Updated CD Strategy

A few months ago, I wrote about a New CD Strategy for getting a 1.5% APY return on my savings. My plan involved opening an 11-month No Penalty CD at Ally Bank. As I may have predicted, CD rates have risen since my post. Ally is now offering 1.75% APY for the same CD.

The main risk of a long-term CDs is the chance that interest rates will rise and you’re committed to the lower rate until the CD matures. But the no penalty CD eliminates this risk.

At Ally, you cannot directly convert an old CD into a new one at the higher rate. As a result, I first opened a new CD at the higher rate. I then transferred money into the new CD at the higher rate. Withdrawals from the existing CD carry no penalty.

Disclaimer: The example provided here is for illustrative purposes only. I am not providing tax or investment advice.

PFS

Money Market Rates November 2017

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.40% Popular Direct Savings
1.30% GS (Goldman Sachs) Bank Online Savings
1.25% Ally Bank Online Savings
1.25% American Express High Yield Savings
1.20% Discover Bank Online Savings
1.15% FNBO Direct Online Savings
0.75% Capital One 360 Savings
0.20% Unify (fmr. Western) FCU Money Market
0.04% Citibank Savings Account
0.04% Chase Plus Savings

In some cases, MMA interest rates are tiered. If this is the case, I usually report the interest rate at the $10,000 tier in these updates. Rates are believed to be accurate as of 11/20/17. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list. I have included one credit union in the list so that readers have a comparison point with banks.

Several other banks have bumped up their money market rates and most of the ones in my list are now paying 1.15% or more. Even Citibank and Chase nudged their rates higher by 0.01%! I expect that some increase will become a trend for a while.

The frequent changes show how variable the money market is. Because this is a constantly moving target, it has been very hard to keep track of the rates that I've been getting in my various money market accounts, and this is the main reason I've decided to compile a list of these annual percentage yields.

So, that is the latest list of money market rates. Please let me know if you know of any higher interest rates.

PFS

Credit Card Bonuses Year-End 2017

Save money on purchases and get cash back with coupon codes and the following credit cards:

Citi Dividend Card

• 5% cash back 10/1/16 - 12/31/17: Best Buy & Department Stores
• 1% on everything else.

Discover Card

• 5% cash back 10/1/17 - 12/30/17: Amazon.com & Target
• up to 1% on everything else.

Barclaycard Arrival World MasterCard (Travel Rewards)

• 2.1% on travel and dining
• 1.05% on everything else.
• No annual fee.

BankAmericard Cash Rewards

• 3% on gas
• 2% at grocery stores
• 2% at wholesale clubs (including Costco)
• 1% on everything else.
• No annual fee.

Costco Anywhere Visa Card
This card replaced the Costco TrueEarnings Card from American Express on June 20, 2016.

• 4% on gas
• 3% on restaurants and travel
• 2% at Costco
• 1% on everything else.
• There is no annual fee, however you must be a Costco member.

Citi ThankYou Card

• 2X points on Dining Out & Entertainment
• 1X points on everything else.

Barclaycard Arrival Plus World MasterCard (Travel Rewards)

• 2.1% on travel and dining
• 2.1% on everything else.
• ($89 annual fee after first year)

PFS

Money Market Rates September 2017

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.21% Popular Direct Savings
1.20% GS (Goldman Sachs) Bank Online Savings
1.20% Ally Bank Online Savings
1.15% Discover Bank Online Savings
1.15% FNBO Direct Online Savings
1.15% American Express High Yield Savings
0.75% Capital One 360 Savings
0.20% Unify (Western) FCU Money Market
0.03% Citibank Savings Account
0.03% Chase Plus Savings

In some cases, MMA interest rates are tiered. If this is the case, I usually report the interest rate at the $10,000 tier in these updates. Rates are believed to be accurate as of 9/15/17. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list. I have included one credit union in the list so that readers have a comparison point with banks.

Several other banks have bumped up their money market rates and most of the ones in my list are now paying 1.15% or more. I expect that some increase will become a trend for a while.

The frequent changes show how variable the money market is. Because this is a constantly moving target, it has been very hard to keep track of the rates that I've been getting in my various money market accounts, and this is the main reason I've decided to compile a list of these annual percentage yields.

So, that is the latest list of money market rates. Please let me know if you know of any higher interest rates.

PFS

E*TRADE OptionsHouse Combination

Recently, OptionsHouse merged its website into E*TRADE. I had an OptionsHouse account before the merger. And for me, the upper right side of my E*TRADE screen shows "Launch Trading" and "Legacy Platform" for OptionsHouse.

Through these links, I can access the OptionsHouse Legacy Trading Platform, even for my E*TRADE accounts that were never at Options house.

But, my question is, do people who only had E*TRADE accounts have access to this trading platform as well?

PFS

New CD Strategy

I recently found a new strategy for getting a 1.5% APY return on my savings. This plan is not complicated. I opened an 11-month No Penalty CD at Ally Bank with a minimum deposit of $25,000.

I have written about Ally Bank before, and I have been their customer for years. I have an Online Savings account that currently pays 1.15% APY. This is a decent return for a day-to-day account.

I have also had 2- and 4-year Raise Your Rate CDs that both offer 1.5% APY. This 11-month CD matches the yield on the longer term CDs, but it doesn't have an early withdrawal penalty.

The main risk of a long-term CDs is the chance that interest rates will rise and you’re committed to the lower rate until the CD matures. But with no early withdrawal penalty, if rates rise there is no risk. You can withdraw the money with no penalty, and then put it back into a new CD at the higher interest rate.

Disclaimer: The example provided here is for illustrative purposes only. I am not providing tax or investment advice.

PFS

Credit Card Bonuses Q3 2017

Save money on purchases and get cash back with coupon codes and the following credit cards:

Citi Dividend Card

• 5% cash back 7/1/16 - 9/31/17: Hilton & Airlines
• 1% on everything else.

Discover Card

• 5% cash back 7/1/17 - 9/30/17: Restaurants
• up to 1% on everything else.

Barclaycard Arrival World MasterCard (Travel Rewards)

• 2.1% on travel and dining
• 1.05% on everything else.
• No annual fee.

BankAmericard Cash Rewards

• 3% on gas
• 2% at grocery stores
• 2% at wholesale clubs (including Costco)
• 1% on everything else.
• No annual fee.

Costco Anywhere Visa Card
This card replaced the Costco TrueEarnings Card from American Express on June 20, 2016.

• 4% on gas
• 3% on restaurants and travel
• 2% at Costco
• 1% on everything else.
• There is no annual fee, however you must be a Costco member.

Citi ThankYou Card

• 2X points on Dining Out & Entertainment
• 1X points on everything else.

Barclaycard Arrival Plus World MasterCard (Travel Rewards)

• 2.1% on travel and dining
• 2.1% on everything else.
• ($89 annual fee after first year)

PFS

Did Anybody Get a 1099 for Their Costco Visa Reward?

I have written before about the Costco Anywhere Visa Card which offers cash rewards on such purchases as 4% on gas, and 3% on restaurants and travel. One evening, while paying for our meal, a friend mentioned that he also has a Costco Card, and that he received a 1099 form for his cash reward because it exceeded a certain threshold.

While I don't doubt my friend's story, I have not been able to confirm this anywhere. I could not find any mention of it in the Costco Visa materials that I have. I always thought that the credit card cash reward was not taxable. And searching the internet, I was not able to find anybody else that actually received a 1099 for their cash reward.

Getting to the point of my post, has anybody else received a 1099 form for their Costco Visa reward? Or for that matter, has anybody received a 1099 for any credit card cash reward program? I'd be interested to know. Thanks.

PFS

Citi Dividend Card Q2 2017 Categories

I had written before that I have a Citibank Dividend MasterCard. One of the benefits of this card is that it offers 5% cash back on rotating categories of merchants. The main problem I have with this arrangement is that I always forget which categories are currently offering 5% cash back when I am at the store. As a result, I often miss out on the bonus dividend dollars. In order to help me remember, I have decided to post the categories which change every three months here.

Q2 2017: Drugstores, Fitness Clubs

Note that "Q2 2017" means from April 1 - June 30, 2017. Also note that even if you have a Citi Dividend Card, the enrollment is not automatic. You have to login and sign up for this offer at the Citibank website.

See also Discover Card Q2 2017 Cashback Bonus Categories

PF Stock

Brokerage Price War

This past week, I was informed that three of my brokerages have reduced their commissions. TD Ameritrade reduced their trade commissions from $9.99 to $6.95 per trade. E*TRADE also reduced their rate from $9.99 to $6.95 per trade. And, I found that Fidelity lowered their price from $7.95 to $4.95 per trade. This is an all out price war among online brokers!

In an October 2006 post, I mentioned that I stopped paying much attention to commissions when they dropped below $20 per trade, saying that "The difference of few dollars is not a big deal." But, it is interesting to note that stock commissions are still going down -- a true race to the bottom.

And yes, PFStock has been around since 2006. As the tagline goes:

PFStock: Providing Food for Thought and helping you to reach the Pinnacle of your Finances since 2006.

Money Market Rates February 2017

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.15% Popular Direct Savings*
1.05% GS (Goldman Sachs) Bank Online Savings
1.00% Ally Bank Online Savings
0.95% Discover Bank Online Savings
0.95% FNBO Direct Online Savings
0.90% American Express High Yield Savings
0.75% Capital One 360 Savings
0.20% Unify (Western) FCU Money Market
0.03% Citibank Savings Plus
0.03% Chase Plus Savings

In some cases, MMA interest rates are tiered. If this is the case, I usually report the interest rate at the $10,000 tier in these updates. Rates are believed to be accurate as of 2/24/17. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list. I have included one credit union in the list so that readers have a comparison point with banks.

*I recently added Popular Direct which is from Banco Popular North America. I don't know much about this bank, but will note that they have a $5000 minimum to open an account, and will charge $4 each month if the account balance is less than $500. If anybody has experience with this bank, I would like to hear from you.

Western Federal Credit Union has announced that they have changed their name to Unify Financial Credit Union. They said that all accounts and services are intended to remain the same after the name change. However, I did notice that they reduced their interest rate after the name change.

The frequent changes show how variable the money market is. Because this is a constantly moving target, it has been very hard to keep track of the rates that I've been getting in my various money market accounts, and this is the main reason I've decided to compile a list of these annual percentage yields.

So, that is the latest list of money market rates. Please let me know if you know of any higher interest rates.

PFS

Waiting for 1099s to Come In

Like many people, I am waiting for the last of my 1099 forms from banks and brokerages for tax year 2016. Together with these 1099s and my W-2 form, I have should all the data that I need to start on my tax returns.

Historically, these 1099 forms were sent out by January 31st. For investors, however, there are certain items that will delay your forms to at least February 15th. The usual suspects are mutual funds (especially foreign funds), Exchange Traded Funds (ETFs), tax-free bonds, and dividend paying stocks. For mutual funds, there are four categories of distributions: long-term capital gains, short-term capital gains, dividends, and non-qualified dividends. ETFs will sometimes declare a distribution in December, but not pay you until January. Unfortunately, you need to pay taxes on these funds in your prior year's taxes. Sometimes, foreign mutual funds need to calculate the foreign taxes paid by the fund. This calculation often takes a while for the fund to figure out. Foreign taxes paid can be taken as a credit on your U.S. taxes.

These are just a few of the reasons why you may still be waiting for your 1099 forms well into February.

Disclaimer: PF Stock does not provide tax advice. I encourages readers to consult with a tax adviser if they have specific questions about 1099 forms or filing their taxes.

PFS