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How much would you put into a FCU for 4% interest?

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I belong to credit union through my employer. They offer a 4% checking account up to $25g's. Of course I have to jump through a few hoops each month like a minimum number of debit card transactions, direct deposit, etc, but I feel its certainly worth it. The credit union will also allow multiple accounts. How much would you put into a credit union for 4% assuming 401k, HSA, Roth IRA and employee stock purchase are maximized? I currently have maximized 4 accounts but want to make sure I'm exercising my best option. Thanks!

 

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Yeah, cuz like, if ya gots a million bucks you be ballin' for life, right?

Glitch99 (May. 07, 2017 @ 4:08p) |

Exactly, how do you think most people got to $1 million? They scrimped, saved and invested every chance they had.

stanolshefski (May. 07, 2017 @ 6:19p) |

Or started with $2 million and lost half of it...

RidicuRuss (May. 08, 2017 @ 1:40p) |

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I mean, I would max that puppy out. Simple.

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4% is a pretty solid return. I would balance out all of my accounts. What percentage of your overall investments is in the 4% accounts. You have four accounts, so I would assume you have 100k in them, or near that. If that is the case, and it makes up more than say 10% of your investments, and you are still a ways away from retirement, I would keep the 100k at 4%, and just make sure my 401k/IRA/HSA are in the market. Use the bank accounts as your bond type funds, and balance out your portfolio based off of that.

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daw4888 said:   Use the bank accounts as your bond type funds, and balance out your portfolio based off of that.
  
Excelent way of looking at it as most of my retirement is in index funds with a little in Target retirement funds.

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jaytrader said:   I mean, I would max that puppy out. Simple.
  And get an account for my spouse as well...

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hey op how can the rest of fwf get in on this

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kchunk said:   I belong to credit union through my employer. They offer a 4% checking account up to $25g's. Of course I have to jump through a few hoops each month like a minimum number of debit card transactions, direct deposit, etc, but I feel its certainly worth it. The credit union will also allow multiple accounts. How much would you put into a credit union for 4% assuming 401k, HSA, Roth IRA and employee stock purchase are maximized? I currently have maximized 4 accounts but want to make sure I'm exercising my best option. Thanks!

 

  Like 10 or 20? I'm assuming those "hoops" would make that near impossible to manage that many.

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atikovi said:   
kchunk said:   I belong to credit union through my employer. They offer a 4% checking account up to $25g's. Of course I have to jump through a few hoops each month like a minimum number of debit card transactions, direct deposit, etc, but I feel its certainly worth it. The credit union will also allow multiple accounts. How much would you put into a credit union for 4% assuming 401k, HSA, Roth IRA and employee stock purchase are maximized? I currently have maximized 4 accounts but want to make sure I'm exercising my best option. Thanks!

 

  Like 10 or 20? I'm assuming those "hoops" would make that near impossible to manage that many.

  
Exactly, for a percentage that high (4%) I GUARANTEE it isn't just a minimum number of debit card transactions - I guarantee it's minimum number of dollars charged to said debit card. That's what a lot of them are doing now.

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hankhill (47.38kB)
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justignoredem said:   
atikovi said:   
kchunk said:   I belong to credit union through my employer. They offer a 4% checking account up to $25g's. Of course I have to jump through a few hoops each month like a minimum number of debit card transactions, direct deposit, etc, but I feel its certainly worth it. The credit union will also allow multiple accounts. How much would you put into a credit union for 4% assuming 401k, HSA, Roth IRA and employee stock purchase are maximized? I currently have maximized 4 accounts but want to make sure I'm exercising my best option. Thanks!

 

  Like 10 or 20? I'm assuming those "hoops" would make that near impossible to manage that many.

  
Exactly, for a percentage that high (4%) I GUARANTEE it isn't just a minimum number of debit card transactions - I guarantee it's minimum number of dollars charged to said debit card. That's what a lot of them are doing now.

  how many dollars

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stanolshefski said:   
jaytrader said:   I mean, I would max that puppy out. Simple.
  And get an account for me spouse as well...

  I was purposefully vague there. "Max it out" means what? Whatever you can do. Whether it's multiple of your own accounts, or an account or two per family member. However many $25k increments you can afford, while maintaining a balanced portfolio. I do like the "like bonds" idea.

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justignoredem said:     
Exactly, for a percentage that high (4%) I GUARANTEE it isn't just a minimum number of debit card transactions - I guarantee it's minimum number of dollars charged to said debit card. That's what a lot of them are doing now.

  Guarantee? Well, as of today, and since Amazon has raised their minimum e-gift card to $1, I spend $15/month per account. But back when Amazon's minimum e-gc was 15˘ I never had an issue either. So yeah, its transactions and not dollars charged.

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If you buy stuff off Amazon typically anyway, that is not a bad deal at all.

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justignoredem said:   
atikovi said:   
kchunk said:   I belong to credit union through my employer. They offer a 4% checking account up to $25g's. Of course I have to jump through a few hoops each month like a minimum number of debit card transactions, direct deposit, etc, but I feel its certainly worth it. The credit union will also allow multiple accounts. How much would you put into a credit union for 4% assuming 401k, HSA, Roth IRA and employee stock purchase are maximized? I currently have maximized 4 accounts but want to make sure I'm exercising my best option. Thanks!

 

  Like 10 or 20? I'm assuming those "hoops" would make that near impossible to manage that many.

  
Exactly, for a percentage that high (4%) I GUARANTEE it isn't just a minimum number of debit card transactions - I guarantee it's minimum number of dollars charged to said debit card. That's what a lot of them are doing now.

  It could be pretty high and still worth it.  A $25k deposit at 4% will earn $1k a year in interest, figure $650 after taxes (depending on your tax rate).  Compare to a 1% account earning $250, or $163 after taxes, that's an additional $490/year in after-tax interest.  If you spend the $ using a debit card rather than a a 2% back credit card, the monthly $ spend requirement would have to be over $2k per MONTH to make it not worth it.  

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daw4888 said:   If you buy stuff off Amazon typically anyway, that is not a bad deal at all.
  You're only losing about $0.75/month in cashback by using a debit card rather than the Amazon 5% card, well worth it for that additional interest.

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I'd put whatever allocation to bonds into the 4% rather than BND. Up to 25k. Or just use it as a checking account and keep your working capital there. Or think of it as an active investment where you make roughly $5/swipe in additional interest for completing the requirements.

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Is this swacu.org or another credit union?

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Amazon gift card reloads are still 50 cents, I believe.

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stanolshefski said:   jaytrader said:   I mean, I would max that puppy out. Simple.
  And get an account for my spouse as well...


She has a mil liquid yet still dabbles in these piddly squat investments. Go invest in something worthwhile.

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I would place 401k, HSA, Roth IRA all in longer term investments like index funds, best of breed mutual funds, etc.

I assume you have covered your emergency fund and the credit union has NCUA insurance deposits of up to $250,000. Do you know the rules that coverage has. The best I can do for you is give you something to compare with what you are asking about.

Compare to Northpointe 5% Interest Checking Account (Now On Balances Up To $10,000) 

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It seems that this is Southwest Airlines Federal Credit Union. They have a Reward Checking account that earns 4.00% APY on balances up to $25,000.
Are there any associations that one can join to be eligible for membership?

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I guess it's really up to your patience level. Back in the heyday of RCAs (and who knows, with interest rates on the rise, maybe there will be an RCA resurgence), I was keeping four of these rolling at once, and that was on the edge of too annoying for me. I am down to one and that's comfortable. But 4% on $25k is sweet. I could be convinced to add more accounts at that.

Chris.

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JILL10 said:   It seems that this is Southwest Airlines Federal Credit Union. They have a Reward Checking account that earns 4.00% APY on balances up to $25,000.
Are there any associations that one can join to be eligible for membership?

  
How to become a member

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cpaynter said:   I guess it's really up to your patience level. Back in the heyday of RCAs (and who knows, with interest rates on the rise, maybe there will be an RCA resurgence), I was keeping four of these rolling at once, and that was on the edge of too annoying for me. I am down to one and that's comfortable. But 4% on $25k is sweet. I could be convinced to add more accounts at that.

Chris.

  Yeah, juggling 4 is about the level of annoyance I can handle. Luckily, my wife works in retail and can easily break a $10-20 transaction into a bunch of dollar-something transactions.

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lonestarguy said:   Is this swacu.org or another credit union?
That's the one...
Employee or family member of employee, I think that's the only path to membership.

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JW10 said:   
JILL10 said:   It seems that this is Southwest Airlines Federal Credit Union. They have a Reward Checking account that earns 4.00% APY on balances up to $25,000.
Are there any associations that one can join to be eligible for membership?

  
How to become a member

  it doesn't say which employers are eligible

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There is an employer list in this old 2011 post. Linky

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So are you doing 60x$1 Amazon reloads per month? How many per day? That would suck if the interest rate dropped all of a sudden like many RCAs do. I've gone through maybe 10 RCAs over the years cause they kept dropping rates.

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

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... No matter what, max $250k.

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matrix5k said:   

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

  
I've done a little bit of this in the past, but I'm over it.

3% of 15k is $450 per year.  Most people would pay tax on that, dropping it to say, $375 or less.  10 transactions/month is 120/year.

375/120 = around 3 dollars per transaction.

$375 isn't a life-changing amount. Seems like your time could be better spent elsewhere.

 

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inframan4712 said:   matrix5k said:   

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

  
I've done a little bit of this in the past, but I'm over it.

3% of 15k is $450 per year.  Most people would pay tax on that, dropping it to say, $375 or less.  10 transactions/month is 120/year.

375/120 = around 3 dollars per transaction.

$375 isn't a life-changing amount. Seems like your time could be better spent elsewhere.

 
but what about your money? If you need to have 15k or 30k with spouse in a liquid account, where else would you put it?

Also the transactions can be scheduled

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rufflesinc said:   
inframan4712 said:   
matrix5k said:   

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

  
I've done a little bit of this in the past, but I'm over it.

3% of 15k is $450 per year.  Most people would pay tax on that, dropping it to say, $375 or less.  10 transactions/month is 120/year.

375/120 = around 3 dollars per transaction.

$375 isn't a life-changing amount. Seems like your time could be better spent elsewhere.

 

but what about your money? If you need to have 15k or 30k with spouse in a liquid account, where else would you put it?

Also the transactions can be scheduled

  
True, but as others have pointed out, the banks will give you a teaser rate then drop it to almost zero without a second thought. That's what finally made me give up on chasing these rates.
I got tired of opening accounts, then having to search for the next one, comparison shop, and then apply for, and wait to be approved, and then they need some piece of documentation,
or I have to call and wait in the phone system, etc.

This would be fine if I set it up as my primary checking and the rate remained at a decent number for years, but it never worked that way. I've got a drawer full of old checkbooks from CountyBank,
View something bank, Orange, and on an on. Just waiting for 7 years to pass to throw them away.

If I still needed this kind of extra money I'd just deliver pizzas or do Uber occasionally.


 

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I would mortgage my Banana Stand for a 4% return

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xrufflesinc said:   
JW10 said:   
JILL10 said:   It seems that this is Southwest Airlines Federal Credit Union. They have a Reward Checking account that earns 4.00% APY on balances up to $25,000.
Are there any associations that one can join to be eligible for membership?

  
How to become a member

  it doesn't say which employers are eligible

  You're eligible if your company makes motorized coolers...

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scrouds said:   ... No matter what, max $250k.
  Not really, you can use different account titles to increase the NCUA coverage. For example, you can do POD (Payable On Death) account types.

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inframan4712 said:   
matrix5k said:   

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

  
I've done a little bit of this in the past, but I'm over it.

3% of 15k is $450 per year.  Most people would pay tax on that, dropping it to say, $375 or less.  10 transactions/month is 120/year.

375/120 = around 3 dollars per transaction.

$375 isn't a life-changing amount. Seems like your time could be better spent elsewhere.

 

  You used to be able to automate these transactions for as little as $0.50. I still have some of those going.

rated:
inframan4712 said:   
rufflesinc said:   
inframan4712 said:   
matrix5k said:   

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

  
I've done a little bit of this in the past, but I'm over it.

3% of 15k is $450 per year.  Most people would pay tax on that, dropping it to say, $375 or less.  10 transactions/month is 120/year.

375/120 = around 3 dollars per transaction.

$375 isn't a life-changing amount. Seems like your time could be better spent elsewhere.

 

but what about your money? If you need to have 15k or 30k with spouse in a liquid account, where else would you put it?

Also the transactions can be scheduled

  
True, but as others have pointed out, the banks will give you a teaser rate then drop it to almost zero without a second thought. That's what finally made me give up on chasing these rates.
I got tired of opening accounts, then having to search for the next one, comparison shop, and then apply for, and wait to be approved, and then they need some piece of documentation,
or I have to call and wait in the phone system, etc.

This would be fine if I set it up as my primary checking and the rate remained at a decent number for years, but it never worked that way. I've got a drawer full of old checkbooks from CountyBank,
View something bank, Orange, and on an on. Just waiting for 7 years to pass to throw them away.

If I still needed this kind of extra money I'd just deliver pizzas or do Uber occasionally.
 

  RCA rates typically don't go to zero. They either get reduced a little or the band cuts the max amount subject to the rate.

And, yes, the RCA rates have gone down but we can't expect the 7% rates of 2006 in our 2017 rate environment.

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upanddown said:   I would mortgage my Banana Stand for a 4% return
  There's always money in the Banana Stand.

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inframan4712 said:   matrix5k said:   

My RCA (LMCU) reqs 10/month and pays 3% up to 15k. It has been 3% for a few years now, I'm surprised it hasn't dropped yet.

  
I've done a little bit of this in the past, but I'm over it.

3% of 15k is $450 per year.  Most people would pay tax on that, dropping it to say, $375 or less.  10 transactions/month is 120/year.

375/120 = around 3 dollars per transaction.

$375 isn't a life-changing amount. Seems like your time could be better spent elsewhere.

 


It doesn't take much time to do 10 transactions per month. Where else would you put your liquid cash? Online savings accounts only give around 1% and those rates get cut just as often.

I also like the ATM reimbursement. I never have to look for a certain bank when I need cash.

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I've passed on this game because of the number of transactions required per month.  My local credit union high interest account required 25 transactions per month.  No thank you.

These accounts are not for your long-term or large investments.

Skipping 11 Messages...
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stanolshefski said:   
  Exactly, how do you think most people got to $1 million? They scrimped, saved and invested every chance they had.

  Or started with $2 million and lost half of it...

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