One of the most popular posts I’ve written on this blog is a post I wrote some time ago about how I’m able to put away as much as $50,000 in FDIC insured savings accounts that earn a guaranteed 5% interest. It’s far and away my most commented on post, garnering well over 500 comments over its lifetime. The reception to this post demonstrates that there are a lot of people out there looking for ways to get much more than the standard 1% or so that your typical high-yield savings accounts pay.
If you’re unfamiliar with how these 5% interest accounts work, it’s basically a little financial hack. There are two companies – Insight and Netspend – that offer prepaid debit cards that also come with FDIC insured savings accounts that earn 5% interest. They take some work to set up, but once you go through that process, the accounts run themselves. Over the last several years, I’ve stored pretty much all of my excess cash in these super high-yield savings accounts, allowing me to yield a good rate of return on my cash savings. Hundreds of other people have done the same – at least based on the comments and emails I get about these accounts.
Unfortunately, as seems to be the case, all good things eventually must come to an end. In 2018, Insight informed everyone that it was officially shutting down its 5% interest savings accounts. Below is the email I received from Insight notifying me that they were shutting down their 5% interest accounts.
It’s definitely a bummer that the 5% interest savings accounts with Insight are now dead. While there are other super high-yield savings accounts out there, none of them were as easy to manage as Insight.
What made Insight particularly good was that it allowed each person to put up to $5,000 in each savings account. Most people could open up at least two and often as many as four total Insight accounts (I had three accounts for myself and three for my wife). By taking advantage of these Insight cards, it was possible for most households to put away between $20,000 and $50,000 earning 5% interest in FDIC insured savings accounts.
With Insight officially gone, the question becomes, where should people go to next? The good news is that there are still ways to earn a good return on your cash.
Here are some ideas I have to get 5% or more interest on your spare cash with no risk of loss.
Take Advantage of Netspend’s 5% Interest Savings Accounts
The natural move for most people is to take advantage of the 5% interest savings accounts that are still available with Netspend. I’ve written about Netspend extensively in this post (Netspend Account: 5% Interest Savings and $20 Signup Bonus), so be sure to check that out if you want an in-depth guide on how to set up your 5% interest savings accounts with Netspend. In that post, I walk you through everything you need to know about Netspend in painstaking detail.
The short story is that Netspend works exactly the same as Insight. If you’ve already set up accounts with Insight, you’ll have no problem setting up your Netspend cards. In fact, I’ve found that Netspend is easier to set up, since, for whatever reason, it seems to have an easier time linking to banks and I’ve rarely heard of anyone having issues getting the cards. In contrast, a common troubleshooting problem with Insight was that banks wouldn’t link up properly with it or folks would randomly be unable to sign up for a card without calling in or going into a store location.
Another advantage is that Netspend actually has a functioning mobile app and website. Insight’s app never worked and its website was horrible. Netspend’s app and website, by contrast, are as good as any other bank website. I find there’s some comfort in a company that has a real, functioning online and mobile presence.
Finally, the other advantage with Netspend is that they offer a $20 signup bonus when you first sign up -something that Insight did not offer. It’s not a huge deal, but it’s $20 for free while also gaining access to a 5% interest account.
There’s only one real downside to Netspend – each Netspend savings account is limited to earning 5% on the first $1,000. This isn’t terrible though. You can open up five Netspend accounts per person, which means that each person can put away up to $5,000 earning 5% guaranteed interest. If you’re a two-person household, that means you’ll be able to put away $10,000 total. That’s a solid emergency fund that will earn you $500 of guaranteed interest every year.
Don’t be scared away by the $1,000 per account limit – I’ve honestly never understood why people were so concerned about it. Once you’ve set up one Netspend account and understand the process, it should only take you about 10 or 15 minutes to set up the remaining accounts. Instead of thinking of each account as an individual account, just think of your Netspend accounts as one big pool of money. These accounts are just for your cash to sit anyway, so it’s not like you’re going to have to look at multiple accounts all the time. Plus, once you’ve automated the accounts, you’re not really doing anything with them anyway except collecting the interest. There’s really no other super high-yield savings account that is this easy to manage.
Anyway, if you’re looking to keep getting 5% interest, Netspend is your best bet, so be sure to check out my step-by-step guide on how to set up your Netspend accounts.
Set Up A 6.17% Interest Account With Digital Federal Credit Union (DCU)
After getting your Netspend accounts set up, my next recommendation would be to set up a savings account with Digital Federal Credit Union (DCU). DCU is an online credit union that offers a savings account with 6.17% interest on your first $1,000. Thus, if you have a two-person household, you can have $2,000 earning over 6% interest. My understanding is that you can also open custodial accounts for children in your household, which adds another $1,000 per child earning high rates of interest.
As for safety, DCU is a credit union that is federally insured by the NCUA (that’s the FDIC equivalent for credit unions). This means your money is safe and has no risk of loss (exactly the same as money in a bank account). DCU is also a normal bank and doesn’t require any specialized setup. The savings account has no fees at all, so this is an easy account to park $1,000 per person and let it sit.
When you sign up for this account, make sure to save your Member ID number somewhere, as you’ll need that in order to set up online access. Otherwise, this account is very straightforward.
Consider Looking At Other Super High-Yield Savings Accounts
Besides Netspend and DCU, there are a few other options for super high-yield savings accounts. I personally haven’t used these accounts, so I can’t speak to how well they work, but here’s a list of some that you could consider in no particular order (but again, I have not personally used these options, so I can’t speak to how good they are):
- Blue Federal Credit Union (5% interest on up to $1,000). As I understand it, this account is a soft pull, but they are Chex System sensitive, which means that if you open up a lot of bank accounts (like I do), you might not be able to qualify for an account. I believe the requirements to earn the 5% interest are fairly minimal and can easily be automated.
- T-Mobile Money (4% interest on up to $3,000) (must be a T-Mobile customer in order to qualify): If you’re a T-Mobile customer, then you’ll definitely want to take advantage of their T-Mobile Money account. It has no fees and no weird requirements. The only limitation is that you need to be a T-Mobile customer in order to earn the 4% interest, so not everyone can get access to this account.
There are also a decent number of banks out there that will give you 3% or more interest if you meet certain requirements. Typically, the requirements will be things like using your debit card a 10 or more times per month or having a certain number of transactions in your account each month. I’m not a huge fan of these type of accounts because they require too much maintenance for my taste, but they are an option for the more motivated of us.
Use Your Cash For Bank Account Bonuses
One of the most underrated things you can do to get a better return on your cash is to use your excess cash to qualify for bank account bonuses. As a brief introduction, there are a ton of banks out there that will offer you signup bonuses if you open a bank account with them and meet certain requirements. These requirements typically include some sort of direct deposit requirement, a minimum balance requirement, and/or a debit card transaction requirement. It’s work to do all of this stuff – but it’s a great way to use your idle cash in a way that gets you way more than you can get from just keeping your money in a normal savings account.
As an example of the kind of return you can make from bank account bonuses, in 2018, my wife and I made $4,100 from bank account bonuses. In 2019, we made over $7,000 from bank account bonuses. As a point of comparison, you’d need to put away $200,000 to $600,000 in normal high-yield savings accounts to earn a similar amount of interest.
It definitely takes some work to get bank account bonuses, but if you’re the type of person that likes figuring things out, this is a good way to earn more money on your idle cash. I wrote a huge 7,000 + word guide on how bank account bonuses work.
Make sure to check it out here if you want to understand how you can incorporate bank account bonuses into your financial system: The Ultimate Guide to Bank Account Bonuses.
My Strategy Now That Insight Is Gone
I’ve pretty much explained my new strategy to get the maximum return on my cash but thought I’d recap it below for convenience’s sake. Basically, I’ll be doing a three-prong strategy when it comes to my idle cash.
- Utilize Netspend for the 5% Interest Accounts. I’ll continue to keep $10,000 in my Netspend accounts ($5,000 in my five Netspend accounts and $5,000 in my wife’s five Netspend accounts). I’ve already been utilizing Netspend for over four years, and with Insight gone, I think Netspend becomes even more important to use since there’s pretty much no other way to earn 5% interest without jumping through a ton of hoops. If you’re willing to put in the upfront time to set up your Netspend accounts, they will pay dividends for you (and seriously, it’s not as hard as it looks to set up). As mentioned above, be sure to read my guide to Netspend if you want to earn 5% interest in an FDIC insured savings account (and collect a free $20 signup bonus too).
- Use DCU for the 6.17% Interest Accounts. These accounts require no work to set up or maintain. They’re just regular bank accounts with no fees. I’ll keep $1,000 in my 6% DCU savings account and another $1,000 in my wife’s 6% DCU savings account.
- Take Advantage of Bank Bonuses. I’ll likely try to keep $20,000 or so in normal high-yield savings accounts, which I can then deploy for various bank account bonuses. Over the past three years, I’ve consistently been able to earn at least $1,000 from bank account bonuses. I’ll keep the money in a normal high-yield savings account when it’s not being used for bank account bonuses, and look to use the money whenever I find a good bonus somewhere. If you’re looking for a list of current bank account bonuses, Doctor of Credit keeps the definitive list here. And make sure to read my Ultimate Guide to Bank Account Bonuses if you’re new to the world of bank account bonuses.
The super high-yield savings account landscape isn’t as good as it was now that Insight is gone. However, there are still ways to get a good return on a significant amount of cash. Just using Netspend alone is good for $5,000 per person, which is a solid beginner emergency fund for a lot of people. Combine that with bank account bonuses and you can still get several thousand dollars in interest each year from your cash savings.
Note: In 2019, Insight brought back their 5% interest savings account, but only for people that already had them before. I luckily did not close my Insight accounts and as a result, my three Insight accounts and my wife’s three Insight accounts have both been grandfathered with their 5% interest accounts. As a result, I’m able to keep $42,000 of cash earning 5% or more, which makes for a massive emergency fund.
Do you have any ideas on how to get more return on your cash in a post-Insight world? Let me know – especially if you’ve used any of the super high-yield savings accounts options I mentioned above that I haven’t personally used.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the sharing economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the sharing economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps Kevin uses to track his financial accounts.
- SoFi Money. A really good checking account with absolutely no fees. It also reimburses all ATM fees worldwide. Even better, you'll get a $25 welcome bonus if you open an account and fund it with at least $500.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Dobot. This is a great microsaving app that monitors the cash flow in your bank account and saves away small amounts for you each week. It's free and you'll get $5 when you use it.
- Credit Karma. A free credit monitoring app that everyone should use. It'll notify you of any changes to your credit report and is the best credit monitoring app out there.
Feel free to send Kevin a message here.
Are you going to keep your insight accounts active after pulling 5k balances out to see if savings ever comes back or just going to close the accounts completely after you finish ACH out of the insight cards after July 1st?
I’m probably going to just ACH all of my money out and then close the accounts. I think you can send them a message and have them close it. Make sure to screenshot the confirmation that your account was closed and save it away somewhere so that you have the evidence in case anything happens.
I tried DCU, but they do have pretty strict membership requirements which I did not qualify for!
I’m not 100% positive, so don’t quote me on this, but I believe that you are eligible for a DCU membership if you join one of the member organizations they’re affiliated with. It’s like $5 to join one. But again, I haven’t done DCU myself, so I can’t speak on the exact process.
I’m doing the same, FP. The other high yield options involve too much work every month whereas chasing bank bonus is a much better ROI. They key is being judicious in Which ones you sign up for given that so many banks are increasingly Chex or EWS sensitive.
Yeah, there are some banks that just don’t work, but I find there are enough banks out there, plus the ability to just churn the bank again. I’m going into round 2 and 3 on some of these banks now.
I’m shutting down all my Insights account. It’s a shame they cancelled this offering but like you said all good things come to an end. Personally, I struggle with Netspend’s limit at $1000 and to have 5 accounts seems just too much work. I do like Chase’s $500 bonus which my wife and I got this year. In total we got $800. The only caveat is you need to leave the money locked up for 6mo otherwise you will need to pay back the bonus. I’ve received offers from other banks but don’t want to keep $10K+ locked up for 6mo when in presence of other investments opportunities.
I know a lot of people get hung up on the $1k limit per card and having to juggle 5 accounts, but honestly, it’s not really very much work. Just think of it as one big pool of money. You automate everything, download the mobile apps for each card and put them all into a folder on your phone, then just look at your accounts once a year. I just look at my accounts 4 times per year just to pull out the interest. I can do this while I’m on the bus or walking my dog. My wife only looks at her accounts once a year, just to pull out the interest.
I noticed anything over 1k earns a low interest rate. Are you pulling the interest to use it in accounts with better rates?
Yes. Every quarter I pull the interest out of each account and move it back to my Ally savings account. It’s not a big deal to just do it once per year though if you want to save yourself the hassle.
My wife and I both applied for new insight cards 2 weeks ago.
We received the cards in the mail but I have not registered them or set them up on insights website.
Because we had to go through the process of signing up and getting approved for the cards do you feel I need to register them and then close them now that the 5% savings option is gone or should I just shread these like we never applied?
Thank you,
Just cut them up and don’t use them. Just ordering the cards I don’t think creates an account for you – you have to activate and set things up first for it to count as an account.
Thank you
Great and very timely post FP! I think we are all looking for the best options when we cash out the Insight cards.
The Citibank $400 bonus is one of the best out there currently. another good one is the Huntington $200 checking bonus. Both of them earn way over 5% ROI and require no direct deposit hoops. DoC has a good list of bonuses here:
https://www.doctorofcredit.com/best-bank-account-bonuses/
Another good option is short term CD’s there is a 30 month 3.01% CD at Northern bank direct and a 2 year add-on CD 2.7% at Bank5Connect. Interest rates are rising so stay short on CD’s the FED will be hiking again this month.
For 100% liquid cash I’m using GM right notes which is not FDIC insured but is currently paying 2% on liquid cash for the $50,000 tier. These corporate debt account tent to keep raising their interest rate along with the FED at a faster clip than standard savings accounts. I’m expecting 4 FED hikes for the year with the latest jobs numbers so rates should be improving from here.
As much as I hate to see Insight go I think CD’s may be hitting 5% again before too long and hopefully savings account will follow.
FP you may be interested in doing a blog post about this:
Another thing I do is use 0% “NO FEE” balance transfers. While most credit cards that offer 0% balance transfers have a 3-5% balance transfer fee there are a few gems out there that waive this fee. Here are the ones I have currently:
1. Chase Slate: 0% for 15 months no bt fee for the first 60 days.
2. Bank of America BankAmericard: 0% for 15 months no bt fee for the first 60 days.
3. The AMEX everyday card: 0% for 15 months no bt fee for the first 60 days.
I actually have more but they were targeted offers.
This is actually borrowing money from the bank for free and then depositing it into savings accounts/CD’s. Yes this is actually possible to do although a bit tricky for novices. Some credit cards make it easy by issuing you checks that you can deposit directly to your bank while others make it more difficult as they will not give you a check. You still have to make the minimum monthly payment to the credit card and pay off the remaining balance in full before the 0% rate expires but the interest earned is yours to keep. Now the question becomes how do we get the balance transfer money into the bank if they do not give you balance transfer checks. It is simple really. You just do a balance transfer to another credit card that has a $0 balance. Once the balance transfer posts you will see a negative balance on your card. Then you call and request what is called a “credit balance refund check” usually by mail. Once you get the check you just simply deposit it into your bank and viola you can earn interest on the banks money! I currently have $200,000 earning 2.5% of the banks money in a CD. The amount you can borrow will vary based on your available credit/credit score etc. At one point I had $500,000 of the banks money earning 6% in a savings account when interest rates were higher. I have never paid a penny in interest and I have been doing this for decades. This just started to become profitable again with higher interest rates recently.
Can you say “working the system”! WOW
Banks are real good at “working the system” against us. The banks make the rules I’m just taking advantage them. Banks make tons of money on loans, investments and high fees while shafting us savers with ultra low interest rates. This after us taxpayers(savers really) bailed them out from their own bad investments. That was just a rough beginners guide there is a lot more to it than can be quickly posted. It really deserves it’s own thread.
You should totally write this up yourself!! I want to try it haha
Hey Sly One I would love to learn more about your techniques. Do you have a blog or a place where you discuss this? How do you even get credit limits that high? Does the cars have to be new for you to get a free balance transfer?
I used to post some ideas over at fatwallet but that site is gone now. I should really start blogging like FP as I have tons of ideas. You have to build up your credit limits slowly but one way to do this is to do a credit line “reallocation”. Here is how it works: Say you have 2 Chase cards(Slate and Freedom) with credit lines of $20,000/card and you just paid off your 0% no fee balance transfer from Chase Slate. The Slate is now useless since they will never offer you that 0% no fee deal again so you need to close it. Before closing call Chase and tell them you want to transfer your $20,000 credit line from the Slate card to the Freedom card this is called a reallocation of credit. Now you will have a $0 credit line on the Slate and a $40,000 credit line on the Freedom. Now you can close the Slate card with 0% effect on your credit score. Wait a few months and apply for a new Slate card and repeat. Over time your credit lines will become large and this will help your credit score as it lowers the overall “utilization” of credit when you do a balance transfer. Credit utilization makes up 30% of your FICO score. Not all banks will allow this but some do and both cards MUST be issued by the same bank. Most cards need to be new to get a 0% $0 fee balance transfer but I have had many offers for 18 mo. 1% BT fee on existing cards at Citibank, PNC, Bank of America, Discover and others. The great thing about these low or capped fee offers is that they ALWAYS come with checks that can be deposited directly into the bank without having to do the actual balance transfer. I hope this helps. I also post over at Deposit Accounts under the screen name deplorable 1…………Good luck FS!
This man is a genius.
Ok guys here is the best spot for liquid cash. Northern Bank direct 2.26% MMA.
I have been reading about the Mango prepaid debit card that gives 6% up to $5000, but requires $800 deposited per month and it can’t be transferred back out or it won’t qualify for the 6%, you can instead buy a $800 money order to yourself using the Mango debit card and then deposit that back into a bank account
It also has a $3 monthly fee plus the fee to buy a money order will lower the total interest to around 5%
I have Mango and do exactly what you describe. A money order costs $0.88 at Walmart so I have $3.88 in expenses per month.
I’m not sure I would set up a Mango account today but I set it up when the requirements were easier to meet. For me, the most onerous task is to go to Walmart to buy the money orders.
One time saving hack I use is to deposit the $800 at the end of the month and then deposit the next month’s $800 at the beginning of the month and then buy 2 x $800 money orders (plus accrued interest) on the day the 2nd $800 is deposited. Walmart has a limit of $1000 per money order. I’ve gotten to the point that I can round-trip that $1600 in less than a week.
When should/Where should I see the bonus amount credited to my netspend account for keeping $1000 in the account?
Are you talking about your interest or your $20 signup bonus? That $20 signup bonus only requires you to put $40 onto the card, and that should post pretty much right away.
If you’re talking about the interest, it’s paid quarterly (i.e. 4 times per year, January 1, April 1, July 1, and October 1), so the next interest payment would be October 1st, I believe.
Thank you, that answered my question!
Hey Kevin,
Great job picking up 5% on idle savings. I’ve been at 2.5% for the year with my online bank and loving that; doubling it is fantastic in this environment.
Looking forward to reading more about your strategy for picking up the bank signing bonuses.
Take care,
Ryan
Thanks Ryan. I need to get cracking on that bank account bonus post. It’s something I’ve been doing for a few years now, but I keep getting lazy with writing the whole process of how it works.
Kevin,
Are you using CIT Bank for your 2.5%?
Hey Carlos, I’ve never used CIT Bank, but I don’t have anything against them. Seem like a fine bank to me. My regular savings account I use for emergency fund money that doesn’t fit in Netspend is Ally. I keep Airbnb money in a Discover savings account. Short term savings are kept in sub-accounts at Capital One 360.
Ally and Discover are all over 2% now, and honestly, the difference between 2.2% and 2.5% isn’t significant enough to me to warrant switching accounts. It’s not a lot of work though to open a CIT Bank account, so if you’ve got money you want to move in there, then for sure, do it.
A lot of people consider Mango to be “dead” given the “Signature purchases of $1,500” requirement. However, couldn’t you simply buy $1,500 of money orders with the Mango debit and deposit it back into the account each month?
Not sure. I’ve never used Mango precisely because of all those requirements it has.
looking for the highest paying on savings
Are there any fees if you want to close out your accounts?
Nope.
What’s the interest rate on anything after the first 1,000?
0.5%, I believe.
I have received funds that I will be using to pay off equipment. It is 50K
I was thinking to put it somewhere to collect some interest. As this money will be used once/month for next few years?
Any suggestions
I searched around the Web for reviews of Blue Federal Credit Union, and it doesn’t seem worth it.
Looks like the requirements to get 5% interest are to have at least $25 in the account, and make at least $5/month deposits to the account. Any balance over $1,000 means you get 0.10% interest on the *entire* balance, not just the amount over $1,000. Seems like it would be difficult to stay under $1,000 if you have interest and a $5 transfer posting monthly.