Anyone have experience with Netspend?

[frugalone]

Came across this on another forum today. https://financialpanther.com/netspend-account/

It sounds intriguing, if a bit labor intensive in the set-up process. I am keeping about $5K of my emergency fund in my local credit union's savings account. I've been a customer there a long time, but they've changed hands 2x, and frankly, they are paying a really crappy rate for savings. Of course I want my emergency fund to be easily accessible, but I also think $5K is a heckuva lotta money to have sitting around earning almost nothing.

I know also that some people get accounts in other states, such as with Ally or Synchrony. The Netspend thing pays 5%, which sounds pretty good to me.

What say you?

[bae]

I’m curious how they can pay 5% on savings....

[frugalone]

Why would that be difficult? I know of a credit union that pays 3%.

I’m curious how they can pay 5% on savings....

[jp1]

Why would that be difficult? I know of a credit union that pays 3%.

Name please? I'd like to open an account!

[frugalone]

It's a checking account.
https://www.lmcu.org/banking/checking/checking_max.aspx

Name please? I'd like to open an account!

[bae]

Why would that be difficult? I know of a credit union that pays 3%.

The WSJ prime rate is 4.25% today, the Federal discount rate is 1.75%, and the Fed funds rate is 1.25%.

I'd look very very carefully into the details of any "savings" account that is offering 5%. Banks aren't in the business of losing money.

[jp1]

The WSJ prime rate is 4.25% today, the Federal discount rate is 1.75%, and the Fed funds rate is 1.25%.

I'd look very very carefully into the details of any "savings" account that is offering 5%. Banks aren't in the business of losing money.

I looked into the account she suggested. Yes, it does actually pay that much but with a few caveats. First, it's for a maximum of $15,000. That I can live with. The second I can also live with. Electronic statements. The third is also a hassle that I would put up with. Have to do direct deposit into it each month. The last is the one that is probably a deal breaker, at least for me. Having to do a certain number of debit card transactions each month. That one throws chaos into what could otherwise be an automated system of dealing with the hoops one has to jump through. Yes I could probably make it work by using the debit card every time I go to safeway and then tweak fund transfers at the end of each month to maintain the maximum amount in it, but I'm just not sure that the hassle is worth $450/year in interest.

[frugalone]

It does seem kind of complicated. I'm already dealing with a number of different bank accounts. But at the same time, I wanna make money (of course)!

I looked into the account she suggested. Yes, it does actually pay that much but with a few caveats. First, it's for a maximum of $15,000. That I can live with. The second I can also live with. Electronic statements. The third is also a hassle that I would put up with. Have to do direct deposit into it each month. The last is the one that is probably a deal breaker, at least for me. Having to do a certain number of debit card transactions each month. That one throws chaos into what could otherwise be an automated system of dealing with the hoops one has to jump through. Yes I could probably make it work by using the debit card every time I go to safeway and then tweak fund transfers at the end of each month to maintain the maximum amount in it, but I'm just not sure that the hassle is worth $450/year in interest.

[Tybee]

Thanks for the link. I think this is more complicated than I want to get, with the multiple accounts and debit card. But let us know if you try it and it works for you.

[dado potato]

To me it seems like a lot of gamesmanship to open a number of cards and then avoid inactivity fees... even though cards really are going to be inactive. Since the terms can be changed at any time, there is no saying how long this "opportunity" to earn 5% FDIC-insured interest will exist.

Competitive rates:

Alliant Credit Union, 1.25% APY online savings minimum $100 for interest to be earned. $10 charitable donation required for membership for people who are not qualified due to the bond of association (certain employee groups).

GS Bank (soon to rebrand as "Marcus"), 1.3% APY, no minimum, pays interest on every dollar.

For an emergency fund that is not expected to be withdrawn from for more than 1 year, I Bonds from the US Treasury may be an alternative. Maximum $10,000 purchase per Social Security Number per year. Interest compounds at a composite rate that is reset by the US Treasury every 6 months, based on the CPI. From 11/2017 to 4/2018 the composite rate is 2.58%. Compounds semiannually. Cannot be cashed in less than 1 year after purchase. Available at treasurydirect.gov