5% interest rate sounds like a distant dream for many consumers. But it is in fact a very real possibility. There are certain financial institutions that offer 5% interest on savings account.
One of the best ways to get a high yielding interest rate is through opting for a savings account that is linked with a prepaid card. The prepaid card is just a pre-requisite to get the high-yielding savings account. Initially the minimum deposit for such attached savings account was $5000, but since July 2016 certain institutions have lowered the value to $1000.
Here are some of the popular companies that have a genuine 5% interest savings account with a prepaid card.
Other than these Momentum, Vision, Purpose, Insight, Mango, etc. offer 5% interest rate on savings account. All of these mentioned cards can vary with respect to terms and conditions.
When you sign up for the 5% interest savings account you will receive a prepaid card. The prepaid card is imperative as it lets you move to the next step, i.e. completing the process for the savings account. In this particular program, apart from your basic details like name, address, date of birth, social security number, etc. there is no credit pull. So, no need to fret as the company won’t scrutinize your credit history.
Although you can get multiple 5% savings accounts, you should fulfill one process at a time. This is because many cards might have a different name but they might be monitored by the same company.
After your 5% interest savings account gets initiated, you won’t be able to use it instantly. You’ll have to pay a premium fee so that you can access it. This fee is usually up to $500, and are mostly required to be paid through direct deposits. Post activation when you start transferring the savings funds you will notice that they will first have to flow into the prepaid card. It is only then your money is eligible to be moved to the 5% interest savings account.
You are allowed to withdraw money from this account, but like the funds deposit process even here you’ll first have to transfer the money back to the prepaid card. Then you can transfer this money to your regular bank account for withdrawal purposes.
Since the deposit and the withdrawal procedure is a little extended, a 5% interest savings account can be a great idea to save up some finances for short term purposes. Depending on your company choice you might have an inactivity penalty. So, make sure that you use your account regularly.