In 2022, Keelin and his team closed $827 million in volume, with Keelin originating $322 million alone. He ranked 18th on Scotsman Guide‘s 2023 top LO list.
Competitive mortgage rates, products, services, and ultimately, being a servicing company are factors that appealed to Keelin when bringing his team to the Cleveland, Ohio-headquartered lender, he said.
“I wanted to take advantage of technology, systems to really provide like proficiency in our business, [and] the ultimate thing for me was to be able to scale the model, because we have a model that we go by, and we live by, which is the three C’s – cost-effective, communication, consistency,” Keelin said in an interview with HousingWire.
Being a consultant has helped Keelin retain and grow his client base, especially in his main markets of New Jersey and Florida.
For instance, if his client is putting 5% down as down payment and the property is under-appraised, Keelin would have a “fluid conversation” of all the possible scenarios.
“[If] the person is putting 20% down, we’re also having forward education with them that says, ‘As long as the house appraises within 15% of the purchase contract, then you’re at a 95% LTV, the negative is PMI, but we get you into the house are you comfortable,’” Keelin said.
Another strategy Keelin advises his team members is to have a diversified portfolio, targeting both first-time buyers and investors.
“They (investors) are not scared of interest rates. Interest rates are cyclical,” Keelin said. “So [they are]really focusing on getting that property at this time, because during recessionary periods, inflation periods, the price of goods goes up, which means values go up. So if you wait, what’s the cost of waiting?” Keelin noted.
“I’m always going to be hypersensitive to that first-time buyer, where every dollar makes sense. But there’s also the investor concentration… if you can meet all in the middle, you have a very fluid business model,” Keelin said.
Keelin closed $57 million in volume in the first quarter of 2023. This year, Keelin has a team goal to post $700 million in volume.
“If we continue to do those productive activities and stay in front of people, and are able to brand what we’ve been able to do in the past, as well as with what CrossCountry offers, there’s no reason that we can’t exceed those goals,” Keelin noted.
Going on an African safari can be the chance of a lifetime to see some of the world’s most iconic wildlife up close, experience Earth’s extraordinary untouched corners, learn about new cultures and reconnect with nature.
A safari trip can also be the opportunity to make sustainable, responsible choices about how and where you travel, and to maximize the impact your travel spending has on conservation, community and environmental programs in various destinations.
Many travelers decide where to go on safari in Africa based on their schedules and the seasonality in individual regions — both in terms of the weather and the animals they will most likely see. Others focus on sighting specific species, resulting in visits to places like Rwanda or Uganda to trek and see mountain gorillas or trips to destinations like Kenya to observe the endangered pachyderms at a rhino sanctuary.
Sustainability can be another excellent factor in determining where you should go on safari, though. Many of the most reputable safari outfitters and camps put sustainability front and center in their operations, combining environmental practices, conservation commitments and community outreach to create the ultimate holistic travel experience.
Doing a little research on the regions you are considering for a safari and the specific tour operators and lodges in your chosen location can make a huge difference in the effect your tourism dollars have on things like wildlife preservation campaigns, economic development in local villages and minimizing the overall environmental footprint of your individual journey.
Unlike some other forms of travel that let you book certain components — flights, hotels, cruises, etc. — a la carte by yourself, many safari companies require you to book the bulk of your trip (if not all of it) through them or a partner agency or operator. Because of this, you can ask these representatives about their sustainability track records and even specific programs while planning your trip. Any reliable operator should have materials on hand to send you to help you make your decision.
Here are some of the factors you can investigate to determine just how sustainable your safari can be, plus some of the safari companies undertaking meaningful measures in this sphere by weaving principles of environmental consciousness, wildlife protection and community development into their core ethos and operations.
Eco-sensitive camps
For North American and European travelers, going on an African safari typically necessitates carbon-intensive long-haul flights and sometimes additional bush flights to reach remote regions. In order to limit the rest of your carbon footprint while on safari, look into the eco-credentials of the camps or outfitters you are considering.
Many safari camps, for instance, now run mostly or even entirely on solar power. At both andBeyond Nxabega and andBeyond Xaranna in Botswana’s Okavango Delta, 80% of the camps’ total electricity consumption is supplied by solar photovoltaic plants and Tesla Powerpack battery energy storage systems.
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Nearby, Wilderness’ Chitabe and Mombo camps run on 100% solar (as do 17 of the company’s other camps), and Wilderness has plans to retrofit and invest in further solar power for all new camps and camp refurbishments. Not only is that great for the environment, but it’s also the best means of ensuring an uninterrupted power supply to guests in an area with little other infrastructure.
Cheetah Plains, an exclusive-use safari villa in South Africa’s Sabi Sand Nature Reserve, now uses Toyota Land Cruiser electric safari vehicles with Tesla batteries that are charged via solar power to whisk guests across the reserve’s thousands of acres, creating a zero-emission game drive.
In Tanzania’s Ruaha National Park, Usangu Expedition Camp is steering a different path, developing safari vehicles that run on ethanol, which is derived from molasses produced in the southern part of the country, instead of diesel. The staff even calls the vehicles “Gongos,” a type of traditional Tanzanian gin, since the ethanol looks and smells like the spirit.
But alternative power and fuel are just the start. For its part, Chitabe recycled the wood from an old set of raised walkways to create a chic bar and lounge area for its current guests. What’s old is new again … and looking better than ever.
Many recently built and forthcoming safari camps are being constructed using both traditional materials and techniques, such as thatching and weaving completed by local artisans, and up-to-the-minute technologies like 3D printing and innovative recycling methods utilizing salvaged materials to limit their physical footprint.
Time + Tide Chinzombo in Zambia’s South Luangwa National Park was designed to be completely dismantled if necessary so as to leave a minimal trace on the landscape, and Wilderness is currently constructing a new tented camp in Botswana’s Mbabe concession called Mokete that can be completely disassembled as if it had never been there.
Simple measures can have a large impact as well. Camps like Wilderness’ DumaTau and sister Little DumaTau in Botswana’s riverine Linyanti region provide guests with Healing Earth’s all-natural, biodegradable bath and body products during their stay to minimize harmful runoff from the camp’s water management system.
For its part, the Elewana Collection of lodges in Kenya and Tanzania launched its “Ban the bottle” initiative in 2018, giving guests reusable water bottles that they can fill up at stations in the camps. The outfitter estimates that doing so in just six of its Kenyan lodges saves around 160,000 plastic bottles from going into landfills each year.
Elewana also dropped plastic straws the following year. Even more fun for Elewana guests is the opportunity to toss out seed balls (little nutrient packs that encase seeds of Indigenous plants) during a walk or game drive somewhere along their journey so they’re doing their little part to help revegetate the wild places they are enjoying.
Wildlife conservation
It seems obvious, but without wildlife, there wouldn’t be safari camps. For that reason, many safari companies actively support and participate in wildlife conservation efforts, some of which are specific to individual regions while others are more widespread.
Guests at andBeyond’s Tengile River Lodge and Kirkman’s Kamp, which are near each other in South Africa’s Sabi Sand Nature Reserve, can certainly get a thrill sighting the area’s thriving lion and leopard populations on game drives. However, guests may not know that their guides are also logging those sightings and providing the information to Panthera, an organization dedicated to tracking and protecting big cat populations around the world.
Various other andBeyond camps, including Phinda Private Game Reserve and Ngala Safari Lodge, help fund rhinoceros anti-poaching units. Guests at Ngala can even observe researchers tagging rhinos’ ears with microchips to help monitor the highly endangered animals. These are individual initiatives, but they are all part of andBeyond’s overarching commitment to conservation and community projects that it supports through its Africa Foundation.
Likewise, Elewana Collection has a charitable arm called The Land & Life Foundation that underwrites various efforts such as the Wildlife Warrior Program, which has clubs in primary schools throughout Kenya and Tanzania. The children who join can take part in activities to learn more about environmental and animal conservation. The club currently counts around 2,200 members and even provides primary and secondary educational scholarships to many of them.
High-end safari company Singita, which has lodges in South Africa, Zimbabwe, Tanzania and Rwanda, established its Singita Conservation Foundation decades ago with a 100-year plan to protect Africa’s wildlife and wilderness for future generations. These days, it partners with other nonprofit trusts and funds on a plethora of projects, including rhino reintroduction and protection in the Malilangwe Wildlife Reserve in Zimbabwe, land management and anti-poaching efforts in South Africa’s Kruger National Park and combating invasive vegetation as well as helping in the recovery of megafauna like elephants and buffaloes in Tanzania’s Serengeti National Park.
Community improvement projects
Without buy-in from local communities, conservation efforts would go nowhere. Those who live in or near game reserves and national parks need to benefit from the tourism revenue that these natural wonders generate. That’s why many safari companies’ conservation drives include community-based components.
One telltale sign that a safari company is supporting the communities where it operates in a meaningful way is simply through employment. Specifically, whether its camps employ people from the villages or regions that surround them in high proportions. Not only is this a boon for economic stability and growth in places that might otherwise be destitute, but it ensures that tourism dollars stay in the area and benefit the people who live there.
Many safari companies’ commitments to communities go beyond employment, though. Praveen Moman, who grew up in Uganda before his family had to emigrate to the United Kingdom, founded Volcanoes Safaris in 1997, pioneering the high-end safari experience in both Uganda and Rwanda.
While the Volcanoes Safaris’ lodges have become mainstays for both gorilla and chimpanzee trekking, it is perhaps the company’s nonprofit organization, the Volcanoes Safaris Partnership Trust, that will be its most lasting legacy. The trust supports preservation efforts for the great apes of the region, but it also underwrites innovative, community-based programs that guests are encouraged to explore during their stays at the lodges.
“When I set up Volcanoes Safaris in 1997 in southern Uganda and then in 2000 in neighboring Rwanda, the area was just coming out of the Great Lakes conflict,” Moman told TPG via email. “This experience made me realize how important it was to not only focus on the lodges we were building and the gorilla and chimpanzee experience that we wanted our guests to enjoy, but also that local people need to get tangible economic benefits from conservation and ecotourism for them to support the great apes.”
“Therefore,” he continued, “I felt that it was important that the lodges should be connected to the communities around them. In each lodge, we have set up different community projects.”
At Volcanoes Safaris’ Virunga Lodge in Rwanda, for instance, guests can take a guided afternoon walk through several villages near Lake Bulera to see firsthand the impact of projects such as the “One sheep per family” program, which provides one sheep to each family in three nearby villages (more than 500 so far), thereby supplying them with sources of meat and milk along with natural fertilizer for their sustenance crops.
The lodge has also donated 250-plus water tanks to families in these villages, which help in the catchment of the region’s abundant rainfall and ensure that there is a steady supply of water for drinking and crop irrigation during the dry season.
In Livingstone, Zambia, near Victoria Falls, Tongabezi, which is an elegant lodge along the banks of a tranquil stretch of the Zambezi River, has underwritten the Tongabezi Trust School (also known as Tujatane) since 1996, providing education and meals to children who live within walking distance of the academy. There are currently nearly 300 children between the ages of 3 and 17 enrolled, all of whom can take advantage of the classes and curriculum, as well as the music, sports, arts and computer facilities. What’s more, the school provides funding to send some of the children on to secondary schools and even universities, ensuring a new generation of leaders and professionals with a commitment to the local community.
In Botswana, both andBeyond Nxabega and andBeyond Xaranna share several community-based projects, including the drilling of water boreholes for the communities of Gogomaga and Tsutsubega so that their inhabitants have steady sources of usable water; and funding a school in the rural farming village of Sexaxa near Maun (where the area’s main airport is) so children no longer need to walk three hours, some of it through dangerous terrain, to attend the nearest school.
Longer-term development
Ongoing outreach and individual community projects aside, several safari companies have established philanthropic organizations or arms with a broader purview of economic development and social services not just in the areas where they operate, but in entire countries or regions.
Micato Safaris is one of the best-known luxury safari operators, partnering with premier lodges from multiple companies in Africa and Asia to create bespoke itineraries for its guests. However, it also underwrites AmericaShare, which was founded by a Micato Safaris employee named Lorna Macleod more than 35 years ago to support both community development and access to education in Mukuru, one the largest informal settlements in Nairobi, Kenya.
Today, the philanthropy operates the Harambee Community Centre, which has library and computer facilities as well as recreational grounds, in Mukuru itself. Residents can come for a quiet place to study or work, look for employment and take advantage of other services. AmericaShare also supplies fresh, drinkable water in the area via multiple distribution points.
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Students hard at work at AmericaShare’s Harambee Community Centre. ERIC ROSEN/THE POINTS GUY
Guests who go on safari with Micato in Kenya get to visit the community center to learn more about its efforts and meet students who have benefited from AmericaShare’s various educational undertakings during their stay. Those include supplying school uniforms to local children, sponsoring scholarships to primary and secondary schools, and sending some of the most vulnerable children to private boarding schools around Nairobi. In fact, for every safari the company sells, Micato provides the funds to send a child to primary school.
Micato also supports other efforts like Huru International, which supplies sanitary kits and reproductive health education materials to young women (more than 210,000 to date) throughout East Africa who might otherwise have to miss school or work due to the lack of reproductive health services in rural communities. By empowering women to take their health into their own hands, Huru helps them support their families and communities (not to mention cultivating their own careers) in ways that would not otherwise be possible.
For its part, one of the most targeted yet impactful ways Wilderness carries out its conservation mission beyond the day-to-day and lodge-specific measures it takes is through its Children in the Wilderness program, which was founded in 2001.
The program aims to cultivate new generations of homegrown conservation leaders in Africa’s rural communities by hosting student clubs at schools with activities that focus on environmental sustainability and wildlife education. Children in the Wilderness even brings kids to one of its camps on a yearly basis (7,800 to date) so they can learn firsthand about the importance of wildlife conservation. The program provides scholarships to high-achieving students, and some even return to become guides with Wilderness.
On a recent trip to Botswana, my guide at Little DumaTau, Segopotso Oja (See for short), was a former participant of Children in the Wilderness. “I was born and raised in a small village called Eretsha, located in the eastern Okavango Panhandle,” Oja told me later by email when I contacted him after my trip to ask more about his experience with Children in the Wilderness.
“Wilderness works closely with the community in this area, and when I was 10 years old, I was given the opportunity to join a Children in the Wilderness Eco-Camp,” Oja continued. “Here I grew to learn about and love the wild, and recognize the importance of protecting our wilderness, and this experience inspired me to pursue a career as a guide.”
Spending time in the bush helps combat some of the negative portrayals of wild animals that village children are typically taught, Oja told me. “Once they explore the wilderness, this opens their minds and changes their way of thinking to realize the value of conservation and that there are other career opportunities available to them in the conservation and hospitality space.”
That’s the path that Oja himself took. He has since worked as a guide not only at Little DumaTau, but also two other Wilderness camps, Vumbura Plains and Mombo.
Oja also views his continuing role as an ambassador for Children in the Wilderness as crucial to the work he does and the future of conservation. “It gives me a chance to meet with youngsters when we host them in our camps,” Oja said, “and pass over the love of being a conservationist to the younger generation.”
Minimize your footprint and maximize your impact
Aside from picking a safari company with sustainability efforts you want to support, there are a few things you can do as a traveler to make your safari adventure more sustainable.
Long flights produce a lot of carbon, so you could consider a carbon offsetting scheme to reduce the footprint from your journey to your safari destination.
Don’t overpack since bush flights on small planes mean your luggage will be restricted anyway. What’s more, many safari camps provide free daily laundry, so you don’t have to bring too many outfits along. Plus, by limiting your luggage, you’ll reduce the amount of fuel burned on the planes carrying you to your various camps.
Among those clothes, make sure you bring some made from fabric with sun protection factor. That will reduce the amount of plastic-packaged sunblock you need to bring along. Opt for mineral-based sunscreens (look for those labeled as “reef-safe”) rather than conventional ones since the latter have chemicals that might be harmful to the environment as well as your own body chemistry, according to an increasing body of scientific evidence.
You might also want to leave your usual shampoo and conditioner at home since safari camps tend to provide eco-friendly, biodegradable products that are easier to manage waste-wise in the fragile ecosystems where they operate.
Finally, while safaris tend to be expensive, think about whether you can factor in a charitable donation to your budget. After all, if you’ve done your homework and picked a company with sustainability efforts you support, you might want to do just a little bit more good during your trip by making an unrestricted donation to the measures the group has underway.
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Policyholders who value cheaper car insurance and digital capabilities over bundling multiple insurance policies with the same company might consider Geico as their company of choice.
Low average premiums for high-risk drivers
Robust online and mobile app accessibility
Multi-policy discounts available
Avg. annual auto insurance premium for full coverage: $1,353
Avg. annual auto insurance premium for min coverage: $373
Avg. annual home insurance premium for $250k dwelling coverage: $
Customer service: 1-800-207-7847
Claims: Claims can be filed and managed online through Geico’s website or mobile app, or by calling its toll-free claim number at 1-800-841-3000. For a comprehensive list of claims numbers, please visit the company’s claims reporting page.
Emergency roadside assistance: This can be done online through Geico’s website or mobile app, or by calling 1-800-424-3426.
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Geico car insurance
Geico car insurance received a Bankrate Score of 4.4 out of 5 points. To determine this Score, our insurance editorial team reviewed Geico’s average premiums, coverage options, discounts, customer satisfaction, financial strength and digital insurance features. The better a company performed in each of these categories, the higher its overall Bankrate Score.
Along with its high Bankrate Score, Geico was also named one of this year’s best car insurance companies overall, as well as the best budget car insurance company in the 2023 Bankrate Awards. Thanks in part to its overall lower-than-average premiums and plentiful discount opportunities, Geico may be a good choice for drivers looking for a cheap premium. Average Geico car insurance rates are also significantly cheaper than the national average when adding a young driver to the policy.
Bankrate Award winner for best auto insurance company overall and best budget auto insurance company
Bankrate’s insurance editorial team has decades of combined industry experience, and we use our expertise to uncover the best insurance companies through our annual Bankrate Awards.
Our goal is to give consumers an easy way to find a company that fits their unique circumstances. Based on our extensive research, we’ve recognized Geico as a 2023 Bankrate Award winner for the best overall auto insurance company and the best budget auto insurance company.
Why Geico won
Geico offers below-average auto insurance rates as well as a solid mix of coverage options, discounts and digital tools. These factors, combined with customer satisfaction and financial strength scores, earned Geico Bankrate Awards for best overall auto insurance company and best budget auto insurance company.
To choose the best overall auto insurance company, we started by gathering information from over 150 insurance companies. We researched average quoted annual premiums obtained from Quadrant Information Services for all 50 states and Washington, D.C., because we know that price is a top concern for many shoppers. We also know that service and financial strength are important, so we also evaluated third-party scores and ratings from J.D. Power, the National Association of Insurance Commissioners (NAIC), AM Best, Standard & Poor’s (S&P) and Moody’s. To ensure that we chose companies that offer the coverage that drivers need, we next reviewed available coverage options and discounts. Finally, we considered each company’s local agency presence, digital tool functionality, corporate sustainability and national availability (which we define as being available in at least 48 states, since Alaska and Hawaii often present unique challenges to insurers). While our Bankrate Awards can serve as a helpful guide, keep in mind that each insurance company has its own underwriting and pricing regulations, which means eligibility and rates will vary. We chose to feature two companies, Amica and Geico, as the best overall to help a wider range of drivers.
Price was the most important factor as we looked for the best budget auto insurance company. We obtained average quoted premiums from Quadrant Information Services for all 50 states and Washington, D.C., then analyzed the rates by a number of driver profiles. We weighed the national average rate most heavily in our analysis, but also considered coverage options, discounts, third-party scores and digital tools. Geico consistently offers low average rates and has a long list of discounts that could lower premiums even more.
Geico car insurance is available in all 50 states and Washington, D.C. Its coverage options are generally standard, and it does not have as many optional add-ons as some other car insurance carriers. The only additional options listed on Geico’s website are emergency roadside service, rental reimbursement and mechanical breakdown insurance.
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If you’re comparing auto insurance rates, considering Geico’s pros and cons might help you in your decision.
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Geico car insurance cost
Based on Bankrate’s study of rate data from Quadrant Information Services, Geico is one of the cheapest car insurance companies. Its 2023 average cost of car insurance is $1,353 per year for full coverage and $373 per year for minimum coverage. This is notably lower than the 2023 national average cost of car insurance at $2,014 per year for full coverage.
Geico car insurance rates by driving history
Car insurance companies may weigh driving records heavily when it comes to calculating car insurance rates. An at-fault accident or moving conviction, such as a speeding ticket or DUI, could make your car insurance more expensive compared to a driver with no accidents or tickets on their record. Below is a comparison of rates for drivers with different driving histories. A DUI conviction has been excluded as some insurance carriers may not accept drivers with a DUI.
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Geico average monthly full coverage premium
Geico average annual full coverage premium
National average annual full coverage premium
Clean driving history
$113
$1,353
$2,014
Speeding ticket conviction
$138
$1,658
$2,427
At-fault accident
$166
$1,988
$2,854
Geico average monthly minimum coverage premium
Geico average annual minimum coverage premium
National average annual minimum coverage premium
Clean driving history
$31
$373
$622
Speeding ticket conviction
$38
$455
$748
At-fault accident
$46
$551
$892
Geico car insurance quotes by age
The age of a driver and the years of driving experience they’ve accumulated may also play an important role in determining car insurance rates. Young drivers and those who are newly licensed typically pay more for car insurance than drivers with more years of experience behind the wheel. Average insurance rates by age show that auto insurance premiums do tend to decrease over time until your 60s, but you may be able to find the best car insurance rate at any age by compiling car insurance quotes.
Below are comparisons that show young drivers both on and off their parents’ policy, as well as how they compare to other age groups. All rates are for drivers with a clean driving record.
Average cost of car insurance for drivers on their parents’ policy
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Geico average annual full coverage premium
National average annual full coverage premium
Age 16
$248
$2,977
$4,392
Age 17
$229
$2,753
$4,102
Age 18
$210
$2,523
$3,837
Age 19
$184
$2,212
$3,345
Age 20
$171
$2,054
$3,149
Geico average monthly minimum coverage premium
Geico average annual minimum coverage premium
National average annual minimum coverage premium
Age 16
$74
$886
$1,470
Age 17
$68
$811
$1,362
Age 18
$61
$733
$1,261
Age 19
$53
$633
$1,070
Age 20
$48
$580
$995
Average cost of car insurance for drivers on their own policy
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Geico average monthly full coverage premium
Geico average annual full coverage premium
National average annual full coverage premium
Age 18
$337
$4,048
$6,110
Age 25
$132
$1,584
$2,473
Age 30
$116
$1,389
$2,125
Age 40
$113
$1,353
$2,014
Age 60
$105
$1,264
$1,824
Geico average monthly minimum coverage premium
Geico average annual minimum coverage premium
National average annual minimum coverage premium
Age 18
$98
$1,175
$1,967
Age 25
$36
$432
$747
Age 30
$32
$379
$647
Age 40
$31
$373
$622
Age 60
$29
$352
$578
You may be eligible for a discount if you are a member or employee of a participating affiliate company or organization.
Both active duty and retired military policyholders, as well as members of the National Guard or Reserves, may save up to 15 percent on Geico auto insurance.
Geico provides up to 25 percent off car insurance for service members who experience an emergency deployment.
This usage-based telematics program tracks participating members’ driving habits and may offer premium discounts to safe drivers.
Geico may extend a discount to policyholders who insure multiple vehicles on the same policy.
Full-time students who maintain a strong academic record may receive a discount of up to 15 percent.
Geico car tools and benefits
Geico has partnered with TrueCar to create its Geico Car Buying Service. With this program, Geico policyholders can research their desired car’s market value and receive assistance from TrueCar’s Certified Dealers. After purchasing their vehicle, Geico members can use Geico Mobile’s Vehicle Care app, created through a partnership with CARFAX, to track their service history, access recall information and set maintenance reminders.
Drivers 50-years-old and older in certain states may qualify for policy renewal for life through Geico’s Prime Time contract. However, there are eligibility requirements. For example, there can be no drivers listed on the policy under the age of 25, no drivers on the policy can have received a violation or been involved in an accident in the past three years, and you can’t use your vehicle for business purposes. Still, this unique contract could provide peace of mind for those who are eligible.
Geico home insurance
Geico does not write its own home insurance policies, but it works with non-affiliated insurance companies to provide homeowners insurance quotes to interested customers. The policies are secured through GEICO Insurance Agency, LLC, and may require additional research to see if they offer the best homeowners insurance for your needs. Although coverage options and discounts may vary based on the partner company, Geico does advertise a bundling discount for auto insurance customers who add a property insurance policy through the carrier.
Geico life insurance
Similar to its home insurance policies, Geico life insurance is offered through partner companies.
Geico’s partnered life insurance offerings are available in three policy types: term life, whole life and universal life insurance. Term life insurance provides coverage for a specific amount of time, such as 10 or 30 years, and is typically used to replace lost income and cover future expenses if the policyholder passes away during the policy term. Customers may be able to obtain a term life insurance policy through Geico’s partner companies with no medical exam, but they will likely still have to fill out a health and lifestyle questionnaire.
Whole life insurance and universal life insurance are both types of permanent life insurance. These policies do not have a policy end date as long as policy terms are fulfilled. In addition to helping with income, permanent life insurance policies could also be an integral part of estate planning.
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Geico customer satisfaction
Bankrate analyzes a variety of metrics to evaluate an insurance company’s customer satisfaction, including third-party scores issued by J.D. Power. Every year, J.D. Power studies customer satisfaction, claims satisfaction and digital experience for various insurance companies across the country and issues them scores in each subject, with 1,000 being the highest score possible.
Our editorial team also considers the National Association of Insurance Commissioners (NAIC) complaint index. The NAIC keeps track of how many complaints are lodged against an insurance company and translates this data into a complaint index score. To understand this data, know the baseline (or average) amount of customer complaints is 1.0. A complaint index score higher than 1.0 means the company receives more complaints on average for its size and vice versa.
Geico auto satisfaction
Geico’s scores in the J.D. Power 2022 U.S. Auto Insurance Study vary depending on the region. Although it often scored above the segment average, it fell short in Texas and the Mid-Atlantic and Southeast regions. Additionally, it landed just above the industry average for claims satisfaction in the J.D. Power 2022 U.S. Auto Claims Satisfaction Study.
Geico’s full-service mobile app and online customer portals may be a big perk for tech-savvy shoppers. While it is true that the app is highly-rated on the App store and Google Play, the company fell under the segment average in the service category in the J.D. Power 2022 U.S. Insurance Digital Experience Study. Consumers may be more satisfied with Geico’s online sales flow as the company scored above average in the shopping category.
Regarding the NAIC complaint index, Geico has fewer complaints, on average, about its private passenger auto insurance for a company of its size, with a complaint index of 0.68. This index may indicate that Geico’s auto insurance policyholders are generally happy with the company’s service.
How to file a claim with Geico
Filing a claim with Geico can be done online through its website or the mobile app. Policyholders may also call the company’s claims line at 800-841-3000.
As Geico homeowners insurance is offered through partner companies, contact information for property claims may vary based on the company that writes your policy. A comprehensive list of property claims contact numbers can be found on Geico’s website.
Geico availability
Geico is available in all 50 states and Washington, D.C.
Other Geico perks worth considering
Auto insurance may be Geico’s most popular product, but customers can also access the following:
Travel insurance: Offered through Berkshire Hathaway Travel Protection, this insurance could help insure your travel costs including trip cancellations, lost or stolen travel documents or unplanned medical costs.
Jewelry insurance: Geico has partnered with Jewelers Mutual Insurance Group to help customers insure valuable and sentimental jewelry against theft, damage and loss.
Pet insurance: Caring for a pet can be a major expense, but pet insurance may help decrease some of the costs. Geico works with partner insurance carriers to provide coverage for most accidents, non-pre existing illnesses, dental care and more.
Geico corporate sustainability
Geico supports three main initiatives through the Geico Philanthropic Foundation: education, community engagement and equity, justice, diversity and inclusion. The Foundation has donated an average of $6-8 million annually to over 7,000 charities in the last twenty years. It encourages policyholders and the wider public to submit their 501(c)(3) non-profit organizations for donation consideration, provided that the non-profit meets Geico’s criteria. Nominations can be made from the start of the year to November 30.
Not sure if Geico is right for you?
If you’re still wondering if Geico could be a good fit for your insurance needs, you may want to consider requesting quotes from the companies below:
Geico vs. Esurance
As a fully digital insurance company, Esurance offers a robust digital app experience and may be another good option for those who want to manage their own policies. Its telematics DriveSense mobile app may allow Esurance customers and non-policyholders to earn rewards and discounts by tracking real-time driving habits and behaviors. However, Esurance does not advertise as many discounts as Geico and has higher average auto insurance premiums.
Learn more: Esurance Insurance review
Geico vs. Nationwide
Low-mileage drivers and those who want to build safe driving habits may appreciate Nationwide’s two telematics programs: SmartMiles and SmartRide. Nationwide could also be an option for those who want to bundle home and auto insurance with the same carrier, as the company writes its own homeowners insurance policies. Consumers should note that Nationwide did score below the industry average in J.D. Power’s auto claims satisfaction study.
Learn more: Nationwide Insurance review
Geico vs. Progressive
Progressive offers a long list of car insurance discounts as well as numerous home insurance discounts for those looking to save on both policy types. The company’s Name Your Price tool may also help customers take a price-first approach to their car insurance and find coverage that fits their budget. Progressive auto insurance is available in all 50 states, but homeowners insurance is not, so potential customers may want to verify availability when researching this carrier.
Learn more: Progressive Insurance review
Is Geico a good insurance company?
Bankrate’s insurance editorial staff includes three licensed agents, and we aim to share our intimate industry knowledge to help our readers choose the best insurance company that suits their needs. Insurance is complex, and we know that finding the right carrier isn’t always easy. That’s why we spend hundreds of hours each year conducting in-depth insurance company reviews.
Bankrate’s Geico insurance review also revealed that the company does not underwrite many insurance products other than car insurance. However, its partnerships with non-affiliated companies could allow customers to purchase most types of insurance including home, umbrella and life. Additional research may be required on these carriers to see if they’re the right fit.
Clock Wait
46
years of industry expertise
122
carriers reviewed
20.7K
ZIP codes examined
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Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.
Incidents: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident and single speeding ticket.
Bankrate Scores
Our 2023 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.
Like our previous Bankrate Scores, each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. This year, our 2023 scoring model provides a more comprehensive view, indicating when companies excel across several key areas and better highlighting where they fall short.
Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, 2023 quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best and the NAIC, were analyzed.
Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
Tier 3 (Support): To encompass the many ways an auto insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.
Tier scores are unweighted to show the company’s true score in each category out of a possible five points.
I’m a long-time vocal proponent of higher education. For me, it’s personal. I was raised in a poor family with parents who had briefly attended college, but never with any real gusto. (I’m not sure my father had a plan. My mother studied home economics. Not kidding.)
My uncle got a math degree from a now-defunct community college, and his son (my cousin Duane) went to school back East. I’m not sure if he got a degree, though. (I’ll ask him tomorrow when we get together to bake Christmas cookies!)
But from a young age, I knew that I wanted to go to college. I knew I was a smart kid, and I viewed college as a Way Out. It was an escape from the trailer house I grew up in, an escape from menial labor.
Too bad then that I squandered my college education. I entered Willamette University intending to be a religion major, but eventually ended up with a psychology degree — chased with an equally useless English minor.
My college degree hasn’t really proved useful in my life. Well, I guess I apply both the psychology and English education in my career as a money writer, but I don’t make direct use of the things that I learned. And that’s the rub.
College degrees are valuable — but not if you choose the wrong one.
Although it’s popular in some corners to bad-mouth college degrees, according to the U.S. Census Bureau your education has a greater impact on lifetime earning potential than any other demographic factor. Education matters more than age. Education matters more than race. Education matters more than gender. When it comes to making money, education matters most.
So, I’m always interested when I see knew reports and/or research regarding the value of college. In October, the Foundation for Research on Equal Opportunity (FREOPP) released an excellent report entitled “Is College Worth It? A Comprehensive Return-on-Investment Analysis”.
I like this report because it goes beyond averages. Sure, FREOPP says, the median bachelor’s degree is worth $306,000 for students who graduate on time, but…
…the median conceals enormous variation. Some fields of study, including engineering, computer science, nursing, and economics, can produce returns of $1 million or more. Others, including art, music, religion, and psychology, often have a zero or even negative net financial value.
FREOPP argues that “the decision to attend college is less important than the choices that come next: which school to attend, and which subject to study.”
The analysis reveals that a student’s choice of program is perhaps the most important financial decision he or she will ever make. Most bachelor’s degree programs in engineering, computer science, economics, and nursing increase lifetime earnings by $500,000 or more, even after subtracting the costs of college. But most programs in fields such as art, music, philosophy, religion, and psychology leave students financially worse off than if they had never gone to college at all.
Differences in ROI between programs can amount to millions of dollars.
The FREOPP report — which is very long — includes plenty of interactive stats and charts and graphs. Readers acan compare the value of college majors, expected earnings, and more.
The FREOPP report echoes some of the findings of Georgetown University’s 2015 report on “The Economic Value of College Majors”. The Georgetown study found that engineering majors earned a median starting income of $50,000 per year. Folks with an art degree started with annual salaries of around $28,000. And high-school graduates who didn’t go to college? Well, they had average starting salaries of $22,000 per year.
The bottom line? FREOPP says there are three main messages to draw from their report.
First, major is the most important factor when predicting the return-on-investment for a college education. Degree subject accounts for half almost half of ROI variation alone.
Second, elite colleges can pay off, but not always. FREOPP found that there is a weak correlation between the cost of a school and how much a degree from that school is worth. But, as with majors, there’s plenty of variation. A film degree from Harvard is likely to be worth less than an engineering degree from a “no name” university.
Finally, there are a lot of bachelor’s degrees that don’t make sense from a financial perspective. You might want an art degree or a religion degree for other reasons, and you might be fulfilled with those degrees, but they’re poor choices when viewed through the lens of money.
Here’s what I always say when I write about this subject: The more you learn, the more you earn. And it’s true. No, a college degree isn’t a guarantee that you’ll earn more, but it never has been. But, generally speaking, the more formal education you have, the more money you’ll make during your lifetime. This report only reinforces that conclusion.
[“Is College Worth It? A Comprehensive Return-on-Investment Analysis” at Foundation for Research on Equal Opportunity]
There’s been a lot of buzz lately regarding another 2008 housing crisis unfolding in 2023.
I’m hearing the phrases underwater mortgage and foreclosure again after more than a decade.
To be sure, the housing market has cooled significantly since early 2022. There’s no denying that.
You can mostly thank a 6% 30-year fixed-rate mortgage for that. Roughly double the 3% rate you could snag a year prior.
But this alone doesn’t mean we’re about to repeat history.
Goldman Sachs Forecasts 2008 Style Home Price Drops in Four Cities
The latest nugget portending some kind of massive real estate market crash comes via Goldman Sachs.
The investment bank warned that four cities could see price declines of 25% from their 2022 peaks.
Those unfortunate names include Austin, Phoenix, San Diego, and San Jose. All four have been hot places to buy in recent years.
And it’s pretty much for this reason that they’re expected to see sharp declines. These markets are overheated.
Simply put, home prices got too high and with mortgage rates no longer going for 3%, there has been an affordability crisis.
Properties are now sitting on the market and sellers are being forced to lower their listing prices.
A 6.5% Mortgage Rate By the End of 2023?
Of course, it should be noted that Goldman’s “revised forecast” calls for a 6.5% 30-year fixed mortgage for year-end 2023.
It’s unclear when their report was released, but the 30-year fixed has already trended lower since the beginning of 2023.
At the moment, 30-year fixed mortgages are going for around 6%, or as low as 5.25% if you’re willing to pay a discount point or two.
And there’s evidence that mortgage rates may continue to improve as the year goes on. This is based on inflation expectations, which have brightened lately.
The last couple CPI reports showed a decline in consumer prices, meaning inflation may have peaked.
This could put an end to the Fed’s interest rate increases and allow mortgage rates to fall as well.
Either way, I believe Goldman’s 6.5% rate is too high for 2023. And that might mean their home price forecast is also overdone.
A new report from CoreLogic found that U.S. mortgage performance remained “exceptionally healthy” as of November 2022.
Just 2.9% of mortgages were 30 days or more delinquent including those in foreclosure, which is near record lows.
This represented a 0.7 percentage point decrease compared with November 2021 when it was 3.6%.
And foreclosure inventory (loans at any stage of foreclosure) was just 0.3%, a slight annual increase from 0.2% in November 2021.
At the same time, early-stage delinquencies (30 to 59 days past due) were up to 1.4% from 1.2% in November 2021.
But on an annual basis mortgage delinquencies declined for the 20th straight month.
One big thing helping homeowners is their sizable amount of home equity. Overall, it increased by 15.8% year-over-year in the third quarter of 2022.
That works out to an average gain of $34,300 per borrower. And the national LTV was recently below 30%.
Negative Equity Remains Very Low
During the third quarter of 2022, 1.1 million mortgaged residential properties, or 1.9% of the total, were in a negative equity position.
This means these homeowners owe more on their mortgage than the property is currently worth.
Back in 2008, these underwater mortgages were a major problem that led to millions of short sales and foreclosures.
And while negative equity increased 4% from the second quarter of 2022, it was down 9.8% from the third quarter of 2021.
If downward pressure remains on home prices, I do expect these numbers to worsen. But considering where we’re at, it’s not 2008 all over again.
Per CoreLogic, negative equity peaked at a staggering 26% of mortgaged residential properties in the fourth quarter of 2009. We are at 1.9%.
Even if it rises, many homeowners have fixed interest rates in the 2-3% range and no interest in selling.
Back then, you had every incentive to leave the house and its toxic adjustable-rate mortgage.
The CFPB Wants Lenders to Make Foreclosure a Last Resort
Back in 2008, there wasn’t a Consumer Financial Protection Bureau (CFPB). Today, there is.
And they’re being tough on lenders and mortgage servicers that don’t treat homeowners right.
Last week, they also released a blog post urging servicers to consider a traditional home sale over a foreclosure. This is possible because so many homeowners have equity this time around.
But even before it gets to that point, servicers should consider a “payment deferral, standalone partial claim, or loan modification.”
This allows borrowers to stay in their homes, especially important with rents also rising.
The main takeaway here is that lenders and servicers are going to be heavily scrutinized if and when they attempt to foreclose.
As such, foreclosures should remain a lot lower than they did in 2008.
Today’s Homeowners Are in Much Better Positions Than in 2008
History Repeats Itself?
2008 Homeowner
2023 Homeowner
Down payment
0%
3-20%+
Loan type
ARM (likely an option ARM)
30-year fixed
Underwriting
Stated income at best
Full documentation
Home price forecast
Dismal
+2.8% YoY by November ’23
Incentive to stay in home
Zero
Good (rent ain’t much better)
I’ve made this point several times, but I’ll make it again.
Even the unfortunate home buyer who purchased a property in the past year at an inflated price with a much higher mortgage rate is better off than the 2008 borrower.
We’ll pretend their mortgage rate is 6.5% and their home value drops 20% from the purchase price.
There’s a very good chance they have a 30-year fixed-rate mortgage. In 2008, there was an even better chance they had an option ARM. Or some kind of ARM.
Next, we’ll assume our 2022 home buyer is well-qualified, using fully documented underwriting. That means verifying income, assets, and employment.
Our 2008 home buyer likely qualified via stated income and put zero down on their purchase. Their credit and employment history may have also been questionable.
The 2022 home buyer likely put down a decent sized down payment too. So they’ve got skin in the game.
Our 2022 buyer is also well aware of the credit score damage related to mortgage lates and foreclosure.
And their property value will likely not drop nearly as low as the 2008 buyer. As such, they will have less incentive to walk away.
Ultimately, many 2008 home buyers had no business owning homes and zero incentive to stay in them.
Conversely, recent home buyers may have simply purchased their properties at non-ideal times. That doesn’t equal a housing crash.
If mortgage rates continue to come down and settle in the 4/5% range, it could spell even more relief for recent buyers and the market overall.
Oddly, you could worry about an overheated housing market if that happens more so than an impending crash.
When I would worry is if the unemployment rate skyrockets, at which point many homeowners wouldn’t be able to pay their mortgages.
The lack of housing inventory – a major pain point for real estate agents and loan officers – is an issue that Mark Cohen, principal owner of Cohen Financial Group, also sees in the upper end of the Southern California market.
The $1 million to $4 million homes market is very competitive, and qualified borrowers are having a hard time finding homes. However, there’s an oversupply of Inventory for homes priced $5 million plus, Cohen said in an interview with HousingWire.
“It’s a two-story housing market in Southern California,” Cohen said.
Cohen funded $751.4 million in loan volume in 2022, which led to him being the second-ranked loan originator of the year, Scotsman Guide’s rankings showed. Cohen trailed behind Guaranteed Rate‘s Shant Banosian, who originated $925 million during the same period. He was the number one mortgage broker and the loan officer with the most non-QM origination volume, according to Scotsman Guide.
Among mortgage brokers, Cohen ranked first.
While there are fewer move-up buyers now compared to the pandemic years, Cohen noted the uniqueness of the Southern California housing market, in that people tend to move more frequently compared to other states as they accumulate wealth.
“Here in LA, if you make money, you have your starter home, and if you make more money in the next few years, three, four or five years, you go to a bigger house. It’s not like in the Midwest or in other areas where you are in the house for the next 30 years. (…) There’s a lot of upward movement in LA. That’s why the market is so brisk,” Cohen said.
Read on to learn more about the two sides of the Southern California housing market and how Cohen stays competitive.
This interview has been condensed and lightly edited for clarity.
Connie Kim:California – as well as the rest of the country – is experiencing issues from a serious lack of inventory. I’m curious what the situation has been for the high-end markets you target.
Mark Cohen: I think inventories are improving a little bit just from what I’ve seen the last four, five, six days. But there are many clients, who are well qualified, trying to buy houses. For the most part, it’s the $3 million and under category. Anywhere from about $1 million to $4 million, the market is very, very competitive.
It’s a two-sided market here. Once you get over the $5 million threshold, there’s this oversupply, and the psychology of property tax is having a real negative effect on the market. I think there were only two or three sales last month in LA County over $5 million.
However, you’ll see isolated sales too. Beyonce and Jay Z bought a $200 million house in Malibu recently, so you’re going to see things like that. But as a general rule, the $5 million to $10 million market is off.
Kim: You also do a lot of non-QM loans. Who are your main borrowers?
Cohen: Executives, it’s probably a mix of 50/50. There’s a whole bevy of people here in Los Angeles that are self employed, who have good jobs, good businesses, but they don’t show everything they make on their tax returns. That’s where non-QM comes into play. The rates for those loans are pretty aggressively priced in comparison to the bank rates like JP Morgan Chase and Bank of America.
The rates – depending on the loan-to-value and credit score – are only about half to three-quarter points higher, which is really tangible. So it opens up a whole new avenue for people who fall within that category.
Half the clients go to the traditional banks where we can show tax returns.
Kim: If you have a lot of so-called wealthy borrowers, I would assume a lot would be interested in investment properties. How much of your sales is investment properties versus first-time homebuyers?
Cohen: I also do heavy work in the entertainment business in Southern California. I have several dozen business managers, money managers that I do work with. I would say maybe 10 to 15% of the deals are investment property deals.
A lot of first time buyers [actually], which is good because they’re not used to having 3% mortgages. They’re not going to be sensitive to the rate differentials.
Here in LA, if you make money, you have your starter home, and if you make more money in the next few years — three, four or five years — you go to a bigger house.
It’s not like in the Midwest or in other areas where you are in the house for the next 30 years. It doesn’t really work that way. In most situations, especially with young couples, they get married, have a kid and they need more rooms, assuming they’re doing well. So there’s a lot of upward movement in LA. That’s why the market is so brisk.
Kim: That’s really interesting. It’s quite the opposite from other areas, where people in different states are not moving, thus creating an inventory lock-down.
Cohen: It’s held back to a degree. I’m not saying it’s overly buoyant, but a lot of people really need more rooms when you have a kid. A lot of people I work with make money and there’s a lot of money in upward mobility.
Kim: So are they less impacted by the higher rates compared to about three years ago?
Cohen: Everybody is impacted. But we get the best deliverable rates – rates are in the 5s. So yeah, they’re less impacted. They’d rather pay more with the idea that at some point in time, which will occur in the next six to 12 months, rates will be lower. We’ll have the window to refinance the house.
Kim:What does your product mix look like?
Cohen: With the yield curve where it is, if you’re going to do a bank loan, it’s pretty much all 30-year fixed rate loans or 10-year adjustable-rate mortgages (ARMs).I’m doing a lot of HELOCs. Refinances are maybe 10% of business here from where it used to be at around 40, 50%.
I do have one brokerage house that if you have a million dollars net worth with them, rates are in the high 4s or low 5s. Lower loan-to-value, so I do have some good rates, but that’s going to be for more affluent people.
Kim: What helped you become the top producing broker in 2022? Does Cohen Financial Group have proprietary tech or are sales mostly coming from referrals?
Cohen: I’ve been in the business for 36 years, and it helps obviously knowing people and constantly following through. It’s the same thing in any business: doing the right things.
I’ve got very strong resources in banks and private banks, and on the non-QMs. I’m very picky with who I work with in terms of banks, because the worst thing to do is to get in situations where you don’t have control over the deals.
Kim: There’s a forecast that the 30-year fixed rates will drop lower in the second half of the year. Do you think it will be a better year for you compared to 2022?
Cohen: To maintain this to the best I can and hopefully achieve the same numbers. Obviously the more the better, but I’ve got no control. Just to do the right thing, get good execution and keep my relationships going with people, which I always work on.
Interest rate options enable investors to hedge, speculate on, or otherwise manage their exposure to interest rates. These financial derivatives are available as both puts and calls, and traded on major options exchanges.
Interest rates in the U.S. fluctuate continuously, with the Federal Reserve being a key driver, but not the only one. To mitigate these fluctuations, and also to profit from them, professional money managers turn to interest rates options as a source for risk management.
Interest rate options are sold on major options exchanges as standardized puts and calls, as the two main types of contracts are called in options terminology. Similar to puts and calls on equity securities, interest rate options represent directional bets on the value of an underlying asset.
The value of interest rate options is tied to yields on interest-rate-linked assets, typically Eurodollars and U.S. Treasuries of various maturities.
Buyers of interest rate options can buy exposure to various portions of the yield curve, for example, the 2-year, 5-year, and 10-year treasuries are standardized terms commonly sold on the CME Group exchanges. Professional money managers may use puts or calls at any given maturity to express their views on the future direction and volatility of interest rates.
How Interest Rate Options Work
Interest rate options afford the buyer the right to receive payment based on the spread between the yield of the underlying security on the expiration date and the original strike rate of the option, net of fees.
Interest rate options in the United States feature “European style” options exercise terms, which means they can only be exercised on the expiration date.
This contrasts with equity options, which more often contain “American style” exercise terms. This means they can be exercised at any time before they expire.
Buyers of interest rate options pay a “premium” per the terms of the options contract, which is the price paid by the buyer. Options pricing can be complex, to say the least, and to profit on a trade the buyer of the option will need interest rates to move in their favor enough to cover the cost of the option’s premium before they can profit.
In the event that interest rates don’t move in the option holder’s favor enough to overcome the strike rate, the option will expire worthless and the option holder incurs the total loss of their premium.
We’ll cover how this dynamic plays out with respect to both interest rate calls and puts.
How Do Interest Rate Call Options Work
Buyers of interest rate call options seek to benefit from rising interest rates. Should the yield on the underlying security close above its strike rate on the expiration date, the owner of an interest rate call option will receive a cash payout. This payout will be the difference between the option value at maturity and its strike.
Note that interest options are cash-settled. Unlike equity options, no exercise is required. If the rate is higher than the strike rate, the holder is paid the difference.
Interest rate call options, much like equity call options, give the buyer unlimited upside exposure to rising yields.
Holders of interest rate call options bear the risk that the option might expire out-of-the-money should interest rates remain beneath the strike by the expiration date. In this case, the maximum loss the owner of an interest rate call option can expect is limited to the premium paid.
How Do Interest Rate Put Options Work
In contrast, buyers of interest rate put options seek to benefit from falling interest rates. Interest rate puts give the put holder the right to receive payment based on the difference between the strike rate and the yield on the underlying security at expiration.
In this case, the strike rate is typically the maximum possible gain that a put holder may receive.
Holders of interest rate put options bear the risk that the option might expire worthless (out-of-the-money) if interest rates rise above the strike by the expiration date. In this case, the maximum loss the owner of an interest rate put option will incur is limited to the premium paid.
What Are the Risks of Trading Interest Rate Options?
Trading interest rate options involves enormous risk for any trader who either, 1) doesn’t understand the basic drivers of options valuation and interest rates, or 2) doesn’t understand how to structure their options trade properly to cap risk exposure. The corresponding leverage on options trades can result in enormous losses if improperly managed.
Traders will need to manage a number of key risks, and they may want to consider different strategies for trading options, when it comes to buying interest rate puts and calls. This includes “market risk,” which is the risk of price movements caused by any macroeconomic factor that affects the financial markets. It also includes “interest rate risk,” which is the risk that changes in interest rates might erode the value of one’s holdings.
Finally, user-friendly options trading is here.*
Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.
Interest Rate Option Example
As an example, an investor seeking to hedge (or protect) their portfolio against rising interest rates can choose to buy an interest rate call option on a 10-year Treasury bond, expiring in 2 months at a strike of $50.00.
Strikes on interest rate options are a pseudo-conversion where the interest rate is multiplied by 10x and denominated in dollars. Therefore a 5.0% rate converts to a strike price of $50.
If the option’s premium is quoted at $0.50, then buying a single interest rate call option would cost you a $50 total premium, as each interest rate option affords you exposure to 100 shares of the underlying.
If yields rise for the next 2 months until the option expires, the underlying might be worth $55 by the time it’s exercised.
In this instance, you can calculate your net profit using the following equation:
(Underlying rate at expiry – Strike Price) X 100 – Contract Premium = Profit
($55 – $50) X 100 ) – $50 = Profit
$5 X 100 – $50 = Profit
$500 – $50 = $450 net profit
Remember that each option contract grants exposure to 100 units of the underlying, while options premiums are quoted for a single unit of the underlying. Remember also to use the actual total contract premium paid, as well as introduce a multiplier of 100, when calculating your net profit.
The Takeaway
Interest rate options can be of interest to investors who understand the underlying drivers of these securities. They essentially provide direct exposure to interest rates, on a leveraged basis, at a relatively competitive cost.
When employed strategically, interest rate options enable investors to enhance their upside or mitigate their downside in a volatile rate environment.
If you’re ready to try your hand at options trading, You can set up an Active Invest account and trade options online from the SoFi mobile app or through the web platform.
And if you have any questions, SoFi offers educational resources about options to learn more. SoFi doesn’t charge commissions, and members have access to complimentary financial advice from a professional.
With SoFi, user-friendly options trading is finally here.
FAQ
What are interest rate future options?
Interest rate future options are futures contracts which derive their value from an underlying interest-bearing security. The buyer of an interest rate futures option (the “long position”) purchases the right to receive the interest rate payment in the contract, while the seller (the “short position”) is obligated to pay the interest rate on the underlying contract.
In either case, interest rate future options enable both buyer and seller to lock in the price on an interest-bearing security, for future delivery, which offers both parties some level of price certainty.
What is an interest rate swaption?
Interest rate swaptions represent the right, but not the obligation, to enter an interest rate swap agreement on an agreed-upon date.
In exchange for the contract premium, the buyer of an interest rate swaption can choose whether they want to be a fixed-rate payer (“payer swaption”), or fixed-rate receiver (“receiver swaption”) on the underlying swap, with the counterparty taking the variable rate side of the transaction.
Unlike standard interest rate options, swaptions are over-the-counter products, which means they allow for more customized terms, so there’s more variety when it comes to expiration, the style of options exercise, and the exact notional amount.
What is interest rate risk?
Interest rate risk is the exposure of an investment to fluctuating interest rates in the open market. Interest rates can change on a daily basis according to any number of market influences, including investor expectations, actions, or even statements made by central banks.
If interest rates rise on any given day, that shift will typically erode the value of bonds and most-other fixed income securities. Conversely, if interest rates were to fall, the market value of outstanding fixed-income securities will typically increase instead. Interest rate risk represents your investment exposure to these fluctuations in rates.
Photo credit: iStock/LaylaBird
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. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes. SOIN0522014
Now that America’s largest movie theater chain is going to start charging ticket prices based on where your seat is located, it’s time to think about ways you can save money at the movies.
Seriously, folks, AMC Theatres’ new pricing policy has a lot of people riled up. Just for example, actor Elijah Wood says it’ll penalize moviegoers who have lower incomes. “The movie theater is and always has been a sacred democratic space for all,” Frodo tweeted.
Still, by the end of the year at every AMC theater, seats in the front will be cheaper while the best seats in the middle will cost more.
If you ask us, it’s just another way for them to gouge you.
16 Ways to Save Money at the Movie Theater
Fortunately, we’ve got ideas for how you can save a buck or two at the movies. Check out our list of 16 ways to spend less at the theater.
1. Go to Matinees
Going to a matinee can knock up to 30% off the ticket price, but watch out for the theater’s definition of “matinee.”
Shows before 4 p.m. used to be called matinees at most theaters, but some now charge the evening price for anything that starts after 3 p.m.
2. Go to Pre-Matinees
Some theaters offer an even better deal for really early movies — “pre-matinees.”
These typically apply to movies starting before noon.
3. Go on Tuesday!
America’s three largest movie theater chains all have the same discount day — Tuesday. You also have to join their customer loyalty club to get the Tuesday discount, but that’s usually free.
AMC: The biggest chain in the U.S. has Discount Tuesdays if you’re a member of its loyalty club, which is called AMC Stubs. You can join for free, although there’s also a premium option you can pay for if you want. As for Discount Tuesdays, the ticket price varies by location.
Regal Cinemas: These theaters have Regal Value Days on Tuesdays, when Regal Crown Club members get discounted movie ticket prices and 50% off popcorn. The club is free to join. A look at this theater-by-theater list shows that most Regal theaters charge either $5 or $5.95 for movie tickets on Tuesdays.
Cinemark: This theater chain has Discount Tuesdays if you’re a Cinemark Movie Rewards member. There’s a free option or a $10-per-month option that gets you more perks. Again, the ticket price on Tuesdays varies by location.
4. Buy at Your Warehouse Club — In Person or Online
Seriously, you should make full use of those warehouse club memberships! If you shop at Sam’s Club or Costco, ask about theater tickets at the customer service desk. They often have them at a discount.
Costco also sells theater tickets online at a discount, and so does Sam’s Club.
5. Try Groupon
It’s kind of a crapshoot, obviously. But you can always hop on Groupon to see what kind of movie ticket deals are going on there. We see deals for AMC, Regal and Cinemark theaters there, off and on.
The website LivingSocial is another option to check here.
6. Eat Before You Go
These days, lots of movie theaters go well beyond popcorn, Sno-Caps and Raisinets. If you’re hungry, you’ll be super tempted by the hot dogs, nachos, cheese fries, chicken tenders, pizza…
And they’re all way overpriced, of course.
You’d be better off eating in a restaurant beforehand.
Save even more money by eating at home before you go.
7. Share the Snacks
Theaters don’t want you to bring your own food.
But we haven’t seen them stop parents who bring their own paper bags to divvy up a large bucket of popcorn between the kids.
It’s much cheaper than buying a small bag of popcorn for each person. Share other snacks to save money.
8. Get Special Discounts
You might qualify for special discounts — and you could save up to 35%. Here are some examples:
9. Buy Discount Movie Gift Cards
There are a number of places where you can buy discounted theater gift cards online. For example, you can buy AMC gift cards on online marketplaces like Raise for discounts of up to 25%.
Use them for matinees, and your total cost might be less than half of what an evening ticket costs.
10. Go to Discount Theaters
These are also called late-run movie theaters. You’ll see the same movie, so why not wait a couple of months and catch it for less?
Just search “discount theater” plus the name of your city to locate cheap movies.
11. Join the Club
Most theaters have a club or loyalty program you can join to save money. Here are some examples:
AMC
The largest theater chain’s loyalty club, AMC Stubs, has three tiers.
Insider is free and gets you perks like Discount Tuesdays, which is probably the main attraction here. You also earn $5 back for every $50 you spend.
Premiere seems pricy to us. It costs $15 per month and lets you reserve theater tickets online for free. You can also upsize your popcorn and fountain drinks. Doesn’t sound like a great deal.
A-List lets you see three movies a week for $20 a month. That’s a lot of movies.
Regal Cinemas
The Regal Crown Club is free to join and gets you access to Regal Value Days on Tuesdays, where you get discounted ticket prices and 50% off popcorn.
Cinemark
Cinemark has Movie Fan, which is free, and Movie Club, which costs $10 a month and gets you one movie a month and 20% off concessions.
12. Go to a Drive-In Theater
Check DriveInMovie.com or DriveInTheater.com to see if one of the few remaining drive-in theaters is near you.
Call or check online to see if they have discount days or a price-per-car night when you can bring the whole family or split the cost with friends. And check out our tips for maximizing the fun.
13. Go to Advance Screenings for Free
Movie companies sometimes offer free tickets to the public for advance screenings. If you get one, go early — movie screenings often get overbooked.
Here are a few places you can check to see if anything is available near you:
See The Penny Hoarder’s post on ways to get free tickets to advance movie screenings for more tips on how to snag these freebies.
14. Buy in Bulk for a Discount
At BulkTix.com, save up to $5 per ticket for some theaters if you buy more than four at a time. At Costco, you get a discount when buying 10-packs of tickets at the store.
15. Go to Late Shows
Some theaters offer cheap tickets for late-night shows — sometimes at matinee prices.
Showings typically start around midnight. If you’re a night owl, this can be a great way to avoid the crowds and save a few bucks.
16. Sit in the Front Row at AMC Theatres
If you’re OK with sitting in the front row, you’re in luck! It’s not really most moviegoers’ favorite spot, though.
By the end of the year at all of AMC’s movie theaters, here’s how the tickets will be priced:
The most desirable seats in the middle of the theater will be priced at a “slight premium” compared with the regular theater seats, which will remain the most common choice, AMC says. Those regular seats will continue to cost the current price. Seats in the front row are “value seating” and will cost less than the typical seat.
It’s up to you, but you might want to avoid neck strain and stick with the regular seating. You can always save a few bucks by not buying those Raisinets.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. Steve Gillman is a former contributor to The Penny Hoarder.
One of the keys when it comes to investing for the long term is to make sure you’re minimizing the fees you’re paying to invest your money.
Whether it’s plan administration fees for the company you’re investing with, mutual fund expense ratios and fees, or fees for added account functionality, the more you can minimize how much you’re paying, the better.
Morningstar reports that the average expense ratio for actively-managed equity mutual funds is 1.2% and investment-grade bond funds have an expense ratio of 0.9%. For me, I prefer to invest in mainly low-cost index funds with expense ratios that are much lower.
Beyond saving money on the expense ratios, I also would love to save money on the administration fees I pay in order to invest. My company 401(k) has fees just under 1%, which is way too much for my tastes. I’ve stopped investing there first since there is no company match.
This past week I was doing some research on the new slate of robo advisors that have popped up. One of them jumped out at me because the company is extremely affordable, but it also has shown some of the best results in the past couple of years. Not only do they invest your money for you in a slate of well-diversified ETF index funds, and rebalance your holdings on a regular basis, but they charge you a pretty minimal fee to do it.
This all sounded too good to be true, so I decided to do a full review of this new automated investing service called Axos Invest Managed Portfolios, to see what they are all about.
Axos Invest History
Axos Invest launched several years ago under the name WiseBanyan. They had the goal of being the world’s first completely free financial advisor.
Here’s their reasoning behind why they launched their site.
Herbert Moore and Vicki Zhou founded WiseBanyan after seeing that the incentives between financial advisors and clients were often misaligned. They saw this firsthand while working in asset management and investment banking respectively, and later as colleagues at a quantitative asset management firm. They realized that the main cause of misalignment was a conflict of financial interests, which often resulted in high fees, unnecessary tax consequences, and unreasonable account minimums for the clients. As a result, they set out to build a company that was not incentivized to earn money at its clients’ expense.
WiseBanyan began with the idea that investing is a right – not a privilege. Our mission is to ensure everyone can achieve their financial goals, which starts with investing as early as possible. This is why there is no minimum to start and we do not charge high fees. We hope you are as excited about WiseBanyan as we are, especially what it means for you, your friends, and society as a whole.
Axos Invest was launched with the hope of making investing easy, accessible, and cheap – even for beginning investors who could only invest a small amount every month.
While the service is no longer free (They started charging a 0.24% annual assets under management fee in 2020), they still practice the values of making investing more accessible and affordable for everyone.
WiseBanyan Holdings was acquired by Axos Financial, and as of October 2019 and moving forward the company formerly known as WiseBanyan is now known as Axos Invest.
Axos Invest has become a part of the Axos Financial online banking platform. Check out our full review of Axos Bank.
Axos Invest Account Types – Managed Portfolios Vs. Self-Directed Trading
After reading up a bit about Axos Invest I was intrigued enough to sign up for one of their accounts. I went to their site to find that there are a couple of different account types you can sign up for.
I was mainly interested in signing up for Managed Portfolios since I intended to use this as a robo-advisor to automatically invest, rebalance and reinvest my dividends for me. I wanted it to be hands-off.
If you prefer to research and invest in your own choices of individual stocks, the commission-free Self Directed Trading account may be a better choice for you.
If you’re an advanced trader the Self Directed Trading account has the “Axos Elite” subscription which gives you real-time market data, TipRanks market research, extended trading hours, margin trading, stock lending, and more for a monthly fee.
Head on over to the Axos site via my exclusive invite link below to get started on your Axos Invest account now:
Open Your FREE Axos Invest Account Now
Open an Axos Self Directed Trading account and deposit at least $2000, and you’ll get a $250 bonus for a limited time!. Open Axos Self Directed Trading
Opening An Account With Axos Invest
After going to the Axos Invest site to open my Managed Portfolios account, it dropped me right into a brief questionnaire to assess my risk tolerance, investment time horizon, and more.
While you’re answering the questions you’ll see a progress bar and a “current risk score” listed to the right, telling you just how conservative or aggressive Axos Invest believes you are.
My risk score went up and down throughout the survey based on my answers, and when I finally completed it gave me a risk score of 7.2. That would give me an estimated asset allocation of 65% stocks to 35% bonds – which seems about what most would suggest as I’m relatively conservative in my investments, and the bond allocation roughly matches my age (put your age in bonds!)
I decided that I wanted to change my risk score and asset allocation to be a bit more aggressive, however, and you can do that simply by moving the slider to the right (or left if you’re more conservative). I ended up with closer to 75/25 stocks to bond allocation.
After completing the survey you click on the “Open My Account” button, which takes you into the account opening process. It will ask for all of your personal information including an email, password, employment information, and Social Security number (like you would have to at any brokerage).
Once you’re done entering your personal information you’ll be asked to choose an account type. Currently, you can choose:
Taxable Investment Account
Roth IRA
SEP IRA
Traditional IRA
After you choose an account type you’ll be asked to link a bank to fund your account. You can then choose to fund the account with as little as $500. If you want, you can also set it up to automatically invest for you every month. I have it set to automatically invest $300 for me on the 15th and 30th of the month.
Once you’re done your account will be sent to Axos Financial for approval. Their site says it takes about 5 business days for an account to be approved.
Axos Invest Investment Philosophy
Axos Invest will invest your funds based on Modern Portfolio Theory (MPT).
We use the tools of Modern Portfolio Theory to design the optimal portfolio for a given level of risk. In addition, we further optimize our investment process to minimize tax consequences and streamline the reinvestment of dividends and contributions.
Their investment philosophy is built upon four main pillars:
The value of diversification
Keeping fees as low as possible
The value of passive investing
Starting sooner rather than later
Axos Invest will attempt to give you a portfolio that is well-diversified, low-cost, and at low minimums so just about anybody can get started now. They’ll use the ideas behind MPT to give you the optimal portfolio for your given risk score.
The Actual Investments
So what are you getting when you invest with Axos Invest? You’re getting a well-diversified portfolio that contains passively managed exchange-traded funds (“ETFs”).
The funds held with Axos Invest have an average fund fee of 0.12% – the only fees you’ll pay to invest. Here is the breakout for the individual funds they use (the funds used by Axos is subject to change, and probably will) and their expense ratios:
Vanguard Total Stock Market ETF (VTI): 0.03%
Schwab U.S. Broad Market (SCHB): 0.03%
Vanguard FTSE Developed Markets ETF (VEA): 0.05%
Schwab International Equity (SCHF): 0.06%
Vanguard FTSE Emerging Markets ETF (VWO): 0.15%
iShares Core MSCI Emerging Markets (IEMG): 0.14%
Vanguard REIT Index Fund (VNQ): 0.12%
iShares U.S. Real Estate (IYR): 0.42%
iShares Investment Grade Corporate Bond ETF (LQD): 0.15%
Vanguard Intermediate-Term Corporate Bond Index (VCIT): 0.05%
Vanguard Intmdte Tm Govt Bd ETF (VGIT): 0.05%
iShares Barclays TIPS Bond Fund (ETF) (TIP): 0.19%
State Street Global Advisors Barclays Short Term High Yield Bond Index ETF (SJNK): 0.40%
PIMCO 0-5 Year High Yield Corporate Bond Index (HYS): 0.56%
Vanguard Short-Term Corporate Bond (VCSH): 0.05%
As you can see they have a broad diversification that also includes real estate via the Vanguard REIT Index fund, which isn’t something that Betterment gives you.
The performance of Axos Invest has been pretty good. As you can see from the screenshot from Barron’s “Ranking the Robos” article below, WiseBanyan/Axos Invest had the second-best two-year annualized return, through 6/30/19. Not too bad!
Axos Invest Mobile App
When the service first came out one of the complaints some users had was that there was no mobile app for the service. A mobile-optimized app for iOS was released shortly thereafter, as well as an app for Android users.
From the app, you can now do things on the go like check your balances, view your allocations, make a quick deposit, and more. The apps really are very pretty to look at and are a pleasure to use.
Axos Invest Fees & Account Charges
One of the biggest draws for Axos Invest when they started was the fact that they were essentially a fee-free service. While that is no longer the case, they are still very low-cost, one of the lowest-cost robo-advisors on the market.
Here are a few of the fees (or lack thereof) that you’ll see with the service:
Managed Portfolios
Management fee: 0.24% of assets under management. Accounts less than $500 pay $1/month.
Trading fees: FREE
Rebalancing fees: FREE
Dividend reinvestment fee: FREE
Self-Directed Trading
Stock Trading fees: FREE
ETF Trading Fees: FREE
Options trading: $1 per contract
Self-Directed Trading – Axos Elite
Axos Elite is the premium self-directed investing service that offers more powerful investment tools, real-time market data, extended trading hours, lower fees, stock lending, and margin trading.
Monthly fee: $10/month
Stock Trading fees: FREE
ETF Trading Fees: FREE
Margin Trading: 5.5%
Options trading: $0.80 per contract with Axos Elite
So essentially the Axos Invest service is very low cost with only the 0.24% AUM fee for Managed Portfolios. There are no trading fees, and no fees to rebalance your account or reinvest dividends. Competing services often charge much higher annual management fees, so with Axos being one of the very lowest when it comes to fees, you’re saving on those fees right off the bat.
There are some fees related to transferring funds via wire transfer, or do a full account transfer out, although regular electronic funds transfers (EFT) are free.
Electronic Fund Transfer (EFT) fee: FREE for deposits or withdrawals.
Wire transfers in: FREE (although your bank may charge).
Wire transfers out: $30 per domestic wire transfer.
Account closing fee: FREE.
Full account transfer out fee: $75 per account.
Partial account transfer out fee: $5 per security ($25 minimum/$75 max).
Disbursement of funds by check by mail: $10 per check.
Returned check fee: $40 per occurrence.
As mentioned above, Axos Invest’s product and service is very low cost and there are only a few small fees for certain types of transfers or check disbursements.
Premium Add-On Products & Services
There are several premium packages in your Axos Invest account that have a fee associated with them. You can turn them off and on whenever you want.
Currently, the premium packages include:
Portfolio Plus: The ability to create your own custom portfolio from an expanded list of investments. You can choose from lists of different investment classes and types and add up to 20 investments to each portfolio you create. It costs $3/month to use this add-on package.
Quick Cash: When activated this gives you quick same-day deposits, auto-deposit scheduler, and overdraft protection. It costs $2/month to use this add-on package.
Tax Protection: This package will give you tax loss harvesting, selective trading (to remove ETFs you hold elsewhere to avoid the potential for wash sales) and IRAutomation, which helps you to maximize the use of your retirement account deposits, setup auto deposit plans and more. Each month the cost will be the lesser of 0.02% of your average Axos Invest account value (0.24% annually) or $20. So if you have $5,000 in your account, the monthly cost would be $1.
Using these add-on packages is purely optional, but even if you were to turn them all on it likely isn’t going to cost you more than a few bucks per month.
Axos Invest: Great For Cost-Conscious Investors
When I first read about Axos Invest I dismissed it out of hand because I thought that there had to be a catch somewhere, there’s no way they were offering this service for such a low cost when others are charging anywhere from .35%-1.0% annual management fees for similar services.
After looking into it further, however, it does truly seem like Axos Invest is committed to offering a low-cost investing service for both self-directed investors and those who want their portfolios managed for them.
Axos Invest does seem like a good option for newer investors. Not only can you start investing with no account minimums, and low management fees – but you can buy fractional shares with as little as $10 and get a highly diversified portfolio that should match the market in the long term.
The account has SIPC protection that covers up to $500,000 per client as well, so if Axos Invest were to go under you’d be covered.
I’ve signed up for my own Axos Invest account and have been with them now for years. They are my go-to recommendations for new (and even experienced) investors.
Webull is an online brokerage that offers commission-free trading on stocks, options, and ETFs. Key features of the platform include real-time market data, advanced charting tools, and a customizable newsfeed.
With most investing apps now offering commission-free trading, online brokers must find more creative ways to stand out. Robinhood, for example, is now offering a 1% match on IRA contributions. Webull, on the other hand, tries to place the focus on the customer by offering free stocks, fractional share investing, a user-friendly trading platform, extended hours trading, and 24/7 support.
But is Webull a suitable platform for beginner investors? In this Webull Review, I cover Webull’s trading platform, key features, pros and cons, and more.
About Webull
Launched in 2017, New York City-based Webull is a self-directed investment platform that offers commission-free trading. You can buy and sell stocks, options, exchange-traded funds (ETFs), and even cryptocurrencies. And unlike many newer online brokers, you can trade over-the-counter (OTC) stocks with Webull.
Webull describes itself as “a financial company with the customer at heart, the Internet as our foundation, and technology as our lifeblood.” The company delivers on this description by providing a user-friendly investment platform, free real-time quotes, multiplatform accessibility, full extended hours trading, and 27/7 online support.
Key Features
Zero Commissions
No deposit minimums
Hold crypto alongside stocks, ETFs, etc.
Taxable or IRA accounts available
Supports margin trading
Paper trading option
Access to initial public offerings (IPOs).
Webull Community allows you to share investment strategies with other investors on the platform.
24/7 online customer support
Free stock bonus, as well as a referral bonus program
Is Webull Legit?
Yes, Webull is 100% legitimate. They are a US-based broker-dealer, and a FINRA, SIPC, NYSE, and NASDAQ member. It’s estimated that Webull has more than 12 million users and over $40 billion in Assets Under Management (AUM).
At the time of this writing, the company has a rating of 4.4 out of five stars from more than 174,000 Android user reviews on Google Play and 4.7 out of five stars among more than 275,000 iOS user reviews on The App Store.
Unfortunately, they rate poorly with other major rating agencies.
Webull has a Better Business Bureau “F,” the lowest rating on a scale of A+ to F. It scores 1.07 out of five stars, though that rating is based on just 54 reviews.
The company doesn’t do much better with Trustpilot, where it rates 1.3 out of five stars, or “Bad”. However, it’s worth noting the Trustpilot rating is based on just 137 reviews.
Webull Account Types
Webull offers two taxable account types: cash and margin. With the cash account, your buying power is limited to the funds you have on deposit. The margin account allows you to use leverage for the purchase of securities in excess of the cash value of your account.
The margin account requires a minimum of $2,000 to be maintained in the account at all times. Since a margin account will involve leverage, you must maintain a minimum account balance of $25,000 for unlimited day trades (see below).
You can also open a Traditional, Rollover, or Roth IRA with Webull. Each user can have one IRA account, but you must have an individual account before you can open an IRA.
Day Trading Rules
According to FINRA rules, you can make no more than 4 day trades in a margin account within five business days; otherwise, you will be flagged as a pattern day trader (PDT). That will trigger the requirement of the $25,000 minimum balance.
Margin accounts are also available for LLCs, C-Corps, and S-Corps with 2X overnight leverage and 4X day trading leverage.
Webull Trading Platform
The platform offers intuitive tools and support for traders and supports extended hours of trading, both before and after the market closes.
You can do the following on the Webull trading platform:
Real-time quotes
Customizable screens
Stock market trading ideas from top traders
Sort stocks between top gainers, top losers, and most active and best-performing industries.
More than 50 technical indicators and 12 charting tools.
Quant Ratings to provide an overall rating for each stock based on objective data.
The ability to analyze your past trading performance to look for areas of improvement.
Real-time stock alerts to notify you of price action and technical conditions.
In addition, you can execute the following orders:
Limit order
Market order
Stop order
Stop-Limit order
Trailing Stop order.
Stop-Loss/Take-Profit orders (Bracket orders)
One-Triggers-the-Other order (OTO)
One-Cancels-the-Other order (OCO)
One-Triggers-a-One-Cancels-the-Other order (OTOCO).
Margin Trading
Webull offers margin trading for both long- and short positions. You must maintain a minimum account balance of $2,000 in your margin account to qualify for margin trading. The account will provide up to 4X buying power per day trades and 2X for overnight trades.
Webull Paper Trading
Webull offers their Paper Trading feature to help you learn how to trade or to become a better trader without risking real money. And unlike some paper trading accounts offered by other brokers, Webull Paper Trading comes with unlimited virtual cash.
You can take advantage of real-time quotes, explore integrated charts with indicators, and set up price alerts, the same as you would with live trading. The feature offers more than 50 technical indicators and 12 charting tools. Paper trading can be used for options trading practice.
Initial Public Offerings (IPOs)
IPOs are when a private corporation offers stock to the public for the first time. The stocks are in registration and awaiting listing on the secondary market. The registration phase allows the issuing company to raise capital from public investors, who will be the first to receive the stock as of the listing date. In theory, it’s an opportunity for investors to get in on a newly listed company as it is going public.
Webull makes IPOs available to investors. You can locate IPOs by going to the Market page, then to the IPO Center for a list of available offerings. You can even subscribe to notifications of upcoming IPOs as they become available.
Cryptocurrency
You can trade cryptocurrency on Webull commission-free. As is the case with most cryptocurrency exchanges, Webull charges a spread of 100 basis points on both the purchase and sale of crypto. You will need a minimum of $1 to begin trading crypto.
Crypto trading requires either a cash or margin account for crypto trading (no IRAs). You can trade 44 cryptos, including Bitcoin, Ethereum, Litecoin, Dogecoin, Stella Lumens, Ethereum Classic, Cardano, Tazos, USD Coin, and many more.
Crypto trading hours are from 5:30 p.m. to 6:30 PM, Eastern time, seven days per week (23 hours per day).
Crypto Wallet. Webull offers a crypto wallet so you can buy, sell, store, and transfer crypto to and from the wallet.
Stock Lending Income Program
This program allows you to earn extra income on fully paid stocks in your account. If you allow Webull to borrow certain stocks, you’ll be paid interest while those stocks are loaned out.
Apex Clearing, Webull’s clearing agency, will identify fully paid stock in your account, which is considered “in demand” based on the market. You will be paid 15% of the interest earned by Apex Clearing on the loaned stock.
For example, if Apex earns 10% per year, you’ll earn 1.5%. Interest earned through the program is credited daily and paid monthly.
Webull Community
Webull adds a social component to its investment platform. You can participate with millions of other Webull investors to discuss market and exchange strategies, and swap ideas with other investors.
How Does Webull Make Money if they Don’t Charge Fees?
Webull charges very few fees, but they do charge some. After all, they can’t stay in business without any revenue. Here is a list of Webull revenue sources:
Payment for Order Flow (PFOF). This is a common practice among commission-free retail brokers. When Webull sends trades to market makers, they receive rebates for the practice. This income flow is part of the reason why brokers can allow commission-free trading.
Securities lending. This is another common practice in the brokerage industry. Webull uses the services of Apex Clearing as their clearing agent. Through the Stock Lending Income Program, Apex can loan out investors’ shares to other investors and institutions, usually for short sales. Those borrowers will pay interest to Apex, a portion of which is rebated to Webull.
Interest on cash balances. Since Webull doesn’t pay interest on uninvested cash held by investors, the company retains any interest earned on those funds from outside sources.
Interest on margin trades. When you use margin to purchase securities, Webull charges interest which represents income to the company.
Deposit and withdrawal fees. Webull charges fees of between $8 and $45 per transfer for both deposits and withdrawals made by wire.
The basis point spread on crypto trades. Webull earns a 100-basis point spread on the purchase and sale of cryptocurrencies.
Other Features
Income Tax Reporting
Webull provides a consolidated Form 1099, which includes reporting information from 1099-B (transactions), 1099-DIV (dividend income), 1099-INT (interest), and 1099-MISC (other income and information). The form can be downloaded from the Webull app.
Account Protection
Webull is a fully regulated broker-dealer, and your account is protected by SIPC insurance for up to $500,000 in cash and securities, including $250,000 in cash. For additional protection, Webull offers two-factor authentication for an added step on accessing your account and to prevent unintended parties from entering your account.
Free Stock Bonus and Referral Bonus
Webull is currently offering a free stock bonus to include free fractional shares in two stocks. The stock will be worth between $3 and $3,000, which could make the bonus as high as $6,000 in total. You must be new to Webull and meet other eligibility requirements.
You can also receive fractional shares in four, eight, or 10 free stocks by depositing any amount into your new account within ten days. Each fractional share will be valued between $3 and $300. That means you can earn up to 12 fractional shares with a total value of as much as $9,000. Stock rewards must be claimed within 30 days, or the offer will expire.
Under the Webull Referral Bonus, refer family and friends to Webull, and you’ll receive three free shares of stock. Refer three friends, and you’ll receive nine shares. Once you’ve received nine shares, each successful referral will provide you with two free stocks. Each share of stock will be worth between $12 and $1,400.
Your referral must use your unique referral link, and the free stock will be issued when the new user opens a brokerage account with an initial deposit of at least $100.
How to Sign Up for a Webull Account
You can sign up for Webull from either the website or the mobile app by clicking “SIGN UP” at the top of the page. You’ll need to enter your phone number and a referral code if you have one.
Webull will require you to supply your name, US residential address, date of birth, taxpayer identification (Social Security number or individual taxpayer ID number), telephone number, and citizenship.
To verify your identity, Webull may ask for copies of your driver’s license, passport, or other information as necessary.
Due to Webull’s review process, it will take a minimum of 24 hours to open your account. More time may be needed if manual verification of information is required. Webull will perform a soft credit check, which will not negatively impact your credit score.
Funding Your Account
You’ll need to connect a bank account to fund your Webull account. Webull will make two micro-deposits to your account to confirm a valid account connection. Once verified, you’ll be able to begin transferring funds to and from Webull.
The easiest way to fund your account is through ACH transfers, which are free to complete. (Note that Webull charges domestic and international wire transfer fees.)
ACH deposits initiated before 4:00 PM Eastern time will give you instant buying power, enabling you to begin trading immediately. However, the instant buying power feature is a provisional credit representing a portion of the deposit. Full ACH deposits are generally available on the fourth or fifth business day after the ACH is initiated.
Alternatively, you can transfer securities from another broker into your Webull account. The transfer securities must match those available through Webull.
Webull Pros and Cons
There’s plenty to like about Webull, but the platform also has limitations. Here’s my list of Webull pros and cons.
Webull Pros:
No minimum initial investment
Commission-free trading
Get free stock when you open an account and make a deposit
Available crypto wallet where you can manage your cryptocurrency holdings
Connect with millions of investors in the Webull Community
24/7 online support
Webull Cons:
No joint taxable accounts, custodial or trust accounts
You can’t invest in mutual funds, penny stocks, or bonds
Must have a taxable account to open an IRA
No dividend reinvesting option
No interest on uninvested cash
Fees for domestic and international wire deposits and withdrawals.
Webull Alternatives
Before signing up with Webull, I recommend checking out these alternatives, which offer many of the same features as Webull.
Robinhood
Robinhood is a popular online brokerage that offers zero-commission trades of stocks, options, ETFs, and cryptocurrency. No minimum deposit requirement exists, but like Webull, Robinhood doesn’t allow bond or mutual fund trades. One very interesting feature: Effective December 2022, Robinhood now offers IRA accounts with a 1% match, the first online brokerage to do so.
According to Robinhood, “the IRA Match is an extra 1% that Robinhood adds to eligible contributions to your IRA. It’s not counted toward your annual contribution limits and is typically available to invest immediately.” For more information, check out our full Robinhood Review.
Public
Public is an easy-to-use trading app that is geared toward new investors. Like Webull and Robinhood, Public doesn’t charge any trading fees. You can also buy fractional shares and connect with other users in the Public social community. That said, intermediate traders will want to steer clear of Public due to their lack of advanced trading options – they don’t offer IRA accounts and have little in the way of market research tools.
Learn more in our Public Review.
Interactive Brokers
Interactive Brokers (IBKR) is a truly global trading platform offering investors access to 150 markets in 33 countries. You can also trade in more than 24 currencies. Like Webull, there are no commission fees on stock and ETF trades. Interactive Brokers is hands down the more powerful platform for sophisticated traders looking for access to global markets, but it may be overwhelming for new and intermediate investors.
Webull FAQs
Is Webull good for beginners?
Webull is a safe trading platform for new investors. Accounts are protected by SIPC insurance for up to $500,000, and the platform uses numerous security features, including two-factor authentication.
We also like that Webull has no minimum initial investment requirement, though you will need to deposit funds to begin trading. And as a beginning investor, you can certainly benefit from the paper trading account with unlimited virtual cash.
However, other investment brokers may be a better choice for new investors. Webull is designed primarily for active traders and those with at least an intermediate level of experience. Larger brokerage firms will be able to provide higher levels of customer service and a greater variety of account tools and educational services.
What is the minimum deposit for Webull?
There is no minimum deposit requirement for a Webull account, but a $2000 minimum balance is required for all margin accounts.
What is the downside to Webull?
The main drawbacks to Webull include the lack of a dividend reinvestment program and the inability to buy fixed-income and mutual fund investments.
Does Webull work in Canada?
Webull is a US-based online broker. Because it’s not registered in Canada, it’s not available to Canadian citizens.
Final Thoughts on Webull
Webull is an intuitive trading app where you can trade more than 40 cryptocurrencies on the same platform where you hold more traditional investments. They offer plenty of investment tools, including margin trading, day trading, and short sales.
And if you’re new to Webull or have friends to refer, you can take advantage of free stock bonuses.
While Webull is geared more toward intermediate and advanced traders, its intuitive trading platform shouldn’t overwhelm new traders. That said, beginner investors may want to give Robinhood and Public a long look before signing up with Webull.