The recent increase in mortgage rates, which has made buying a house or borrowing against home equity more expensive, in part reflects a broad increase in rates on long-term U.S. Treasury securities. But the increase in 30-year fixed mortgage rates over the past year has been unusually large relative to rates on long-term Treasury securities, which may suggest that mortgage rates are being pushed up by temporary factors. In particular, as the path of future interest rates becomes more certain, mortgage rates could fall by roughly half a percentage point.
Why have mortgage rates risen by so much more than yields on 10-year Treasury bonds? We find that much of the increase in this spread can be attributed to two factors: interest rates on Treasury bonds with maturities less than 10 years are higher than rates on 10-year Treasury bonds and mortgage prepayment risk has increased. Higher interest rates on shorter term bonds matter because mortgages are generally held for fewer than 10 years. Prepayment risk is higher than in recent decades largely because of uncertainty around future interest rates. Both these factors are likely to continue to push up mortgage rates over the next few quarters.
Factors Contributing to the Spread between Mortgage and 10-Year Treasury Bond Rates
Mortgage rates reflect the cost of using a mortgage to buy a home or tap home equity and thus affect the price of real estate and housing wealth. To the degree that the Federal Reserve’s tightening of monetary policy pushes up mortgage rates, this channel is an important way in which tighter monetary policy slows the economy and dampens inflation. As shown in figure 1, there has been a long downward trend in mortgage rates (dark green) over the past forty years in line with the rate of 10-year Treasury bonds (light green). However, the spread between mortgage rates and Treasury bond rates fluctuates for various reasons, including changes in credit conditions and interest rate uncertainty.
Mortgage rates generally track the rate on 10-year Treasury bonds because both instruments are long term and because mortgages have relatively stable risk. Nonetheless, to compensate investors for the higher risk of mortgages, rates for fixed mortgages have historically been, on average, one to two percentage points higher than Treasury yields. As rates on 10-year Treasury bonds have risen since mid-2020, mortgage rates have risen as well. But, over the past year, mortgage rates have risen by a surprisingly large amount relative to the 10-year Treasury rates, putting more restraint on borrowing conditions and the housing market.
Figure 2 shows the spread between 30-year fixed mortgage rates and 10-year Treasury rates from 1997 through May 2023. The peak spread during the housing crisis was 2.9 percentage points, reflecting a sharp tightening of credit conditions and significant disruptions in the financial markets that fund mortgages. The spread rose again during the COVID-19 pandemic, peaking in 2020 at 2.7 percentage points, reflecting shorter-lived disruptions in financial markets and concerns among lenders and investors in mortgage assets. Recently, the difference between 30-year fixed mortgage rates and 10-year Treasury rates has widened to an unusual degree. Since October 2022, the spread has hovered near the levels last seen during the housing crisis.
To explain why the spread between 30-year fixed mortgage rates and 10-year Treasury rates is so large, figure 3 parses it into three components:
The spread between the rate charged to borrowers and the yield on mortgage-backed securities (MBS), referred to as the primary-secondary spread, which is generally stable when the costs of mortgage issuance are stable (blue).
A combination of an adjustment for mortgage duration and prepayment risk (light green). The duration adjustment reflects that mortgages are generally held for fewer than 10 years and are more closely related to rates on a 7-year rather than a 10-year Treasury security. Prepayment risk reflects the probability that a future drop in rates induces borrowers to exercise their option to refinance.
The remaining spread, which reflects changes in demand for mortgage-related assets after adjusting for prepayment risk (purple).
Given estimates of 1 and 3, we are able to estimate 2 by subtraction.
Factors Driving Higher Mortgages Rates
Using this framework, we find that the biggest reason that the mortgage spread to the 10-year Treasury rate is higher relative to other periods is due to the duration adjustment and prepayment risk. Since mortgages are typically held for fewer than 10 years, they have a shorter duration than 10-year Treasuries. Since early 2022, and for the first time since 2000, the rate on 7-year Treasury securities is higher than the rate on 10-year Treasury securities. In particular, from 2015 through 2019, the 10-year rate exceeded the 7-year rate by about 0.15 percentage point on average. Instead, year-to-date, the 7-year rate has exceeded the 10-year rate by about 0.10 percentage point, on average. As a result, the duration adjustment explains roughly a quarter of a percentage point of the unusually large spread shown in figure 3.
In addition, prepayment risk is higher now than in previous years. Borrowers with mortgages are affected differently if interest rates rise or fall. If rates rise, mortgage holders can simply choose to keep their mortgages at the previously issued rate. Instead, if rates fall, mortgage holders can prepay and refinance their mortgages at lower rates. That means that if there is a wider range of uncertainty around the future of interest rates—even if that range is symmetrical—there is a higher probability that current mortgage holders will find it advantageous to refinance in the future. As it happens, measures of interest rate uncertainty (such as the MOVE index, or Merrill Lynch Option Volatility Estimate Index) are currently higher than before the pandemic. Moreover, when rates are very low as they were in early 2020, there is only so much lower they can go, and thus borrowers and lenders alike see a smaller likelihood of a new mortgage being refinanced to a lower rate in the future. Instead, when mortgage rates are higher, as they are now, there are more possible future outcomes where rates fall and mortgages are refinanced. In other words, mortgage lenders want to protect against the possibility that mortgages issued recently will be refinanced to lower rates. As a result, lenders charge a premium.
To get a sense of how much this factor is pushing up mortgage rates to an unusual degree, it is useful to compare the estimated contributions of the duration adjustment and prepayment risk now versus the late 1990s, which was before the housing bubble, the housing crisis, the slow recovery from the 2008 recession, and the COVID-19 pandemic. In the late 1990s, 10-year Treasury rates were moderately higher than today but, like today, the 7-year rate was higher than the 10-year rate. At that time, the estimated contribution of the duration adjustment and prepayment risk to the mortgage rates spread was roughly a half percentage point lower than today.
While the largest factors driving high mortgage rates are the duration adjustment and prepayment risk, another reason mortgage rates have been unusually high is because of a slightly elevated primary-secondary spread. Lenders often finance mortgages by selling claims to MBS, which are pools of mortgage loans that are guaranteed by government-sponsored enterprises. The spread between the primary mortgage rate to borrowers and the secondary rate on MBS reflects the costs of issuing mortgages. For example, originators have to bear interest rate risk between the time an interest rate on a mortgage is set and when it is closed. The primary-secondary spread jumped by 0.3 percentage points toward the end of 2022, but has retraced most of the runup since then.
Finally, the component after accounting for those factors is also somewhat elevated relative to before the pandemic. This component, referred to as the option-adjusted spread (and “other” in figure 3) is likely elevated due to reduced demand in the MBS market. In recent years, the Fed has reduced its holdings of MBS. In addition, private investors in MBS have readjusted portfolios in response to an increase in interest rates. This was particularly true when long-term Treasury rates jumped in the fourth quarter of 2022; demand for MBS has remained cool since then. In addition, holders of MBS may be more pessimistic about prepayment risk than empirical models reflect, which could be the case if investors think that future mortgage rates are more likely to be a little lower relative to current rates rather than a little higher.
Conclusions
Higher mortgage rates are probably here to stay for a while, but a reduction in uncertainty could meaningfully bring down mortgage rates. If interest rate uncertainty returns to more normal levels and prepayment risk fell back to levels seen in the late 1990s, rates could fall – perhaps by half a percentage point. Nonetheless, one factor keeping rates higher that is likely to persist for the next several quarters is dampened demand for MBS as the market for mortgage financing continues to recalibrate to restrictive monetary policy and higher interest rates.
Until the economy slows to a more sustainable pace, uncertainty will remain. How will a slowdown affect house prices? How much will it reduce the income of borrowers? Will financial markets remain stable? Until such questions are resolved, unusually high mortgage rates will probably continue to cool the housing market and dampen borrowing against housing equity.
The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation.
Today, Bank of America reached a historic agreement with the U.S. Department of Justice to pay the largest settlement in U.S. history related to toxic mortgage loans it knowingly sold to investors.
In short, the company admitted that it misrepresented the quality of the loans it packaged and sold to investors via its Merrill Lynch and Countrywide Mortgage brands, as well as through Bank of America.
Additionally, the bank has taken responsibility for its faulty loan origination practices that resulted in Fannie Mae, Freddie Mac, and the FHA taking on countless bad loans that eventually hurt American taxpayers (not to mention homeowners).
The bank also settled a case with the SEC in which it knowingly “shifted the risk” of wholesale loans originated by mortgage brokers that were described internally as “toxic waste.”
Simply put, the bank and its affiliates made trillions of very bad loans that they tried to pawn off, and now they must pay.
Speaking of payment, the company has agreed to pay $9.65 billion in cash, including $5.02 billion in civil monetary penalty and $4.63 billion in compensatory remediation payments.
Additionally, BofA will provide $7 billion in consumer relief, which will come in the form of loan modifications, including principal balance reductions, forbearance, and second mortgage extinguishments.
How Does a 2% Interest Rate Sound?
Thanks to a major settlement with the Justice Department
Related to its questionable loan origination practices
Bank of America will offer some lucky homeowners
2% mortgage rates on fixed mortgages
Most significantly, some lucky homeowners will receive principal reductions that lower their loan-to-value ratio to 75%. But that’s not all. They’ll also receive a 2% interest rate on their mortgage that is fixed for the life of the loan.
The Department of Justice provided an example where a homeowner with a $250,000 mortgage balance would see it fall to just $112,000 on a property worth only $150,000 today.
That’s a pretty good deal, regardless of what may have happened to the homeowner.
Let’s be honest, a lot of borrowers knew they weren’t providing proper income documentation either, or that their home appraisal was a tad bit steep. But I’m sure they looked the other way, just like everyone else at the time.
The DoJ also negotiated a tax break for those who receive relief under the settlement assuming the Mortgage Forgiveness Debt Relief Act isn’t extended.
They created a so-called 25/25 Tax Relief Fund where 25% of the value of the relief will be made available to offset any tax liability, up to $25,000. But the amount of money set aside is limited, so not all homeowners will be able to take advantage.
During his speech, Associate Attorney General Tony West called on Congress to extend the Act so homeowners won’t be on the hook for phantom income.
Bank of America will also be required to provide more low- to moderate-income mortgage originations, expand affordable housing initiatives, and provide community reinvestment for neighborhoods experiencing or at risk or urban blight.
The settlement is expected to reduce the company’s third quarter pre-tax earnings by $5.3 billion and reduce earnings per share by 43 cents.
Obviously the stock was up on the news, because that’s how the stock market works. But really, investors are probably happy to see the bank move forward from the mortgage mess once and for all.
And its current price of under $16 a share is still just a fraction of what it was during the previous housing boom when shares traded in the low $50 range.
Bank of America Mortgage Rates Are Fairly Competitive
While Bank of America’s standard rates are pretty competitive
You might find a better deal with a non-household name
And receive a better overall home loan experience
Sometimes smaller is better if you want a more personal touch
At the time of this writing (June 5th, 2018), Bank of America was offering a 30-year fixed mortgage at 4.625% with 0.414 mortgage points. It works out to an APR of 4.798%.
They also have a 20-year fixed at 4.375% (4.638% APR) with 0.655 mortgage points.
And a 15-year fixed is being offered at 4% even (4.339% APR) with 0.699 mortgage points.
Bank of America also offers ARMs, including a 10/1 ARM, 7/1 ARM, and a 5/1 adjustable-rate mortgage.
As of 6/5/18, they were priced at 4.125% (4.659% APR), 4% (4.711% APR), and 3.875% (4.774%), respectively. As you can see, the APR of each product is very similar, so it’s important to look at all the details when deciding on a loan product.
For the record, their advertised rates tend to require a credit score of 740 or higher and a minimum 20% down payment.
Most lenders, including Bank of America, assume you’re a pristine borrower so they can advertise the lowest mortgage rates possible.
Houston, Texas, one of the major metropolitan areas in the United States, has no shortage of financial advisors. But which ones are worth the money? Sincehiring a financial planner can be a major expense, you want to pick the right match.
Get Matched with 5-Star Rated Financial Advisors in Your Area
I looked for financial advisors who have a solid reputation for putting their clients’ interests first, and who value building a long-term relationship with clients (think from your twenties and thirties until your retirement). Here’s who made the grade.
What’s Ahead:
Overview of the best financial advisors in Houston
Linscomb & Williams
Contact – (713) 840-1000.
Services offered – Investment management, tax savings, retirement preparation, business and solo entrepreneurial consulting, sstate planning, wealth management, and more.
Asset requirements – Clients need at least $1 million in investable assets. This is a pretty high bar to entry, but the firm claims a diverse group of clients, including individuals without a high net worth.
Typical fees – A fee-only firm, You’ll pay a 1% annual all-inclusive fee for accounts with assets under $2 million. (If you hit $2 million and above, your fee drops to a smaller percentage.)
With over 40 years’ experience, Linscomb & Williams is one of the most well-respected firms in Houston. It has satellite locations in Austin and Fredericksburg, Texas, as well as three offices in Alabama.
Their staff boasts 23 financial advisors, including several who specialize in wealth management.
Like all the firms on this list, Linscomb & Williams is a Registered Investment Advisor (RIA) with the Securities and Exchange Commission.
Asset requirements – There’s no minimum asset requirement, but there is an account minimum of $375,000.
Typical fees – Chilton is a fee-only firm charging an annual 1% of managed assets (for accounts under $4 million) and taking no commissions.
Chilton Capital Management has offered financial literacy, planning, and investment services since 1996. Best of all, clients don’t have to be literal millionaires: Chilton Capital is the rare fee-only firm with no minimum assets required.
Thesmall but very well-credentialed staff includes three CFPs and seven chartered financial analysts (CFAs). Vice President Michael J. Stavar is a certified public accountant (CPA).
Asset requirements – A preferred $1 million account minimum, including assets.
Typical fees – Fee-only firm, $3,500 initial planning fee (waived if you sign on as a client), Fees start at 1.25% for the first $500,000 and drop to 1% for the next $500,000. Hourly rates for consultations ranging from $150-$350 an hour.
Established in 1999, Horizon Advisors works with partner CPA accounting firm Maddox Thomson & Associates to meet all your planning and tax needs.
They’re known for a personal approach with a low 1:54 advisor to client ratio (many advisors at other firms see hundreds of clients).
You’ll work with well-practiced advisors — two of whom, including firm president Larry Maddox, are CFPs. Other Horizon Advisors staff members boast CPA and chartered financial analyst (CFA) credentials.
Tanglewood Total Wealth Management
Contact – (713) 840-8880.
Services offered – Wealth management plan, which covers everything from the basics — retirement, asset protection, taxes, college funds if you need them — to small business financing and long-term disability risk management.
Asset requirements – $2 million ($3 million for those who want portfolio management without financial advice).
Typical fees – 0.60% annually for the first $3,000,000 and 0.35% for the next $17,000,000. The minimum annual fee is around $12,000.
Tanglewood Total Wealth Management describes their clientele as the “quietly wealthy.” If you own a business, have an inheritance to manage, have a lucrative career, or are otherwise negotiating “more money, more problems” Tanglewood has you in mind. With a hefty $2 million account minimum, Tanglewood is best for people further along on their journey to building wealth.
The staff includes six CFPs and one CFA. President John Merrill, a veteran CFP, is also known as a leader among Registered Investment Advisors (RIAs).
Asset requirements – Typical client has $1M+, but no hard set minimum.
Typical fees – Fee-only, Minimum annual charge of $5,000 — more than 2.5% of investable assets for clients with balances under $200,000.
The Financial Advisory Group, Inc. has been around since 1997. It’s on the smaller side, which isn’t a bad thing — fewer clients mean advisors can spend more time customizing your plan. Both the chairman and CEO are registered with the National Association of Personal Financial Advisors, as are most of the advisors on staff.
The Financial Advisory Group’s advisor qualifications include four CFPs, two CPAs, one CFP (Certified Financial Planner), and one JD (juris doctor, a law degree). You can expect expertise in accounting and law as well as finance and investment, though the Financial Advisory Group emphasizes it isn’t a formal CPA or legal firm.
Asset requirements – Investors need a minimum of $500,000 to $1 million in assets.
Typical fees – For investment management, you’ll pay 1.25% on the first $2 million in assets, then 1% on the next $3 million. The minimum annual fee is $5,000 regardless of account size.
The Goff Financial Group emphasizes “value investing.” Founded in 1994, they’re fairly new on the scene but they’ve already won a Better Business Bureau award for excellence.
Senior management at Goff includes a Certified Investment Management Analyst (CIMA) and a CFP. Founder Matthew Goff is a NAPFA-registered financial advisor. The firm is also a Registered Investment Advisor (RIA) with a fiduciary responsibility to clients.
Asset requirements – Requires $1 million in assets. Clients using the Pathway program only need $50,000 (not including a company retirement plan if they have one).
Typical fees – Fee-only, Pathway clients pay a modest $79 per month for accounts under $100,000, clients with over $100,000 in assets pay a percentage of their assets: 0.95% up to the first $1 million. Clients with higher starting balances will pay between 0.75% to 1.50% of total assets.
Financial Synergies Wealth Advisors is one company that welcomes younger investors, whether they’re maintaining individual accounts or building wealth for their families. The firm also specializes in working with professionals in the oil and gas industries, both booming in Houston.
It’s been recognized for excellent wealth management by the Financial Times and the Houston Business Journal.
Each financial advisor on staff is a CFP. The firm also has a certified divorce financial analyst (CDFA) and certified fund specialist (CFS) for those who need specialized plans. Individual advisors maintain NAPFA registrations in good standing.
Summary of the best advisors in Houston
Firm
Services offered
Primary clientele
Linscomb & Williams
Investment management, tax savings, retirement preparation, business and solo entrepreneurial consulting, estate planning, wealth management, and more.
Young people just starting their high-earning careers and those with modest assets.
Those looking to start their financial journey on strong footing, young people without a lot of assets.
Horizon Advisors
Financial planning, tax planning, specializes in unusual tax situations.
Those searching for a more personal experience and people with reasonable assets.
Tanglewood Total Wealth Management
Wealth management plan, which covers everything from the basics — retirement, asset protection, taxes, college funds if you need them — to small business financing and long-term disability risk management.
High-earners searching for help with all aspects of their finances.
Young professionals who don’t have a lot of assets, but want to learn how to grow them.
How I came up with this list
Out of hundreds of financial advisory firms in Houston, these firms stood out because of their solid reputations and reviews. They also hit a few key benchmarks you should look for in any advisor.
They’re Registered Investment Advisors (RIAs)
At a minimum, I wanted to pick firms that are Registered Investment Advisors (RIAs) with professionals who are Investment Advisor Representatives (IARs). All RIA firms are financial fiduciaries, which means their advisors are legally obligated to act in your best interest rather than their own.
They’re fee-only
Fee-only advisors earn nothing but the money clients pay them. These costs might be an hourly rate, a flat fee, or a percentage (usually between 1% and 2%) of your managed assets. They don’t get commissions or financial incentives for recommending certain investment products.
This is the kind of advisor you want — since they don’t have conflicts of interest, their only motivation is to make the best decisions for you. A firm that also operates as an attorney or insurance broker, or earns commissions by selling products and services, might steer clients towards choices that would increase the firm’s profits.
Their advisors have top credentials
The most common individual credential isCertified Financial Planner (CFP) which requires specific economic education, three years’ experience, and continuing education every two years as the industry changes. AChartered Financial Analyst (CFA), another common designation, needs four years’ experience making investment decisions.
A NAPFA membership is also a good sign since NAPFA has strict ongoing regulations and all their advisors are fee-only.
They’re trusted by industry insiders
The financial advisory industry is heavily regulated; clients trust advisors to handle their life savings, so they need the most qualified people on the job.
Aside from reading objective reviews, I looked up each firm and its principal staff members on a few watchdog sites: theInvestment Advisor Public Disclosure database run by the SEC, and the independent search engineinvestor.com. Both sites screen for possible conflicts of interest and track whether an advisor has any disclosures, or complaints, on their record.
What questions should you ask a financial advisor?
Who are your typical clients?
You want a skilled advisor, and just as importantly, you want a good match. I wanted to find firms that will work with young professionals despite the high financial bar to entry. If a firm’s clientele is mostly mid-career executives and people ready for retirement, they may not be the best fit for a recent college grad starting to save for retirement.
How do you usually communicate with clients, and how often?
Maybe you’re content with quarterly reports on your investments and annual check-ins. Or maybe you want an advisor available by email or phone whenever you have a question. Get a sense of how regularly your planner will be available outside of any scheduled chats.
What’s your investment philosophy? What asset allocation do you use?
A good advisor will have a clear answer, including their plan to diversify your portfolio and increase returns.
How are you compensated? Do you collect any commissions for investment products?
Your advisor should be compensated with fees only, not commissions. Otherwise, they may guide you towards investment choices that will earn them money or boost their sales.
Who has custody of my assets?
Reputable financial advisors don’t actually have contact with your assets. Instead, they’ll trust client assets to a “custodian”—a larger brokerage, often a big name like Charles Schwab or Fidelity.
What are the costs of hiring a financial advisor?
Almost all advisors offer an initial free consultation (in-person or via phone) where you’ll discuss what you’re looking for.
If you decide to work together, your annual fee will most likely be a percentage of your assets under the firm’s management. A charge between 1% and 2% of total assets is the industry standard. For instance, if your advisor charges a 1% fee and you entrust $500,000 in assets to the firm, your fee is $5000 a year or around $417 a month. As your assets climb higher, you’ll pay a smaller percentage.
Some firms charge an hourly rate instead of an asset-based rate for working with advisors, usually between $200 and $500 an hour.
Summary
Whether you’re exploring the idea of hiring a financial planner in Houston or you’re ready to commit, use this list as a jumping-off point. Non-Texas residents should give these firms a look too, since many are licensed or have offices in other states.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
When you’re a small business owner, a cash-back credit card can be one of your most valuable tools for trimming business expenses. Good thing there’s a nearly infinite number of cards that offer 1% or 1.5% cash back on all purchases. Some even offer 2%.
The Bank of America Business Advantage Customized Cash Rewards Credit Card goes even farther. It offers 3% back in a category of purchases that you choose — a very strong return indeed.
It gets better. New users start out with an excellent spend-based sign-up bonus and an unusually long 0% intro APR purchase financing offer. If you’re a member of Bank of America’s Preferred Rewards program, you can earn even more — up to 75% over and above your cash-back haul.
All told, it’s a fantastic package for a card with no annual fee. Let’s dive into the details.
What Is the Bank of America Business Advantage Customized Cash Rewards Credit Card?
The Bank of America Business Advantage Customized Cash Rewards credit card is a cash-back business card with no annual fee. It offers a solid cash-back earning structure, a strong 0% intro APR offer, and an above-average sign-up bonus.
Let’s start with the sign-up bonus: Earn a $300 online statement credit after making $3,000 in purchases in the first 90 days of account opening. Not bad.
The card earns 3% cash back in the business spending category of your choice. It also earns 2% cash back on dining purchases. Earnings in the 3% and 2% categories apply only to the first $50,000 in annual combined purchases, but you’ll always earn unlimited 1% back on all other purchases. Yes, that includes purchases in the 3% and 2% categories above the annual spending cap.
This card offers even better rates if you qualify for the Bank of America Preferred Rewards program. The Preferred Rewards program has three tiers for customers with less than $1 million in combined Bank of America and Merrill Lynch accounts: Gold, Platinum and Platinum Honors.
Which you qualify for depends how much money you have on deposit in eligible accounts. The details are a bit complex, but basically, you can earn a bonus worth 25%, 50%, or 75% on your base cash-back rewards.
Best-case scenario, you can earn 5.25% cash back in your selected choice category and 3.5% cash back on dining purchases on the first $50,000 in those combined purchases each calendar year, plus unlimited 1.75% cash back on all other purchases.
Other notable cardmember benefits include:
Overdraft protection for your linked Bank of America deposit account (if applicable)
Free access to your company’s Dun & Bradstreet business credit score
Travel and emergency services, including emergency ticket replacement, legal and medical referrals while traveling, and lost luggage assistance
Up to $100,000 in travel accident insurance
Insurance coverage for eligible rental cars
What Sets the Bank of America Business Advantage Customized Cash Rewards Credit Card Apart?
This card has several features that help set it apart from other business cash rewards credit cards.
Overdraft protection for linked Bank of America deposit accounts. If you have a Bank of America deposit account, you can link it to your card to prevent declined purchases, returned checks, or other overdrafts. This service involves per-transaction fees, but that could be better than a bounced check.
Basic travel and emergency services. This card is not a travel rewards card, but it does offer some basic travel and emergency services, plus travel insurance coverage. Highlights include up to $100,000 in travel accident insurance, auto rental insurance on rentals paid in full with the card, emergency ticket replacement, lost luggage assistance, and legal and medical referrals while traveling.
0% intro APR promotion. This card comes with 0% intro APR on purchases for the first 9 billing cycles. After that, variable regular APR applies. While not long by consumer card standards, this promotion is longer than most business cards’.
No annual fee. This card has particularly strong features for a no-annual-fee business credit card.
Key Features of the Bank of America Business Advantage Customized Cash Rewards credit card
The Bank of America Business Advantage Customized Cash Rewards credit card has a solid earning structure, a sign-up bonus, and a somewhat unusual 0% intro APR promotion offer.
Sign-Up Bonus
Earn a $300 online statement credit after making $3,000 in purchases in the first 90 days of account opening.
Earning Rewards
With this card, you can earn 3% cash back in the category of your choice. You can choose from gas stations (which is the default category) or:
Office supply stores
Travel
TV/telecom and wireless communications
Computer services
Business consulting services
You can change your chosen category up to once a month through Bank of America’s app or online banking site.
You also earn 2% cash back on dining purchases. You’ll earn 3% and 2% cash back on the first $50,000 in combined choice category and dining purchases each calendar year, and 1% after that.
And you earn unlimited 1% cash back on all other purchases, with no caps or restrictions.
Preferred Rewards Bonus
If you belong to Bank of America’s Preferred Rewards loyalty program, you can earn up to 75% more cash back on every purchase.
That means you could earn:
Up to 5.25% cash back in your selected choice category
Up to 3.5% cash back on dining purchases on the first $50,000 in those combined purchases each calendar year
Up to 1.75% cash back on all other purchases with no limits
See Bank of America’s Preferred Rewards guide for more on balance requirements and potential bonus earnings, plus other program perks.
Redeeming Rewards
You can redeem your cash-back rewards as:
A deposit into your Bank of America checking or savings account
A statement credit to your credit card account
A check mailed to your address on file
Regardless, your rewards don’t expire as long as your account remains open and in good standing.
0% Intro APR Promotion
New cardholders may qualify for the intro APR promotion, where you can get 0% intro APR on purchases for the first 9 billing cycles. After the intro APR offer ends, variable APR applies.
Important Fees
There’s no annual fee. The foreign transaction fee is 3%. Other fees may apply, including balance transfer and cash advance fees.
Overdraft Protection
This card offers an optional service to help prevent declined purchases, returned checks or other overdrafts. When you link your credit card to a Bank of America business checking account, you get overdraft protection through Balance Connect. Terms and fees apply.
Credit Required
This card requires excellent credit to qualify.
The good news is that you can qualify on personal credit if you have limited or no business credit history. The bad news is that if your FICO score is much below 720, or your personal credit history is limited, then you may have trouble being approved.
Pros & Cons
As with any small-business credit card, the Bank of America Business Advantage Customized Cash Rewards card has some high points and some low points.
Up to 3% cash back in your choice of purchase category
Excellent sign-up bonus
Up to 75% more cash back for Preferred Rewards members
0% intro APR offer on purchases
3% and 2% spending categories have an annual spending cap
Intro APR doesn’t apply to balance transfers
3% foreign transaction fee
Pros
Overall, this is an above-average cash-back credit card for small business owners who aren’t looking for tons of frills.
Up to 3% cash back in a category of purchases that you choose. This feature adds crucial flexibility to what’s otherwise a pretty straightforward rewards program.
Excellent sign-up bonus. For a no-annual-fee small-business card, this sign-up bonus is among the very best.
9 months of 0% APR financing on new purchases. Few business credit cards offer any sort of introductory financing, let alone an offer stretching as long as this.
Up to 75% more cash back for Preferred Rewards members. If you have enough on deposit with Bank of America or Merrill Lynch, you could qualify for a tidy boost to your cash-back earnings.
Cons
This card isn’t ideal for high spenders nor anyone with existing high-interest credit card balances to pay down.
Caps on 3% and 2% cash-back categories. Your potential 3% and 2% cash-back earnings are limited to the first $50,000 in combined purchases each calendar year. In other words, the most you can possibly earn in those categories is $1,500 per year.
Introductory APR isn’t valid for balance transfers. This is a notable downside if you’re already struggling with high-interest business credit card debt.
3% foreign transaction fee. Leave this card stateside when you travel abroad and bring one of the many small-business cards with no foreign transaction fees.
How the Bank of America Business Advantage Customized Cash Rewards credit card Stacks Up
The card’s closest competitor is probably the U.S. Bank Triple Cash Rewards Visa Business Credit Card. Here’s how the two cards compare:
Bank of America Business Advantage Customized Cash Rewards credit card
U.S. Bank Triple Cash Rewards Visa® Business Credit Card
Annual Fee
$0
$0
Sign-Up Bonus
Good
Better
Rewards Rate
Up to 3%
Up to 3%
0% Intro APR
0% intro APR on purchases for the first 9 billing cycles
0% intro APR on purchases and balance transfers for the first 15 billing cycles
Foreign Transaction Fee
3% of each transaction
3% of each transaction
Credit Needed
Excellent
Good or better
Final Word
The Bank of America Business Advantage Customized Cash Rewards Credit Card has a list of features that’s almost as long as its name. But the key feature is 3% cash back on a category of your choice, which can become as much as 5.25% when you’re a top tier member of their Preferred Rewards program. That’s where the real value lies.
And so for most small-business owners who want to earn cash back, this card is a strong competitor. For existing Bank of America customers who qualify for their Preferred Rewards program, it’s a no-brainer.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Bank of America Business Advantage Customized Cash Rewards Credit Card
This small-business card makes the most sense for those who are looking for cash back from their most frequent business purchases. It’s also ideal for existing members of the Bank of America Preferred Rewards program, which offers substantial cash-back bonuses on top of this card’s base rewards program. Throw in a $300 new account bonus plus 9 months of 0% APR financing on purchases and you have yourself a very competitive product.
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Jason Steele is one of the nation’s leading experts in credit cards and travel rewards since 2008. Jason is also the founder and producer of CardCon, which is The Conference for Credit Card Media. Jason lives in Denver, Colorado where he enjoys bicycling, snowboarding and piloting small airplanes.
A few weeks back, I wrote about having a financial health day at work. With the help of some of my Foolish colleagues, we’ve created a PDF that outlines how to host your own financial health day at work, including a checklist of what to consider accomplishing during the day.
As you’ll read, a key component of the financial health day was classes taught by experts we invited to Fool HQ, including several fee-only financial advisors from the Garrett Planning Network. Which brings us to the topic of today’s post: how to pay for help from a financial professional. It all begins with my experience as one myself.
My Short Life as a Stockbroker
Way back when (in those crazy, hazy, dot-com-zy days of the 1990s), I put on a suit every workday and headed to the offices of Prudential Securities, where I was a (very junior) member of team that managed $200 million. I started off as essentially an office gopher, and ended up being a licensed broker in a span of about two years (at which point I left to join The Motley Fool).
The term “broker” is important; it means I earned commissions for sales of stocks and mutual funds. I also was a licensed insurance agent, and earned commissions for selling insurance products such as annuities.
Now, the fellows I worked work were smart and ethical, and I’d trust them with my own money. And they’re not the only good brokers in the industry; I know plenty of them. But I saw enough to know that this is an industry driven, first and foremost, by people who want to make a lot of money for themselves. That money doesn’t materialize out of thin air; it comes straight from their clients’ accounts and into their own.
As part of my training, I spent three weeks in New York City. During the day, we heard from various representatives of the firm’s departments — the bond desk, the equity analysts, etc. We weren’t being taught how to choose better investments for our clients; it was more of an introduction to how the firm worked. Then, we’d learn sales techniques. At night, we practiced them by making cold calls while instructors listened in, giving us advice after the call on how to provide more “sizzle.”
When I joined the firm, I thought I’d be getting “the keys to the kingdom” in terms identifying the best investments. After all, this is a big-name Wall Street firm; they surely knew how to beat the market. Alas, it was not true. I learned more about investing from reading a collection of good books than I did from Prudential’s training. What I did learn was that recommending certain investment products resulted in a bigger payday for the broker than recommending others — regardless of what was best for the client — and that many brokers weren’t able to overcome (and loath to disclose) this conflict of interest.
The Fee-Only Way
Is there a way to get financial help without this conflict interest? Yes, there is — by hiring a fee-only financial advisor. Such an advisor gets paid by the hour, by the project, or — if they will be managing your money — as a percentage of the assets under management. These folks have just one incentive: provide good advice. You know they will recommend what they really think is the best course of action, because they get paid the same no matter what they recommend.
Here are a few other reasons why I like fee-only planners:
If you walk into your local Merrill Lynch, Morgan Stanley, or some other brokerage, the advisor you speak with will care mainly about your investments, and maybe your insurance, because that’s how they get paid. (Don’t expect much guidance on the money in your 401(k), because they can’t get paid for providing advice about that.) Fee-only advisors, on the other hand, take a look at the whole picture, from debt to cash flow to employee benefits to estate planning.
Many fee-only planners will work on an as-need basis. Perhaps you just need help answering one or two questions, such as whether you’re saving enough for retirement. Or you’d like to continue handling your own finances, but you want an objective second opinion to make sure you’re on track. An hourly fee-only advisor can help you. It’s not exactly cheap — approximately $150 to $200 an hour. But not spending that money can be hundreds-wise but thousands-foolish.
Fee-only planners tend to have professional designations, such as Certified Financial Planner or Chartered Financial Analyst. Plenty of brokers have those designations, too, but not as many, percentage-wise. Such a designation doesn’t guarantee good behavior or perfect advice, but it does mean the advisor knows enough to pass very rigorous exams and fulfill continuing education credits, including classes in ethics.
Most fee-only planners are fiduciaries, which means they are legally obligated to put their clients’ interests first. Surprisingly, and appallingly, the typical broker is not a fiduciary, and is held to a lower standard. I won’t bore you with all the legalese, but it has been in the news lately since it’s a part of the debate about financial reform. Just know that it’s a topic you should research and bring up with any financial advisor you consider hiring.
Where do you find such a fee-only planner? The Garrett Planning Network is a start. Visit their locate an advisor page and click on your state to see if there’s an advisor in your area. (In the interest of full disclosure, and revealing my own conflicts of interest, The Motley Fool has a partnership with Garrett, but no money has changed hands. It’s more of a “we like each other, so let’s spread the good word about each other” type of arrangement.) Another option is the National Association of Personal Financial Advisors, or NAPFA. Finally, you can use the PlannerSearch tool of the Financial Planning Association, and specify “Fee Only” under the “How Planners Charge” link.
Fee-only advisors are independent, and have their own ways of doing business. So not every fee-only advisor will manage money, and not every one will work on an hourly basis. Determine what you need, and find an advisor who will work on your terms — and put your interests first.
“How can I travel on a budget?” is one of the top questions we receive at TPG.
There’s no question that travel is expensive right now as millions satisfy the itch to travel more. Demand has been through the roof. Inflation and correspondingly high hotel, rental car and airline ticket costs have many would-be travelers throwing up their hands in frustration.
However, there are still many ways to save. In addition to using reserves of points and miles to book hotels and airfare, TPGers have many budget travel tips to help stretch your dollars when traveling.
Here are 22 ways to travel on a budget.
Use membership codes to save on car rentals
If you’re a member of AAA or AARP, have a Costco membership, are a veteran or work for a large company with a car rental discount code, pull all of these levers. You might be eligible for discount codes you didn’t even know about. A few examples from AARP include 30% off a car rental at Budget or Avis.
Related: How to never pay full price for a rental car
Look beyond traditional car rental companies and locations
Most people search for rentals at the airport with standard companies like Hertz and Avis. If you don’t find good results, consider off-airport locations or try alternatives like Kyte, Turo and Silvercar.
Related: Delta and Turo launch partnership, allowing travelers to earn 2,000 SkyMiles on 1st rental
Check credit card merchant offers
Before booking your trip, review your credit cards’ special merchant offers. Multiple issuers offer this option (although American Express is a leader in the category).
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Every program works similarly: Log in to your card account online or through your banking app, review the offers available to you, add the ones you want and make a qualifying purchase using the card for which the offer is registered.
There are no promo codes to enter at online checkout or coupons to print to take to the register. There are likely offers you can activate that will provide discounts on dining, gas and entertainment.
Related: How credit card merchant offers can save you hundreds of dollars every year
Take advantage of free days at national parks
Every year the U.S. National Park Service sets aside several days when entry is completely free; options include Martin Luther King Jr. Day in January, the first day of National Park Week in April, National Public Lands Day in September and Veterans Day in November.
Visiting a national park on one of the NPS’ free-entry days can save you up to $35 per vehicle at some of the most popular national parks, such as Glacier National Park and the Grand Canyon.
Stay outside the national parks
You might dream of a night in a rustic cabin inside a national park, but getting that reservation could be challenging or costly — especially if you can’t pay for it with points.
However, just beyond the park, there’s probably a hotel you can book with points. For example, you could stay at the Holiday Inn in West Yellowstone with IHG One Rewards points; the SpringHill Suites just outside of Zion National Park is a great property if you have Marriott Bonvoy points to spend.
Related: The best campgrounds, hotels and lodges near Yellowstone National Park
Download the T-Mobile Tuesdays app
If you’re a T-Mobile user, you’re in luck: This app is a major perk that will put money in your pocket just for checking your phone on Tuesdays.
To participate, download the T-Mobile Tuesdays app, check the app on Tuesday and claim your discount code. We’ve seen weekly discounts on everything from rental cars to gas, hotels and theme park tickets.
Get discounted gas at Shell through the Fuel Rewards app
At TPG, we love to stack savings. The Shell Fuel Rewards app is a good one to pile on the discounts.
You can link it to other loyalty programs — including American Airlines AAdvantage, Giant Food, Stop & Shop, Advance Auto and more — to receive extra discounts. Also, if you purchase through Fuel Rewards, link to partner retailers such as Petco, Bed Bath & Beyond, Office Depot/OfficeMax and many others to save even more.
Don’t forget to use a credit card that gives bonus points or discounts at gas stations for even more savings. TPG likes the Citi Premier® Card (see rates and fees), which awards 3 ThankYou points per dollar at gas stations, and the Blue Cash Preferred® Card from American Express, which also gives 3% back at U.S. gas stations.
Related: These are the best credit cards for gas purchases
Save on theater tickets in New York and London
Check TodayTix for cheap Broadway and West End tickets if traveling to New York City or London.
The TodayTix app has discounted tickets to various shows available. Prices vary, but most of the top shows currently playing are available on the site and the app.
While not all shows are hugely discounted, TodayTix often runs no-fee promotions. Keep in mind that for some shows, you won’t be able to choose your precise ticket location. Instead, you will pick a section you’d like to sit in.
Related: On with the show! How to get a great deal on Broadway tickets
Save on entrance fees with Bank of America
Bank of America cardholders can enjoy free general admission to more than 225 cultural institutions in dozens of U.S. cities on the first weekend of every month just by showing their cards. It’s through the Museums on Us program that’s been going on for 25 years. It’s open to Bank of America, Merrill and Bank of America Private Bank (U.S. Trust) credit or debit card holders.
Related: 5 reasons to get the Bank of America Premium Rewards credit card
Use your library card for museum entry
Another way to get free museum admission is with a library “lending ticket” — a program where libraries will lend museum passes for a set amount of time.
Also, check if your local museum’s membership comes with ROAM (a reciprocity program across North America). It’s an easy way to get maximum value from a regional (and usually less expensive) membership.
Take a free walking tour
Sign up for a free walking tour on your first day in a new city. It’s an inexpensive way to learn about the city and orient yourself.
Look online for options before traveling and sign up in advance if necessary. Then, all you need to do is show up with comfortable shoes and enjoy your free tour.
Although tipping is suggested, you’ll spend much less, even after generously tipping your guide, than you would with a standard tour option. You will likely also meet other like-minded travelers, which can be welcome if you’re traveling alone or looking to make new friends.
If you’re interested in seeing what’s available on your next trip, Google the city you’ll visit and the phrase “free walking tour” to see what comes up.
Dine on the cheap with Seated
Here’s a fun one: The Seated app allows you to dine out and get paid for it.
The app rewards diners who sign up and eat at designated restaurants with cash they can redeem through gift cards. All you have to do is let the app know you’ll be dining at a location before you take a seat. You can also get gift cards for Uber, Amazon and Starbucks.
Fly on weekdays
Flexibility on which days you fly is one of the keys to getting the best airfare prices. Leisure travelers most commonly book weekend flights, while many business travelers fly on Monday. So, the midweek days — Tuesday and Wednesday — have lower demand and are often the best days to travel for lower prices.
Related: When is the best time to book airfare?
Book vacation packages
Airlines that bundle airfare and hotels as vacation packages can offer better deals thanks to their vast buying power and inventory. These bundles can offer savings of up to 40% off. Savings on business-class plane tickets and high-end hotels can offer some of the best deals.
Also, purchasing directly from the airline gives you a one-stop shopping experience. You can even add a car and activities to your trip at the same time. Plus, you’ll often be able to take advantage of special sales and bonus points and miles offers.
Related: Everything you need to know about saving money with vacation packages
Use a price monitoring tool
Airline fare monitoring sites such as Hopper and Google Flights ensure you get notifications when your trip’s best and lowest prices become available. Set up as many combinations as you’re considering, including different departure and return dates, so that you can get alerts for all possible fare reductions.
Be flexible on destination
If you’re not locked into a fall or winter vacation location (like you would be for a destination wedding or family reunion that you can’t change), try an alternative to find better prices. For example, consider subbing Quebec City in for Paris if you want Old World charm. For scuba diving enthusiasts, skip the expensive long-haul flight to Australia and the Great Barrier Reef and instead head to the second-largest barrier reef in the world in easy-to-access Belize.
Related: 5 key tools and tips for cheap airfare
Hold your deal
If you see a great deal but are not yet ready to book, hold it. For example, Hopper’s Price Freeze allows you to lock in the price of a flight for up to seven days to take more time to finalize plans before you book. Some airlines will also let you hold flights for a small fee. (Remember that all U.S. airlines, by law, allow you to hold and cancel a flight booking within 24 hours without penalty as long as you book more than seven days in advance.)
Re-price your flights and hotels
As long as you’ve booked a hotel, car or flight that can be canceled without penalty, you should make it part of your weekly routine to check for price drops. If you find a lower price, rebook. You can use these same rebooking strategies with points to make dynamic pricing work in your favor for hotel stays so you can save on award nights.
Related: How I saved 33,500 points on upcoming hotel stays
Consider alternative airports
With prices high, now is the time to be flexible and check all nearby airports. For example, Houston and Chicago have two airports, while the New York City area has three, including Newark Liberty International Airport (EWR) in New Jersey. In Southern Florida, you could easily fly to West Palm Beach, Fort Lauderdale or Miami. It works internationally too: Try Gatwick Airport (LGW) instead of Heathrow Airport (LHR) when flying to London.
It may even make sense to get to one city by flying to another city and then taking a short train ride for the rest of the journey. For instance, you could fly into Philadelphia and catch a train to New York. Strategies like this can help you get to your destination on a flight with better pricing or award availability.
Use positioning flights
Positioning flights are unrealistic for every situation or trip, but they can often offer better award availability or pricing than those from your home airport. Can you reach your destination for a lot less by starting in Seattle or Chicago? Would adding another flight to a different airport save you money or miles? Just ensure you leave enough time between flights to avoid unnecessary travel headaches.
Related: Use positioning flights to get amazing deals
Use points and miles when appropriate
Since you are reading TPG, you may also want to earn points or miles through your everyday spending that you can use to pay for part of your trip. Some credit cards — like the Delta SkyMiles® Gold American Express Card and the Hilton Honors American Express Surpass® Card — can help you earn airline miles or hotel points that you can redeem directly with the airline or hotel. Cards such as the American Express® Gold Card earn transferable points you can redeem for travel or transfer to various travel partners.
If you have a stash of points and cash fares are high, it makes a lot of sense to use those points instead. For example, I recently priced a trip to San Francisco and found a flight over the Fourth of July weekend; it should normally cost about $400, but for this particular weekend, it was going to cost me at least $621. I used 46,000 Delta SkyMiles instead. While it wasn’t the best redemption in the world, it was better than shelling out all that cash. Most of those SkyMiles came from credit card spending on my Delta SkyMiles® Reserve American Express Card.
Related: Why I’m keeping my Delta Reserve card even when I’m flying less
There are many strategies for getting the most out of your credit card. You’ll generally get the most value when redeeming for premium-cabin flights or luxury hotel stays. However, you may prefer to book economy award flights or lower-category hotel stays using your points to stretch your points further.
Join AARP
You can join AARP for discounts even if you are not retired. The advocacy group for older adults offers all kinds of cool discounts, including $60 to $200 off British Airways flights and 10% off Hilton hotels.
Related: How to use AARP discounts on travel
Bottom line
Spending a small amount of time researching the best ways to travel on a budget could easily make a dream trip, like a Paris vacation, more attainable.
It’s possible to take an excellent vacation on a budget. You just need to put in the time to plan your trip, budget your expenses, download a virtual wallet of money-saving apps and consider using points and miles to decrease your out-of-pocket costs.
Some of our top budget travel tips include shopping around, signing up for deal alerts through websites like TPG and using points and miles. Opening a credit card or two for the sign-up bonus once or twice every few years could make your trips even cheaper. Don’t forget to sign up for our daily newsletter, where we teach you how to travel better for less. At TPG, we make traveling on a budget easy.
Webull believes that everyone should have an equal opportunity to control their financial future, and with their app, you can do just that.
Let’s dig into our Webull review.
In This Article
What is Webull?
It’s an iOS and Android online stock trading app that incorporates a ton of real-time information and tools to help the beginner get started investing for their future, or give the veteran investor an excellent option for zero commission trading.
Although other mobile apps offer free trades, like Robinhood, these two apps are very different, and Webull has some unique features to offer, especially in the area of research.
Webull is offering a free stock priced at $12-$1400 after successfully opening a free account and depositing ANY amount.
Webull Financial, LLC owns the Webull application. The company was founded in 2017 (privately held), and the mobile app was launched in May of 2018.
Webull is a registered broker-dealer with the SEC and a member of FINRA and Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).
You can check the background of Webull Financial LLC on FINRA’s BrokerCheck.
Keep in mind when investing in stocks and all other investment products involve substantial risk of loss and are not suitable for every investor. The value of stocks may fluctuate, and as a result, clients may lose more than their original investment.
Webull Features
Webull provides several great features to get you started buying and selling stocks. Webull V6.0 was recently released, which added Options Trading for all our users. Cryptocurrency Trading will also be coming to Webull soon! Visit the Webull website to join the Cryptocurrency Trading RSVP list.
Here are the features WeBull includes:
Free to Setup – Download the app, and you can begin setting up a commission-free brokerage account. You must be at least 18 years old with a valid social security number. There is no minimum deposit required for regular trading, but for margin trading, the minimum account balance must be at $2,000 or above (to use leverage or short).
Trading Tools – Webull delivers some of the best tools of any trading platform. They include free Free real-time quotes (NASDAQ Last Sale), in-depth charts, analyst ratings, and financial calendars.
Extended Trading Hours – Webull has free pre-market, and after-hours trading from 4 am to 8 pm Est. Full pre-market (4:00 AM – 9:30 AM ET) and after hours (4:00 PM – 8:00 PM ET) sessions.There are not many trading platforms that offer these extended hours.
Retirement Accounts – Webull offers three different types of IRAs to serve different financial goals: Traditional IRA, Roth IRA, and Rollover IRA.
Margin Account – With a margin account, you can short stocks, employ leverage to increase your exposure beyond that of your cash balance, and can place multiple day trades within a week without breaching regulatory constraints around day trading.
Free Stocks – You have the opportunities to receive free stock. You get one for opening an account. You can’t beat free!
Easy of Use – The Webull app is easy to use and has a great design. Check out the video I made. The app is running on an iPhone 6 with no issues.
Multi-platform accessibility
Free access to our advanced and fully customizable desktop, web, and mobile platforms.
24/7 Online Help
We offer 24/7 online help to guide you through our multiple platforms and answer all your questions.
Is Webull Safe?
Webull has several different levels of security and insurance for your account.
First, for your personal data, Webull uses state-of-the-art security measures when handling customer information. Your personal information is fully encrypted and never shared.
Second, for your money invested, Webull Financial is a member of SIPC, which protects securities customers of its members up to $500,000 ( $250,000 of cash).
Thirdly, Webull’s clearing firm, Apex Clearing, has purchased an additional insurance policy. The coverage limits protect securities and cash up to an aggregate of $150 million, subject to maximum restrictions of $37.5 million for any one customer’s securities and $900,000 for any customer’s cash. Similar to SIPC protection, this additional insurance does not protect against a loss in the market value of securities.
All the details can be found at Webull’s website or call Webull’s customer service for more information.
Webull Offers Free Stocks
Did I mention a free stock? Who doesn’t like free? You can get a free stock, once you successfully open a Webull account and fund the account with ANY amount. A stock valued between $12-$1400 will be received.
The stock inventory is composed of stocks with a minimum market capitalization of $2.5 billion from a US-based company listed on the NYSE or NASDAQ stock exchange.
Increase Your Investing Knowledge
One of the best features of Webull’s app is its aggregation of stock and investing information in one place. If you are looking to gain a better understanding of the stock market, this app is for you.
Several features will help you increase your knowledge, and help get you more comfortable with investing.
Watchlist – The watchlist gives you the ability to track individual stocks, mutual funds, ETFs, and companies. Even if you know very little about investing, this feature allows you to track the performance of any company you add to your watch list.
So if Netflix happens to be your binge-watching service or Starbucks your beverage company of choice, you can add them. Once added, you can drill down and review detailed performance, news, and analyst rating. This simple ability will help you increase your investing IQ.
Market Data – The market tab within Webull’s app gives you a complete market overview, including all US-base markets, the Dow Jones, S&P 500, and the NASDAQ. It also includes the Cryptos market, and all of the Global markets with great detail.
Paper Trading – This is a simulated trading feature, that just maybe the best way for a novice investor to better understand the market without the risk of losing any of their own money.
The feature allows you to start with 1 million dollars of virtual money to begin to build a stock portfolio. This real-life scenario is suitable for beginners to practice without using real money and a variety of features that benefit traders.
Webull offers simulator trading competition with real prizes on the line. To participate, you need to use Webull points to enter.
From their website, points are based on your contributions to Webull and the community. You can earn points by posting comments and ideas in the Webull community, completing tasks, and participating in our promotional activities, etc. These points can be redeemed for upcoming Webull products and services.
Cons
There is a lot we like about WeBull. Currently, there is only one con we could find.
Joint accounts – Webull does not support custodian, joint, or trust accounts. All accounts are individual accounts.
Overall Webull Impressions
I hope you have found this review useful. Webull is a slick trading platform app with a significant number of tools and data to balance your level of experience. It’s easy enough to use to help the beginner investor learn more about the stock market and deep enough to keep the experienced investor engaged.
Webull is an excellent choice for anyone who wants to be able to trade stocks from a smartphone.
Check out Twitter and follow the hashtag #HelloWebull for all the social media buzz on the application.
Brian is a Dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013. Who, with his family, has successfully paid off over $100K worth of consumer debt. Now that Brian is debt-free, his mission is to help his three children prepare for their financial lives and educate others to achieved financial success. Brian is involved in his local community. As a Financial Committee Chair with the Board of Education of his local school district, he has helped successfully launch a K-12 financial literacy program in a six thousand student district.
When you choose a bank for your daily checking and savings needs, you can choose between a national bank, a smaller regional bank, credit unions of varying sizes, and even online banks and financial technology companies.
Since early 2023, when Signature Bank and Silicon Valley Bank both experienced failures after customers pulled out large amounts of money during bank runs, banking customers may feel more comfortable choosing a national bank.
Although the U.S. government took extraordinary measures to protect the assets of SVB and Signature Bank customers, and deposits held in the accounts were FDIC insured, many customers were still rightfully concerned about gaining access to their money in a timely manner.
After the banking crisis of 2008, the Federal government declared banks like JPMorgan Chase, Bank of America, Citibank, and Wells Fargo as “too big to fail.” But these aren’t the only national banks or credit unions available.
You might think that smaller online banks may have lower fees, while small local banks are known for friendly and responsive customer service. But the national banks on this list blend the best of all worlds: low fees, high marks for customer satisfaction, ways to avoid overdraft fees, convenient ATM networks, and a variety of banking products.
16 Best National Banks
Here are the 16 best national banks that offer exceptional services, excellent customer support, and innovative banking solutions to meet all of your financial needs.
1. SoFi – Best for Digital Banking & High Yields
SoFi became a nationally chartered online bank in 2022, after acquiring Golden Pacific Bancorp, Member FDIC. Originally known for its vast array of loan products, including private student loans, today SoFi has a combination checking and savings account, or a cash management account, with no monthly service fee.
SoFi also has no minimum balance requirements, no overdraft fee, and overdraft protection up to $50 with qualifying direct deposits each month. You can bank for free at any of 55,000+ fee free Allpoint ATMs nationwide.
As an online bank, SoFi offers higher interest rates than you may find at brick and mortar banks. Earn up to 4.20% APY on your savings account balance and 1.20% on money in your checking account. When you use your SoFi debit card at select local businesses, you can earn up to 15% cash back.
SoFi offers two tiers of accounts: SoFi and SoFi Plus. To qualify for the “freemium” SoFi Plus membership, bank customers must have qualifying direct deposits. Plus, when you sign up before December 31, 2023, you can earn a cash bonus of $250 when you set up direct deposits of $5,000 or $50 with a direct deposit as low as $1,000.
SoFi Plus members receive loan rate discounts, bonus rewards, access to special entertainment events and more, making SoFi a unique company when it comes to online banks.
2. Discover Bank – Best for Cash Back
Discover may be best known for cashback and rewards credit cards. But its online banking products are some of the best you’ll find among national banks.
With no monthly fees and no minimum balance, your Discover Cashback checking account pays 1% cashback on up to $3,000 worth of debit card purchases monthly. You’ll never pay overdraft charges, and you can withdraw cash at a network of 60,000+ fee free ATMs.
You can qualify for overdraft protection by linking your Discover Bank savings account. Discover Savings pays a high 3.90% APY with no minimum deposit required.
Other Discover Bank deposit accounts include CDs with terms from 3 months to 10 years, and a money market account that pays 3.80% APY for balances under $100,000 and 3.85% on balances $100,000 and up.
For questions or help with your account, you can reach a U.S.-based customer service representative for Discover Bank by phone, 24/7/365.
3. Chase Bank – Best for Credit Card Rewards & Referral Bonuses
As the world’s largest national bank, JPMorgan Chase Bank doesn’t need to do much to entice customers. People will choose Chase based on its name, reputation, and more than 4,700 convenient branch locations across the U.S.
However, Chase happens to have one of the best bonuses for new customers and a generous referral bonus program when existing customers refer their friends. This, coupled with a robust and easy-to-use mobile app and a variety of checking, savings and investment services, puts Chase on our list of top national banks in the U.S.
Chase is currently offering new Chase Total Checking customers a $200 bonus when they open a new account and set up direct deposit within the first 90 days.
New or upgrading Chase Private Client customers can earn a $3,000 bonus with a deposit of $500,000 or more within the first 45 days of account opening. Deposits of $150,000 to $249,999 earn $1,000 and cash deposits of $250,000 to $499,999 earn $2,000. You must keep the money in your J.P. Morgan Wealth Management or JPMorgan Chase deposit accounts for 90 days to qualify.
In addition to Chase Total Checking, the bank’s most popular checking account, and Private Client services, Chase also offers other checking and savings accounts.
Chase Secure Banking has a $4.95 monthly fee and no overdraft fees. Chase Premier Plus Checking offers a few added benefits beyond Chase Total Checking, including ATM fee rebates up to four times per statement cycle, a linked personal checking account with no monthly fees, and a 0.01% interest rate on balances.
Chase also offers bank accounts for kids, teens, and college students, as well as CDs, savings and money market accounts, mortgages, loan products, and a full array of top-rated rewards credit cards.
If you have multiple Chase accounts, it’s easy to manage them all within the mobile app.
4. Chime – Best for Building Credit
Chime is a financial technology company backed by Stride Bank, Member FDIC, and Bancorp Bank, Member FDIC. It is not a bank, itself, but offers some of the same features, including online banking, a debit card, and direct deposit up to two days earlier than some other banks.
Chime has no monthly service fee, no overdraft fee, and no minimum balance requirements. For customers who need a little boost to make it from paycheck to paycheck, Chime offers fee-free overdraft up to $200 through the SpotMe5 program and a credit builder secured Visa credit card with no annual fees, interest or minimum security deposit.
Use your Chime debit card at any of 60,000+ fee free1 ATMs in the Allpoint, MoneyPass or Visa Plus Alliance ATM networks. Out of network ATM fees may apply, otherwise.
You can qualify for Chime’s SpotMe program with a single direct deposit of $200 or more during any monthly statement period. If you process a transaction that would put you into overdraft, Chime will accept the transaction even if it puts your balance into the negative by up to $200.
The Credit Builder Secured Visa card carries the same requirements of a $200 monthly minimum direct deposit. You can build your credit and raise your credit score with responsible use of the card.
5. Citi® – Best for Large Cash Deposits
The third of the four largest national banks in the U.S. based on assets, Citi, owned by Citigroup, is best for high net worth customers or those with large cash deposits divided among Citi checking, savings, and other accounts.
Currently, you can earn a generous cash bonus of $200 to $2,000 when you open a qualifying Citi checking account and meet specific minimum opening deposit requirements. Your bonus will be determined by your account balance on the 20th day after opening the account. Funds must remain in the account for an additional 60 days after the 21st day.
Citi offers multiple checking accounts to meet various customers’ financial needs, all with monthly fees that are easy to waive if you hold the required minimum balance. The bank accounts include:
Citibank
Citi Priority, which includes travel perks and access Citi Personal Wealth Management advisors
Citigold, relationship banking and investment services
Basic Banking and ATM access
Access Account, a debit account with no paper checks
For the Basic Checking account, you’ll need to maintain a $1,500 minimum balance to waive the fees. The other accounts have larger minimum balance requirements to avoid monthly maintenance fees and take advantage of other perks, up to $200,000 for a Citigold account.
All accounts provide access to personal banking at Citi branches and access to more than 65,000 fee free ATMs across the U.S. All accounts except for Basic and Access accounts also have no fees at ATMs outside the Citi network.
Like all the larger national banks on this list, Citi has a full gamut of rewards credit cards, savings and money market accounts, and high-yield CDs.
6. CIT Bank – Best for High Interest Rates
CIT Bank, a division of First Citizens Bank, has earned awards and accolades for customer satisfaction, rated by American Banker as #1 for “delivering the most humanized experience in banking.”
You should be aware that deposits in First Citizens Bank & Trust Company, Member FDIC, are not separately insured. This only matters if you hold more than $250,000 in any single account type, such as checking or savings, in both First Citizens Bank and in CIT Bank.
CIT is the online only banking arm of First Citizens Bank, with high-yield savings accounts, CDs, money markets, and eChecking, all with no monthly fees and no overdraft fees. You won’t pay any ATM fees at CIT Bank machines, and CIT Bank reimburses up to $30 per month when you use out-of-network ATMs.
CIT offers 0.25% APY on checking when you hold more than $25,000 in your account, and 0.10% APY on balances under $25,000. The bank has high interest rates for savings, offering customers a 4.85% APY on balances of $5,000 or more with the Platinum Savings account.
CIT Bank has two other savings accounts as well:
Savings Connect, with a 4.60% APY
Savings Builder, which requires a minimum balance of $25,000 or a $100 monthly deposit to earn 1.00% APY
You’ll need a $100 minimum deposit to open a checking or savings account at CIT Bank.
7. Bank of America – Best for College Students
As the second largest of the best national banks, behind Chase, Bank of America has the full gamut of banking products, with three checking accounts plus a student account, savings, CDs, and investment products.
It’s easy to waive monthly maintenance fees on a checking account with a minimum daily balance, direct deposits, combined balances across eligible linked Bank of America accounts, or by enrolling in their Preferred Rewards programs.
We like the Advantage SafeBalance banking for kids, teens, and college students under 25 years old. They have no monthly fee and no overdraft fees. Teens ages 16+ can have sole ownership of the account.
For everyone else, the bank offers Advantage Plus and Advantage Relationship checking accounts with easy ways to waive the monthly fees with direct deposit or a minimum daily balance.
When you open a new checking account, you can qualify for a $100 bonus when you receive qualifying direct deposits of at least $1,000 within 90 days of opening the account.
Of course, Bank of America also has CDs, and a savings and money market account. Plus you can invest with Merrill. All of these deposit accounts count toward your Preferred Rewards membership.
When you have a combined average daily balance of at least $20,000 for three months, you’ll qualify for the rewards program.
8. U.S. Bank – Best for Military Members & High Balance Savings
U.S. Bank offers the Bank Smartly checking account so you can earn interest on your money. The current interest rate is just 0.01% APY on all checking balances. You’ll pay a $6.95 maintenance fee, but this is waived if you meet minimum deposit requirements or if you are a member of the U.S. military.
You can link your Bank Smartly checking account to a standard savings account or Elite Money Market to earn even more. To avoid fees on your savings account, you’ll want to keep a $300 minimum daily balance or a $1,000 average monthly collected balance. If you are already a Bank Smartly customer, you can enroll in Smart Rewards to waive savings account fees.
The Elite account is better for those with high balances. You can earn up to 4% APY on balances from $25,000 up to just under $500,000.
The appeal of U.S. Bank is in its high ratings for banking satisfaction across the board from customers. U.S. Bank earned accolades for having the best mobile app, the best digital mortgage tools, the best customer service features, and best mobile check deposit capabilities. These factors all contribute to its ranking as a best national bank.
9. Axos Bank – Best Online Bank
Axos is an online only bank with a rewards checking account that delivers up to 3.30% APY, with no fees and unlimited ATM fee rebates for out-of-network ATMs.
To earn the maximum APY, you’ll need to set up direct deposit and Axos Bank’s free Personal Finance Manager for 0.70% interest. Then, open an investment account and take out an Axos personal loan or auto loan and earn another 2.60% annual percentage yield on your checking account balance.
Axos also offers an Essential Checking account with early direct deposit and no fees, and a Cashback Checking account, which gives you 1% cash back on debit card purchases, along with no maintenance fees and unlimited domestic ATM fee reimbursements.
Voted the best online bank by many top personal finance sites, Axos Bank offers more than just high interest, no fee checking.
Axos Bank offers CDs with terms between 3 and 60 months and a savings account with 0.61% annual percentage yield, with interest compounded daily. You can also find personal loans, car loans, mortgages, and investment products.
Like other national banks, Axos Bank provides FDIC insurance up to $250,000 or $500,000 for joint account holders. But you can expand your coverage up to $150 million with Axos Bank InsureGuard+ Savings from IntraFi Network Deposits.
Axos splits up your large deposit into multiple accounts across several banks, each covered up to $250,000. If you are dealing with a substantial amount of cash and want your savings protected at a single bank, Axos may be a good choice for you.
New customers can earn a $100 welcome bonus by opening an account with just a $50 minimum opening deposit.
10. Truist Bank – Best for Relationship Banking & Innovative Savings Perks
Truist Bank is one of the top 10 largest national banks, formed as a merger between BB&T and SunTrust in 2019. Called “the biggest bank you’ve never heard of” by CNN Business, Truist holds assets of $574 billion and has been growing steadily since the merger.
Truist offers checking and savings accounts, CDs, and credit cards. Truist checking and savings customers can earn perks and benefits. This includes access to Long Game, a savings game app that lets you earn cash when depositing into your Truist savings account. It also includes bonus rewards on your Truist credit cards.
Truist has four levels of relationship banking in its Truist One checking account. This means the more you deposit, the more perks you will receive, up to a 50% loyalty bonus on Truist credit cards, and a discounted annual fee for a Delta SkyMiles debit card. Benefits for relationship banking begin at $10,000 in combined average monthly balances for Truist deposit accounts.
Your Truist checking account has a $12 monthly fee, which is easy to waive with $500 or more in direct deposits each month or a $500 minimum balance across all Truist deposit accounts. Truist personal loan, mortgage or credit card customers also pay no fees on their Truist checking account.
You can also waive the monthly fee with a linked Small Business checking account or if you are a student under the age of 25. You’ll need a $25 minimum opening deposit for a Truist One checking.
Customers with lower income or just getting started establishing their finances can benefit from Truist Confidence checking and savings accounts. The account has just a $5 monthly maintenance fee, which is easily waived.
11. Capital One – Best for High Interest Rates at a Brick and Mortar Bank
Like Chase Bank, Capital One is well known for its top-rated rewards credit cards. The company is also one of the best national banks with a savings account and CDs offering interest rates higher than the national average.
Capital One Performance 360 savings has a 3.90% APY, no monthly maintenance fees, and no minimum deposit to open your account. A Capital One 360 Performance checking account, similarly, has no monthly maintenance fee, overdraft protection through your linked savings account, and early direct deposit.
You can bank with no fees at a network of 70,000+ ATMs nationwide, and can deposit cash easily at CVS retail locations. Although you must open your Capital One Performance account online, you can receive personalized service and deposit cash at any Capital One bank branches or Capital One Cafes.
12. PNC Bank – Best in East and Southwest
PNC Bank is a large, national bank with branch locations across 29 states. Most branches are in the east, south, and southwest, although you will also find branch locations in some Midwest states.
PNC Bank’s online checking account is called Spend and it links to the PNC VirtualWallet. You can add a savings account, called Reserve, or upgrade to the Performance Select product with two tiers of savings and double layer overdraft protection.
When you set up your VirtualWallet with PNC Bank and open your Spend account, you can earn a $50 bonus.
Combining your Spend account with a PNC Bank Reserve account yields even more benefits. Earn a $200 bonus when you qualify. Finally, if you open a Performance Select VirtualWallet, you could earn $400.
Each account comes with a low monthly fee that is easily waived through qualifying monthly direct deposits or by meeting minimum balance requirements.
13. Wells Fargo – Best for Checking Account Options
Wells Fargo, one of the “big four,” is the fourth largest of the best national banks in the U.S. It is known for having many convenient bank locations, with 4,700 branch locations.
The vast number of branches across the country puts it top on our list for in-person banking and customer satisfaction.
Plus, we also rated it best for various checking account choices for everyone from children to retail investors.
Like the other national banks on this list, Wells Fargo has checking, savings, and CD accounts. The bank has four checking account options for consumers at various stages of their financial lives:
Clear Access Banking, with no overdraft fee and a low $5 monthly fee, waived for teens and young adults ages 13 to 24
Everyday Checking, the most popular bank account, with optional overdraft protection
Prime Checking, offering discounted interest rates for loans and higher interest rates for linked CDs and savings accounts
Premier Checking, a relationship banking service with 24/7 support and discounts on investing services
It’s easy to waive the $10 fee on Everyday Checking with a $500 minimum daily balance or $500 in monthly direct deposits. Waive the $25 fee on your Prime checking with $20,000 in linked balances. Similarly, your Premier Checking account will be free with $250,000 in linked balances, including investments with the bank’s Advisors.
You’ll need a $25 minimum opening deposit to open your account.
14. Ally Bank – Best Online Only Bank for Savings
Ally Bank is widely recognized as one of the best national online banks. It has very few fees, including no maintenance fee, no overdraft fee, and no ACH fee (even on expedited transfers). Plus, you’ll earn interest of 0.25% in your checking account and 3.85% APY on savings, including money you have allocated into various buckets.
We rated Ally Bank as the best online only bank for savings, not just because of the high interest rate, but because it offers so many ways to manage your money and ramp up your savings efforts.
You can set up recurring transfers into your savings account for specific goals or just to build up your emergency coffers. You can choose to round up transactions made with your Ally Bank debit card, or even electronic payments and checks. When Ally Bank finds at least $5 in “round-up” savings, it will be transferred automatically to your checking account.
Finally, Ally Bank analyzes your checking account periodically to reveal extra funds that are “safe to save.” Ally Bank automatically transfers that money for you. But you can transfer it back whenever you’d like.
In addition to these savings benefits, Ally Bank lets you access your money with your debit card with no fees at any of 43,000+ Allpoint ATMs. The online bank also refunds up to $10 in fees charged by out-of-network ATMs.
You can avoid stress and overspending with the Overdraft Transfer Service, which automatically transfers money from your Ally Bank savings account into checking. If you exceed six transfers or six savings withdrawals per month, Ally Bank will reimburse those fees, too.
You can also apply for CoverDraft℠ Coverage, which will cover up to $250 in charges that would put your account in the negative. You’ll qualify 30 days after you deposit at least $100 into your checking account. If you receive qualifying direct deposits of at least $250 two months in a row, you can increase your coverage to $250.
15. TD Bank – Best for Overall Banking Satisfaction
TD Bank, deemed America’s most convenient bank for its number of branches, branch hours and excellent customer service, blends the best of brick and mortar banks with easy online banking.
Most TD Bank locations are open seven days a week, including Sundays, with extended hours beyond what most brick and mortar banks provide. Most TD Bank branches are located across the East Coast, with locations in 15 different states and Washington, D.C.
TD Bank is the 7th largest bank in the U.S. based on deposits, with 1,668 branch locations nationwide. You can also reach customer service by phone, 24/7/365, which earns TD Bank high marks for banking satisfaction.
TD Bank offers six checking accounts for customers in various life stages:
TD Essential Banking
TD Convenience Checking
TD Beyond Checking
TD Simple Checking
TD 60 Plus Checking
TD Student Checking (for ages 17 to 23)
Currently, TD Bank is offering sign-on bonuses for new customers who open a TD Beyond or TD Convenience bank account. You’ll need a qualifying direct deposit (or more than one) totaling $2,500 within the first 60 days to earn $300 with TD Beyond, and a direct deposit of just $500 within the first 60 days to earn $200 with TD Convenience.
16. Schwab Bank – Best for Investors
Schwab may be best known as an investment service, but the bank was rated highest in banking satisfaction with checking accounts from J.D. Power & Associates four years running.
If you have a Schwab investment account, or are considering opening one, Schwab could be the best choice in banking for you.
The Schwab Bank Investor checking account has no foreign transaction fees, no minimums, and unlimited ATM fee rebates. Plus, earn 0.45% annual percentage yield on checking. Schwab’s savings account offers 0.48% APY.
Schwab also offers exceptionally high interest rates for CDs, with up to 5.40% APY and terms as short as 30 days. You’ll receive FDIC protection exceeding the federal maximum because you can purchase CDs from multiple banks, all through Schwab investment.
Methodology: How We Chose the Best National Banks
We evaluated a variety of banks and credit cards, taking into consideration the:
Variety of products
Interest rates
Monthly fees
ATM fees and ATM fee reimbursement
Branch locations and number of branches
Minimum deposit requirements
Fraud protection and security
We also looked at consumer reviews, and drew on the general reputation of each bank to find the best national bank.
Finding the Best National Bank
Now that we’ve explored the specifics of the best online banks and brick and mortar banks nationwide, you probably still have questions about which one is really the best national bank.
Let’s compare the three largest in the U.S. based on number of branches, interest rates, and overall banking satisfaction.
Chase vs. Wells Fargo
For the largest nationwide bank, Chase offers excellent banking satisfaction with an A+ rating from the Better Business Bureau, 4,800 branch locations, and an easy and intuitive mobile app. If you are shopping for a bank credit card, Chase also offers some of the best rewards cards available today.
Wells Fargo rivals Chase when it comes to number of branches, with roughly 4,700 locations across the U.S. It’s somewhat easier to waive the checking account fees at Wells Fargo. Wells Fargo offers higher interest rates for savings, with a 0.15% APY compared to Chase’s 0.01%.
Both banks have lower interest rates than you might find at online banks. However, if you are looking for national banks with a solid reputation, many branches, and high marks in banking satisfaction, either Chase or Wells Fargo would be a good choice.
Wells Fargo vs. Bank of America
Bank of America and Wells Fargo are the second and third-largest banks in the U.S. based on assets. BofA only has 4,000 branches compared to Fargo’s 4,700, but BofA boasts more ATMs nationwide.
BofA stands out when you join the Preferred Rewards program because you can waive the fees on your bank account and enjoy perks, bonus rewards on BofA credit cards, and rate discounts on loans.
If you have a large balance or are looking for an investing platform through your bank, BofA may be your best choice. On the other hand, Wells Fargo offers high interest rates on savings and convenient branch locations nationwide.
Common Questions
People have many questions related to whether an online bank is better than a traditional bank or whether a local bank is better than one of the largest national banks. We break it all down here.
Which is better, an online bank or a brick-and-mortar bank?
If you are looking for the highest interest rates and generous rewards programs, you are highly likely to find them at online banks. However, there are some advantages to a brick and mortar bank, including in-person service at local branches, the availability of paper checks, and easy ways to deposit cash in person or at branch ATMs.
You should expect the best national online banks and the best brick and mortar banks to have robust mobile apps, easy-to-waive fees, and fraud protection.
Make sure whatever bank you choose is “Member FDIC,” which means your deposits are insured up to $250,000 per account holder, per account type. That means joint accounts have $500,000 worth of FDIC insurance protection.
Is my money safer in a national bank vs. a regional bank (or a national credit union vs. a regional credit union)?
All banks on this list are Member FDIC, which means they are insured to the maximum allowable limit of $250,000 per account holder, per account type. Credit unions are covered up to the same limits by the National Credit Union Administration.
Many online banks are insured up to $2 million or more. These financial institutions divide cash deposits among multiple partner banks. Each bank insures deposits up to the maximum limit allowed by the Federal Deposit Insurance Corp. Read the fine print to determine your coverage limits when you choose a bank.
Beyond that, your money should be equally safe in a national bank, a smaller bank, or a credit union of any size. Also look for features such as fraud protection, fraud alerts via text, email or in the mobile app, and enhanced website security measures. You should also be able to lock and unlock your debit card in the mobile app if you misplace it or believe it may have been stolen.
What makes big banks different from smaller banks?
By definition, big banks will have larger market capitalization, which represents the total value of a bank’s stocks. Big banks will also hold more assets. For instance, Chase, which is the world’s largest financial institution, holds $3.2 trillion in assets. The second-largest national bank, Bank of America, possesses $2.41 trillion in assets. Larger financial institutions may also have more bank branches.
In many other ways, big national banks and smaller banks are similar, especially today. Customers want specific features and are unwilling to compromise on things like fee-free ATMs, no monthly fees, early direct deposit, and an intuitive mobile app.
How much interest do the best big banks pay?
In general, some of the largest national banks do not have the highest interest rates for savings and very few offer interest earning checking accounts.
Capital One 360 and Discover are two of the best national banks that offer interest on checking. To earn a higher APY with one of the largest national banks, you might want to consider CDs.
Are national banks better than other kinds of banks?
National banks aren’t necessarily better or worse than other kinds of banks. They may have more convenient branch locations, a higher number of branches, and a greater variety of products, but they might also have higher fees. Decide what’s most important to you when you choose a bank.
If you’d prefer to trust your money with one of the largest national banks, with a large market capitalization, high value, and branches nationwide, consider opening your checking and savings accounts with one of the best national banks on this list.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
The Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
Fannie Mae has tapped Chetlur S. Ragavan to serve as a member of its board of directors, as well as its risk policy and capital committee and nominating and corporate governance committee. Ragavan, the founder and principal of advisory and consulting firm Risk Response, comes to the role with decades of experience in enterprise risk … [Read more…]
Investment banking is a specialized area of the financial services industry that focuses on aiding governments, corporations and other entities to raise capital and complete mergers and acquisitions. The term “investment banker” refers to an individual who works for an investment bank that offers these services.
Investment banking is typically considered to be a prestigious career, and becoming an investment banker can be lucrative for those willing to complete the necessary education and training.
What Is an Investment Banker?
Investment bankers work for investment banks, which are effectively middlemen between entities that need capital and entities that provide it. In simpler terms, investment bankers help their clients to expand and grow their businesses or operations.
Another way to think of an investment banker is as a financial advisor to governments, corporations, and other businesses. As part of their professional duties, they may guide clients in making financial decisions that directly or indirectly affect their bottom line.
Investment bankers are most often associated with Wall Street, though they work in cities throughout the world. Some of the largest investment banks in the United States include Goldman Sachs & Co., Morgan Stanley, J.P. Morgan, Bank of America Merrill Lynch, and Blackstone.
What Do Investment Bankers Do?
Investment bankers play an important role in helping companies achieve their financial goals. When a corporation is planning an upcoming expansion project, for instance, its board may turn to an investment bank for help. An investment banker can analyze the company’s financial situation to determine the best way to meet its needs.
In terms of the specific tasks an investment banker may carry out, that depends largely on the type of clients they work with.
Assisting With Initial Public Offerings
Investment bankers can play a critical role in helping clients secure capital. Depending on the client, this can be done through a variety of means, including the launch of an initial public offering (IPO).
An initial public offering, or IPO, allows private companies to offer shares of its stock to the public for the first time. The investment banker assists by creating a prospectus explaining the details of the IPO, marketing it to potential investors, and navigating Securities and Exchange Commission (SEC) compliance rules.
Investment bankers are key to whether the company’s IPO is a success. They help determine the initial price of the offering, which is critical. Pricing too high could scare off investors, while going too low could undercut their client’s profits.
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Bond Issuance
Government agencies and corporations often use bonds as a fundraising tool. For example, if a city government needs money to improve local roads they might issue a municipal bond to fund the project. Investors purchase the bonds on the bond market, giving the government the capital it needs to complete the road updates. Investors can hold onto the bond and earn interest on it, or they can sell it to another investor.
As with an IPO, an investment banker’s role in issuing bonds may include preparing the bond issuance documents, setting a price, submitting it to the SEC for approval, and marketing the bond to investors to raise capital.
Recommended: Federal Reserve Interest Rates, Explained
Equity and Debt Financing
Equity and debt financing are two other ways that companies can tap into funding. With equity financing, companies raise capital by selling an ownership share in the business. Venture capital and private equity are common examples of equity financing.
Debt financing involves taking out loans or lines of credit, without giving up ownership stakes. An investment banker can help companies assess which type of financing makes more sense for their business model, and help them work through the process of securing the funding.
For example, investment bankers may work with startups to pitch angel investors, while they might help more established companies compare and select loan options.
Mergers and Acquisitions
Another common task that investment bankers assist companies with is mergers and acquisitions. In a merger, two companies enter into an agreement to become a single business entity. Each company is treated as an equal in the transaction. An acquisition, on the other hand, involves one company purchasing another.
In either type of arrangement, companies may use investment bankers to oversee the process. This could involve negotiating the terms of a merger or acquisition and reporting the details of the transaction to the SEC to ensure compliance. When a company considers an acquisition, investment bankers can also help identify and vet potential targets.
Recommended: What Happens to a Stock During a Merger?
Investing and Asset Management
While investment bankers’ duties primarily revolve around raising capital for their clients, there are other services they may perform. This can include things like:
• Investment research and analysis
• Buying and selling securities
• Offering advisory services
• Asset management
These services are similar to what a personal financial advisor might offer their clients.
How to Become an Investment Banker
If you’re interested in a career in investment banking, there are a few things to know. In terms of education, a bachelor’s degree is typically a minimum requirement for most investment banker jobs. Though some investment banks may look for candidates that have earned a higher degree of education, such as an MBA or a graduate-level degree in finance.
Aside from education, there are certain skills that may help you be successful as an investment banker. Those include:
• Ability to perform under pressure
• Good communication skills
• Solid marketing skills
• Firm grasp of financial markets and modeling
• Strong attention to detail
Depending on your responsibilities, you may also need a securities license. That may include completing one of more of the following licensing exams:
• Series 7 General Securities Representative Qualification Examination (GS)
• Series 79 Investment Banking Representatives Exam
• Series 63 Uniform Securities Agent State Law Exam
Before you can take these exams, you first have to be employed and sponsored by a FINRA-member firm or other self-regulatory organization member.
Taking and passing the Securities Industries Essentials (SIE) Exam could help improve your chances of being hired as an intern or junior employee. That process begins early, with many banks hiring summer interns more than a year ahead of the start of the program.
How Much Do Investment Bankers Make?
Investment bankers generally earn above-average salaries. Even at the entry level, it’s possible to make $100,000 or more, and salaries for top Wall Street bankers can easily range into the millions or tens of millions. But investment banking is one of the hardest jobs on Wall Street. So, if you’re not prepared to routinely work 100-hour weeks or constantly be on-call for your clients, it may not be the job for you.
The Takeaway
Investment bankers work primarily with institutional investors, governments and corporations rather than individual investors. But you can still benefit from the work investment bankers do behind the scenes indirectly.
Investment bankers may work in a variety of roles, such as helping facilitate IPOs, or mergers and acquisitions. It can be a lucrative career path, too, but generally requires a graduate-level education, and additional licensing.
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