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Thread: Anyone have experience with Netspend?

  1. #1
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    Anyone have experience with Netspend?

    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?

  2. #2
    Senior Member bae's Avatar
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    I’m curious how they can pay 5% on savings....

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

    Quote Originally Posted by bae View Post
    I’m curious how they can pay 5% on savings....

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    Senior Member jp1's Avatar
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    Quote Originally Posted by frugalone View Post
    Why would that be difficult? I know of a credit union that pays 3%.
    Name please? I'd like to open an account!

  5. #5
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    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.

  6. #6
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    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

  7. #7
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    It's a checking account.
    https://www.lmcu.org/banking/checking/checking_max.aspx

    Quote Originally Posted by jp1 View Post
    Name please? I'd like to open an account!

  8. #8
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    I do understand what you mean.

    But how can one possibly know if the emergency funds won't be needed for a year or more? That's the whole idea of "emergency."

    I don't know...I get very disappointed when I see these rates. 1.3% isn't anything to hop up and down over, IMHO. I guess this is all because of the recession?


    Quote Originally Posted by dado potato View Post
    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

  9. #9
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    frugalone,

    I can imagine reserves in an on-line savings account for purposes that are:
    A. certain to occur within a year: Property Taxes (for those with no mortgage, in January and July), Quarterly Income Tax Installments, Travel/Vacation, Medical Deductible (perhaps in a separate HSA), Dental Care, Annual Premium for home insurance, Semiannual Premium for vehicle insurance, Tires and Vehicle Repairs, etc.
    B. probable to occur with in a year (if applicable... every person's situation is unique): home improvements and repairs (occupants of the home periodically can suggest estimated amounts for the costs of these relatively urgent expenditures), vehicle replacement (if needed within a year), Veterinarian, Moving, Down Payment on real estate, Major Recreation expenditure (boat, RV, etc.), Orthodontic work. ... The acquisition of any of these might also be planned for more than a year out. If so, Treasury I bonds might make sense, instead of a savings account.
    C. the truly unexpected (such as): home insurance deductible, vehicle insurance deductible, job loss, helping a family member with legal bills, divorce transition, avoiding eviction. ... A person with a fairly predictable, simple life could probably survive by allocation $100 per month to the unexpected. But someone who is more disaster-prone or less aware of future expenditures would need to allocate more to the savings account for the unexpected.

    For ABC above I believe the liquidity of a savings account is essential.

    If the money-manager in the household is providing for more than one person, it would be important to communicate and establish consensus about the urgency of discretionary spending. One spouse might believe new wall-to-wall carpeting and counter-tops are needed urgently, while buying a piece of unimproved land on which to shoot grouse, turkey and deer during hunting season CAN WAIT. It is good to have a meeting of the minds on such things.

    I believe it is possible, if not easy or with 100% confidence, to set up reserves for major expenditures that are expected to occur more than 1 year out in the future. I agree, it might not be quite right to call these "emergency" items. I Bonds might make sense for these purposes. Generally by saving in advance of need, one reduces or avoids borrowing when the time comes. Thus compound interest increases an asset rather than a liability. Everybody's situation is unique, but some of these purposes might include:
    Daughter(s)' nuptials, Son(s)' nuptials, Own nuptials.
    Vehicle Replacement
    Tuition
    Down Payment on Real Estate (own, or helping the next generation)
    Replacement of roofing, driveway, HVAC, flooring, siding or other major home improvements.

  10. #10
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    dado potato, Thanks for weighing in on this one.

    As we don't own a home, we wouldn't need any money for property tax, repairs, etc. We don't owe quarterly tax. For medical spending, I have a flexible spending account at work, and I don't qualify for an HSA (I think it's because of either the FSA or because we are on the ACA exchange).

    I have a separate account for vehicle replacement (it's in my Capital One 360 money market account). I'm basically keeping about $5K in the credit union savings for those things like vehicle deductibles, vet bills (we had a sick animal over a year ago and it really helped). I also have what I call a Freedom Account (if anyone's read Mary Hunt's books, I got it from there). It's for irregularly occurring expenses, not emergencies.

    There is a possibility of us buying a house, but I have other money for that that I may put in a VTSTX. Also, we probably qualify for first-time homebuyers' programs (FHA) and a relative may help out with that.

    Fortunately, spouse is not interested in grouse hunting or new carpeting. The only thing he really wanted in nearly 30 years of marriage was a flat-screen TV and Blu-Ray player, plus a couple of pieces of stereo equipment. I'll never forget when we moved into our house, and I wanted to buy a couch and a La-Z-Boy. He always, always bought stuff used. He took me down to the Salvation Army and showed me the ugliest suite of furniture I'd seen in ages, and tried to tell me I should buy that instead of new. Man, did I put my foot down.

    I guess I have to put more thought into this.

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