smartphone.
One exceptional feature of Cash App is that it allows users to receive paychecks through direct deposit. This is excellent for workers in the gig economy or for anyone preferring a digital banking experience.
Is Cash App safe?
In the age of data breaches and identity theft, Cash App ensures the safety of Cash App users’ personal information through encryption and fraud detection technology. The app is designed to keep your transaction details secure, even if your phone is lost or stolen. It also provides notifications for all account activities, helping you keep an eye on your transactions.
While Cash App is a financial platform, it is not a bank. It provides banking services and debit cards through its bank partners, but a great feature is that the balance in your account protected by FDIC insurance (Federal Deposit Insurance Corporation), just like a traditional bank.
Competitor Analysis
There are other players in the digital money transfer field such as Google Pay, Zelle, Venmo, Square Cash, and PayPal. What sets Cash App apart, however, is its combination of simplicity, versatility, and user-focused design. While other services might offer similar features, Cash App’s uncluttered interface and intuitive user experience keep it at the forefront of other payment apps.
See my in-depth comparison between Cash App and its competitors
Economic Impact
The rise of apps like Cash App has changed the financial landscape dramatically. By eliminating the need for brick-and-mortar banks, they’re driving the shift towards a more digital, user-centered banking experience.
Future of Cash App
Looking forward, Cash App appears poised to expand its offerings even further. The rapid growth of fintech and evolving consumer preferences suggest that apps like Cash App could begin to offer more extensive services, such as loans or insurance products, in the not-too-distant future.
Critiques and Controversies
No service is without its challenges. Cash App has faced criticisms related to customer service and has also been used for scams. The company has taken steps to address these issues and is continually working to improve Cash App user experience and security.
Through its various features and offerings, Cash App has made managing finances a more seamless experience. Whether you’re looking to go digital with your banking, simplify money transfers, or venture into investing, Cash App may become your preferred payment method.
Cash App FAQs
To wrap things up, let’s address some common queries you may have about Cash App:
Can you withdraw money from Cash App without a card?
Yes, you can transfer money from your Cash App account to your linked bank account.
Can someone steal your money with your Cash App name?
No, your Cash App name, also known as a $Cashtag, is just an identifier for others to send money. They can’t access your funds with it.
What happens when someone sends you money on Cash App?
The money will be added to your Cash App balance. You can use it within the app or withdraw it to your linked bank account.
How do you withdraw from Cash App without a bank account?
You need to have a linked bank account or a Cash Card to withdraw money from Cash App.
Do you have to provide your Social Security Number to Cash App?
For certain functions, such as sending large amounts of money or using the app for investing, Cash App does require your Social Security Number to comply with federal regulations.
Do you need a bank account with Cash App?
You can send and receive money with just a debit card, but having a bank account linked allows you to transfer funds to and from your bank.
Is it free to make ATM withdrawals using Cash App?
There may be a fee for using ATMs with your Cash Card, but Cash App can reimburse the fees if you have at least $300 coming into the app each month, like a paycheck deposit.
Debit cards can unlock many of the benefits of your checking account.
July 7, 2023
If you’re taking your first steps toward financial independence, it’s the perfect time to get acquainted with the debit card. So let’s dive into what a debit card is, how to use a debit card, and how to get a debit card for yourself.
What is a debit card?
A debit card is a physical form of payment—meaning it’s a card you can actually hold in your hand—typically connected to a checking account. It’s possible to link a debit card to a money market account, a savings account, or another cash account, but linking it to a checking account is the most common. You can use a debit card to pay for things in person and online or to withdraw cash directly from your account via an ATM. Whether you’re making a purchase or withdrawing cash with your debit card, the money is immediately drawn (that is, debited) from your account.
What’s the difference between a debit card and a credit card?
Debit cards and credit cards look similar, but there are some important differences between debit cards and credit cards that you should keep in mind:
Where the money comes from
A debit card pays for transactions with money you already have in an account, while a credit card effectively picks up the tab and sends you a bill later. After buying something with your debit card, your account balance will decrease by the amount you just paid almost immediately. With a credit card, your credit balance is how much you’ll eventually need to pay back to the credit card company, while your available credit is how much you have left to spend before you reach your credit limit. When you purchase something with your credit card, your credit balance will increase by that amount, and your remaining available credit will decrease in tandem.
Spending limits
With a debit card, you can only spend as much as you have in your account. Credit cards, by contrast, are effectively lending you money to spend. Credit card companies don’t want you to spend more than you can eventually pay back, so they cap how much money you can spend. This is known as your credit limit.
Costs and fees
The most common fees associated with a debit card are minimum balance fees (when your balance falls below a required amount) and overdraft fees (when you don’t have enough money in your account to pay for your debit card transactions). Credit cards don’t have those fees, but you can incur other fees if you don’t pay your total monthly credit balance on time each month. That’s because you’ll start accumulating interest on any balances not paid in full by the end of the billing cycle. The longer it takes to pay off your balance, the more you’ll end up owing in interest.
Do money market accounts have debit cards?
Some, but not all, money market accounts offer debit cards. Money market accounts typically earn interest and are Federal Deposit Insurance Corporation (FDIC)-insured, but they can also offer some of the features of a checking account. Money market accounts like the Discover Money Market Account provide customers with debit cards to use for purchases or at ATMs.
How does a debit card work?
Debit cards are versatile. When you know how to use a debit card, you can get the most out of:
ATM withdrawals
Debit cards can be used at ATMs to withdraw cash from your account. Simply insert or tap the card, type in your PIN, and select how much money you want to withdraw. Some banks and ATMs may charge fees if you use your card with an unaffiliated financial institution, so make sure you know which ATMs are free for you to use.
In-person transactions
Similar to a credit card, you can use your debit card in person at a cash register. Depending on your card type, you will either swipe, insert, or tap your debit card and enter your PIN to make your purchase. You’re probably used to seeing debit cards used this way at stores, restaurants, and even in taxis.
Online purchases
Debit cards can also be used for buying things online. However, when you place an order online, you typically need to enter more information since you can’t swipe your card. That information can include your card number, expiration date, security code, billing address, and possibly other verification information.
What are the benefits of a debit card?
There’s a reason that a debit card is a staple in so many people’s wallets. Debit cards come with a number of benefits:
Convenience. It’s a lot easier to use a debit card to buy things and withdraw money than it is to write checks.
Security. Your money is typically protected by FDIC insurance. (Check with your bank.) And many banks will send you a fraud alert if any suspicious activity is detected.
Rewards. In the past, credit cards have been known for having better rewards than debit cards. However, in recent years, some debit cards have stepped up their game, offering cash back in exchange for using the card.
What are typical debit card fees?
You won’t pay interest on the transactions you make with your debit card, but you need to be aware of common debit card fees and how to avoid them:
Overdraft fees. If your bank doesn’t offer overdraft protection, this is a fee to keep an eye on. That’s because if you accidentally spend more money than you have in your linked account, your bank may charge you an overdraft fee.
ATM fees. Using ATMs outside of your bank’s ATM network may result in transaction fees that will be deducted from your linked account.
Maintenance fees. Some banks charge account maintenance fees if your minimum balance falls below a certain amount. According to a 2022 Bankrate study, the average monthly maintenance fee for noninterest-earning checking accounts that charge this fee was $5.44.
While the above fees can dwindle your account balance, they can often be avoided by checking your balance, keeping an eye on your spending, and using the right ATMs.
How to get a debit card
To get a debit card for yourself, follow these steps:
Research financial institutions There are a lot of banks with different fees, ATM networks, and rewards, so be sure to assess your options. Some banks may offer certain perks for opening a new account or using your debit card regularly, while others may have more flexible options that allow you to avoid fees.
Open an account with your financial institution of choice Regardless of where you open it, you can’t have a debit card without some sort of bank account—such as a checking or a money market account—tied to your debit card. Once you’ve chosen a bank, open a checking account or money market account with them.
Activate your debit card When you receive your card, it should come with instructions on how to activate it. This typically involves calling a phone number or going online.
Earn cash back with your debit card
Discover Bank, Member FDIC
More and more people are using debit cards and other digital forms of payment to make purchases. According to a 2022 study by the Pew Research Center, roughly 40% of Americans say that in a typical week, none of their purchases are made with cash. This number has increased by 12% since 2018. Now that you know how to get a debit card, you can more easily make digital payments, too.
How old do you have to be to get a debit card?
You can usually be any age to have and use a debit card, but if you’re under 18, you’ll need a legal guardian to open the linked account for you.
A debit card is a first step toward financial freedom
Getting your first debit card may seem intimidating, but once you find the card that’s right for you, it’s a breeze. In fact, there are many perks to having a debit card—especially if you know how to use a debit card to your benefit.
If you’re looking for a card that gives you free access to over 60,000 ATMs, no fees, and awesome rewards like 1% cash back, then Discover Cashback Debit could be for you.
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An emergency fund can help you cover life’s curveballs when an unexpected financial situation comes your way. You may be wondering where to keep your emergency fund until you actually need it.
You could stuff your emergency savings under the mattress or in a piggy bank, but a bank account can be a smarter way to save. The best account for emergency fund savings is one that offers you convenient access to your money, a competitive rate on deposits, and minimal fees.
Weighing some of the different banking options can help you decide where to put emergency funds. Read on to learn more about:
• Where you can keep an emergency fund
• How much to keep in an emergency fund
• The pros of having an emergency fund
• How to start an emergency fund
Where to Keep Emergency Funds
Now, where to keep an emergency fund? There are different places you could keep your rainy-day money. When making a decision, it’s important to consider what works best for your lifestyle. And you’ll also want the security of knowing your money is safe, so it can be best to bank at a financial institution that is insured by the FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration).
With that in mind, here are five possibilities you might consider when looking for the best account for emergency funds.
1. Traditional Checking or Savings Accounts
You might consider keeping emergency savings in a traditional checking account or savings account at a brick-and-mortar bank. On the pro side, that could make it easier to access your money in an emergency. However, you may not get the best rate for your money. Also, checking accounts often don’t earn you any interest, and their accessibility can make it tempting to dip into the funds for something that isn’t a true emergency.
Traditional banks are not known for offering the highest annual percentage yields, or APYs, on savings accounts either. You’re also more likely to pay a monthly maintenance fee for a traditional savings account than one at an online bank.
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2. High-Yield Savings
High-yield savings accounts offer above-average rates on balances. For example, you might find a savings account with an APY that’s five, 10, or even 20 times higher than the national average.
It’s more common to find high-yield savings accounts at online banks vs. traditional banks. That’s because online banks tend to have lower overhead costs so they’re able to pass on savings to their customers. You’re also less likely to pay a monthly fee for a high-yield savings account.
Of course, you won’t have branch banking access with an online savings account. You may, however, be able to access your account via an ATM card or debit card, or by transferring funds to a linked account.
3. Bonds
A bond is a type of debt instrument. When you buy a bond, you’re agreeing to let the bond issuer use your money for a set time period. In return, the issuer agrees to pay interest back to you.
Bonds can be attractive since you can earn decent interest rates on savings. However, they’re not great for accessibility since you have to wait for the bond to mature to get your money back.
You could cash out a bond early but that might mean forfeiting some of the interest you could earn. So you may want to consider bonds for money that you’d like to invest, versus money that you might need to tap into for emergencies.
4. Certificate of Deposit (CD) Accounts
A certificate of deposit or CD is a time deposit account. When you put money into a CD, the bank agrees to pay interest on your balance over a set time period. Once the CD matures, you can either withdraw your initial deposit and the interest or roll it all over to a new CD.
CDs can be a reliable way to save, since interest rates are guaranteed. However, your money is locked in for the entire maturity term. If you need to break into a CD early, your bank may charge an early withdrawal penalty. That could cost you some or all of the interest earned.
If you’re interested in using CDs for emergency savings, you might consider a CD ladder. Laddering CDs means opening multiple CDs with different maturity terms. That way, you always have a CD maturity date on the horizon. CD laddering could also help you to capitalize on rising interest rates since you can roll expiring CDs into a new account with a higher APY.
5. Money Market Accounts
Money market accounts combine features of savings accounts with checking accounts. For example, you can earn interest on balances and you might also get a debit card or paper checks that you can use to access your money.
A money market account can offer flexibility since they’re easier to access than bonds or CDs. And you might find money market accounts at online banks that offer rates comparable to what you could get with a high-yield savings account or CD. However, read the fine print: There may be minimum account opening and balance requirements as well as monthly fees to be paid.
If you’re considering a money market account for your emergency fund, consider the fees. An online money market account might be preferable for minimizing what you pay in fees while getting a competitive rate. Remember, the best account for an emergency fund will be the one that suits your specific needs.
How Much Should You Keep in Your Emergency Fund?
A common rule of thumb for emergency savings is to aim for a minimum of three months’ worth of expenses and many financial experts bump this up to six months. How much money you should keep in your emergency fund should be a number that you’re comfortable with, based on your financial situation.
For example, instead of aiming for three to six months’ worth of expenses, you might choose to save $2,000 for every person in your household. If you have a family of four, that means you’d need an $8,000 emergency fund.
Whether that’s sufficient can depend on what expenses you have, what other financial resources you have, and how quickly you believe you could replace lost income if you end up out of work. Some people may be fine with having a $1,000 mini emergency fund while others are more comfortable setting aside nine to 12 months’ worth of expenses for emergencies.
The Benefits of Having an Emergency Fund
The importance of emergency savings can’t be underestimated. When an unexpected situation or expense comes along, your emergency fund can act as a safety net and help you pay bills without resorting to high-interest methods.
In this way, an emergency fund may be able to reduce stress and give you a sense of financial security.
When you have money in emergency savings, it becomes easier to:
• Avoid high-interest credit card debt. Rather than using your credit cards, you can draw from your emergency savings to cover extra expenses. You can then pay yourself back by depositing money into savings, without having to pay the high interest a credit card might charge.
• Get through financial challenges. An emergency fund can pay for a smaller expense, like a new tire, but it can also cover bigger obstacles. For example, if you lose your job unexpectedly, having emergency savings to fall back on can ease anxiety over paying bills while looking for a new job.
• Avoid impulse decisions. Having emergency savings gives you some breathing room so you can make financial decisions with less pressure. That’s a good thing if it allows you to avoid a potentially negative outcome, like rushing into an expensive loan without reading the fine print.
Keep in mind that your emergency savings isn’t meant for any kind of spending. It’s designed for emergencies only.
So what is a financial emergency? Generally, it’s any situation that you weren’t expecting that affects you financially. Examples of financial emergencies can include:
• A job loss or extended layoff
• Natural disasters that displace you from your home
• A car accident or breakdown that requires major repairs
• Illness or injury that leaves you unable to work
• An important appliance (whether that’s a washer or a laptop) that breaks down
• Unexpected loss of a loved one
Those are all examples of when to use your emergency fund. Buying new clothes, funding a last-minute, or upgrading your furniture because there’s a sale happening, on the other hand, are “wants” and not true emergencies.
Starting an Emergency Fund
If you’re ready to start an emergency fund, the first step is finding the money in your budget to save. The amount of money you get started with doesn’t have to be much; the most important thing is to commit to saving for emergencies on a consistent basis.
For example, say you can only save $25 per pay period and you get paid biweekly. That’s $650 you could save in one year if you’re saving regularly. If you’re not satisfied with that amount, you could review your budget to look for more money to save.
Here are a few additional tips for starting an emergency fund:
• Consider opening a separate bank account to hold your emergency savings and linking it to your main checking account. Money in your checking account often gets spent despite the best intentions.
• Look for a savings account that offers a competitive APY with no monthly fees.
• Set up automatic transfers from checking to savings each pay period to make saving effortless.
• Use “found” or extra money, such as tax refunds or year-end work bonuses, to grow your savings versus going shopping with the whole bundle.
Comparing different banks can help you find the best place to keep your emergency fund savings. And remember that while saving money might seem difficult at times, it can pay dividends if you’re able to stick with the habit.
The Takeaway
Having an emergency fund can help you sleep easier at night if you know that you’re covered should an unexpected expense crop up. If you’re looking for the best emergency fund savings account option, you can start with your current bank then compare it to other banks. Look for a combination of high APY and low (or no) fees to make the most of your money.
For instance, you might consider opening an online bank account with SoFi. With our Checking and Savings account, you can spend and save in one convenient place, plus you’ll earn a competitive APY on balances while paying no account fees, which can help your cash grow faster. One other terrific benefit: Qualifying accounts can get paycheck access up to two days early.
Better banking is here with up to 4.30% APY on SoFi Checking and Savings.
FAQ
What type of account is the safest for emergency funds?
A bank account at an FDIC-member bank is the safest option for holding your emergency fund. FDIC insurance protects your deposits in the rare event that your bank fails. Accounts that can be FDIC-insured include savings accounts, money market accounts, checking accounts, and CD accounts. NCUA serves a similar function insuring credit union accounts. Both offer $250,000 coverage per depositor, per account type, per insured institution.
Should I open a separate bank account for my emergency fund?
Opening a separate bank account for an emergency fund can be a good idea if you’re worried that you might be tempted to spend savings that are mingled with other funds. Having a separate savings account that’s linked to your checking account can allow for easy transfers. You’ll also continue earning interest until you need the money.
Should emergency funds be kept in cash?
Keeping an emergency fund in cash can be problematic as it increases the risk of the money being lost or stolen. You’re also not earning any interest by keeping emergency funds in savings. What’s more, certain emergency expenses might need to be paid using a check or debit card, which would still require you to deposit your cash into a bank account at some point.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi members with direct deposit can earn up to 4.30% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 6/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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Even the most aggressive stock market investors keep some cash on the sidelines. That balance helps offset market volatility and cover end-of-year tax payments on capital gains. It’s there when you’re ready to put more money in the market too.
Many brokerages hold cash in basic, boring accounts that pay little or no interest and have no real features of their own. Others, like Fidelity, offer more appealing cash management accounts with much higher yields and checking-like features.
There’s no contest. True cash management accounts are better. And the Fidelity Cash Management account is among the best of the bunch. Even if you’re not a current Fidelity brokerage customer, it’s worth checking out. Just make sure you understand how it works — and its limitations — before you apply.
What Is the Fidelity Cash Management Account?
The Fidelity Cash Management account is an FDIC-insured cash management account with no maintenance fees and competitive interest rates on eligible balances.
You can open a Fidelity cash management account without an existing Fidelity brokerage account. Once open, you can keep the entire balance in cash or use a portion of it to purchase stocks, ETFs, or mutual funds. You don’t need to apply for a separate brokerage account.
Fidelity cash management account balances up to $5 million earn 2.60% APY. Interest is variable above that threshold. Other notable features include a secure debit card compatible with major digital wallets, global ATM fee reimbursement, mobile check deposit, and online bill payments.
Unlike a traditional bank account, funds deposited into the Fidelity cash management account may be distributed among a network of partner banks rather than held with Fidelity. This enables much higher FDIC insurance coverage because more than one FDIC-insured bank is involved. It also offers the possibility (though not the guarantee) of higher yields because each bank sets their own interest rates.
What Sets the Fidelity Cash Management Account Apart?
The Fidelity cash management account stands out for several reasons:
Comes with a Visa debit card that works worldwide. This account comes with a Visa debit card accepted by millions of merchants worldwide. As a payment method, it’s as good as any other Visa debit card or credit card.
No limits or geographical restrictions on ATM reimbursements. Fidelity reimburses ATM fees worldwide. There’s no monetary limit to this privilege either.
FDIC insurance many times the standard limit. Although the exact limit is subject to change based on how Fidelity allocates the funds in your cash management account, Fidelity advertises up to $5 million in FDIC coverage. That’s 20 times the standard limit of $250,000.
Impressive mobile features. This account holds its own against any mobile-friendly checking account. It has a full lineup of mobile features in an easy-to-use app.
Key Features of the Fidelity Cash Management Account
Before you open a Fidelity cash management account, take some time to understand its core features and capabilities.
Account Yield & Requirements
This account yields 2.60% APY on the first $5 million. Fidelity allocates this portion of your balance among its FDIC-insured partner banks, but for all practical purposes, it’s held with Fidelity.
Any portion of your balance above $5 million goes into a Fidelity money market fund, which holds a mix of government securities. The interest rate on this portion is variable but generally lower than the rate on the partner bank portion. Importantly, there’s no FDIC coverage on balances held in money market funds.
Account Fees & Minimums
This account has no monthly or annual maintenance fee. There’s no minimum or ongoing balance requirement either.
Secure Debit Card
This account comes with a secure Visa debit card accepted by millions of merchants worldwide. The card itself has no additional maintenance fee, though fees may apply for foreign transactions or overdrafts.
ATM Access
This account’s debit card works at tens of thousands of machines worldwide: any with the Visa, Plus, or Star logos. Fidelity charges no ATM fees of its own and reimburses any fees charged by third parties, like other banks or ATM owners.
Mobile Features
This account has a user-friendly mobile app and a responsive web interface that works well on small screens. It has a full feature lineup:
Mobile check deposit
Digital bill payments
Digital wallet integration
Real-time spending view
Fast internal and external funds transfers
Deposit Insurance
This account has FDIC insurance on balances up to $5 million. Balances above that amount are held in a money market fund that has no FDIC coverage and can lose value due to market volatility.
Access to Stocks & Other Asset Classes
True to its name, the Fidelity cash management account is first and foremost a cash account. You can use it as you would any other checking account.
But because it’s associated with a major investment company, it’s also easy to use some or all of the balance to fund your investing activities. You can buy stocks, ETFs, and mutual funds directly out of your cash management account balance. If you want to trade in riskier asset types, such as options contracts, you need to apply for those privileges separately.
Pros & Cons
The Fidelity cash management account has plenty of upsides and a few notable downsides too.
Visa debit card accepted worldwide
No limits on ATM fee reimbursements
Lots of checking-like features
Very high FDIC insurance limits
Brokerage account link could be too much temptation
Yield isn’t competitive with the best savings accounts
Some traditional checking features missing
Pros
The Fidelity cash management account is a well-rounded cash account with enough firepower for higher-asset users.
Visa debit card accepted worldwide. This account comes with a Visa debit card that’s accepted by millions of merchants worldwide. Functionally, it’s as good as any checking account debit card.
No limit on ATM fee reimbursements. Fidelity is unusually generous when it comes to ATM fee reimbursements. No matter how many withdrawals you make, Fidelity covers the associated fees.
Lots of checking-like features. This account isn’t quite as good as a checking account, but it’s pretty close, and you might not need a checking account if your financial life is otherwise simple.
Very high FDIC insurance limit. Your Fidelity cash management account balance has FDIC insurance up to $5 million, many times the standard limit and high enough not to be an issue for the vast majority of users.
Integrates seamlessly with Fidelity brokerage account. Your Fidelity cash management account integrates seamlessly with your Fidelity brokerage account. That is, if you want it to. It functions perfectly fine as a standalone cash-only account too.
Cons
The Fidelity cash management account is stingier than some other cash management accounts and could tempt less sophisticated users with potentially risky investments.
Yield can’t match top cash management or savings accounts. Though variable, the Fidelity cash management account’s yield tends lower than the leading high-yield savings accounts and interest checking accounts. If your top priority is to maximize your return on cash balances, this isn’t the best account for you.
Direct access to stocks and ETFs could threaten users’ emergency savings. Traditional checking and savings accounts aren’t linked to online brokerage accounts, which means they don’t carry the temptation to invest FDIC-insured emergency savings (or any other cash balances) in stocks and ETFs that can lose value.
Some missing checking features. This account has important checking features like online billpay and mobile check deposit, but it’s not quite a full-service checking account.
How the Fidelity Cash Management Account Stacks Up
The Fidelity cash management account shares the spotlight with several other high-yield accounts tied to brokerage platforms. One of its top competitors is the Wealthfront Cash Account. Before applying for either, compare them head to head.
Fidelity Cash Management
Wealthfront Cash
Maintenance Fee
$0
$0
Yield
2.60% APY
4.55% APY
ATM Reimbursements
Yes, unlimited
No
FDIC Insurance
Up to $5 million
Up to $5 million
The Fidelity cash management account is clearly better for folks planning to use it more like a checking account, thanks in particular to unlimited ATM fee reimbursements. But Wealthfront has a significantly higher yield, which is a key consideration for many investors.
Final Word
The Fidelity Cash Management account is a checking-like deposit account with a much higher yield than most checking accounts and direct access to a low-cost digital brokerage. It has sky-high FDIC insurance limits and unlimited ATM fee reimbursements too, making it appropriate for high rollers.
It’s not perfect though. Its yield is lower than many competing cash management accounts, not to mention high-yield savings accounts, and it’s not quite a full-service checking account. Before you apply, make sure it’s the best choice for your cash management needs.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Fidelity Cash Management Account
With a strong-but-not-industry-leading yield and very high FDIC insurance coverage, the Fidelity Cash Management account is an ideal place to park money you don’t need right away. It also has enough checking-like features to potentially replace your existing bank account. But it’s not the best option if all you care about is earning the most interest possible.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Today is the last day of Financial Literacy Month. To tie everything together, I thought it would be fun to share an interview my real millionaire next door, a man we’ll call John. He used the basic tenets of money management to build wealth and to retire early. Here’s how I described John when I first wrote about him last year:
John is a 71-year-old retired shop teacher who lives in a modest ranch house on half an acre, the same house he’s had for over forty years. He has an old barn filled with salvaged lumber, outdated appliances, and who knows what else. When he’s around, he drives a junkie 25-year-old station wagon. But most of the time, he’s not around.
He spends his winters in New Zealand helping friends on a dairy farm. His summers are spent fishing in Alaska. For a couple of months each year, he’s home, puttering in the yard. Year-round, he rents his house to boarders. He leads a very active retirement.
John’s story was popular with Get Rich Slowly readers, and many of you asked me to interview him. I had to wait for him to return from New Zealand, but earlier this month, the opportunity finally presented itself. John agreed to sit down for a chat.
“I want to take you to lunch at the Chinese place up the street,” I told him.
“What the hell for?” he asked.
“Just to be nice,” I said. “To thank you for taking the time to speak with me.”
“I don’t need that,” he said. “Save your money. Let’s just sit at your dinner table.” And so we did.
In the Beginning
Before John left for New Zealand just after Christmas, I mentioned the idea of an interview. He liked the notion, so on his flight home at the end of March, he made some notes about his financial philosophy. “These are my secrets to financial freedom,” he told me, showing me what he had jotted on the back of an envelope. “This is what I did to get where I am today.”
“I’m ready,” I said. I had a yellow legal pad and a Bic pen. I motioned for him to continue.
“It was interesting to do this,” John said. “It’s really the story of your web site. The real secret is to spend less than you earn. I don’t care how much you earn, you spend less than you earn.”
I laughed. “My readers aren’t going to like that,” I said. “There’s a vocal group that complains that personal finance writers are always preaching ‘spend less than you earn’.”
“It’s not funny,” John said. “Because that’s the secret. They don’t have to like it, they just have to do it.”
“Right,” I said. “There are no magic bullets. There are no special shortcuts. Now, before we get started, can you tell us a little bit about your background?”
“Well, I’m retired,” John said. “I’m 72 years old. I spent twenty years as a shop teacher at a junior high school. I retired at 58. Before that, I did other things. I worked as a carpenter for eight years, and I spent six or seven years working in the juvenile court system.”
“Did you have good financial habits growing up?” I asked.
“Yeah, I really did. My family had a lot of money. We owned a big hardware store. But I saw money wasn’t the key to happiness. There were other families that were happier that had far less. But I’m grateful for having grown up with a solid financial background.”
On Frugality
“What advice do you have for people who want to spend less?” I asked.
“Well, I made this list,” John said, pointing to his old envelope. “I listed all of the things I do. First of all, people should learn what a kilowatt hour is. A kilowatt hour is a thousand watts burned for an hour. All of these appliances left on standby draw power. And don’t leave your lights on.” John gave me a look.
I was sheepish. The lights were on in the bathroom and the kitchen, but we were sitting in the dining room. I got up to turn them off while he continued speaking.
“Learn to figure your own power bill and know why it is what it is. People should learn about electrical use. That’s a drain on your monthly budget. Every penny saved on electricity is a penny you can use for something else.”
“No smoking or alcohol consumption,” he continued. “This has nothing to do with morals and health — okay, maybe health — it’s all about the money. I see people with a cigarette in their mouth, and I think, ‘That’s 25 cents!’” I laughed.
“Don’t have a credit card without autopay. And if you have a credit card, you should benefit from it. I use a credit card for everything I can, but I get things back from that.”
“Like air miles?” I asked.
“Exactly,” John said. “Air miles or a cash rebate. And I have my bank automatically pay the bill every month.”
“Next is food,” he said. “I think people’s eating habits are hell-bent on spending money.”
“Yeah,” I said. “I offered to take you to lunch while we talked.”
“I know, but I don’t need that gesture. I appreciate it, but that’s money that could be spent on other things. Like your new car!“
“You don’t have to spend a lot on food,” John continued. “When I go to the grocery store — which is rarely — I don’t know how anyone could afford to feed a family on that stuff. It seems outrageously expensive. People need to learn to cook from raw ingredients.“
“But where do you get the raw ingredients?” I asked.
“From the farmers market! Or Costco! You don’t need the little individual servings. That’s crazy. You have to be creative. Part of the problem is that you need to buy a freezer. Or look,” he said, waving his hand at Kris’ seedlings. “Over there are your tomato starts. Those cost you what? 50 cents? You’ll get 50 dollars of fruit from those! Plus I buy what I can in bulk.”
“Eating in-season food is important. It’s less expensive and it’s better quality. I also like this eating close to home thing. That’s neat.”
“Kris makes her own granola,” I offered.
“Yeah,” he said. “Exactly. But nobody advertises that. Nobody advertises ‘make your own granola’. Again, it makes sense to own a freezer. The electrical use of a freezer is pretty tiny. That’d be an interesting article for you, J.D. How much electricity does a freezer use versus how much you save by buying in bulk? People don’t understand about electrical use. They have a foggy notion about it.”
“Yeah, I have this device called a Kill-a-Watt,” I said. “It measures electricity use. But I’ve never checked our freezer.”
“Here’s another thing,” John said. “It’s okay to buy used. There’s nobody advertising to be thrifty. There’s nobody advertising to go to Goodwill. That’s not where the profit is. People have to get permission to buy used from somewhere else, because they’re not going to get it from advertising. I buy all sorts of stuff used, but especially cars. I bought my minivan off Craigslist.”
“How did that work?” I asked.
“It worked great,” John said.
“I bought my Mini Cooper used,” I said, “but I didn’t do it as well as I could have. I didn’t take it to a mechanic, for example.”
“I took my car to two mechanics. I wanted to be sure.”
He rattled off a few more tips. “Do your own home repairs. Use the library more — movies and books, and it’s totally free. I think that’s great. Remember: A dollar spent will never produce dividends. Money spent is gone and will never earn you anything.”
On Investing
“That’s a good transition,” I said. “Let’s talk about your approach to investing.”
“I advise people to look for good investments. Take some time to do research. And think outside the box. I just re-opened my account with Reliable Credit. They offer 4%, which keeps up with inflation.” Reliable Credit is a nearby consumer finance company. But it’s not a bank. They take deposits from people like John and they loan them to high-risk clients. They do a lot of used car loans.
“The thing that worries me about Reliable Credit is that they’re not insured. There’s no FDIC insurance,” I said.
“Doesn’t bother me,” John said. “I’m not putting a whole lot in there. It’s just part of my money.”
“What would happen if you lost it all?”
“Not a big deal. I own my home. I have a guaranteed pension. I have no debt. That’s the key. Because I’ve done these other things, I can afford to take some risk. A lot of people can’t.”
“What about your other investments?” I asked.
“If you’re going to do stocks, diversify your stock holdings,” John said. “But for me, no-load mutual funds are the only way to go. To give anybody 3-4% of your money off the top is insane. It used to be I wasn’t aware how much I was paying. Once I figured it out, I thought, ‘Shit, I can make these mistakes myself. Why should I pay anybody to do it for me?’”
“I invested in small-cap funds at Columbia here in Portland. What a great move that was. Those did very well. I tracked their growth in the newspaper. Every week I drew a graph. I plotted the weekly high and the low and where it closed. I had to keep making new pages for my records because it was growing so much. I didn’t mind,” he said, laughing. “Back in the olden days, if I wasn’t getting 20% a year, I looked someplace else. But I can’t hold that up as an example — although it may happen again if things get turned around, once this economy corrects itself.”
“Does this economy worry you?” I asked.
“No. I don’t have to worry about it. I don’t need the income. I’m debt-free. If I was retired and had a mortgage or other debt, or if I had health problems, it would worry me. To my mind, even if you invest and it goes to hell, it’s still better than nothing. The odds of that are pretty slim, though, especially if you diversify.”
“What are your financial goals?” I asked.
“I used to say that when I reached $100,000 I would have arrived. But I got there so fast, I just kept going. Some people plan for retirement, but I didn’t plan. I did go to investment workshops — free workshops — that were put on for the teachers, and I learned from them. You’d be surprised at how few people showed up to them. Nobody cared.”
“When did you start to save?” I asked.
“It must have been 30 or 35 years ago,” John said. “And I’m glad I did. I think there are people who still don’t take advantage of tax-advantaged savings and investments accounts. I did this as soon as I could. I was amazed at how many teachers didn’t take advantage of this. That’s crazy.”
On Choosing a Lifestyle
John looked back down at his list. “Here’s another thing,” he said. “Volunteer to help others. I really think that’s an important personal lifestyle choice. It feels good to me. I used to do scouting. I had a Boy Scout troop for fifteen years.”
“You know, scouting was important for me when I was a boy,” I said. “I think it can be a great experience.”
“Sure it can,” John said. “When I was growing up, a lot of people shared things with me. It feels good to be in a place to be able to share myself now.”
“What kind of things do you share?”
“Well you know I rent the house, but it’s basically at cost. I don’t charge much at all. I host guests on my boat [in Alaska] at no charge. I do my work in New Zealand. Earlier today I picked up some sheet metal. I went and bought some scrap sheet metal and I took it in to Franklin High School. I took it to their metal shop. They can really make use of that.”
“What do you splurge on?” I asked. I’ve seen the things John owns. They’re very functional. He doesn’t have a lot that I would consider “fun”.
“Some people would say that buying a boat is a splurge,” he said. “But I bought that boat right. I bought it for less than market value. I’ve taken care of it. I’ll get a lot more use out of it.”
“I guess I could eliminate a couple thousand dollars airfare getting to New Zealand and back, but I spend very little money when I get there. If I spend a couple hundred dollars in New Zealand, I’d be surprised.”
“How do you keep your costs so low there?”
“I work on farms. I’m part of Willing Workers on Organic Farms. You travel to someplace and do work on their farms for them. They provide room and board. Sometimes they take you to do local stuff. This year I got to see sheepdog trials. That was fun. Anyhow, I do carpentry work. I build stuff and fix things. There are four farms I go to, about three weeks at a time, and I do what needs done.”
He paused for a moment and smiled. “But Alaska is just for fun.”
“How long have you been doing this now?”
“I’ve been doing this for about fifteen years, ever since I was retired. Back when I was 58.”
Reader Questions
We’d come to the end of John’s list, but we weren’t finished yet. “I told some of my readers that I was going to interview you,” I said. “They sent in some questions. Would you be willing to answer them?”
“Sure. Of course.”
“Annie Blue wants to know how money affects your daily happiness.”
“Well,” he said. “I can buy whatever I want. Not need, but want. I just don’t want very much. I always have $100 in my pocket, but I don’t piss it away. I don’t stop for coffee. I seldom eat out.”
“I understand why people buy things,” he said, “I like to buy things, too. There’s a certain satisfaction in looking at the things you’ve accumulated. It’s like an affirmation that you’re doing things right. So you surround yourself with things that make you think you’re doing well — but they’re not necessary. That’s one of the advantages of being older. People just leave you alone to do what you want.”
“Next,” I said, “Suburban Dollar wants to know what advice you’d give to a 30-year-old.”
“Spend less than you earn. This is true whether you’re on welfare or a millionaire. And remember: wealth is created by investing money, not by working longer and harder.”
“Here’s another thing,” he said. “Remember that when you’re raising kids and stuff, that’s really hard. The demands on your money are so great. But you’ve got to be willing to say no. So much money is pissed away to keep kids happy.” (John has grown children. He’s speaking from experience.)
“Here’s a final question from Bill in Detroit,” I said. “He wants to know if outer wealth causes inner wealth. Or is it the other way around? Or are they completely disconnected?”
“There’s a lot of personal power from personal spending,” John said. “If I’m feeling down in the dumps, going out and buying something gives me a lift. But I’m aware of that. I’m aware of how it makes me feel and it helps me to not do it.”
“I think it all has to do with how you feel about yourself,” John said. “I learned long ago that it was okay to spend less than I earned. It wasn’t going to kill me. And I learned that by doing so, I felt really good about myself. I still do. I’m happy. I feel really comfortable.”
I thanked John for answering my questions, and we walked out to look at the vegetable garden. He admired our onions and peas and asparagus. We discussed whether it was time to rototill. At last, we shook hands and said our farewells. I was headed to California in the morning, and he was off to Alaska. He’ll be there until about the time his grapes are ready to harvest in September. I’ll miss him while he’s gone. But if I’m lucky, I just might get to spend a week with him on his boat this summer, catching a glimpse of what early retirement is like.
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Eco-conscious consumers know that trade-offs are a fact of life. Just about every purchase we make has a carbon footprint, as do activities as simple as flicking on the lights or turning on the air conditioner.
The Aspiration Spend & Save account is designed for people eager to reduce their environmental impact while still earning a decent return on their purchases and savings. It’s one of the better high-yield savings and rewards checking accounts around, though there is a monthly cost to take full advantage of its benefits.
Aspiration Spend & Save has some important drawbacks, both on the environmental and financial fronts. So take some time to learn about its capabilities, upsides, and downsides before opening an account.
What Is Aspiration Spend & Save?
Aspiration Spend & Save is a checking and savings account package that pays interest on eligible balances and offers rewards on select debit card purchases. It has no required monthly maintenance fee, but some features aren’t available without a paid subscription to Aspiration Plus ($7.99 per month).
Aspiration Plus users can earn up to 3.00% APY on the first $10,000 in the account. Aspiration Standard users’ yield tops out at 1.00% APY, also on the first $10,000. Both plans require at least $500 in monthly debit card purchases to earn interest.
Aspiration offers several ways to reduce your carbon footprint, including the option to have Aspiration plant a tree for every debit card purchase and automatic carbon offsets for your driving.
What Sets Aspiration Spend & Save Apart?
Aspiration Spend & Save stands out from competing accounts for several reasons:
Up to 10% back on eligible debit card purchases. Aspiration rewards you for debit card purchases with brands in its Conscience Coalition, a group of eco- and climate-friendly brands like Warby Parker and Blue Apron. You can earn up to 5% as an Aspiration Standard member and up to 10% with Aspiration Plus.
Multiple eco-friendly features. Several Aspiration features can help reduce your carbon footprint, or at least the guilt you feel about it. Even if these features’ tangible benefit is unclear, they go well beyond what most other financial institutions offer.
Deposit insurance well above standard FDIC coverage. Aspiration offers deposit insurance on balances up to $2 million, several times the standard FDIC coverage limit. This is a big advantage for higher-net-worth users.
Need to pay a monthly fee to unlock all benefits. One of Aspiration Spend & Save’s biggest disadvantages is Aspiration Plus’s relatively high monthly fee. Unless you use Aspiration as your primary financial institution, it might not pay for itself.
Aspiration Spend & Save Plans
Aspiration offers two plans: Aspiration Standard and Aspiration Plus. Aspiration Standard has no required monthly fee, though you can pay one if you want. Aspiration Plus costs $7.99 per month.
Your choice of plan determines which features you have access to and how much you can earn on your purchases and savings:
Aspiration Standard
Aspiration Plus
Yield on Balances
1.00% APY on the first $10,000
3.00% APY on the first $10,000
Cash Back on Purchases
Up to 5%
Up to 10%
Early Direct Deposit
Yes
Yes
Free ATM Withdrawals
Yes, in-network
Yes, in-network plus one monthly out-of-network
Optional Tree Planting
Yes, free
Yes, free
Automatic Driving Offsets
No
Yes, at no extra cost
Purchase Assurance
No
Yes, on eligible items for 90 days from purchase
Basically, Aspiration Plus is potentially much more rewarding than Aspiration Standard, but you need to maintain a significant balance and regularly make purchases with Aspiration’s Conscience Coalition partners to get real value from it.
Key Features of Aspiration Spend & Save
Aspiration Spend & Save has the same basic features and parameters as other online bank accounts, but it throws some curveballs as well.
Account Yield & Requirements
To earn full interest on your balance in a given month, you must make at least $500 in qualifying debit card transactions during the period.
Once you clear that hurdle, you can earn interest on balances at least up to $10,000 in your Save account. Balances above $10,000 earn no interest for Aspiration Standard users and 0.25% APY for Aspiration Plus users. Aspiration Plus users also earn 0.25% APY on their balances even if they don’t spend enough on their debit card.
The yield is 1.00% APY with Aspiration Standard and 3.00% APY with Aspiration Plus, subject to change at Aspiration’s discretion.
Account Fees & Minimums
The minimum deposit and ongoing balance is $10. There’s no monthly maintenance fee with Aspiration Standard unless you want to pay one. Aspiration Plus has an unavoidable $7.99 monthly fee.
Cash Back on Eligible Purchases
You can earn cash back on eligible debit card purchases with Aspiration’s Conscience Coalition partners, which include well-known retail brands and service providers like Warby Parker, Allbirds, Imperfect Foods, and Blue Apron.
The cash-back rate varies by partner and your plan level. The maximum payback is 5% with Aspiration Standard and 10% with Aspiration Plus.
Early Direct Deposit
Regardless of your plan level, you can get your paycheck direct-deposited up to two days early if your employer or benefits provider qualifies. Most private employers and government agencies qualify.
ATM Access
Aspiration has more than 55,000 fee-free machines in its ATM network. With Aspiration Plus, you also get one monthly reimbursement for out-of-network ATM fees.
Mobile Features
Aspiration is a mobile-first platform built around its iOS and Android mobile apps. The mobile app earns high marks from Google Play and App Store reviewers, and Aspiration has made several significant updates (each adding new features) since 2019. The interface is intuitive and uncluttered and can handle essential banking functions like remote check deposit and online bill payments.
Climate-Friendly Features
Environmental consciousness and action are core to Aspiration’s brand. In addition to built-in incentives to shop with eco- and climate-friendly brands, Aspiration’s eco-friendly features include:
A debit card made from recycled plastic
The option to have Aspiration plant a tree (or finance its planting) every time you swipe your debit card, at no out-of-pocket cost to you
A personal impact score, updated in real time, that measures the environmental and social impact of your purchases
Automatic carbon offsets for your driving at no out-of-pocket cost, based on how much you drive and how much fuel you consume (only with Aspiration Plus)
Aspiration also pledges to give at least 10% of its profits to charity, though not all contributions go to environmental causes specifically.
Purchase Assurance (Aspiration Plus Only)
As an Aspiration Plus member, you qualify for purchase assurance for 90 days on eligible items purchased with your debit card. Purchase assurance is a basic insurance policy that reimburses you for qualifying theft or damage.
Other Purchase Protections
Regardless of your plan level, you get other purchase protections:
Extended warranties on most purchases, typically double the length of the manufacturer’s existing warranty
Refunds on eligible purchases for up to 60 days from sale, even if the retailer won’t accept your refund
Up to $600 in cell phone protection when you pay your phone bill with your Aspiration debit card
Deposit Insurance
Aspiration Spend & Save comes with FDIC insurance up to $2 million. That’s eight times the standard maximum of $250,000.
Pros & Cons
Aspiration Spend & Save is a rewarding money management platform with potentially significant environmental impact, but it has some notable downsides.
No required monthly fee
Excellent cash-back rate on eligible purchases
Above-average yields with Aspiration Plus
Multiple opportunities to reduce carbon impact
Best yields capped at $10,000 maximum balance
Minimum debit card purchases required to earn interest
$7.99 monthly fee for Aspiration Plus
Pros
Aspiration Spend & Save can more than pay for itself with regular use and is one of the few financial platforms that pays more than lip service to environmental causes.
No required maintenance fee. Aspiration Standard has no required monthly maintenance fee. You can still earn interest and debit card rewards without pay out of pocket each month.
Earn up to 10% on eligible debit card purchases. You can earn up to 10% on eligible debit card purchases with Aspiration Plus. If you spend heavily with Conscience Coalition partners, you can almost certainly offset Aspiration Plus’s monthly membership fee with earned rewards.
Yields up to 3.00% APY with Aspiration Plus. That’s not quite a category-leading yield, but it’s better than most traditional bank savings accounts pay.
Extra deposit insurance at no additional cost. Aspiration guarantees deposits up to $2 million per account holder. This is a big deal for the select few users who hold more cash than the FDIC’s standard deposit insurance covers.
Low minimum balance. Aspiration’s minimum balance is just $10, which shouldn’t be a hurdle for the vast majority of account holders.
Multiple opportunities to reduce carbon impact. Although the precise impact is difficult to quantify, Aspiration offers several good-faith opportunities to reduce the environmental impact of your purchasing habits and lifestyle (including your driving).
Bigger-than-average fee-free ATM network. Aspiration has more than 55,000 fee-free ATMs in its network, located all across the United States.
Cons
Aspiration Spend & Save reserves its best features for paying customers, who can still lose money on the deal, and there’s a natural limit to how much you can earn in rewards and interest.
Top yield only applies to the first $10,000. With Aspiration Standard, you only earn interest on the first $10,000 in your account. Aspiration Plus entitles you to interest on your entire balance, but at a greatly reduced rate (currently 0.25% APY). This limits your return on savings and makes it harder to offset Aspiration Plus’s full cost.
Must make at least $500 in qualifying debit card purchases to earn top interest. You must spend at least $500 on your debit card in any month you wish to earn the full interest rate. Otherwise, you earn no interest at all with Aspiration Standard and just 0.25% APY with Aspiration Plus.
Paid membership required for all features and value. To get the most out of Aspiration Spend & Save — both financially and environmentally — you need to pay nearly $8 per month for Aspiration Plus.
Environmental benefits are opaque and difficult to measure. Aspiration contracts with reputable environmental organizations to plant trees and purchase carbon offsets. However, it’s inherently difficult to measure the actual impact of carbon-reducing actions (like planting trees, some percentage of which die as saplings) and products (like carbon offsets based on anti-deforestation agreements that counterparties often violate). Aspiration is probably lower-impact than big global banks like Citibank or Wells Fargo, but by how much is less clear.
How Aspiration Spend & Save Stacks Up
Aspiration Spend & Save is a potentially rewarding financial platform that can improve your finances while lessening your impact on the environment. But before you apply, see how it compares to popular competitors like the Signature Federal Credit Union High-Yield Checking account.
Aspiration Spend & Save
Signature FCU High-Yield
Maintenance Fee
$0 to $7.99 per month
$0
Minimum to Open
$10
$0
Minimum Ongoing
$10
$0
Maximum Yield
3.00% APY with Aspiration Plus
4.00% APY
Qualifying Activities
Yes
Yes
Maximum Balance to Earn
Yes, $10,000
Yes, $20,000
Spending Rewards
Up to 10% cash back
None
Aspiration Spend & Save has more potential value than Signature FCU High-Yield Checking thanks to its cash-back rewards program and unlimited base yield for Aspiration Plus users. But if all you care about is maximizing your yield on day-to-day balances, Signature FCU’s higher interest rate makes it the better choice.
Final Word
Aspiration Spend & Save is one of the better high-yield checking and savings packages available to U.S. residents. Its eco-friendly features enhance its appeal for users who want to reduce the ecological impact of their everyday choices without sacrificing financial rewards.
That said, Aspiration Spend & Save has some important shortcomings, both financially and ecologically. Before you open an account, figure out how much you expect to use it — and how much you expect to keep in your account — and decide whether it’s worthwhile.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Aspiration Spend & Save
Despite some important limitations, Aspiration Spend & Save has a rewarding cash-back program and offers above-average yields on eligible balances. It’s also among the most intentionally planet-friendly financial platforms out there, even if its actual impact is fuzzy. But if you’re tempted to upgrade to Aspiration Plus, run the numbers and make sure you can offset the monthly fee.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Whether you are a freelancer, side hustler, or run a full-time business, opening a separate business bank account should be your first move after starting your business.
A business bank account helps you keep your business finances and personal income and expenses separate. Having a business bank account for all your business finances makes it easy to run records and track your costs and deductions at tax time.
Business checking accounts can also help business owners establish credit, which they can use for net terms with suppliers or to take out business loans or business credit cards.
But which business checking account is best? And can you find good options with free business checking accounts?
12 Best Free Business Checking Accounts
We’ve done the legwork for you, compiling a list of the 12 best free business checking accounts available in the U.S. today.
1. Bluevine: Best Free Business Checking Account Overall
Bluevine offers one of the most comprehensive and best free business checking accounts you’ll find. It has no monthly maintenance fees, no overdraft fees, and an annual percentage yield APY of 2% on up to $250,000 of your balance if you meet monthly activity goals. To qualify, simply make $500 in debit card purchases with your Bluevine business debit or receive $2,500 per month in customer payments to your account.
Bluevine offers features that make it great for a team, including the ability to open multiple sub-accounts and even have separate logins for employees or contractors, like accountants and virtual assistants.
While some free business checking accounts have transaction limits, your Bluevine business checking account does not. Funds are backed by Coastal Community Bank, Member FDIC. Coastal Community Bank provides business banking services for Bluevine customers.
2. Capital One Business Bank Account: Best for Local Branches
If you’re looking for personalized service at local branches, consider Capital One business checking. Capital One offers two tiers of checking accounts: Basic and Enhanced. Both accounts offer unlimited digital transactions, free overdraft coverage, access to Capital One’s mobile app, no ATM fees at 70,000 Capital One, Allpoint, and MoneyPass ATMs, and low monthly fees that are easily waived when you meet minimum balance requirements.
Capital One Enhanced business checking is designed for larger businesses who can meet $25,000 average daily balance requirements needed to waive the $35 monthly service fee. Enjoy free incoming wire transfers, five free outgoing wire transfers monthly, and a remote scanner for mobile check deposits.
3. GO2bank: Best for Online Banking
GO2bank is a complete mobile banking solution with digital banking services provided by Green Dot Bank. The bank offers many features in its online business checking account that will appeal to business owners and their employees, including co-branded debit cards, optional overdraft protection, and a co-branded app for businesses. You can also get a secured business credit card through GO2bank.
Waive the monthly fees with qualifying direct deposits, and receive ACH payments up to two days early. You can also purchase eGift cards for yourself or as employee incentives and earn up to 7% cash back.
4. Found: Best for Freelancers
Hailed as the debit card for the self-employed, we rate Found as the best free business account for freelancers. It has no monthly maintenance fees, no minimum deposit or minimum balance requirements, and no credit check to open your account.
Found has a few features that can help you streamline your business. By evaluating your income and expenses, Found can calculate your tax bill, categorize tax write-offs, and even auto-save the correct amount from each deposit to cover your quarterly taxes. You can also send invoices from the app.
Found is a financial technology company, not a bank. Deposits are FDIC insured through Piermont Bank.
5. First Citizens Bank Basic Business Checking: Best for Checking Account Choices:
Most business checking accounts have one option for a business owner. First Citizens has four choices to help you choose the right business checking account with the features you need. The basic business checking account offers 100 transactions with no monthly fee, and has a minimum opening deposit of $100.
Business Banking I is free with a merchant account or a minimum daily balance of $25,000. It offers processing of up to $250 transactions per month, plus $10,000 in cash processing, including cash deposits. Business Banking II has similar features with 500 free transactions and $15,000 in cash processing, including cash deposits. There is a $50 monthly fee unless you have a merchant account or an average daily ledger balance of $50,000.
Business Banking III is best for larger enterprises who want choices and do a high volume of business. Process up to 750 transactions free each month, with $20,000 in cash deposits. You’ll need a merchant account or $75,000 in your average daily ledger balance to avoid the monthly maintenance fee.
Business Banking I, II, and III accounts also let you customize your plan with additional discounted services.
6. Novo Business Checking Account: Best for E-commerce and App Integrations
Novo is not a bank, it’s a financial technology company with deposits backed by Middlesex Federal Savings, Member FDIC. Novo is one of the most tech-forward financial institutions on our list, offering easy integration with apps like Shopify, Wise, Stripe, Square, and Quickbooks.
The Novo Business Checking account has no monthly fees, no minimum balance requirements, no cash deposit fees, and ATM fee reimbursement for out-of-network ATM use. Account holders can also get discounts on popular business software and services, including LegalZoom, Constant Contact, and Stripe.
7. Mercury Banking For Start-ups: Best for Start-ups
Bootstrapped and venture-backed startups of every size have unique needs in a business checking account. A Mercury free business checking account helps your money stretch further with no monthly fee, no minimum balance requirements, and no minimum deposit to open. You can earn 5.11% annual percentage yield APY with mutual funds invested through Mercury Treasury if you have an account balance of $250,000 or more.
Mercury free business checking offers unlimited free transactions, including no cash deposit fees, for businesses who process less than $200,000 per month. The account offers team management tools, debit cards for multiple employees, and capabilities to open multiple checking and savings accounts to manage cash flow.
Plus, your Mercury account is backed by up to $5 million worth of FDIC insurance through partner banks. Banking services are provided by Choice Financial Group and Evolve Bank & Trust, Members FDIC and deposits are held in various partner banks.
8. U.S. Bank Silver Business Checking: Best for Sign-up Bonus
If you’re looking to earn free cash to boost your business, consider a U.S. Bank Silver Business checking account with a $100 minimum deposit before June 30, 2023. You can earn a $500 bonus when you make new deposits of at least $5,000 and maintain a minimum balance of at least $5,000 until 60 days after the account opening. Increase that to $15,000 in new money deposits and maintain that balance for 60 days and earn $750 deposited into your new business checking account.
U.S. Bank offers tons of benefits for business owners, including no transaction fees for up to 125 transactions each month, 25 free cash transactions (or up to $2,500 in free cash deposits, whichever comes first), no monthly maintenance fee, and 50% off on your first check order, up to $50.
Larger businesses may prefer a Gold Business Checking Account, with no transaction fees for up to 300 transactions per month. It also has a waivable $20 monthly fee.
There is also a Platinum Checking Account Package with 500 free transactions and a $30 monthly fee. This fee is waived by meeting monthly minimum balance requirements.
9. Chase Business Complete Banking: Best for Payment Processing
For those who want to avoid online only banks and are looking for a big bank with international recognition and branches and ATMs across the U.S., Chase Business Complete Banking offers a solid solution. It comes with many ways to waive the monthly service fee.
Chase also makes it easy to accept credit and debit card payments without using a third-party payment processor. Chase QuickAccept is a built-in feature as part of Chase Business Complete Banking. You don’t need to apply for a separate merchant account, and the transaction fees are competitive with other credit card processing companies.
QuickAccept also allows you to access money faster with same-day deposits with no added fees. If you need a merchant payment processing provider that works in synch with your bank account, Chase Business Complete Banking could be the best choice for you.
Right now through August 3, 2023, businesses can earn a bonus up to $500 when they open a Chase Business Complete Checking account and meet requirements, which including total deposits of $15,000 or more. Deposit just $2,000 or more and snag an easy $300 for your new business checking account.
10. Huntington Business Checking 100 (Midwest): Best for Community Banking
Huntington National Bank, headquartered in Columbus, Ohio, since 1866, offers three business checking accounts, including a business interest checking account, Unlimited Plus Business Checking.
The top-tier account includes unlimited transactions, plus cash deposits of up to $25,000. Waive the $40 monthly fee with up to $50,000 in total deposit relationship balances across business accounts. Designed for larger businesses, the Unlimited Plus Business Checking allows you to choose two bonus services such as a fraud tool, waived returned deposited items fees on up to 25 items per month, or two free incoming domestic wires monthly.
The Unlimited Business Checking account offers similar features, with unlimited transactions, free cash deposits on up to $10,000 per month, and a choice of one bonus service. Waive the $20 monthly fee by maintaining a minimum balance of at least $10,000. A Business Checking 100 account offers up to 100 transactions per month, and up to $5,000 in cash transactions with no monthly fee.
Huntington is devoted to the local communities it serves and spotlights small business owners on its website. It also specializes in SBA loans and offers a linked business money market account to earn interest on savings with no monthly maintenance fee if you maintain an average daily balance of $10,000+.
11. Relay Business Checking: Best for Money Management
Relay online banking offers up to 20 primary business checking accounts for members of your team or for different business expenses, plus 50 virtual or physical Visa debit cards. Designed to assist with cash flow and money management, your Relay online banking account allows automated transfers into the various checking accounts based on percentage of income or flat-rate dollar figures.
Your Relay online and mobile banking account also includes up to two business savings accounts with APYs of 1% to 3%. Best of all, unlike many free business checking accounts that are only free if you meet transaction or balance requirements, Relay has no monthly maintenance fee, no transaction fees, no overdraft fees, no ATM fees, and no minimum balance requirements.
12. Axos Basic Business Checking Account: Best for No Fees
Axos Bank has been voted best online bank by Money Magazine and its business offering stands out for small business owners as a straightforward business checking account with no transaction fees, no monthly maintenance fee, and no minimum opening deposit. You also don’t have to worry about balance requirements or ATM fees. You’ll even receive unlimited reimbursements for using out-of-network ATMs within the U.S.
You will need to maintain a minimum balance of at least $5,000 for the first five statement cycles to earn a $100 account opening bonus. You will receive $25 into your business account each month you maintain the minimum requirements. However, if you close the account within 120 days, you might have to pay a $100 early closure fee.
What to Consider When Choosing the Best Free Business Checking Account
The best free business checking account for your business depends on the volume of cash deposits, number of transactions, the size of your company and your general banking needs.
It’s important for a business of any size, including a sole proprietor or 1099 contractor, to open a business checking account to keep business funds separate from your personal checking account and other personal finances. This is especially important at tax time.
Many of the business bank accounts on our list of best free business checking accounts make it easy for you to track your business finances. They offer end-of-month or quarterly reports or integrate with QuickBooks or other accounting software to make money management easy. This, along with costs, quality of customer service, mobile apps, and more should factor into your decision when you choose a small business checking account.
Monthly Maintenance Fee
Account fees have long been a fact of life for individuals and business owners, but they no longer have to be with so many free checking accounts available today. Some of the banks on this list, including Axos and Relay, offer no monthly fee of any kind. Others make it easy to waive the monthly fee by meeting balance requirements.
See if there are any balance requirements, direct deposit requirements, or minimum debit card purchases to avoid the monthly service fee, and if you will be able to meet those minimums easily each month.
Easy-to-use Online and Mobile Banking
Even basic business checking today should have a robust app and mobile banking solutions, including mobile check deposits, capability to turn your debit cards on or off, and to monitor spending in a user-friendly app.
You may think online-only banks have better mobile capabilities, but that’s not always the case. All the best business checking accounts on our list have intuitive, user-friendly mobile apps.
Low Minimum Opening Deposit Requirements
Most of the free checking accounts on our list have low minimum opening deposit requirements. Some may have higher minimums to earn a bonus on your business checking account. Make sure to read the fine print and know the minimum deposit requirements if you want to earn that sign-up bonus.
Reasonable Fees
While it’s possible to find a business checking account with no monthly service fee, your bank may have some fees. Read the fine print so you know exactly what you’re getting for your money. It should be easy to avoid ATM fees, overdraft fees, and even monthly fees.
However, you may have to pay for wire transfers, out-of-network ATMs, and other transactions. Unlike personal accounts, it’s common for business bank accounts to have fees if you deposit cash. Sometimes, a certain number of cash transactions is included in your monthly fee.
Customer Service
It’s important to research the bank’s customer service before you commit to a business checking account. Online only banks, especially, may have limited ways to reach customer support. Find out if they offer 24/7 service. Many people prefer online banking for the convenience and low account fees. But if you experience a problem, you want to make sure you can get help promptly.
Positive Customer Reviews
When you’re looking for the best business checking account, it pays to research the opinions of other business owners like you. Customer reviews can give you a feel for the level of customer service, ATM fees, monthly fees, fraud protection, and more.
Practical Transaction and Cash Deposit Limits
Many of the best business checking accounts offer unlimited transactions and reasonable monthly limits to deposit cash. Many banks offer different tiers of business checking accounts, so you can pay a set monthly fee for the level of service you need.
Linked Business Savings Account or Business Interest Checking Account
If you want to earn interest on your cash reserves, look for a checking account that pays interest or for a bank with a high interest savings account. Pay attention to account fees, withdrawal limits, and
Consider the Need for a Bank With Physical Locations
Online banking offers lower monthly fees and convenience. But if your business needs to deposit cash regularly or you just want personalized service and relationship banking, you might prefer a bank account at a financial institution with brick-and-mortar locations.
Questions to Ask Before Deciding on a Business Checking Account
When you’re shopping around for a free business checking account, consider your needs, the number of transactions you conduct daily, your account balance, and whether you prefer a traditional bank or are willing to consider online only banks for your business checking needs. Ask yourself the following questions so you can compare your options.
Will you be making regular cash deposits?
Many business checking accounts charge a fee if you want to deposit cash. Sometimes, a number of cash deposits will be included in your monthly fee. Make sure to pick an account with the capabilities you need.
Do you prefer a bank or credit union?
You might prefer the personalized service of a credit union instead of choosing a large bank or an online bank. When you’re evaluating credit unions, compare all the features and fees the same as you would evaluate business bank accounts.
Do you need to process customer transactions?
Banks like Chase offer credit card processing as an add-on feature to their services. If you are using an online bank, you might want one that integrates with Stripe, Square, or other payment processors. The capability to process customer transactions is one element that sets a business bank apart from a personal checking account.
Do you want to earn interest on your balance?
Several banks on our list offer high yield savings accounts, which is a benefit for small businesses, start-ups, and any business that wants to earn free money from their balance. You might also consider an interest earning business checking account like Bluevine, which pays interest on your checking account balance.
Business Checking vs. Money Market Account
A money market account is a special savings account designed to hold money that you may need to access in the short term. Some money market accounts offer higher APYs than other savings accounts. A money market account often has limits on the number of fee-free withdrawals per month.
Most business owners will want to open a free business checking account and link it to a money market account to earn interest on cash reserves.
What You Need to Open a Small Business Checking Account
You may not need an Employer Identification Number or Tax ID number to open a business checking account. If you have one, you should open the account using that number instead of your Social Security number to help keep your business and personal funds separate.
But if you are a freelancer and file taxes as a sole proprietor/self-employed, you can open your business checking account with your SSN. However, if your business has a DBA (doing business as) you will need a certificate or paperwork showing that name.
Likewise, if you are an LLC, you’ll need your business registration along with your EIN. If you have a partnership, you’ll need your partnership agreement and paperwork showing the business name.
Beyond that, you can open a business checking account with your business address, a phone number, email address and the minimum deposit (if required). Visit a branch for personalized service or open your free business checking account online.
FAQs
See what people are asking about free business checking accounts.
Do you need to pay account or transaction fees?
Some business checking accounts have monthly fees that you can waive by meeting specific requirements. You may also pay ATM fees, fees for cash deposits, and fees for wire transfers or international transactions.
Read the fine print or speak to a personal banker to choose the account that’s right for you.
Can you open a business checking account with no credit check?
Most banks and credit unions will allow you to open a business checking account with no credit check. By maintaining a positive balance in your account, you can build your business credit. A credit check may be required for business loans, lines of credit, or “net” terms with vendors.
What are the most important features of business checking accounts?
Most business owners are looking for business checking with no ATM fees and no monthly fee or easy ways to waive the monthly fee. Beyond that, consider the type and number of transactions you complete monthly, whether you need payment processing capabilities, and if you want a linked savings account to earn interest.
What banks offer free business checking accounts?
Many online and traditional banks offer free business checking or easy ways to waive the monthly fee. The list above describes 12 of our favorite options in free business checking.