I've long been a shameless advocate of high-interest savings accounts. By replacing low-yield bonds at a one-to-one ratio in your portfolio with FDIC-insured savings accounts yielding 5%-6% APR, you can replicate or exceed the returns of those bonds in your portfolio while reducing your exposure to volatility in the bond market. That's just about as close to a free lunch as you can get in this world.
Mango appears to no longer be available to new customers
One of my favorite high-interest savings accounts is the one linked to Mango prepaid debit cards. Mango savings accounts pay 6% APY on up to $5,000 in deposits per savings account. After that, they pay a mere 0.10% APY, but customers can have up to 3 Mango savings accounts, with a distinct $5,000 limit on each.
To save my readers a headache, this works out to $24.84 in interest per month on a "maxed out" $5,000 savings account balance, less a $3 monthly fee, for a net APR of roughly 5.24%.
Via Saverocity Forum user and friend of the blog ed1chandler, I learned this morning that Mango has, at least for now, closed their site from registering new accounts. This change has not affected currently existing accounts, and indeed we can hope it's a temporary change, but in the meantime this cuts off one of the best high-interest savings account opportunities that has been widely available in the US.
Mango's parent company also administers the Union Plus prepaid card
Mango is the own-brand product of Rêv North America, which is supposedly a white-label prepaid card company. I say "supposedly" because I have no reason to believe the company actually exists. Look at their website and decide for yourself.
However, in addition to the Mango prepaid card and linked savings account, Rêv North America administers an almost identical product called the Union Plus prepaid card, which also has a linked high-interest savings account. The savings account pays just 5.1% APY on up to $5,000, but the prepaid card's $2 monthly fee is waived in months where you load over $500 to the card, making the two products much closer to a wash.
Most importantly, the Union Plus prepaid card appears to still be available for new applicants.
The Union Plus application is finicky
The first time I submitted a Union Plus prepaid application yesterday, the site returned an error. After refreshing the page, my application was submitted successfully and I was able to immediately access my new Union Plus prepaid account.
So if at first you don't succeed, I'd suggest clearing your browser cookies, using a different browser, and rinsing and repeating until your application is successfully submitted and you have access to your new account.
Consumers Credit Union offers yet another option
Based in Illinois, Consumers Credit Union offers up to 5.09% APY on up to $20,000 in balances in their rewards checking account, although it's necessary to meet a variety of hurdles each month. Still, for those of us with the resources to meet those hurdles, it offers an extremely competitive interest rate on a much higher maximum balance than either Mango or Union Plus.
High-interest savings accounts offer the best of all worlds: easy access to your money through ACH pulls and interest rates that exceed those of "safe" assets like US Treasury bonds. I consider them an indispensable part of a well-balanced portfolio, and hope they'll be here to stay.
But this week's developments are not an especially promising sign.