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. I’ve actually 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, Netspend offers a $20 signup bonus when you open your first Netspend account. 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 and allow your emergency cash to keep up with or beat inflation.
Don’t be scared away by the $1,000 per account limit either. Once you’ve set up your first 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, 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.
Open a 5% Interest Savings Account With Service Credit Union
Service Credit Union is another credit union that has a savings account that offers 5% interest. It only earns 5% interest on the first $500 in your account, so keep that in mind. Still, if you and a partner open an account, you’ll have another $1,000 safely earning 5% interest.
Interest in this savings account is paid monthly and there are no fees or account minimums to worry about. In addition, because this is a credit union, all of your funds are insured by the National Credit Union Administration, so your funds are safe. My own experience with Service Credit Union has been very positive and this is an account I can recommend even as a primary checking account.
As an added benefit, Service Credit Union is currently offering a $75 signup bonus if you sign up via a referral link, open a checking account, and meet a few requirements. Here are the steps to follow to open your Service Credit Union account and sign up for the $75 signup bonus offer.
- To earn this bonus, you have to first register for the bonus via a referral link. Here is my referral link if you want to take advantage of this offer. Do this first.
- Next, you need to join the American Consumer Council (ACC). Go to the ACC membership website to get your membership. Enter the code “consumer” in the membership code section for a free membership (if “consumer” doesn’t work, then try entering the code “service”). You’ll then get an email with your membership certificate.
- After getting your ACC membership, go to the Service Credit Union website, click the “Open Now” box, and then click “New Member Account.”
- Under “Select Your Eligibility,” click the box that says you are a member of the American Consumer Council. Then enter your ACC membership number found on the membership certificate that was emailed to you.
- Under required products, choose Primary Savings. You should also open the Holiday Club Account, which offers 3% interest on up to $3,000. In addition, if you want to earn the $75 referral bonus, you’ll also need to open a checking account (I recommend the Everyday Checking Account, which has no fees or account minimums).
- On the final application page, you can upload documents before submitting your application. The documents you’ll want to upload are (1) your ACC membership certificate, (2) a picture of the front and back of your driver’s license, and (3) something to verify your address, such as a utility bill or home insurance policy. You don’t have to do all of this at this point in the application, but if you don’t, you will receive an email from someone at Service Credit Union asking you to send them this information before your account can be approved.
- Even if you upload all of the required documents, you may still get an email from the membership department asking you to send them these documents. Just keep an eye out for this email and send any documents as requested.
- Once approved, you’ll get a welcome email with your member number. To set up online access, go back to the main Service Credit Union website and sign up for online banking. To sign up, you’ll need your member number and your “Call 24” pin. Your pin number is the last four digits of your SSN. Once you enter this info, you’ll be able to set up your username and password to access online banking.
If you open the 5% interest savings account plus the 3% interest Holiday Club Account, you’ll have $500 earning 5% interest, plus an additional $3,000 earning 3% interest. Obviously, if you have a spouse or partner, you can open accounts for them as well, adding an additional $500 and $3,000 of high-yield savings.
Regarding the $75 signup bonus, you have to do the following to earn the bonus:
- Register for the $75 referral promotion using a referral link (here’s my referral link).
- Open a checking account with Service Credit Union (I recommend opening the Everyday Checking Account).
- Have direct deposit of net pay of at least $500 per month into the new checking account.
- Account must be open and in good standing for a minimum of 90 days.
- Referee must enroll in e-communications.
- The $75 bonus will be deposited to the checking account of both the referee and referrer 120 days after the referee’s account is opened as long as all criteria met.
If you’re a two person household, the best move would be to first open your account using my referral link, then refer your spouse or partner using your own referral link.
As to the direct deposit requirement, I was able to trigger the direct deposit requirement by doing an ACH transfer from Ally. A friend of mine was able to meet the direct deposit requirement via an ACH transfer from Chase. This was completed in the summer of 2020, however, and I don’t have any data points on whether they’ve tightened up the direct deposit requirement. My assumption is that things are still the same, but if anyone has any data points on what works for the direct deposit requirement, please let me know,
Open An HMBradley Account For 3% Interest On Up To $100,000
HMBradley is a fintech company that recently launched a savings accounts that can earn you 3% interest on up to $100,000. In order to qualify for the 3% interest, you have to do two things:
- Have a real direct deposit of any amount go into the account each month; and
- Save at least 20% of your deposits that go into your HMBradley account each quarter.
If you do both of those things, you’ll qualify for the 3% interest for the next quarter. Note that interest is paid monthly, but the qualifications are determined on a quarterly basis. So if you meet the qualifications in Q1, you’ll earn 3% interest on your funds in Q2, and so on.
As a savings accounts, this is actually pretty useful for someone like me since I have a payroll system that allows me to split up my direct deposits. I’ve currently got it set up where $1 from each paycheck goes into mine and my wife’s respective HMBradley accounts. I don’t plan to withdraw anything from these accounts, so I should qualify for the 3% interest indefinitely. And whenever I do need to withdraw, I’ll move the funds over into a regular high-yield savings accounts and wait to qualify for the 3% in a future quarter.
I also think HMBradley is useful because it lets you create different savings buckets. I’ve set up my emergency fund bucket and a house downpayment bucket. And since you can save up to $100,000 at 3% interest, it’s a good place to save for larger goals like a house or a car.
Qualifying for the 3% interest might seem more confusing than it is. Basically, set up a direct deposit and try not to withdraw anything until you need to. Here’s an FAQ from HMBradley that further explains it. You can open your HMBradley account here.
Consider Looking At Other Super High-Yield Savings Accounts
Besides Netspend, DCU, and Service Credit Union, 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.
- St. Mary’s Bank
(5% Interest on first $500, 3% interest on next $500). The Rainy Day savings account offers 5% interest on your first $500 and then 3% interest on your next $500. The caveat with this bank is that it’s very difficult to get approved outside of New Hampshire. In addition, to earn the 5% interest, you have to have a monthly deposit into your savings account of $25. You’re also only allowed to do one withdrawal per month, so that’s another thing to keep in mind. There is currently a $100 signup bonus with this account, so if you’re in their footprint, it’s worth opening to get the bonus.St. Mary’s Bank recently cut their bonus interest rate down to 2.5%. This could still be useful for some people, but I’m not bothering with it since there are other options.
- Porte (3% Interest on up to $15,000). Porte is another fintech bank that offers a 3% interest savings account on your first $15,000. To qualify for the 3% interest, you need to do a direct deposit of $1,000. The terms suggest that you have to have a $1,000 monthly direct deposit to activate the savings account, but it looks like you only need to do one $1,000 direct deposit to activate the savings account. I’ve opened this account and did not have a good experience with it, so I’m personally staying away. Do your research to see if this bank makes sense for you.
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 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 types of accounts because they require too much maintenance for my taste, but they are an option if you’re a little more motivated than I am. I have not included those banks here.
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 keep $1,000 in my 6% DCU savings account and another $1,000 in my wife’s 6% DCU savings account.
- Use Service Credit Union for the 5% Interest Accounts. Like DCU, Service Credit Union is an easy way to get more 5% interest savings on up to $500 per person. I keep $500 in my account and $500 in my wife’s account. I also used my referral code to open my account and used my referral code for my wife’s account, which got us some easy bank signup bonuses.
- Use Any of the Other 5% Bank Accounts That I Can. I don’t have T-Mobile, so I can’t use T-Mobile Money. I also can’t get approved for Blue Federal Credit Union. For some reason, I was able to get approved for St. Mary’s Bank despite not being in their geographic footprint. This was luck, more than anything, but I’ll park $500-$1,000 in here and take advantage of the high rates.
- Use HMBradley for 3% Interest. HMBradley is easy enough for me to use, so I’m parking most of the money that I would have had with Insight in this account. It’s almost no work for me to maintain and getting 3% interest on money that I’d like to keep for emergencies is a good rate of return.
- Use the Service Credit Union Holiday Club Account For More 3% Interest Space. The Holiday Club Account from Service Credit Union lets you get 3% interest on up to $3,000. This is a hassle-free savings account, so it’s worth putting $3,000 in here and letting it sit.
- 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. Add DCU and Service Credit Union to the mix and you’re looking at $6,500 per person. 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.
Update: In 2020, Insight once again got rid of their 5% interest savings accounts and reduced them all down to 1%. I’ve moved the additional $30k that I had saved into HMBradley, with the plan of getting 3% interest on that money for as long as that lasts. I’m also using the Service Credit Union Holiday Club Account for additional 3% interest space.
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.