Archives for April 3, 2018

Chase Freedom & PayPal: 5% Back on Federal Income Tax Payments

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

Chase Freedom VisaThe Chase Freedom Visa card has updated its quarterly 5% cash back categories for April 1st to June 30th, 2018. One of the eligible cash back categories is PayPal. April is also the time to make both income tax payments along with 2017 tax returns and also quarterly estimated taxes for 2018. PayUSATax.com is an IRS-approved payment processor and accepts PayPal as a payment with a 1.97% transaction fee.

Here is the fine print:

Includes transactions made using your Chase Freedom card with PayPal for purchases or sending money. Eligible transactions only qualify for a total of 5% Cash Back rewards. Purchases made using PayPal at other current 5% quarterly categories will be awarded a total of 5% Cash Back rewards on up to $1,500 in combined purchases. When you send money to Friends & Family via PayPal using your Chase Freedom card, standard transaction fees apply. See PayPal’s fees. Websites and other information provided by PayPal are not within Chase’s control and may not be available in Spanish. Must have/open a PayPal account to send and receive money.

Technically the Chase Freedom earns 5x Ultimate Rewards points, which might actually get you more than 1 cent per Ultimate Rewards point value if you have a Chase Sapphire Preferred (at least 25% more) or Chase Sapphire Reserve card (at least 50% more).

Bottom line. From April 1st to June 30th, 2018, you can make a tax payment of up to $1,500 using PayPal with Chase Freedom as the funding source and get earn 5% cash back while paying only ~2% fee, for a net ~3% profit. You must go through PayUSATax.com. That’s a max profit of about $45, which you could think of as covering your tax prep software.

Book Sale: A Random Walk Down Wall Street + The Intelligent Investor

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

(Update 4/7: Random Walk is no longer on sale, but Intelligent Investor is still $2.99.)

randomwalk2018Amazon has the Kindle version of two investment classics on sale for $2.99 each at the moment. These are savings of over $10 from the usual price.

A Random Walk Down Wall Street was the first investment book I ever read that dealt with passive investing. My short-but-sweet December 2004 review was one of the first posts on this site – nearly 14 years ago! (I had read some previous books on DRIP plans and individual stock investing.) I should probably re-read it and see if it holds up now that I have read probably 20+ more books on passive investing.

Another coincidence is that I am currently reading the Buffett biography by Roger Lowenstein, and am at the part where Buffett studied under Benjamin Graham at Columbia University.

p.s. If you are a Texas-style brisket aficionado like me, Franklin Barbecue: A Meat-Smoking Manifesto is also on sale for $2.99.

Popular Direct Exclusive Savings Account Review

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

(Update 5/18/18: Looks like the available rate to new applicants is now down to 1.85% APY. This is why I don’t like switching savings accounts nearly as much as locking in a good CD rate.)

popdirectThe Popular Direct Exclusive Savings account, offered under the FDIC certificate of Banco Popular North America (BPNA), is the first liquid savings account to reach 2% APY in several years. This is a big psychological threshold, so let’s take a look to see if it’s worth the hype.

Note for existing customers. This account appears to be a “new” flavor of savings account, so if you are an existing Popular Direct customer, you may need to open up a new “Exclusive Savings” account to get the higher interest rate. You might also want to leave $500 in that old account if it’s new to avoid the early closure fee… but also close that account to avoid inactivity (see fees below). Banks always be trying to take advantage of your inaction…

Piggyback-style account. This accounts follows the many other barebones online savings accounts with a higher interest rate but limited features. Deposits are only permitted through a single designated “External Account” which can’t be changed within the first 60 days, internal transfers from other Popular Direct accounts, ACH, or via Mobile Check Deposit through the Popular Direct mobile app. This is why it is good to have a “hub” bank with fast transfers and multiple linked banks allowed in order to move funds around. I use Ally Bank as my hub since it has 1-day transfers available and allows you to link up to 20 different banks.

Notable fees. This account has a few annoying “nickel-and-dime” fees that you don’t always find elsewhere, so please take a look at their fee list:

  • Minimum to open: $5,000
  • Minimum daily balance: $500, otherwise $4 monthly service fee applies.
  • Early closure fee: $25 if account closed within 180 days.
  • Inactivity fee: $5 per month if no activity for 12 months.

Many other online savings accounts have no minimum opening balance, no minimum balance requirement, no early closure fee, and/or no inactivity fee.

Smartphone app. It’s amazing how much I bank from my phone these days, from checking balances to mobile check deposit. Based on the app store screenshots, it looks like Popular Direct also outsourced their back-end software to Fidelity National Information Services (subdomain ibanking-services.com). In my experience, the app is basic but functional. Mobile check deposit and Touch ID are supported.

popdirect2

Bottom line. Popular Direct Exclusive Savings Account is notable as the first liquid savings account (back) at 2% APY. For the most part, it is like many other copycat online savings accounts, but they did add some minor niggles including a $500 minimum balance and an inactivity fee. Check out my Ultimate Rate-Chaser Calculator to estimate how much additional interest you’d earn if you switched over and make an informed decision. I believe that other banks will soon follow at 2% APY, so it may not be worth the effort for a non-guaranteed rate.