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I have just started my career a couple of months back and plan to save money for emergency funds. I was browsing the internet for a good savings account and came across Mango Money savings (6% APY upto $5,000) and found a detailed post about it. I have read about the prepaid card I need to have to open the account and their $3 monthly fee. As the post mentions I still get about 5% after the monthly fee so I am keen on opening a savings account with them and fine with the above conditions.

I want make sure that I am not missing anything here and want to know any disadvantages of using this savings account to store money as a emergency fund. Can anyone list the pros and cons (other than the ones mentioned above) for this approach? I am mostly interested in the cons.

  • A prepaid card? Are you sure this is not a pyramid scheme of some kind? A savings account with 6% annual yield in the US sounds too good to be true. – Dilip Sarwate Jan 20 '15 at 22:20
  • Yes, It does look like that but the post I linked is from 2012 and it has still active comments and updated content so I was curious to make sure this not so phony scheme. There is even a WSJ article about it. – Ram Jan 20 '15 at 22:24
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    Just FYI... If your average daily balance drops below $505 dollars every month, then the interest generated is less than the $3 monthly subscription charge. – AbraCadaver Jan 20 '15 at 22:39
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    For most people, you really have to compare the rates to a CD or brokerage account. There are so many restrictions that it's not really comparable to a regular savings account at a bank. – JAGAnalyst Jan 21 '15 at 19:13
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Mango is legit, there are some other forums out there with some reviews and discussion about whether or not it's worth the effort of setting it up and following the rules to realize the maximum benefit.

The main downside is that Mango is fee-heavy: ATM fees, monthly fees, etc. One person did a calculation that if you follow all the rules and minimize fees, your maximum benefit above what you can get at other online banks with enticing rewards or interest rates is about $250/yr. Is $250 worth the hassle of following the Mango rules? You'll have to decide.

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