GREAT INTEREST RATES - EARN 3.42% INTEREST RIGHT NOWBelieve it or not, federally insured, completely liquid, high paying bank accounts are still available TODAY. Yes, even in this extremely low interest rate environment, it is possible to find FDIC-insured, completely liquid checking accounts paying out as much as 4% APY. Better yet, they are not all that hard to find when you know where to look. If you have $10,000 or more sitting in a standard bank account earning little to no interest, keep reading to learn where you can park this money to start earning a significant return all while keeping your money completely safe (FDIC insured), and liquid. Oh, and you will also likely qualify to have any ATM withdrawal fees reimbursed each month to boot. Anyone reading this for the 1st time will probably be thinking, “How is this possible? The highest rate I’ve seen ANYWHERE for a federally insured liquid account is less than 1%!” Even the very highest paying long term CD’s, which are not at all liquid (in fact you are forced to lock your money up for a long period of time), pay rates less than 2% right now. So what are these magical accounts that are completely liquid and pay out high interest rates? 3 magic words: REWARDS CHECKING ACCOUNTS SmartMoney Magazine published this article in 2009 highlighting various types of FDIC-insured high interest paying bank accounts. Quickly browse the article and pay close attention to the section on Rewards Checking Accounts: SmartMoney Article highlights great interest rates Great interest rates indeed! When this article was written, the very best of these rewards checking accounts were returning 6%! Interest rates in general were higher back then but these Reward Checking Accounts just about tripled the return available from any other option at the time. Of course, interest rates overall are much lower today than they were back then. The highest yielding of these types of accounts today are returning 5% (and these 5% deals are only available for residents of certain states). For the rest of us however, there are still some banks paying rates as high as 4% and available to residents of all states. Not as high as in the SmartMoney article but still unbelievably great interest rates considering the times. If you have significant amounts of cash ($10,000-$25,000) that must remain liquid and FDIC-protected, you simply must learn more about rewards checking. So What's the Catch? Something you should have noticed when reading the SmartMoney article is that there is a small "catch" with these accounts. Some pretty significant hoops to jump through in order to "qualify" for these great rates. GOOD. There should be! Simply put, if there wasn’t a catch, or a series of hurdles to overcome in order to qualify for their highest tier rates, these types of accounts would not exist. No bank could survive paying out these industry busting returns without creating some kind of barrier to prevent the average customer from qualifying on a regular basis. They lure in a lot of depositors with the promise of super high rates but have built in their own safety mechanism which prevents a large percentage of them from actually earning the high rate every month. If you miss one step in the process, you are paid out at a rate significantly lower than advertised. Again, GOOD! If you know anything about us by now it is that we love to find loopholes and systems to take advantage of a great opportunity when we see one. So don't worry about all the hoops. We have figured out how to easily jump through each of them. SHOW ME THEIR MONEY!!! We have opened and maintained many reward checking accounts over the years to hold and grow our “Show-Me” money as part of our "Show-Me-Their-Money" strategy. (If you are just popping onto this page as your initial entry to our site, don't worry for now if you are not clear on what our "Show-Me" money or strategy is. In a nutshell, thru credit card balance transfers, we simply borrow money for 12 months at 0%, park it all in reward checking accounts, and keep whatever interest we earn for the year before returning the originally borrowed money. As of 2009, we were borrowing as much as $500,000 at 0% and storing and growing it in multiple rewards checking accounts. 2009 was a fantastic year because we borrowed money at 0%, parked it in reward checking accounts paying 6% and earned just under $30,000 by basically doing nothing.) I’m a HUGE fan of the television series Seinfeld (A Show About Nothing) so take great satisfaction in devising ways to make money by doing absolutely nothing. So the goal was to figure out a way to earn the high payout from rewards checking accounts, and make sure we were jumping thru all of their hoops each month, while exerting as little effort on our end as possible. Let's dive in and explore rewards checking accounts a bit further and talk about the hoops that need to be jumped thru each month. In general, and with most rewards checking accounts, there are 3 main requirements that must be met every month in order to qualify for a great interest rate (ranked in order from hardest to easiest):
Requirement #3 is clearly a very easy one. You are just giving up paper statements in favor of reviewing your balance electronically. If the bank you choose happens to also demand that you log in to your account once a month as part of fulfilling this requirement, you can just set up an outlook reminder to do this. It will literally take 20 seconds to log-in once per month. Requirement #2 should not be particularly difficult either (in fact we have now made it simple to automate this step directly thru our website). Otherwise you can ask your employer to direct deposit a small portion of your monthly paycheck to this account each month. This is a simpler process than you may realize so, if you don’t want to automate this step thru us, contact your employer and find out how to do it. Requirement #1 is clearly the most restrictive of the hoops to jump through. You must remember to use your bank card for credit card purchases a minimum of 10-12 times EVERY month. This challenge is twofold. First there is the issue of remembering to make 12 separate credit card purchases using your bank card every month. ( If you only make 11 credit card purchases that month, you are out of luck.) Second is the issue that this account should really be the place that most of your money just sits and earns high interest payments. You don’t want to be whittling down the amount of money you have stored in this account by constantly using your bank card for credit card purchases. In a perfect world, you would not be whittling down the balance in this account at all because you want ALL of your money to be earning the high interest rate. It makes a lot more sense to have your day-to-day transactional expenses come out of one of your current accounts that is not earning such an exceptionally high yield. Good news, we have a solution and a way for you to set up and completely automate the process thru our website so that you will clear this hurdle each and every month without doing anything (George, Jerry and Kramer will be so happy!)
In order to clear this hurdle, you will set up 12 payments (or however many are necessary per the terms of the rewards checking account you choose) to be drawn automatically from your rewards checking credit/debit card each month (when you open a rewards checking account you will receive a credit/debit card linked to your new account). We have set up a section of our website which makes it very easy for you to set up a series of automatic $1 payments to us every month. In return for what amounts to basically a $12 payment to us every month, we offer you in return… Wait for it… ABSOLUTELY NOTHING!!! You’re welcome! Ok, this probably needs a bit of explanation right? Here is the history of our experience with rewards checking accounts and how it led us to where we are today. CLEARING THAT FINAL HURDLE As noted above, hurdle number 1 and hurdle number 2 are relatively easy to clear. It is that final hurdle that is the most difficult to jump. Our challenge was to find a way to make 12 separate credit card purchases each and every month at a low enough price that we would meet the monthly quota with very little impact to our bottom line. It was also very important that we find a way to make these 12 payments every month automatically so that we didn’t have to think about it or run the risk of forgetting. If the price per transaction could be low enough for each of these 12 purchases, it wouldn’t even necessarily matter what is was that we were buying. This may sound odd at first glance but let me explain: If we currently have $25,000 which must remain liquid and FDIC-insured sitting in a money market account which earns 1% annually, we are effectively earning $250 on that money for the year ($25,000 x 1%). If, instead of leaving it in the money market account, we were to shift it into a rewards checking account earning 4% annually, that $25,000 would earn $1,000 for the year ($25,000 x 4%). Now, assume that each month we are making a total of 12 separate $1 automatic payments that we have set up so that we don't have to remember to do anything to qualify for the 4% rate. $12 x 12 months equals $144 total in payments for the year. Now, even if we were literally buying chunks of air with our $1 payments, we end up earning $856 total for the year ($1,000 - $144) a return more than 3 times what we would be earning by keeping our money in that money market account. At $1 per transaction we knock down our total overall return for the year by only a few points and allow ourselves the freedom to earn an incredible rate, ON AUTO PILOT. The $12 we are "giving away" each month is a low enough amount that we are still earning an exceptional interest rate even when figuring this in to our total return. Here is the math for a rewards checking account that pays 4% on the first $25,000 in our account:
Some rewards checking accounts will let us earn the high interest rate on only the first $10,000 in our account. For these accounts our "actual" interest rate drops correspondingly (but still remains huge in comparison to any other liquid FDIC-insured choice). Here's that math:
The initial challenge was finding ANY vendor willing to accept a monthly payment as low as $1 per month for any product or service they provided. When we first brainstormed the process, we imagined the perfect vendor to be a newspaper or magazine publisher. We'd find a newspaper or magazine we liked with an annual subscription price of $12 and agree to have them pull $1 from our bank card each month. We'd get the benefit of monthly delivery of their magazine plus our payment would count towards one of our 12 monthly credit card transactions. Just repeat this process with 12 different magazine or newspaper subscriptions and we'd be on auto pilot. Easy! Unfortunately, however, the $1 per month plan was not appealing to any magazine or newspaper publisher. Nor to any other vendor or for any other service or product we could find. What we quickly learned was that, by the time a vendor pays all of the associated processing, postage, and other cost-of-doing-business fees per transaction, $1 per month quickly gets whittled away to almost no profit. And so the structure made no sense to anyone selling an actual product or service. In most cases, they'd actually be LOSING money by structuring their billing this way. We kept the wheels turning, doing Google and Yahoo searches, trying to find ANY vendor selling ANY product (we didn't care what it was) that would willingly accept monthly payments as low as $1. Everywhere we looked was a dead end. No one could afford to do business with us at this threshold no matter how cheap their product was to manufacture or ship out. SWEET CHARITY! Fortunately and finally, after extensive searching, we ran across a website where some users had already discovered rewards checking accounts and had devised their own ingenious way of clearing the final hurdle. Charity! They had discovered that there were a number of charitable organizations who would willingly accept monthly donations in amounts as low as $1 per month. Donations were relatively easy to set up by going to the individual charity's website and signing up to have a $1 payment pulled automatically from our credit/debit card at the beginning of each month.
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