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The low interest rates offered by even the highest-yield savings and money market accounts are disappointing for savers. Even as the Fed starts to raise rates, savings account yields haven’t budged. So, do we just give up the idea of earning anything on our savings?


Well, not necessarily. One alternative is to create what’s called a CD Ladder.

If you don’t want to tie your short-term cash in a riskier investment, you can consider certificates of deposit (CDs). Typically, CDs carry penalties if you withdraw your cash before they mature. In other words, you will want to invest in a CD designated with a length of time that represents when you would like to get your money back (plus interest). If you need to liquidate the CD early, a bank may take away some or all of the interest that has accrued since the time of the deposit.

In addition, the longer the CD is held, the higher the interest rate you’ll earn. A 5-year CD, for example, will pay a much higher yield than a 12-month CD. The downside, of course, is that you are much more likely to liquidate a 5-year CD in an emergency, losing money to the penalty most banks charge for early withdrawals.

By using a CD ladder, however, you can get the higher rates that accompany longer terms, while also reducing the risk that you’ll need to liquidate a CD before it matures.

So, how does it work?

The strategy is simple. You will initially buy a number of CDs, all with staggered maturity dates. Every few months, one of the CDs will mature and you can then roll that cash into a new CD (or use the cash for your short-term expense needs). Eventually, you will only need to buy CDs with the longest maturities, but the constant maturation of certificates will continue. This provides you with a rolling source of interest and/or principal, which you can use or reinvest depending on your finances at the time.

The process consists of two phases. For this example, we’ll use the latest rates from online banks, which often do not have a minimum balance requirement.

Setting up the CD Ladder

These are the CD products and interest rates we will be dealing with. These are example rates, so check with your bank to determine the interest you’ll earn.

Duration APY
3 Month 0.30%
6 Month 0.60%
9 Month 0.64%
12 Month 1.05%
2 Year 1.30%
3 Year 1.50%
4 Year 1.40%
5 Year 1.65%

We can use this combination of maturities to create a ladder that provides us with a roll-over, or a chance to withdraw part of the cash, every three months. During Phase 1, this will require a combination. By Phase 2, though, all CDs will be of the 5-year maturity, which usually offers the highest interest rates. Remember that five years is as long as you want to go with the CD ladder. If you have funds that you can afford to part with for more than five years, you should look at investing them in a slightly riskier (and more lucrative) investment.

Alright, let’s get started. Assume that we have $10,000 that we’d like to begin rolling into certificates of deposit. Since the longest we want to go is five years, we can split this evenly over time at $2,000 per year. Our shortest maturity is three months, so we can tackle this in terms of $500 a quarter.

In the first phase, start on day zero by buying CDs with the following maturities:

  • $500 in the 3 month CD
  • $500 in the 6 month CD
  • $500 in the 9 month CD
  • $2,000 in the 12 month CD
  • $2,000 in the 2 year CD
  • $2,000 in the 3 year CD
  • $2,000 in the 4 year CD
  • $500 in the 5 year CD

At the end of the each of the first three quarters, withdraw each quarter’s $500 plus interest and use the funds to buy new 5 year CDs. For the sake of the example, we’ll withdraw the interest and place it in another bank account to use as income. To make more of your money, you should “reinvest” your interest each quarter.

Watch out for automatic renewal. At Ally Bank, for example, CDs are automatically renewed for the same duration when they mature. During this stage, you will need to be proactive to withdraw the funds at maturity and use them to buy the next appropriate CD.

After one year of doing the above, this is what we have:

  • $2,000 maturing today (original 12 month CD)
  • $2,000 maturing in one year (original 2 year CD)
  • $2,000 maturing in two years
  • $2,000 maturing in three years
  • $500 maturing in four years
  • $500 maturing in four years, three months
  • $500 maturing in four years, six months
  • $500 maturing in four years, nine months

With the $2,000 maturing today, buy:

  • $500 in the 3 month CD
  • $500 in the 6 month CD
  • $500 in the 9 month CD
  • $500 in the 5 year CD

Do the same with the $2,000 that matures each year until you have a total of 20 CDs, each maturing every quarter for the next five years. Once this process is complete, you can allow the automatic renewals to take effect, except for when you need to withdraw your money.

Drawbacks of the CD ladder

As long as rates for long-term CDs remain higher than short-term CDs — as they do most of the time — you may notice something. This method, in fact, results in earning less than simply investing your entire $10,000 in a 5 year CD. So, why would you go this route?

It’s because the CD ladder provides you some protection against losing interest if you need to withdraw your funds early. At Ally Bank, the penalty is not significant. This bank will charge you the amount of three months’ interest if you withdraw a CD with a maturity of 12 months or less. They’ll also charge 6 months’ interest if you withdraw a CD with a maturity of longer than 12 months.

Another possibility to consider is that you might earn more interest in a high-yield savings account than you would in a short-term CD. When this is the case, use a specially designated savings account rather than the short-term CDs.

We could have made this process easier by setting up a ladder that results in a turnover of $2,000 once a year rather than $500 every quarter. However, this method allows you to better decrease the possibility of losing interest. This is because you will always be able to access a portion of your investment within three months.

In combination with a savings account, which is liquid at all times, you can earn consistently higher interest rates with less risk than using five-year CDs that mature only once a year.


It’s been a long time since banks offered savings accounts with decent returns. The Fed may raise interest this year, meaning rates could finally rise. In the meantime, what do you do?

If you’re looking for a quick way to create an investment vehicle that is FDIC insured, and promises greater returns than online savings, Fidelity Investments has an option for you. The new Model CD Ladder tool is Fidelity’s attempt at bringing easy CD Ladders to its account holders. Let’s look at what this tool offers and see if it’s a better option than an online savings account.

Finding a Safe and Steady Return on Cash Holdings

For a detailed explanation of CDs, go here. Basically, in a volatile financial environment, CDs offer investors an FDIC-insured means to safely earn a consistent return on their cash. The rates of return can’t match the stock market, but they are better than what you’ll find with savings accounts. If the Fed finally decides to raise interest rates, the yield on new CDs should rise with them.

CD Ladders Explained

CD Ladders are multiple CDs purchased together, each with varying time horizons. This “ladder” is designed to return the owner’s initial investment at intervals, with interest payments paid out during the life of each individual CD. Each CD is a different “rung” on the ladder. As each CD matures and you climb up the ladder, your yield rises and liquidity remains the same. The goal is to max out the ladder with the highest yielding, longest term CDs and continually renew them as each rung expires. Your waiting time for each rung to mature should be the same as the very first CD that matured.

Yield, Liquidity, and the World of CDs

I just mentioned yield and liquidity. I want to find an equilibrium between the two when I am building my CD Ladder.

Yield is the rate of return that I’ll receive on my premium. My premium is my initial investment in each CD, and in Fidelity’s case, $1,000 is the smallest CD they broker. I’ll address overall minimum investment amounts later.

Liquidity is how easily or quickly I can access my investment.

Liquidity and yield are inversely related in the world of CDs. As liquidity rises, yield falls. As yield rises, liquidity falls. This is true when you first purchase the CD. Rates are generally locked in upon purchase.

But I said that “your yield rises and liquidity remains the same” when you create a CD Ladder. This is true, and you’ll understand why by the end of this article.

Put another way, the longer your CD time horizon, the less liquid it will be. It will take me more time to access the money I’ve invested, usually measured in months and years. If I have a 5-year CD, I’ll have to wait 5 years from the date of purchase to access the principal. If I want to access it before the 5-year period is up, there will be a penalty fee associated with that action. There is, however, a bonus to having to wait so long to get my premium back. Because of the inverse relationship of yield and liquidity, though, your yield is going to be higher. Ideally it’s high enough to make it worth waiting 5 years!

Conversely, the short time horizon CDs – such as 3 to 12 month CDs – are more liquid and yield much less than a 2 to 5-year CD.

In my ladder, I would start out with low yielding, shorter term CDs. They will mature in the first two years, while the clock ticks away on longer term, less liquid CDs with a higher yield. By doing this I am balancing my need for liquidity and yield with a mix of short and long term CDs.

Once I make it past the initial CD, or rung, my average percentage yield (APY) climbs with each rung expiration. That is why the CD ladder is a great tool for holding cash.

Fidelity’s New CD Ladder Tool

Fidelity Investments new CD Ladder tool lets you quickly make a CD Ladder that meets your individual yield and liquidity goals. Divided into three easy steps, your Model CD Ladder can become a reality in just a few minutes.

When creating your CDs with the Model CD Ladder tool, you will pick between a 1, 2, or 5-year ladder. Let’s look at what it takes to create each one, and what kind of return you can expect.

Minimum Amounts and Yields

If I want to create a Fidelity CD Ladder, it will take $4,000 or more. The next minimum investment amount is $8,000 (you calculate by $4,000 increments). Also, the $4,000 minimum applies to the 1- and 2-year ladders, and a $5,000 minimum applies to the 5-year model.

If I’m going to create a 5-year CD Ladder, I’ll need the $5,000 minimum and increase that by $5,000 increments if I want to invest more.

The yield for each ladder varies day-to-day, but as of this writing you’re going to see the following:
Time Horizons

I can choose between a 1-year, 2-year, and 5-year CD Ladder.

The 1 year option will consist of 4 CDs that mature at the 3, 6, 9, and 12-month maturity date. For example, if I buy a ladder on November 1, the first portion (3 months) of the ladder will mature on or around February 1. This specific CD will pay both the interest accrual and full principal upon maturity. At 3 months, the amount will be relatively small. The 6-month CD will mature on May 1, the 9-month on August 1, and the 12-month on November 1 of the following year. Here’s an example of a 1-year Model CD Ladder:
The 2-year ladder will hold 6, 12, 18, and 24-month maturity dates. The same example above will apply with the modified time horizons. I will receive the original principal as each rung expires, and interest payments for the life of each CD. Here’s an example:
The 5-year ladder will hold CDs with 1, 2, 3, 4, and 5-year maturity dates. Remember, I needed a $5,000 minimum investment to start this longer-term ladder. This means I’ll get 5 annual principal payments and interest payments throughout each year. Here’s the 5-year ladder example:

*Assumes that I reinvested each premium into the longest term, highest yielding CD after the first CD expired. For the 1-year CD Ladder, I’d purchase another 12-month, 0.80% yield CD. For the 2-year ladder, I’d buy the 24-month CD yielding 1.20%. The APY listed in each chart is the starting APY, and this climbs as you reinvest each rung.

Using the 5-year model as an example, I should re-invest the principal from the 1-year CD into the ladder when it matures. I’ll then buy a 5-year CD to add another rung and keep the ladder going. This will cause my average percentage yield to climb. Consider that I would add a 1.80% yielding CD – or higher if interest rates rise – and eliminate that short term low yielding CD by letting it mature. My 2-year CD is now only 1 year from maturity and yielding 1.25%, and so on. At the end of the 5-year period, I’d have a CD ladder with a 1.80% APY.

This is the power of the ladder. If I do nothing and take the principal out as each rung expires, I am losing out on future higher returns.

Author’s note: I used this CD Ladder calculator to do the calculations for these examples. This website has over 400 financial calculators for personal finance, business analysis, and more.

Ladder Strategies: Investment or Income

After choosing the time horizon for my ladder, I must decide between two strategies to achieve my goals. Do I want to just contribute an initial investment, or do I have a specific annual income that I’m after?

With either option, the job is easy. If I desire $100 in annual income from a CD ladder, I see I’ll need to invest $10,000 in a 5-year ladder. Fidelity automatically fills the ladder with the best CDs that match my strategy. This is true whether I’m using either strategy.

Overview and Estimated Interest

The overview tab lists out the key details for each rung of the ladder. The coupon rate (yield) and maturity date are available for the user to see immediately on each rung.

The estimated interest tab breaks down the payment schedule for the ladder. A key point to note here is that it does not illustrate the power of executing the ladder. The chart does not assume you reinvested the principal each time a rung expired.

Choosing CDs and Attributes

If I want the freedom to pick and choose CDs, I’ve got it. I can replace any rung in my ladder by choosing other CDs on the market.

All CDs will tell me if they have sinking fund protection, call protection, and FDIC insurance. I have yet to see one that didn’t have those three options.

If I click on the CD name, I’ll get the Overview and Price/Performance tabs where I can get the CUSIP, Issuer Information, and see how often the CD pays out interest.

Other Options – Custom Rungs

There is an option to select different bond types and ratings. Don’t mess with it. The Fidelity Model system operates on the same page as their bond ladder program. By selecting your model CD Ladder, you’ve already notified the system you want to see CDs and there are no additional settings you should adjust here.

There is a custom “number of rungs” option, and after experimenting with the tool I could modify the ladder to between 2 and 5 rungs.

No Fees and Renewal Options

Fidelity charges no fees for buying CDs using their ladder tool. There are no annual cost or commission fees.

Fidelity will not automatically renew your CDs for you, so it’s important to track when your CDs are maturing. Reinvest the principal of your maturing CD into the longest term, highest yielding CD available for your ladder.

A Word on Penalty Fees

If I create a CD Ladder, and an emergency – or opportunity – pops up that requires me to cancel one or all my CDs, what will happen? Many investors assume they will automatically face an early withdrawal penalty. This isn’t the case with Fidelity’s CDs.

Since I’m creating my ladder out of brokered CDs, there are no termination penalties brought on by Fidelity. If I do want to exit my CDs, I must find a buyer for each one to get my principal back. The CD will be sold on the open market to other individual or institutional investors, so I may not get the full-face value when I sell. This is a slightly better option than facing steep fees associated with canceling some types of non-brokered CDs.

This is a factor you’ll have to weigh when deciding whether to start CD Ladder. If you have extra money sitting around that is not “working” for you, I’d seriously consider a 2 or 5-year ladder.

But what about Online Savings Accounts? Don’t they provide a decent yield with great liquidity?

Well, sort of. There is no debate as to the liquidity of a savings account compared to a CD. But I’ll bet your online savings account won’t be able to beat the yield of a CD over longer time horizons.

The best online savings accounts will yield about 1 percent. That is better than most brick and mortar savings accounts. But I must consider how often and in what circumstances I’ll use the cash I have put away in my savings accounts. I will not use my emergency fund for anything other than an emergency, which statistically does not happen often in my life. My personal earnings are sufficient to cover most unexpected expenses with the help of a credit card, if necessary.

If I am going to hold large amounts of cash outside of what I need for my emergency fund, I should consider using a CD Ladder. That way, I can increase my returns and at least maintain pace with inflation.

Online savings accounts can be beat within one year of starting a Fidelity Model CD Ladder.

Right now, a 1-year ladder will never match the online savings account.

But, if I use the 2-year ladder, I will beat online savings accounts by the 12-month mark! Boom. Every 6 months, I’ll have $1,000 due to me that I can either use or reinvest back into the ladder and earn 1.25%. If interest rates rise during the life of this ladder, the longest I’ll have to wait is 6 months before I can purchase a new rung with a higher interest rate. Here’s how the math works out:


For a 5-year ladder, Fidelity beats the best online savings accounts immediately. The only disadvantage it has against the 2-year model is the liquidity. I’ll have to wait 12-months for each rung to mature, rather than 6-months with the 2-year model.

The Evidence Favors the Ladder

If you agree that you generally don’t access your cash stockpiles in your online savings accounts, the evidence favors using a CD Ladder. It doesn’t have to be from Fidelity, but this tool illustrates that you can quickly outpace the returns of the latest 1% online savings account. I wish my bank offered this tool and the great rates that come with it. Right now, I’m only seeing a CD for 1% at my home bank.

Fidelity CDs vs Ally Bank and Others

In the 5-year CD Ladder, Fidelity beats Ally Bank on a $5,000 investment by 10-20 basis points. Ally has a 3 and 4-year Ladder option that beats the Fidelity 2-year model. Fidelity also sells 3-year CDs that yield just 5 basis points lower than Ally’s 3-year term. You can use the model tool to insert a CD like this into your custom ladder.

Nationwide Bank offers more competitive interest rates than Fidelity. The 5-year yield is around 2.25%, which over the first 5 years of a ladder will earn you about $120 more than Fidelity’s model.

Discover Bank is about the same as Fidelity for anything 5 years or less. It’s the same with Alliant Credit Union.

Fidelity beats Capital One by half a percent on a 5-year CD, and beats all other time horizons.

What Works for You

Fidelity’s Model CD Ladder tool makes it fast, simple, and easy to start earning more on your cash. If you don’t have any fixed income vehicles in your asset allocation plan, this may be the perfect place to get started. Balance your liquidity and yield needs to come up with the perfect ladder, either by choosing a target annual income or initial lump sum investment. Online tools like this are perfect for experimenting – use it to find the right CD Ladder for your investment strategy.

Have you ever tried a CD ladder?


When opening a bank account, there are a few things you should be looking for: low (or no) fees, the highest interest rates possible, and promotional bonus offers.

With the latter, you can often score free money without doing anything extra, which is a win in my book. After all, promotional bonus cash is better than the free toasters that your local branch used to hand out, wouldn’t you agree?

Here is a list of our favorite bank deals that are available right now:

1. TD Bank Premier Checking – Get $300

This is a pretty simple bonus to earn, as long as you’re able to meet their minimum requirements. It’s available to new personal checking customers in CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, and VT.

All you need to do is:

–          Visit TD Bank’s website and sign up for a new TD Bank Premier Checking account

–          Set up and receive $2,500+ in direct deposits within the first 60 days

After those requirements are met, your $300 bonus will be deposited into your new account.

Note: the TD Bank Premier Checking accounts do have a monthly service fee of $15. This can be waived if you keep a daily balance of at least $100.

2. Chase Total Checking® & Chase Savings – Get up to $350

This $350 bonus actually consists of two, separate bonus offers. They can be combined, or used separately, depending on your needs. Both offers together total $350 in free cash.

The first $200: In order to receive this bonus, you’ll need to:

–          Open an approved Total Checking account as a new customer

–          Deposit a minimum of $25 at opening

–          Have a direct deposit made to this account within the first 60 days

After completing all three of these steps, you will receive your $200 bonus in the form of a deposit into your new account, within 10 business days.

Note: Chase Total Checking® accounts do have a $12 monthly fee. This can be avoided if you a) have monthly direct deposits totaling $500+ made to the account, b) keep a minimum daily balance of $1,500+ in the account, OR c) keep an average daily balance of $5,000+ in any combination of qualifying Chase checking, savings, and other balances.

The remaining $150: Earn another $150 bonus by opening a Chase SavingsSM account as a new customer. In order to receive the bonus, you’ll need to:

–          Open a new, approved Chase SavingsSM account

–          Deposit a total of $10,000 or more into the account within the first 10 business days

–          Maintain a balance of at least $10,000 for 90 days from the date of deposit

After completing all three of these steps, you’ll receive your $150 bonus in the form of a deposit into your new account. This deposit will show up within 10 business days, from the completion of the last step.

Note: Chase SavingsSM accounts do have a $5 monthly fee. This can be avoided by a) keeping a daily balance of $300+ in your savings account, b) have at least one repeating, scheduled transfer of $25+ from your Chase personal checking account (this needs to be scheduled through Chase OnlineSM Banking, OR c) have a linked Chase Premier Plus CheckingSM, Chase Premier Platinum CheckingSM, or Chase Private Client CheckingSM account.

This offer is in-branch only! In order to be eligible for these bonuses, you’ll need to visit this page, enter your email address, and print the coupon they’ll send. Then, take that coupon in to your local Chase branch to open the new account(s).

Once you complete these steps for each of the two new accounts, you’ll have earned a whopping $350 in free cash! Not a bad deal.

3. Chase Premier Plus Checking – Get $300 (expires 01/15/17)

This offer is different from the one above, and it is good through January 15, 2017. Instead of the Total Checking account mentioned in #2, this offer is for the next tier up: the Chase Premier Plus Checking account.

In order to earn your $300 bonus, you will need to:

–          Open a new, approved Chase Premier Plus Checking account

–          Deposit a minimum of $25 at account opening

–          Set up your direct deposits to be made to this new account within the first 60 days

After completing all three of these steps, your $300 bonus will be deposited into the new account within 10 business days. If you close this account within the first six months, however, they will deduct the full bonus amount from your closing balance!

Note: There is a $25 monthly service fee on this account, which can be waived by a) maintaining an average daily balance of $15,000+ in any combination of qualifying Chase accounts (checking, savings, and other balances), OR b) having a qualifying Chase mortgage and setting up automatic payments from your Premier Plus Checking account.

In order to be eligible for these bonuses, you’ll need to visit this page and either apply online or enter your email address, then print the coupon they’ll send. If you choose the latter option, you’ll then take that coupon in to your local Chase branch to open the new account(s).

4. Bank of America Checking – Get $100

If you’re new to Bank of America, here’s a $100 bonus good through the end of the year. All you’ll need to do is:

–          Open a qualifying personal checking account (only available to new customers), online or in-branch; these include Core Checking® and Interest Checking® accounts

–          Deposit the minimum opening amount ($25 for Core Checking® and $100 for Interest Checking®)

–          Set up two monthly direct deposits totaling $250 or more for at least the first 90 days

Once you complete these requirements and keep your account in good standing, your $100 bonus will be deposited into the new account within 60 days.

Note: both of these checking accounts incur monthly service fees. The Core Checking® account comes with a $12 fee, which you can have waived by a) having at least one direct deposit of $250+ made each monthly statement cycle, b) maintain a minimum daily balance of $1,500+ each cycle, OR c) enroll in Preferred Rewards. For Interest Checking®, the fee is $25 and can be waived by a) maintain $10,000+ in combined balances between eligible, linked accounts each statement cycle, OR b) enroll in Preferred Rewards.

5. Discover Cashback Checking – Get up to $120

This bonus is a little different, as the amount you’ll receive depends on the transactions you make. Oh, and it’s a recurring bonus, up to $120 a year.

If you’re an existing Discover credit card holder, you can open a new Cashback Checking account. Then, you’ll earn $0.10 in rewards each time you write a check, make a purchase using your debit card, or pay a bill online. There are no monthly service fees or balance requirements involved with these checking accounts.

6. Santander Bank Checking– Get $150 (expires 12/31/16)

This offer is only valid through 12/31/16, so be sure to jump quickly if you want the free $150. All you need to do is:

–          Open an eligible checking account at Santander Bank as a new customer. These include the Simply Right®, Basic, and Premier Plus checking accounts.

–          Make the minimum deposit ($25 for Simply Right® and Basic accounts, $50 for Premier Plus)

–          Have direct deposits of $500+ made into the account within the first 90 days

–          Keep your account open for 90+ days

Once all four of these requirements are met, your $150 bonus will be deposited into your new account within 30 days.

Note: These accounts each incur a monthly service fee. These can be waived in the following ways:

–          Simply Right® ($10 fee) — All you need to do is make any financial transaction that posts within that calendar month. This includes deposits, withdrawals, transfers, or payments. Anything.

–          The $3 monthly fee for the Basic checking account cannot be waived.

–          Premier Plus ($35 fee) – Make a total of $6,000+ in direct deposits each month OR maintain a combined $75,000 in deposits + balances with Santander Investment Services

You can apply online at Santander Bank, or go online to print a coupon and open your account in-branch.

7. Fifth Third Essential Checking® – Get $200 (expires 12/31/16)

This is another offer that is only good through the end of the year, available to residents of FL, GA, IL, IN, KY, MI, MO, NC, OH, PA, TN, and WV. In order to get your free $200, you’ll need to:

–          Open a new, qualifying account online, in-branch, or by phone

–          Deposit a minimum of $50

–          Make at least three bill payments online

–          Set up a qualifying direct deposit within the first 90 days

Once all four requirements are met, you’ll receive your $200 bonus in the form of a deposit into your new account, within six weeks.

Note: the Essential Checking® account comes with an $11 monthly service fee. The fee drops to $8 a month if you have a monthly direct deposit totaling $500+. Either of these fees can be waived if you a) maintain a combined monthly balance of $1,500 or more between your eligible accounts, b) spend $500 or more each month on a Fifth Third credit card, c) currently hold a balance on an existing Fifth Third mortgage, auto loan, or personal line of credit, d) are a current or former member of the US military and make monthly direct deposits of $500 or more, e) have a valid student ID, f) are a member of your employer’s Fifth Third banking benefits program and make monthly direct deposits of $500 or more, OR g) have a Business Premium or Business Elite Checking account.

8. M&T Bank Checking – Get $150 (expires 12/31/16)

If you live in CT, DC, DE, FL, MA, MD, NJ, NY, OR, PA, VA, or WV and want to open a new checking account before 12/31/16, this offer is one way for you to earn $150 free from M&T Bank. You’ll need to:

–          Open a new personal checking account online or in-branch (with printed coupon)

–          Make one qualifying direct deposit of $100 or more within the first 90 days

–          Keep your account open for at least 90 days more

That’s it. Your $150 bonus cash will be deposited into your new account within 90 days of the direct deposit.

Note: M&T Bank’s EZChoice Checking accounts come with a $6.95 monthly service fee. This can be waived by simply making one deposit to or withdrawal from the account during that charge cycle.

9. Charles Schwab – Get $100

If you are new to Charles Schwab, you can open one of a number of accounts, and earn $100 cash. This includes their personal banking accounts, as long as it is linked to a Schwab One® brokerage account. You’ll need to:

–          Open a Schwab Bank Checking account through this link or by calling 800-398-8640 and mentioning the code REFER

–          Fund the account with any amount you choose —  there is no minimum opening deposit OR minimum balance!

–          Your application will automatically open a Schwab Bank brokerage account for you, too, which will be linked to the checking account

–          Fund the second account with any amount your choose — this account also has no minimum deposit or balance requirements

–          Keep the accounts open for a minimum of one year, to avoid the bonus being charged back

Even if you put a single penny in these accounts, you’ll still receive your bonus of $100 about a month after opening them. Then, just keep the account open for a year. There are no monthly service fees and no minimums, so it’s a pretty easy way to earn free cash.

**Please note: While this is a very easy bonus to earn, without any big requirements, you need to watch the application process. Charles Schwab will often use a hard pull inquiry when opening accounts, especially for new-to-CS customers. This may be worth it to you (or it may not), but just be aware of the possibility.*

10. Regions Bank Checking and Savings – Get up to $100

This one isn’t an instant-gratification bonus, but it’s free money nonetheless. All you’ll need to do is:
–          Open a Regions Bank LifeGreen® Checking account and a LifeGreen® Savings account
–          Link the two
–          Set up monthly automatic transfers of at least $10 from checking to savings, for an entire year
At the end of the year, Regions will give you a 1% annual savings bonus, up to a maximum of $100. Oh, and there are no monthly fees with the checking account.

11. Capital One 360 Checking – Get $100 (expires 12/31/16)

Yet another bonus good through the end of the year, but if this is your first Capital One 360 account, it’s a nice freebie. You’ll need to:

–          Open a qualifying Capital One 360 checking account through this link and accepts the terms and conditions (they stress this part, for some reason)

–          Set up and receive a minimum of two direct deposits totaling $250+ in the first 60 days

After you complete those two requirements, you’ll receive your $100 bonus deposit about 90 days later. There are no minimum balance requirements or monthly service fees associated with this account.


You’re probably familiar with Goldman Sachs, at some level. The multinational banking firm, best known for investment banking, goes all the way back to 1869. But did you know that they also have a web-based arm known as Goldman Sachs Bank USA, or simply GS Bank?

It’s an online bank that pays far higher rates of interest on savings and certificates of deposit than traditional banks, and it competes favorably head-to-head with other well-known online banks. As an example, Ally Bank currently pays an APY of 1.75% on its 60 month certificate of deposit (CD). GS Bank, on the other hand, pays a 1.85% APY on its CD of the same term. (rates as of October 2016)

They may not be the highest paying bank in the market across the board, but they will usually lead the pack on one or more offerings. Let’s learn more about this online division and what they are offering.

About GS Bank

GS bank specializes in online savings accounts and certificates of deposit. They offer high yielding savings instruments with no transaction fees, and FDIC insurance of up to $250,000 per depositor.

Their specialty is working with the small business market. They provide smaller companies with access to relevant education, capital, and business support. In fact, their stated purpose is “unlocking growth and job creation potential of small businesses.”

GS Bank provides the services that you would expect from an online bank. You can check balances, track transactions and deposits, and receive monthly statements electronically. You can also transfer money between linked accounts, as well as make scheduled transfers at your own discretion.

How GS Bank Works

GS Bank uses a four-step process to open an account, and you can do it entirely online. Completing the process takes under 10 minutes. Want to see how easy it is?

  • Select a savings account or certificate of deposit
  • Enter ownership information
  • Review and sign your application
  • Transfer money to your account from outside accounts

For security purposes, you’ll need to create a username, password, and security challenge questions. GS Bank will then issue you a four-digit banking PIN so that you can access your account.

Trial deposits will be used when you open your account. GS Bank will make two very small (just a few cents’ worth) into your external bank account. You will then verify that those transfers have been received in your external bank account, as well as confirm the amount of each transfer. Once that has been completed, you will be able to make actual transfers between your GS Bank account and your external bank accounts.

You can transfer funds into your new account via electronic transfer, wire transfer, or check deposit. You can also set up direct deposits from either your paycheck or your monthly Social Security check.

GS Bank allows you to link as many as four external accounts, and you can then make transfers anytime, night or day. You’ll begin earning interest on your savings account or CD the very same day that a deposit is posted to the account.

Bank Highlights

GS Bank provides the full range of services that you would want, and expect, from an online bank. These include:

Minimum initial deposit requirement. There is no minimum deposit required to open a savings account. You must make a deposit into the account within 60 days of opening it, but that’s it. For CDs, the minimum requirement is just $500. This makes GS Bank a natural choice for both new and small savers.

Types of accounts offered. Individual or joint accounts only. GS Bank does not offer custodial or trust accounts, nor do they offer IRAs.

Deposit limits. The maximum amount of money you can have on deposit for all individual accounts is limited to $250,000 (combined) per account owner. This includes interest earned and credited but not withdrawn. For joint accounts, the combined maximum is $500,000, which includes interest earned and credited but not withdrawn.

Interest calculated using the daily balance method. Your interest earned begins to accumulate on the very first day you deposit money into your savings account or CD. They apply a daily periodic rate on your account balance, and it is calculated based on either 365 or 366 days. On savings accounts, interest is compounded daily, but is paid into your account on a monthly basis.

Fees. There are no fees charged in connection with your online banking accounts. That includes no fees for wire transfers.

Customer Service. GS Bank customer service is available Monday through Friday, from 7:00 AM to 11:00 PM Central time. Customer service can be reached by phone, email, or snail mail. I called the 800 number to get information and was connected to a live person within 2-3 minutes.

Availability of funds. For electronic and wire transfers, deposits are immediately available if they are made before 5 PM Central on regular business days. A deposit made after 5 PM will be considered effective the following business day. For check deposits, funds will be available on the first business day after the bank receives the deposit.

Limits on funds withdrawal. There is a limit of six withdrawals per statement cycle, which is typical with true savings instruments at all banks. (This is what distinguishes them from checking accounts.) Funds can be withdrawn from your account by wire transfer or electronic transfer, and you can also make transfers on weekends and holidays. There is a per-transfer limit of $125,000 when the transfer is done online.

Account protection. All accounts are fully protected by FDIC insurance, for up to $250,000 per depositor. Joint accounts are protected for up to $500,000 ($250,000 per depositor).

Certificates of Deposit

GS Bank’s CDs offer some of the most aggressive interest rates available. You can open one for as little as $500, with terms that run from six months to six years.


The 10-day CD Rate Guarantee. When you open a new CD with GS Bank, you will get the highest interest rate the bank offers within the first 10 days of purchasing the CD. Your CD must be funded within that 10 day period.

What does this mean? Say you hypothetically open a CD (day one) while they are offering a 1.0% APY. Then, 4 days later, the interest rate they are offering jumps up to 1.05%. As long as you fund the CD before day 10, you’ll be given the higher interest rate of 1.05% (even though the rate you signed up for was only 1.0%).

Bank Limitations

There are a few services that GS Bank doesn’t offer, at least not at this time. They include:

No ATM/debit card. You can access the funds in your account by electronic transfer to your account at another bank or by wire transfer. But at this point in time, GS Bank does not offer an ATM/debit card. That may not be a deal breaker, however. The primary purpose of either a savings account or a CD is to earn high interest on your deposits. The accounts are not designed to serve as a typical on-demand deposit accounts, so this may not bother you at all.

Limited account types. Right now, GS Bank doesn’t offer either custodial accounts or trust accounts.

No international transfers. At least for the time being, you won’t be able to transfer of funds to and from accounts outside of the US. However since Goldman Sachs is a multinational bank, we can reasonably expect this feature to be provided at some point in the future.

No IRA accounts. GS Bank does not provide IRA accounts, as of October 2016.

Is GS Bank the Right Online Bank for You?

Most banks today pay something close to nothing – often less than 0.10% year – on savings accounts, CDs, and money market funds. This is why you need a relationship with a bank like GS Bank, in order to hold the majority of your savings. Even if you have great features elsewhere, such as award-winning checking accounts and credit cards, you still need a strong bank that pays high interest rates to hold your savings instruments.

So, what about other online banks that also pay high interest? One major advantage that GS Bank has is that they are backed by one of the most respected financial institutions in the world: Goldman Sachs. Not only should that make your investments more secure, but it also holds the promise of expanded features and opportunities in the future. The kind that only a world-class banking organization could provide.

To get more information, check out the GS Bank website, where you’re certain to find savings opportunities that will interest you.

Have you signed up for a GS Bank account yet? What has been your experience?



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