Netspend cards? A way to park cash for 5 percent return?

[bearkeley]

Hi - tried to see if this has been covered, but somehow, it didn't come up on any searches....

A friend just told us about Netspend cards... a visa debit card option used by those with low credit ratings....apparently you earn a 5 percent return on money you have on the card.

Thinking we can buy a few (free as long as you do quarterly ach)....why not earn 5percent by parking some cash? Down sides for those who have considered it?


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[rodi]

Interesting.

It looks like they pay 5% up to 5000, and 0.5% on balances above $5k.

But -they charge fees for each transaction where you access your money. $1-2/for debit/credit usage. $2.50 for atm access.

And if you don't add money the right way - there is a fee to add money.

Oh - and don't forget the $5.95 fee to close the account and get a check.

It could work - as long as you are very careful and don't do anything to mess with the $5000 you park there, until it's time to withdraw it.

Link to the fees: https://www.netspend.com/how_it_works/what_it_costs.shtml

 

[audreyh1]

There are fees. Seems like those might cancel out the 5% on up to $5000. Not sure I'd be willing to hassle with it. https://www.nerdwallet.com/blog/banking/netspend-prepaid-debit-card-review/

I get pretty good rewards on various credit cards, and no fees.

 

[W2R]

Interesting.

It looks like they pay 5% up to 5000, and 0.5% on balances above $5k.

But -they charge fees for each transaction where you access your money. $1-2/for debit/credit usage. $2.50 for atm access.

And if you don't add money the right way - there is a fee to add money.

Oh - and don't forget the $5.95 fee to close the account and get a check.

It could work - as long as you are very careful and don't do anything to mess with the $5000 you park there, until it's time to withdraw it.

Link to the fees: https://www.netspend.com/how_it_works/what_it_costs.shtml

[...]Not sure I'd be willing to hassle with it.[...]

+1

I'm definitely sure I am not willing to hassle with it. I'm growing older every day and have zero desire to spend any time doing that.

 

[bearkeley]

Here is what my friend does.

She has 3 accounts her husband has 3 accounts for total saving of 30k at 5% interest. The accounts serve as her "emergency fund". There is no fee to set up the accounts. Once she gets the debit card she puts it in the safe and does not use it. She then sets up wire transfers between her primary checking and the net spend account so she can move they money between the accounts for free, so she has access to the money in an"emergency". She also sets up a monthy transfer of $5.00 into each of the accounts to avoid the maintenance fee. She does not earn much on amounts over 5k but that is a small amount.

Seems like a bit of a pain to set up but how else can your earn 5% on and FDIC insured account?


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[MBSC]

The more recent posts on this Bogleheads thread speak of a change in terms. Beginning 7/1/16, the 5% rate will only apply to the first $1,000.

https://www.bogleheads.org/forum/viewtopic.php?f=2&t=185253&newpost=2924919#p2924476