2-4% interest on savings accounts? Too good to be true?

[i_have_so_much_to_learn]

Has anyone used beam?

I just signed up for the wait list (my invite code is https://meetbeam.com/?r=CASH-SklKaHWW5W ) . Apparently it's a startup that is offering 2-4% savings accounts in FDIC insured accounts. In full transparency, it was offered to me through a targeted Facebook ad. My intention was to wait out the wait list and then see what they offer when they're ready. If they are actually FDIC insured, the risk is slightly mitigated. Their rate would be higher than current CDs.

I can't find them here https://research.fdic.gov/bankfind/ - and I asked them via email who the supporting bank was - they told me that they would reveal their FDIC details when ready to launch.

(p.s. i did a quick search for "meetbeam" but didn't find anything in the forums. sorry if this is a duplicate post of someone else)

[kayvent]

I don’t know anything about that particular organization. If they are genuine, there are conditions that will apply. Think promotional rates, account fees, limits on transactions in or out, or trying to sell give you an expensive credit card with a high limit. Something.

A lot of start up banks will give phenomenal packages like this to attract customers. Later they will add more programs or reduce the benefit. Tangerine in Canada, formerly IngDirect Canada and presently owned by Scotiabank, employed these techniques. At the time other savings accounts were giving .2 for large balances, Tangerine was giving .8% with the occasional 2.4% for a few months. It also had the best no fee credit card. As time went on it introduced frictionless retirement and tax-advantaged accounts (again, among the best in the industry). Now they have tapered the savings rates and cc but that initial loss leader did generate many customers.

[i_have_so_much_to_learn]

I don’t know anything about that particular organization. If they are genuine, there are conditions that will apply. Think promotional rates, account fees, limits on transactions in or out, or trying to sell give you an expensive credit card with a high limit. Something.

A lot of start up banks will give phenomenal packages like this to attract customers. Later they will add more programs or reduce the benefit. Tangerine in Canada, formerly IngDirect Canada and presently owned by Scotiabank, employed these techniques. At the time other savings accounts were giving .2 for large balances, Tangerine was giving .8% with the occasional 2.4% for a few months. It also had the best no fee credit card. As time went on it introduced frictionless retirement and tax-advantaged accounts (again, among the best in the industry). Now they have tapered the savings rates and cc but that initial loss leader did generate many customers.

That is probably true - I was envisioning this to be similar to mint or creditkarma, where the service is free and the ads are plenty. but i'll take 2-4% interest on cash for a few years. Also, there are US federal limits on deposits/withdrawals into savings accounts, so this is to be expected.

[Paul der Krake]

From their FAQ:

What does 2 - 4% APY mean?

APY, or Annual Percentage Yield, is the annual growth rate for your money. Every approved Beam users will receive a 2% APY base rate, and the Beam app has a number of daily engagement features (e.g. bonuses and rewards that arrive daily) that users can use to boost your rate up to 4%. They're free to use, and we'll share more details about those features closer to launch. Rest assured, Beam does not discriminate interest rewards based on account balances.

[Michael in ABQ]

I've got about $10k in an emergency fund earning about 0.1% right now so I'm posting to follow and see if this turns out to be worthwhile. I'm planning to move it to a high-yield savings account to get a bonus once I get up to $15k.

[sol]

I've got about $10k in an emergency fund earning about 0.1% right now so I'm posting to follow and see if this turns out to be worthwhile. I'm planning to move it to a high-yield savings account to get a bonus once I get up to $15k.

Most of the high-rate accounts I've seen work in the other direction.  They'll offer you like 5%, but only on the first $500 of your balance and then a lower rate on the rest.  It's the same plan employed by credit card companies that offer you 5% cash back, but only on the first $1500 of purchases.  It's really just a $75 bonus, but 5% back sounds a whole lot better than $75. 

[Rubic]

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

Here are the criteria to qualify for the 3% rate in an LMCU Max Checking account:

• Sign up for e-statements.
• Minimum of 4 logins to online banking per month.
• Minimum of 10 debit card purchases per month.
• Direct deposit in your account at least once per month.

I have my LMCU account linked to Mint.com, which handles the minimal
required logins.

On the first Monday of each month, I reload my Amazon gift balance
with ten purchases of $0.50 each for a total of $5.00 to satisfy my debit
card requirement.

I also transfer $5 each month from my primary checking account into LMCU via
an automated ACH transfer which counts as a direct deposit.

The entire process takes less than 10 minutes each month after you've
got your account set up.  LMCU has a nice link on your account page to
confirm you've met all the requirements to qualify for the 3% rate.

[i_have_so_much_to_learn]

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

I've heard of similar perks at other local credit unions, but they are not super convenient if you can't go into a physical branch.

[Rubic]

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

I've heard of similar perks at other local credit unions, but they are not super convenient if you can't go into a physical branch.

If you need a physical branch, then LMCU is probably not for you -- unless
you live in Grand Rapids.

What indication do you have that the credit union offered by meetbeam will
provide you with a convenient physical location?  (Not challenging you or being
snarky, just genuinely curious.)

FWIW, for the past couple decades I've had my main account with USAA, which
has no local branches.

[inline five]

I dislike when people use community forums like this to advertise and get spiffs.

[i_have_so_much_to_learn]

I dislike when people use community forums like this to advertise and get spiffs.

Me too.

However, my spidey sense makes me feel like you're referring to the referral code, which is explicitly permitted by forum rules: https://forum.mrmoneymustache.com/forum-information-faqs/forum-rules/ - (See "4/1/14 Edit:") I imagine you can request an amendment if you dislike the rule.

Regarding the discussion as to whether this is legit or not, as with all banking products, sign up at your own risk (plus it's not even live yet & i have no idea if it will ever go live....) Do let me know, however, if you have any more information on them - which was the original purpose of this thread. 2-4% is way better than the puny rates that my bank offers me.

[alexpkeaton]

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

I've heard of similar perks at other local credit unions, but they are not super convenient if you can't go into a physical branch.

If you need a physical branch, then LMCU is probably not for you -- unless
you live in Grand Rapids.

I used to live in Grand Rapids and have a LMCU account. I can vouch for them. In fact, I used to have a regular poker game with some LMCU employees, and did some work for them myself as contractor. I still use LMCU as my primary account even though I live in New York now. They refund ATM fees every month so it's no trouble when I need to get cash for whatever reason.

I do, however, keep a Chase account for when I actually do need a physical branch. But it's pretty rare.

[Rubic]

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

I've heard of similar perks at other local credit unions, but they are not super convenient if you can't go into a physical branch.

If you need a physical branch, then LMCU is probably not for you -- unless
you live in Grand Rapids.

I used to live in Grand Rapids and have a LMCU account. I can vouch for them. In fact, I used to have a regular poker game with some LMCU employees, and did some work for them myself as contractor. I still use LMCU as my primary account even though I live in New York now. They refund ATM fees every month so it's no trouble when I need to get cash for whatever reason.

I do, however, keep a Chase account for when I actually do need a physical branch. But it's pretty rare.

Thanks for the additional information @alexpkeaton!

Just this past week I've opened up an account with Old Missouri Bank.  It's a similar
deal as LMCU, but the 3% tops out at $25,000 and requires 12 debit transactions per month.

Combined, that's a total of $40,000 FDIC/NCUA protected funds drawing 3% interest with
minimal effort.

[Wayward]

I have never heard of Beam before, but will keep it in mind for the future.  There is a way to get 5% interest on savings through NetSpend/Insight that I started after reading this article: https://financialpanther.com/netspend-account/ on up to $25,000 per person!  It does take some legwork to get everything setup, but so far my NetSpend account is active and working great

[Rubic]

I have never heard of Beam before, but will keep it in mind for the future.  There is a way to get 5% interest on savings through NetSpend/Insight that I started after reading this article: https://financialpanther.com/netspend-account/ on up to $25,000 per person!  It does take some legwork to get everything setup, but so far my NetSpend account is active and working great

I used to park cash in a series of NetSpend accounts, but they dropped the 5% interest
from $5000 to $1000 (limit per account).  To get to $25,000, you'll have a lot of work to do,
and I assumed NetSpend will eventually weed out those of us who aren't generating revenue
for them (similar to Amex Serve) through transaction fees.

Best wishes and good luck!

[Slee_stack]

I get a whopping 1.35%...but no hoops.

Debit transactions and other hoops don't work for me as I am always working CC bonus spends.

I would love a no-tricks 2% rate though.

[Imustacheyouaquestion]

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

+1 for LMCU. I don't need to keep more than $15k in cash so I'm good with 3% up to that amount. I direct $5 of each paycheck there, signed up for e-statements, Mint takes care of the login requirements. I carry the card and use it for small debits to meet the transaction requirement.

FWIW, I've used this account on occasion to transfer money, pay bills, deposit checks, withdraw cash at ATMs, and order checks without any problem remotely. I also wired money for a house down payment (although I did have to Skype with them to prove my identity, which I didn't mind doing at all because I'm happy for the extra security precautions).

If you need physical locations for anything, I wouldn't recommend looking for the highest possible savings rate. It's extremely likely that it's either going to be an online bank or one that's not in your area.

[Rubic]

Debit transactions and other hoops don't work for me as I am always working CC bonus spends.

I'm also usually working through minimum bonus spends on credit cards, but that doesn't
affect my ability to make debit transactions on Amazon (as described above).

[i_have_so_much_to_learn]

I got an email that says they've pushed their launch timeline to Q1 2018.

[WootWoot]

Hey, that sounds pretty damn tempting!

With a little work, you can park up to $15K at Lake Michigan Credit Union
for a 3% rate:  https://lmcu.org

Here are the criteria to qualify for the 3% rate in an LMCU Max Checking account:

• Sign up for e-statements.
• Minimum of 4 logins to online banking per month.
• Minimum of 10 debit card purchases per month.
• Direct deposit in your account at least once per month.

I have my LMCU account linked to Mint.com, which handles the minimal
required logins.

On the first Monday of each month, I reload my Amazon gift balance
with ten purchases of $0.50 each for a total of $5.00 to satisfy my debit
card requirement.

I also transfer $5 each month from my primary checking account into LMCU via
an automated ACH transfer which counts as a direct deposit.

The entire process takes less than 10 minutes each month after you've
got your account set up.  LMCU has a nice link on your account page to
confirm you've met all the requirements to qualify for the 3% rate.

[WootWoot]

As long as the institution is in the AllPoint network I should have no problem using a debit card. So that should take care of the "location" problem.

I have trouble understanding why the savings rates are so low. I can only guess it's because of the recession. I feel somewhat foolish that I haven't really begun looking into this until recently. But I'm trying to learn; I guess that counts for something.

[Paul der Krake]

Banks are flush with cash and don't need deposits. Hence, low rates.

[WootWoot]

I did not know what drives this sort of thing. I'm learning a lot lately! Finding JH Collins' book fascinating.

[i_have_so_much_to_learn]

I wanted to reply to this thread.

This is lterally why you don't believe things that are too good to be true. https://www.cnbc.com/2021/03/29/ftc-shuts-down-savings-app-beam-under-tentative-settlement.html

The FTC has shut them down. They didn't want to give people their money back. What an awful company.

 I was actually interviewed for this CNBC article, even though they didn't quote me :).

[RWD]

I wanted to reply to this thread.

This is lterally why you don't believe things that are too good to be true. https://www.cnbc.com/2021/03/29/ftc-shuts-down-savings-app-beam-under-tentative-settlement.html

The FTC has shut them down. They didn't want to give people their money back. What an awful company.

 I was actually interviewed for this CNBC article, even though they didn't quote me :).

Wow, that's nuts! What did Beam tell you about FDIC insurance at launch? Sounds like you were already wary about that from the beginning.

Because Beam was not a bank, the FDIC insurance would cover customers if one of the banks failed, but not if Beam itself failed.

[i_have_so_much_to_learn]

Wow, that's nuts! What did Beam tell you about FDIC insurance at launch? Sounds like you were already wary about that from the beginning.

Good question! Here's what they told me in feb 2019:

"Beam partners with Synapse, our third-party bank software provider and agent of Evolve Bank & Trust, Member FDIC, to open these accounts. We will be migrating these demand deposit accounts into Sub-Accounts in Beam's FBO (for benefit of) account also held at Evolve Bank & Trust, Member FDIC."

[RWD]

Wow, that's nuts! What did Beam tell you about FDIC insurance at launch? Sounds like you were already wary about that from the beginning.

Good question! Here's what they told me in feb 2019:

"Beam partners with Synapse, our third-party bank software provider and agent of Evolve Bank & Trust, Member FDIC, to open these accounts. We will be migrating these demand deposit accounts into Sub-Accounts in Beam's FBO (for benefit of) account also held at Evolve Bank & Trust, Member FDIC."

The funds held in an FBO Account also qualify for pass-through FDIC insurance. Your funds at Beam will continue to be FDIC-insured.

Wow, sounds extremely misleading or they didn't understand it properly themselves... There are a lot of rules related to pass-through FDIC insurance which at a first glance I can't see anything that raises red flags. I don't blame anyone for assuming that their money is safe. But good to know in the future that FDIC pass-through is not equivalent to FDIC insurance directly.

Thanks for sharing!

[i_have_so_much_to_learn]

Wow, that's nuts! What did Beam tell you about FDIC insurance at launch? Sounds like you were already wary about that from the beginning.

Good question! Here's what they told me in feb 2019:

"Beam partners with Synapse, our third-party bank software provider and agent of Evolve Bank & Trust, Member FDIC, to open these accounts. We will be migrating these demand deposit accounts into Sub-Accounts in Beam's FBO (for benefit of) account also held at Evolve Bank & Trust, Member FDIC."

The funds held in an FBO Account also qualify for pass-through FDIC insurance. Your funds at Beam will continue to be FDIC-insured.

Wow, sounds extremely misleading or they didn't understand it properly themselves... There are a lot of rules related to pass-through FDIC insurance which at a first glance I can't see anything that raises red flags. I don't blame anyone for assuming that their money is safe. But good to know in the future that FDIC pass-through is not equivalent to FDIC insurance directly.

Thanks for sharing!

Yes! I agree. And furthermore, it seems weird that they made themselves the legal custodian of your funds while only keeping you as beneficiary. That sounds to me like you wouldn't be able to access your funds unless they do it for you, which on the surface sounds ok - but the more I think about it, the weirder it sounds.

[Michael in ABQ]

Evolve Bank & Trust is also the bank behind some other Fintech companies such as Mercury which is an online "bank" built for entrepreneurs.

I wonder how many other companies they have their fingers in?

[PJC74]

I have 12k earning 5.5%, but that is the max amount. Looking for another bank to add to HI savings profile.

[RusticBohemian]

Where do you have 5.5%?

[PJC74]

DCU 6.17% on up to 1k X 6 accounts my wife and 4 kids
Dedham Savings Start up savings 5% on up to 1k as well X 6 accounts

[EricEng]

DCU 6.17% on up to 1k X 6 accounts my wife and 4 kids
Dedham Savings Start up savings 5% on up to 1k as well X 6 accounts

You are managing 12 accounts for $660/year total?  Doesn't seem worth the paperwork and hassle.

I will say this thread is the best example of a proper thread necro.  So rarely do we get to see a conclusion to something years later from the OP no less.

[i_have_so_much_to_learn]

I will say this thread is the best example of a proper thread necro.  So rarely do we get to see a conclusion to something years later from the OP no less.

😎 i am so honored

[PJC74]

DCU 6.17% on up to 1k X 6 accounts my wife and 4 kids
Dedham Savings Start up savings 5% on up to 1k as well X 6 accounts

You are managing 12 accounts for $660/year total?  Doesn't seem worth the paperwork and hassle.

I will say this thread is the best example of a proper thread necro.  So rarely do we get to see a conclusion to something years later from the OP no less.

Nothing to manage really. Every month I get a little over $5 for each account and move it to my checking account with the mobile app. Takes a few minutes for $60.