As my regular readers know, this is not a personal finance blog. In fact, I find the personal finance industry distasteful in the extreme. My opinions on personal finance are simple and wouldn't make for a very good (or long) read:
- Invest in Vanguard Target Retirement Date mutual funds;
- Don't pay interest (unless it makes sense).
But when you keep your eyes out for opportunities the way the travel hacking game trains you to, you'll inevitably spot some that aren't strictly speaking "travel" hacks.
There are 6% APY saving accounts
I've written before about Mango prepaid cards and savings accounts. Mango pays 6% APY on up to $5,000 held in the savings account linked to their prepaid cards, as long as you meet their direct deposit requirements. Those requirements are a bit fuzzy, but are certainly satisfied by depositing $50 per month, whether from your paycheck or from another bank account that allows ACH "pushes" to external accounts.
Mango has started charging $3 per month for the required prepaid account, but the savings account still allows you to earn around $264 in interest on a $5,000 savings account balance, or 5.28% annually (actually a bit less since the 6% is calculated APY, not APR). It's quite liquid (since Mango allows ACH pulls from the linked prepaid card), and beats any other federally-insured, liquid account I know of.
Likewise, the PayPal Prepaid Debit MasterCard and Netspend prepaid cards have 5% APY savings accounts, again on up to $5,000 in savings, and have their own fees and requirements to waive them.
Zeugma Rewards savings accounts earn 2.05% APY
Last weekend, I returned to New England for a long weekend catching up with a friend who lives out there, and for the thousandth time I walked by the Leader Bank branch in Cambridge. The same sign caught my eye as always: "Earn 2.05% APY on your Zeugma Rewards Savings Balance up to $50,000."
Let me attempt my best droll understatement and point out that 2.05% APY is much higher than current market interest rates on federally-insured savings accounts.
Activating Zeugma Rewards
What, you ask, is a Zeugma Rewards savings account? Similar to Santander's "extra20" accounts, you need both a Zeugma Rewards checking and savings account to participate, and in order to earn the full 2.05% APY on your Zeugma Rewards savings account, you'll need to meet three conditions with your Zeugma Rewards checking account:
- Elect to receive statements electronically;
- Direct deposit $500 or more each month;
- Make 8 or more debit card transactions.
Obviously these requirements aren't too heavy a lift for my readers, but you'll need to make sure you meet them all or you'll earn a tiny fraction of the 2.05% interest you were hoping for.
It gets better
Maybe you're interested in a 2.05% APY savings account and maybe you aren't. But I'll bet you're very interested in a 1% cash back debit card.
Remarkably, Zeugma Rewards checking account debit cards earn 1% cash back on all signature transactions, specifically "signature purchase transactions only where the customer selects 'credit' as the transaction type." On the one hand, that's less generous than the (no-longer-available) Suntrust Delta Skymiles debit card. On the other hand, it's comparable to the PayPal Business Debit MasterCard, but backed by a real bank that may value their relationship with customers more than PayPal appears to.
Now I'm getting into the realm of speculation, but it's my blog and I feel like speculating. There are a number of "signature" debit card transactions that PayPal does not award cash back on. For example, Evolve Money transactions funded with a PayPal Business Debit MasterCard appear in your account history as signature transactions, but don't earn cash back at the end of the month. It seems possible to me that a smaller regional bank like Leader Bank may not have PayPal's level of awareness with respect to these transactions, and may end up awarding 1% cash back on transactions that would not qualify for rewards when funded with the debit cards of other, larger banks.
That's not a promise; it's an invitation. If you experiment you may find some kinds of transactions end up being more profitable than you're otherwise able to achieve. Will online debit Bluebird and Serve loads earn 1% cash back? Almost certainly. Will Evolve Money bill payments earn 1% cash back? Probably. Will Square Cash transfers earn 1% cash back? Maybe.
Free online debit card services are increasingly popular because of the low, fixed processing fees now-enshrined in law, while rewards-earning debit cards are increasingly rare.
Personal finance is one of the many areas of life that is made more profitable by the habits of mind we develop while travel hacking. Zeugma Rewards may or may not turn out to fit into your own financial life, but I think for some of my readers it's probably an opportunity worth exploring.