3

If you get a Brinks prepaid MasterCard (no initial fees, and you can even get a $20 signup bonus) and go through some other gyrations, you can presumably get access to a 5% FDIC-insured savings account.

Has anyone does this?

It sounds too good to be true, so I'm suspicious, but banks have done weird things before (I once transferred a balance to a Citibank card with a -5% fee: my balance decreased by 5% after the transfer).

I want to hear from someone who has actually done this, if possible. I've skimmed the terms, and there are various fees, but they all seem avoidable if you're reasonably clever.

Since you can borrow money for less than 5% (usually collateralized though), this sounds like free money (sort of).

Googling shows some results, but many of them are people asking the same question and/or people who are speculating without experience.

  • 4
    5% for the first $5000. Not a big money maker. – Nathan L Aug 19 '15 at 16:29
  • @NathanL Where did you read that? I didn't see a limit? – barrycarter Aug 19 '15 at 16:45
  • 1
    From brinksprepaidmastercard.com : "r an average daily balance up to but not exceeding $5,000.00, the interest rate for the Savings Account is 4.91% with an annual percentage yield (APY) of 5.00%. For that portion of the average daily balance of the Savings Account that is $5,000.01, or more, the interest rate is 0.49% with an annual percentage yield (APY) of 0.50%. – JB King Aug 19 '15 at 16:54
  • Looks like they moved it down to $1,000 now. – Zaz Jun 3 '17 at 21:21
5

Down in the Fine Print are these points to consider for the limit:

  • For an average daily balance up to but not exceeding $5,000.00, the interest rate for the Savings Account is 4.91% with an annual percentage yield (APY) of 5.00%.

  • For that portion of the average daily balance of the Savings Account that is $5,000.01, or more, the interest rate is 0.49% with an annual percentage yield (APY) of 0.50%.

The interest rates and APYs of each tier may change. The APYs were accurate as of March 1, 2014. These are promotional rates and may change without notice pursuant to applicable law. No minimum balance necessary to open Savings Account or obtain the yield(s). Because Savings Account funds are withdrawn through the Card Account (maximum 6 such transfers per calendar month), Card Account transaction fees could reduce the interest earned on the Savings Account. Card Account and Savings Account funds are FDIC-insured upon verification of Cardholder's identity. For purposes of FDIC coverage limit, all funds held on deposit by the Cardholder at BofI Federal Bank will be aggregated up to the coverage limit, currently $250,000.00.

  • So, a nice little incentive, but not much of an arbitrage. – Nate Eldredge Aug 20 '15 at 7:56

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