Loading...

Follow Investor Junkie on Feedspot

Continue with Google
Continue with Facebook
or

Valid

The premium credit card market is very hot. It’s been that way ever since the runaway success of the Chase Sapphire Reserve.

However, even before that card was released in 2016, Mastercard offered three products under the Luxury Card brand. Mega-bank Barclays issues these cards, including Mastercard® Black Card.

We looked into this card program, and this is what we found.

What Is Mastercard® Black Card?

The Mastercard® Black Card is the middle of the three products in MasterCard’s Luxury Card range. It has a $495 annual fee, yet it offers many of the features you’ll find with the $995 Gold Card — minus the 24-karat gold plating of course.

Its most valuable feature is the Priority Pass Select airport business lounge access. It also offers 15 months of 0% APR financing on balance transfers, along with numerous travel insurance and shopping protection benefits.

Mastercard® Black Card Features
Annual Fee $495
Sign-up Bonus None
Introductory Financing 15 months of 0% APR financing on balance transfers completed within 45 days of account opening, with a 3% balance transfer fee
Rewards for Spending 2% rewards toward airfare; 1.5% rewards toward cash back
Foreign Transaction Fees None
Travel Benefits $100 annual airline credit; $100 Global Entry application fee credit; Priority Pass Select airport business lounge membership; Luxury Card travel program; baggage delay insurance; trip cancellation and interruption coverage; trip delay coverage
Shopping Benefits Luxury Card concierge; return guarantee; extended warranty
Mobile Wallet Compatibility None
Contactless Payment Compatibility No
Customer Service Phone: Mon–Sun 7A–12A; Email
Promotion None
Who Is Mastercard® Black Card Good For?

First things first: To qualify for a Mastercard® Black Card, you need excellent credit. It’s also designed for higher net-worth individuals; the high annual fee of $495 may present a barrier to entry for many everyday folks, but those who can afford it will find the fee worth it for the luxury benefits they receive.

Mastercard® Black Card Pros and Cons
Pros
  • Rewards — This card offers 2% rewards value for airfare and 1.5% for cash-back redemptions.
  • Interest-Free Financing — New applicants receive 15 months of 0% APR financing on balance transfers completed within 45 days of account opening.
  • Airport Lounge Membership — The Priority Pass Select membership offers you access to 1,400 lounges and restaurants around the world.
  • Luxury Gifts — Mastercard will send you high-priced merchandise from name-brand companies.
  • Global Entry, the TSA's Trusted Traveler Program — You receive a $100 application fee credit.
  • Credit Toward Airfare Purchases — Enjoy a $100 annual annual credit toward airfare.
  • Travel Insurance and Purchase Protection Benefits — This card offers numerous policies such as trip delay insurance and extended warranty coverage.
Cons
  • Annual Fee — The $495 annual fee is very high.
  • Additional User Fees — You have to pay $195 for each additional user.
  • No Signup Bonus — Most other premium reward cards offer a bonus for new applicants.
How Does the Mastercard® Black Card Compare?

The closest comparison is to the Chase Sapphire Reserve Card. This is another luxury credit card with a high annual fee, in this case, $450. For the Sapphire Reserve Card, Chase has partnered with 13 travel partners, including favorites Southwest and Marriott.

However, the Chase card may be better when it comes to rewards. The Mastercard® Black Card gives you one point per every dollar spent — no matter if that was spent on travel expenses or not. The Chase Sapphire Reserve card offers three points per every dollar spent on travel expenses or in restaurants and one point per dollar on all other purchases.

How to Earn Mastercard® Black Card Bonuses and Benefits

This card doesn’t offer a sign-up bonus, but it does give new applicants 15 months of interest-free financing on balance transfers completed within 45 days of account opening. Its benefits include a Priority Pass Select membership that grants you access to more than 1,400 airport business lounges and credit at dozens of restaurants. You also receive a $100 annual air travel credit and a $100 credit toward the application fee for TSA PreCheck or Global Entry, which includes PreCheck.

One unique feature is that this card occasionally sends you luxury gifts from famous brand names. It also includes numerous travel insurance and purchase protection benefits.

With this card, points are worth 2¢ toward airfare redemptions and 1.5¢ toward cash-back awards. There’s no limit to the amount of rewards you can receive.

Mastercard® Black Card Fees

This card has a $495 annual fee, plus a $195 fee for each additional authorized cardholder. The balance transfer fee is 3% of the amount transferred, and the cash advance fee is either $10 or 5% of the amount of each cash advance — whichever is greater. There are late payment and returned payment fees of up to $37, and there are no foreign transaction fees.

Signing Up for the Mastercard® Black Card

Luxury Card requires that applicants have excellent credit to be approved for the Mastercard® Black Card. You can apply for the card online at luxurycard.com or by calling 1-844-589-2283.

Customer Service

Although Mastercard® Black Card doesn’t offer users 24/7 customer service support, the hours are quite long: from 7 a.m. to midnight seven days a week.

Mastercard® Black Card Mobile

There is a Luxury Card App available at the Apple and Android App Stores. Features include 24/7 live chat with Concierge agents, links to cardmember benefits and account management tools. You can also explore and book travel offers.

Summary

The Mastercard® Black Card seeks a middle ground between the top-of-the-line Gold Card and the more affordable Titanium Card. But thankfully, this card offers nearly all the Gold Card benefits for about half the price. The key differences are the 1.5% value for cash back redemptions, instead of the Gold Card’s 2%, the $100 annual air travel credit, instead of Gold’s $200, and the lack of the gold-plated card.

But when you compare the Mastercard® Black Card against its competitors, it may come up short. Other premium cards such as the American Express Platinum card, the Chase Sapphire Reserve and the Citi Prestige offer points that can be transferred to airline miles. These cards also offer a range of categories that offer up to 5x bonus point per dollar.

Unfortunately, all of the Luxury Cards, including the Mastercard® Black Card, fail to offer this flexibility. In the end, the Mastercard® Black Card is all about the perception of luxury, including receiving gifts spontaneously. If this perception is what you’re after, the Mastercard® Black Card offers the best value among the four cards.

The post Mastercard® Black Card™ Review 2019 appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

If you’re serious about your money, you know it’s important to keep tabs on your various financial accounts. However, it’s likely you have several separate investment, credit card and bank accounts. Wouldn’t it be great to have a way to view them all together?

These apps range in price and features. Depending on what you want from a money management app, you may find that one is a better fit than the others for your needs. If your sole focus is cost, jump right to Personal Capital, which offers a free financial analysis tool. But if you need more help with budgeting than investing, one of the others could be worth the price.

Personal Capital, Quicken and Moneydance each give you a digital personal finance dashboard with the most important details about your money at your fingertips. But which is the best?

About Personal Capital

Personal Capital launched in 2011. It’s an investment management service that also offers a free personal finance dashboard. You can use the investment tools even if you don’t pay to use Personal Capital as an investment manager. The only “string attached” is that the company may try to sell you on its investment services if you have $100,000 or more in investable assets.

The free online money tools do an excellent job of helping you understand your investments. Personal Capital breaks down your asset allocation, shows your portfolio performance by account or across accounts, calculates your net worth and gives a high-level overview of your cash flow by category. Just connect your financial accounts and Personal Capital will take care of the rest.

When I signed up back in 2012, I used Personal Capital’s tools to take a closer look at the investment fees on my mutual funds and ETFs. That led me to make some changes, and ultimately I saved $300 per year in fees. That compounds to tens of thousands of dollars in savings over time.

I regularly suggest this free money management app to friends and family. Because it’s free, you have nothing to lose by giving it a try. There’s both a web and a mobile version to monitor your money at your computer or on the go.

About Quicken

Many people think of Quicken as the original money management app. It has a lot of history, since the first version came out in 1983. That’s before most of us had computers, if we were alive at all!

Intuit, the current owner of QuickBooks and Mint, developed the software but sold it to another company several years ago.

Unlike Personal Capital, which is web based, you must download Quicken onto your Windows or Mac computer desktop. Despite this, you still have to pay an annual or two-year license fee to access the latest updates.

Quicken offers four Windows versions, ranging from $34.99 for Starter to $99.99 for Home & Business (which is not available for Mac). Most Investor Junkie readers would probably need at least the Premier version, which has a $74.99 price tag.

Quicken has a ton of budgeting features. Intuit practically invented computer budgeting programs, so it should come as no surprise that the software is good at this. It also connects to your accounts to automatically download balances and transaction details to your computer. Other major features include investment tracking, retirement planning and bill pay. The Home & Business version adds features for property managers and small business owners.

There’s no free trial available, so you have to pay to download. But Quicken offers a 30-day unconditional money-back guarantee.

About Moneydance

Moneydance is not as well-known as Personal Capital or Quicken, but it packs powerful features and a great-looking interface. It costs $49.99 and comes in Windows, Mac and Linux versions, as well as iOS and Android mobile apps. The mobile app automatically syncs with your desktop download.

Like Quicken, Moneydance can connect and automatically download transactions from your bank.

It learns from you how to automatically categorize future downloads. It features useful summaries and graphics, a digital checkbook register for each account, a reminder calendar for single or recurring transactions, and investment tracking.

Moneydance gets frequent updates with new features. The April 2019 update added dark mode, imports from other money applications, speed updates and other features. Moneydance is developed by a small, focused team in Edinburgh, Scotland. It was first released in 1997.

How Are They the Same?

All three services offer many features. First, let’s take a look at how they’re similar.

Budgeting All three apps offer tools to help make budgeting a breeze.
Investment Tracking Personal Capital, Quicken and Moneydance can all track your investments across your accounts.
Online Synchronization All three services can sync with outside online accounts.
How Are They Different?

Let’s take a look at the areas where Personal Capital, Quicken and Moneydance differ.

Bill Pay While you can use Quicken and Moneydance to pay your bills, Personal Capital offers no such option.
Retirement Planning Personal Capital and Quicken both offer tools to help you plan for your retirement. However, Moneydance does not.
Mobile Apps Personal Capital and Moneydance were made with the mobile-app user in mind. Quicken’s app is clunkier to use and lacks some features, and you’ll still need to download the desktop software too.
Multiple Currency Support If you have money in international accounts, you may need multiple currency support. Moneydance and Quicken offers this, while Personal Capital deals only with U.S. dollars.
Price Personal Capital: Free for the basic app; Wealth Management services range from 0.49% to 0.89% annually
Quicken: $34.99 to $99.99
Moneydance: $49.99
Unique Features Features Unique to Personal Capital

Personal Capital is the only app on this list that’s free to use. It’s also the only entirely cloud-based program. The benefit here is that Personal Capital works everywhere there’s an internet connection.

Some people have security concerns about handing their information over to a web-based platform. However, this app uses bank-level security to keep your information safe and two-factor authentication for unrecognized devices.

Personal Capital is the only service out of these that also offers its own paid investment management service.

Features Unique to Quicken

Quicken is the granddaddy of money apps, so it has a lot of features that are very well developed. It saves your information to your computer instead of the web, but that means you’re also responsible for keeping your computer secure and backed up (something you should do anyway) to keep your financial data safe.

Depending on which version you choose, Quicken is also the most expensive. And it’s the only one of the bunch with a recurring subscription fee.

Features Unique to Moneydance

Moneydance is the underdog in this fight. That’s certainly the case when it comes to the size of the company. But that doesn’t mean you should discount it. Moneydance runs on the same double-entry bookkeeping system used by accountants. But it does so with a friendly interface that’s perfect for casual personal finance “experts.”

We also like that you can test Moneydance with a free trial before paying to unlock the full version. Plus, there’s a 90-day money-back guarantee if you’re unhappy for any reason.

Price
  • The Personal Capital program we’re talking about here today — the personal finance tools — is free. There’s also a paid investment management service available if you have a minimum of $100,000.
  • Depending on which version of Quicken you want to use, you’ll have to pony up $34.99 to $99.99 for each year’s subscription (discounts are available).
  • Moneydance costs a flat $49.99.
[compare winner=’Personal Capital is the winner here, because you can’t beat free.‘] Standout Features

Besides being free, Personal Capital really shines when it comes to investment analysis. The service can monitor the health of your asset allocation and make suggestions on how to tweak it to better fit your goals and risk analysis. There’s also a suite of planners and calculators that can help you make the most of your accounts.

On the other hand, Quicken does personal finance tracking very well. Maybe that’s because it’s the granddaddy of all personal finance apps. It has several features — including Bill Pay from right within the app — that make managing your money simple and doable.

The coolest feature from Moneydance is its checkbook-style register. You can use it to enter, edit and delete transactions in your account. It’s straightforward and a no-brainer.

[compare winner=’Personal Capital, Quicken and Moneydance all offer great experiences. It just depends on what you are looking for.‘] Customer Service
  • If you’re using Personal Capital’s free app, you can reach support via an email form that you can access once you’re logged in.
  • Quicken offers live chat, phone and community forum-based support. You can pay $49.99 per year for premium support with shorter waits.
  • Moneydance support comes solely through the developer’s support forum.
[compare winner=’Thanks to offering live chat and phone support, Quicken is the winner here.‘] Security

All three apps take the security of your financial information very seriously.

  • Personal capital is an online platform that uses bank-level security.
  • Quicken is a desktop platform that holds your data locally.
  • And Moneydance is a desktop platform that uses cloud sync for its mobile app.
[compare winner=’Personal Capital, Quicken and Moneydance are all great when it comes to security.‘] Who Are They Best For?

All three of these offerings are a good fit depending on your needs.

  • Personal Capital is best for beginning investors. Its investment analysis can help you improve and grow your portfolio. Plus, it’s free!
  • Quicken is best for people who want control over their finances. If you want to sit down at a desktop and pore over your financial picture, this is the one for you.
  • Moneydance is for people who need a budget. This app can help you figure out where your money is coming and going.
Which Is the Best?

So which personal finance app is the best?

There’s no clear winner here. However, one might be the best choice for you depending on some criteria.

  1. If you’re purely worried about cost, Personal Capital wins without question. It’s free and offers the strongest investment analysis tools of the bunch.
  2. Quicken and Moneydance are very similar in many aspects. Quicken does a better job at giving you a well-rounded look at your money if you pay for a version that gives you the details you want. Moneydance gives you everything for one price and does a good job as well. The free trial and pricing model may give Moneydance an edge. I’ve used Quicken for many years, here’s why I stopped using it.
  3. If you are concerned mostly with tracking investments, go with Personal Capital. But if you want to control your data and keep everything on your local computer, Quicken is the best choice.

The post Personal Capital vs. Quicken vs. Moneydance appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Online banking is the wave of the future. And Ally and Capital One 360 are two of the hottest online banks out there. But which one is better? We put them head to head in this battle of the banks. Read on to find out which one is the right choice for you.


Banking
Recommended
Rating 8/10 9/10
Accounts Checking, Savings, Money Market, CDs Checking, Savings, Money Market, CDs
Online Deposits Yes Yes
Promotions None None
Visit
About Ally Bank and Capital One 360 About Ally Bank

Ally Bank is one of the best known and most trusted online banks. More than 1 million customers have taken advantage of its interest-paying checking and savings accounts, as well as a suite of mortgage and auto loans.

What do people love best about Ally? Well, it’s no-fee policy is a good place to start. That’s right — there are no pesky maintenance fees to eat away at your hard-earned money.

Plus, there are the generous interest payouts from Ally’s savings accounts, as well as a checking account that pays interest too!

Because Ally doesn’t have a single brick-and-mortar branch location, it can pass these savings along to you.

There’s good reason to trust this bank too. Its history stretches back 100 years, when General Motors founded Ally’s “ancestor,” GMAC, to help everyday folks finance a car. Today Ally Bank is a subsidiary of Ally Financial (which also owns Ally Invest). Together, these products can give you a one-stop shop for all of your savings and investing needs.

About Capital One 360

Capital One 360’s history doesn’t go back nearly as far as Ally’s. Its parent, Capital One, was founded in 1995 to offer credit cards. In 2012, Capital One bought the ING Group’s banking operations and rebranded them as Capital One 360.

Now, Capital One 360 is mainly an online bank, but there are brick-and-mortar branch locations as well. You’ll find them in Connecticut, Delaware, Louisiana, Maryland, New Jersey, New York, Texas, Virginia and Washington, D.C.

However, the rates and features the bank offers are in line with other online banks, rather than the typical old-school brick-and-mortar operations. And as with Ally Bank, Capital One 360 charges no maintenance fees ever.

How Are They the Same?

Both banks offer a lot of features. First, let’s discuss the similarities between the companies.

Accounts Offered Checking, Savings, Money Market and CD Accounts
ATM Reimbursement Both banks offer to reimburse your fees if you use an out-of-network ATM
Online Deposits Both banks allow you to make deposits online
FDIC Insurance Both banks offer FDIC insurance of up to $250,000 per account
No Maintenance Fees Neither bank charges maintenance fees on accounts

Next, let’s check out how these banks compare when it comes to account options.

Checking Account Comparison

Even among online banks, it can be rare to find a checking account that pays interest. But with both Ally Bank and Capital One 360, you’re in luck!

Now, keep in mind annual percentage yields (APYs) for checking accounts won’t be as great as what you’ll get with a savings or CD account. But it’s certainly better than what you’ll likely get elsewhere — nothing!

In addition to paying interest, both Ally Bank and Capital One 360 checking accounts include a debit card that you can use free at select ATMs. If you use an out-of-network ATM, both banks will reimburse you up to a point.

Ally Bank Interest Checking Capital One 360 Checking
Monthly Fees $0 $0
Minimum Deposit $0 $0
Interest APY $0–14,999: 0.10%
$15,000+: 0.60%
$0–49,999: 0.20%
$50,000–99,999: 0.75%
$1,000,000+: 1.00%
[compare tie=’If you have $15,000 to $50,000 to deposit, Ally Bank offers a higher APY. Otherwise, Capital One 360 has the better rate.’] Savings Account Comparison

If you want an interest-paying savings account, it’s good to know that both banks pay more than the national average. However, as you’ll see, one offers a much higher rate.

Ally Bank Online Savings Capital One 360 Savings
Monthly Fees $0 $0
Minimum Deposit $0 $0
Interest APY 2.20% 1.00%
[compare winner=’Ally Bank offers a higher APY for checking accounts.’] Money Market Account Comparison

Money market accounts are enhanced savings accounts. They offer higher interest rates, but you’re prohibited from making more than six withdrawals via check, debit card or automatic bill pay per month. (You’re not limited when it comes to ATMs.)

Ally Bank Money Market Capital One 360 Money Market
Monthly Fees $0 $0
Minimum Deposit $0 $0
Interest APY $0–24,999: 0.90%
$25,000+: 1.00%
$0–9,999: 0.85%
$10,000+: 2.00%
[compare tie=’For amounts smaller than $10,000, Ally Bank offers a higher APY. Otherwise, Capital One 360 has the better rate.’] CD Account Comparison

Certificates of deposit (CDs) are extremely popular savings tools. Although they tie your money up for a predetermined term, they generally offer higher APYs.

Ally Bank offers a couple of CD options, but here we’ve chosen to compare the most basic CD accounts. See our Ally review for more information on additional CD products.

Ally Bank High Yield CD Capital One 360 CDs
Minimum Deposit $0 $0
Three-month APY 0.75% N/A
Six-month APY 1.00% 0.60%
Nine-month APY 1.25% 0.75%
One-year APY 2.75% 2.70%
18-month APY $0–4,999: 2.40%
$5,000–24,999: 2.55%
$25,000+: 2.60%
2.70%
Two-year APY N/A 2.80%
Three-year APY $0–4,999: 2.50%
$5,000–24,999: 2.60%
$25,000+: 2.65%
2.85%
Four-year APY N/A 2.90%
Five-year APY 3.00% 3.10%
[compare tie=’Both Ally Bank and Capital One 360 offer great CD rates that are higher than you’ll find at a brick-and-mortar bank.’] Customer Service

Ally Bank is strictly online only. There are no branch offices anywhere that you can go into if you have a pressing question about your account. That might bother some folks. But others will find that to not be an issue, especially since Ally Bank offers plenty of other ways to contact customer service. You can give the bank a call or open a live chat 24/7.

With Capital One 360, on the other hand, you can find support at more than 550 local branches, including trendy branded cafes. However, the support you find may be limited. For full support, you can call Capital One from 8 a.m. to 8 p.m. Eastern Time, seven days a week.

[compare winner=’In this day and age, there isn’t much reason to visit a bank branch. You can do everything online. Ally Bank wins here because you can access customer support 24/7.’] Security

Both banks take your security seriously. And both banks are FDIC insured.

Ally Bank uses two-step authentication and other strategies to protect your private information. In addition, the bank offers a security center, where you’ll find tips on identifying fraud and identity theft, safely using social media and even protecting your mobile device from malware.

Capital One 360 pioneered the SwiftID system. It’s a bit complicated to explain, but basically, it bypasses the usual pesky security questions (“What’s the name of your great-aunt’s second favorite cat?”). The SwiftID system can identify your particular device with a swipe of the screen.

[compare tie=’Both Ally Bank and Capital One 360 take security seriously.’] Promotions

Currently, neither Ally Bank nor Capital One 360 is offering a promotion. Keep an eye on this space in case that changes!

Conclusion

So which bank is better?

That’s a tough question. Both banks shine when it comes to a lack of maintenance fees and minimum deposits. And both offer higher APYs than you’ll find at a traditional brick-and-mortar bank.

However, I’m inclined to give Ally Bank a slight edge. That’s because you’ll earn twice as much interest on savings accounts. Plus, you can give the bank’s customer service team a holler anytime you want.

That’s not to say Capital One 360 isn’t great too. In fact, you might find better CD rates here, depending on your desired terms. Plus, there’s the convenience of a bank branch if you need one.

Ultimately, the choice is up to you!

The post Ally vs. Capital One 360 appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 
Investor Junkie by Eric Rosenberg - 1w ago

Just a few decades ago, if you had told a stock broker that you would one day enter your own investment and stock market trades from a little computer you keep in your pocket, they might have laughed. These days, it’s hard to imagine a world without online and mobile investing.

While virtually every major brokerage offers online and mobile account management, a small crop of brokers took a mobile-first approach, putting most of the power of your investment account on your smartphone. Stash, Robinhood and Acorns are three leaders in the mobile-first investment landscape.

Stash, Acorns and Robinhood tout low costs and a great user experience, but do they live up to the hype? Let’s investigate whether they may be a good fit for your investing needs.


Microsavings
Recommended
Rating 8.5/10 7.5/10 8.5/10
Mobile Access iOS App, Android App iOS App, Apple Watch, Android App iOS App, Apple Watch, Android App
Website Access Yes Yes Yes
Promotions Get $5 from Stash Invest None Get a $5 Bonus When You Sign Up
Visit Read the Review
About Stash

Stash Invest is a simple investment platform where you can invest with as little as $5. Stash supports taxable brokerage accounts, retirement accounts and custodial accounts, so you can open one for any major financial goal.

Stash charges $1 per month for taxable accounts up to $5,000 and 0.25% for larger accounts. For retirement accounts, Stash charges $2 per month for accounts with less than $5,000 and 0.25% for accounts with $5,000 or more. You can choose between a traditional and a Roth IRA.

You can invest in exchange traded funds (ETFs) or fractional shares of stocks, and Stash never charges any trading or brokerage commissions or fees.

Stash is great for people learning to invest, as it offers suggestions around building your ideal portfolio (similar to a robo advisor) while giving you the freedom to choose any supported investment. The platform supports recurring contributions and one-time deposits.

I don’t use Stash myself, but it generally gets good reviews from customers. One of the best standout features is the option to invest in industries you feel good about. More on that in just a bit.

Rating:
8.5/10
Quick Summary
  • Minimum Investment: $5
  • Fees: First month FREE; $1/month under $5k; 0.25%/year over $5k
  • Website Access: Yes
About Robinhood

In the story of Robin Hood, a dashing hero leads a band of Merry Men to steal from the rich and give to the poor. While the Robinhood app doesn’t do quite the same, it does empower people from any background to get involved in the stock market. It offers zero-fee accounts with no trading fees.

Yes, you read that right. Robinhood is free and supports stocks, ETFs, options and even cryptocurrencies. (Note that new investors would be wise to avoid options and digital currencies and focus on the stock and ETF offerings.) While aggressive low-fee brokers charge $4.95 for most buy-and-sell transactions, Robinhood doesn’t charge anything. That makes it more viable to make smaller investments without losing a large percentage off the top to fees.

Robinhood recently got into hot water with regulators for a planned savings account launch, but otherwise, the company has held a good reputation. While free investment trades sounds too good to be true, with Robinhood that’s really what you get. It recently added a web version, but it started out mobile only.

I have a Robinhood account myself for testing purposes, and it does live up to the promises of free and easy investing. I particularly like the automatic notifications for news relating to investments in your portfolio — and you can’t beat free!

Rating:
7.5/10
Quick Summary
  • Minimum Investment: $0
  • Stock Trades: Free
  • Options Trades: Free
About Acorns

Acorns started out with only automated investing for $1 per month and expanded through acquisition to support retirement accounts and recently launched a bank account. You can still get just Acorns Core for $1 per month (or free if you are in college). Acorns Core + Acorns Later (retirement account) costs $2, and the whole suite of Acorns Core, Acorns Later and Acorns Spend (checking account with debit card) is $3 per month.

If you want to keep all of your finances in one app, Acorns may be one of the best options. But for today, we are going to focus on the investment features. It costs more than free but remains a very low-cost and attainable option for new investors.

Acorns is all about fun ways to contribute and add to your account. You can set up automated recurring investments, round up change from debit or credit purchases, and get bonus cash invested when you shop with partner brands.

I have an Acorns Core + Acorns Later account. To be honest, I have not been thrilled with the investment performance. My account is up 1.52% over the last year compared to the S&P 500’s 9.16% return. This isn’t quite an apples-to-apples comparison, but it is directionally indicative of my performance since starting with Acorns. Overall though, the account works as advertised.

Rating:
8.5/10
Quick Summary
  • Minimum Investment: $0
  • Fees: $1/month under $1 million; 0.25%/year over $1 million; FREE for under 24 and in college; IRAs are an additional $1/month; $3/month for Spend and Later
  • Website Access: Yes
How Are They the Same?

All three services offer many features. First, let’s take a look at how they’re similar.

Investment Account Types All three offer a taxable account.
Investment Types All three services allow you to invest in ETFs.
Mobile Apps All three services emphasize investing with an Android or Apple mobile device.
How Are They Different?

Let’s take a look at the areas where Stash, Robinhood and Acorns differ.

Minimum Investment There’s no minimum deposit required to invest with either Robinhood or Acorns. However, Stash requires at least $5.
Fees Robinhood is completely free to use. Acorns charges $1–3 per month for accounts under $1 million and 0.25% per year for amounts above that. Stash charges $1 per month for accounts under $5,000 and 0.25% per year for amounts above that.
Socially Responsible Investing If you’re interested in investing in designated SRI (socially responsible investing) portfolios, you’ll find this to be a focus at Stash.
Individual Stocks Both Robinhood and Stash allow you to invest in individual stocks; Acorns does not.
Unique Features Features Unique to Stash

Stash is unique in its ability to focus your investments into different themes based on your values. If you want to avoid putting your dollars into any particular industry or if you want to focus on specific sectors, you have some options to handle that with Stash.

Stash offers more than 100 investment options, made up of a limited list of popular stocks and ETFs. It is best for someone who doesn’t know a lot about investing now but wants to learn more and have some guidance while building a portfolio.

Stash offers a banking solution, which Robinhood currently does not. That makes it a viable option to hold all of your money if you choose.

Features Unique to Robinhood

Robinhood is totally free. You can buy a huge range of stocks, ETFs and other investments with no fees. It doesn’t offer extensive guidance or education resources, so it’s best for someone willing to do their learning elsewhere.

Its support of free cryptocurrency and options trades is unique, but most investors should avoid those. Also, did I mention it’s free?

Features Unique to Acorns

Acorns offers unique and fun options to fund your account and takes care of the investments for you. While you won’t pick individual stocks or ETFs as you would with the other apps, that also takes away the worry about having to know what to choose.

Its three accounts are competitive in cost with Stash and could work as a home for all of your finances.

Minimum Investments

Stash requires $5 to get started with an investment account. Neither Acorns nor Robinhood have a minimum requirement.

[compare winner=’Robinhood and Acorns win here, but keep in mind $5 is far better than the minimums required by other stock brokers.‘] Annual Fees
  • For accounts under $5,000, Stash charges $1 per month for the standard account and $2 per month for an IRA. For accounts with a balance of more than $5,000, the fee is 0.25%.
  • Robinhood charges no fees. Really. Zero. Zip. Zilch. Nada.
  • Acorns charges $1 per month for accounts with less than $1 million in them. Over that amount and you’ll pay 0.25% per year.
[compare winner=’Robinhood wins again because you just can’t beat free.‘] Standout Features
  • Many investors will find Stash appealing because it allows clients to take advantage of automated investing when they want to just set it and forget it. Or clients can take full control over their accounts if they choose.
  • Robinhood is a standout in that it’s a full-service stock broker that’s completely free. You can trade stocks, funds, options, whatever, all without paying a dime.
  • Acorns appeals to some with its fun and unique options for funding your account. For instance, you can round up your purchases and invest the spare change. You can also earn investment rewards by shopping with a number of select partners.
[compare winner=’Stash Invest, Robinhood and acorns all offer great features. It just depends on what you’re looking for.‘] Customer Service

Stash offers email and phone support. Both Acorns and Robinhood offer support only via email. There’s no number to call.

[compare winner=’Stash Invest is the winner because you can call up and talk to somebody if you need help.’] Security

All three of these apps use industry-standard security and encryption. As long as you use a strong password, your account should be safe with Stash, Robinhood or Acorns. All are regulated financial companies in compliance with federal laws.

[compare winner=’Stash Invest, Robinhood and Acorns are all winners when it comes to security.‘] Who Are They Best For?

All three of these offerings are a good fit depending on your needs.

Stash is best for new investors who want to learn. Its hybrid of self-directed and automated investing options can teach you a lot about how investing works.

Robinhood is best for active traders. This is where you’ll want to come if you have some experience and are looking for low-cost, self-directed stock, ETF, options and cryptocurrency trading.

Acorns if best for people who don’t want to be bothered with investing. You can totally set it and forget it. This is hands-off investing for the long term.

Which Is the Best?

I have one major issue with Stash and Acorns, and that’s pricing. If you’re starting out with just a very small portfolio, that $1 per month ($12 per year) can take a relatively big bite out of your portfolio gains. That’s partly why my Acorns account has hardly grown compared to the S&P 500. I’m paying $2 per month, and that comes out of my investment profits.

However, I also recognize that you’re paying for service with Acorns and Stash. The fee of a few bucks per month is for investment advice. If you can do without the advice, you can self-direct your portfolio at a discount brokerage elsewhere for no monthly or annual fees.

Because Robinhood is free and doesn’t offer any advising services for your portfolio, I would put it in a different category from the others. There could be reasons to use both Robinhood and Acorns, but Stash does roughly the same thing as the other two combined, provided you don’t need some stock or other investment Robinhood offers but Stash does not.

So which is the best? That depends on your goals and fee tolerance. If you can do it yourself, Robinhood is great. If you can’t and want to pay someone for help, Stash and Acorns are both excellent products. But be aware that the cost comes out of your investment gains, and $1 per month in fees is a cost that adds up over time.

Overall, any of these apps could be a good fit for your finances. Just make sure you fully understand the costs before getting started.

The post Stash vs. Robinhood vs. Acorns appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Have you ever had trouble redeeming your airline miles? Capital One® Venture® Rewards Credit Card is one of a new breed of credit cards that reflects people’s frustration with traditional airline credit cards. Instead of offering frequent flyer miles with a single airline, it offers reward miles that can be redeemed for statement credits toward any travel purchase you make.

But the Capital One® Venture® Rewards Credit Card has recently built on that formula by offering a way to transfer your miles to 14 different airlines. After all, sometimes frequent flyer miles can be extremely valuable — like when you can redeem them for expensive tickets in business or first class.

If you’re looking for a simple travel rewards credit card that also offers you this kind of flexibility, then you need to learn more about the Capital One® Venture® Rewards Credit Card.

We looked into this card program, and this is what we found.

What Is Capital One® Venture® Rewards Credit Card?

Capital One® Venture® Rewards Credit Card (not to be confused with the VentureOne card) is Capital One’s top-of-the-line travel rewards card, and Capital One continues to add new features and benefits to keep it competitive in a very crowded marketplace. Its most recent enhancements include credits toward Global Entry or TSA PreCheck applications, a partnership with Hotels.com, and the ability to transfer miles.

Capital One® Venture® Rewards Credit Card Features
Annual Fee $95, waived for first year
Sign-up Bonus 50,000 miles after spending $3,000 within three months of account opening
Introductory Financing None
Rewards for Spending 2x miles on all purchases; 10x miles on bookings made through webpage hotels.com/venture (through January 2020)
Foreign Transaction Fees None
Travel Benefits Up-to a $100 statement credit toward Global Entry or TSA PreCheck application fee
Shopping Benefits Extended warranty; premier access to culinary, sports and entertainment events
Mobile Wallet Compatibility Apple Pay, Google Pay, Samsung Pay
Contactless Payment Compatibility Yes
Customer Service Phone: 24/7
Promotion None
Who Is Capital One® Venture® Rewards Credit Card Good For?

Before Capital One® Venture® Rewards Credit Card added partnerships with 14 airlines, this credit card was best for people who really wanted to keep things simple and were interested in using their miles for travel expenses other than airfare (cruises, car rentals, hotels, etc.). However, now that you can count your miles toward airline programs, the card has a broader appeal. Throw in the fact that there are no foreign transaction fees, and it’s a good credit card for people who are simply interested in traveling.

How Does the Capital One® Venture® Rewards Credit Card Compare?

The closest comparison to a non-Capital One card is the Chase Sapphire Preferred Card. This credit card also charges a $95 annual fee. For the Sapphire Preferred Card, Chase has partnered with 13 travel partners, including favorites Southwest and Marriott.

When it comes to rewards, it may at first appear that Chase has a slight advantage. With the Chase card, there’s a 1:1 transfer ratio for its travel partners, versus 2:1 or 2:1.5 with the Capital One® Venture® Rewards Credit Card.

But since each dollar spent earns two miles with the Capital One® Venture® Rewards Credit Card, 2:1.5 is actually better than Chase’s program, and the 2:1 works out to the same per dollar spent. (Chase’s card earns two points per dollar only on travel and dining.)

How to Earn Capital One® Venture® Rewards Credit Card Bonuses and Benefits

This card is currently offering new applicants 50,000 bonus miles after spending $3,000 on new purchases within three months of account opening. This is worth $500 in travel statement credits, or you can transfer your miles. You earn 2x miles per dollar spent on all purchases, with no limits. And through January 2020, you can earn 10x miles on reservations booked at hotels.com/venture.

Reward miles can be redeemed for 1¢ each as statement credit toward travel purchases such as airfare, hotels, car rentals, tours and cruises. Alternatively, you can transfer your miles to 14 different frequent flyer programs. Most transfers are 2:1.5 but two airlines are 2:1.

A valuable benefit is up-to a $100 statement credit toward the application fees for TSA PreCheck or Global Entry (which includes PreCheck). Other benefits include no foreign transaction fees on international purchases and extended warranty coverage.

How to Redeem Your Miles

As before, you can still use your Capital One® Venture® Rewards Credit Card to redeem miles toward travel expenses. However, now you can also convert those miles with 14 airline partner programs:

  1. Aeromexico Club Premier
  2. Air Canada Aeroplan
  3. Air France KLM Flying Blue
  4. Alitalia MilleMiglia
  5. Avianca LifeMiles
  6. Cathay Pacific Asia Miles
  7. Emirates Skywards
  8. Etihad Guest
  9. EVA Infinity MileageLands
  10. Finnair Plus
  11. Hainan Fortune Wings Club
  12. Qantas Frequent Flyer
  13. Qatar Airways Privilege Club
  14. Singapore Airlines KrisFlyer
Capital One® Venture® Rewards Credit Card Fees

There’s a $95 annual fee for this card that’s waived the first year. It also has a 3% balance transfer fee and a cash advance fee of $10 or 3%, whichever is greater. The late payment fee can be as high as $38. There’s no foreign transaction fee for this card.

Signing Up for Capital One® Venture® Rewards Credit Card

Capital One requires that applicants have excellent credit to be approved for the Capital One® Venture® Rewards Credit Card. You can apply for the Capital One® Venture® Rewards Credit Card online at capitalone.com or in response to an offer you receive in the mail. You can also sign up for this card at Capital One branch locations.

Remember, you can receive a signup bonus of 50,000 miles after you spend $3,000 within three months of opening your account.

Customer Service

You can call a customer service agent anytime any day. Note that unlike some other credit card companies, Capital One does not provide live chat or messaging.

Capital One® Venture® Rewards Credit Card Mobile

Capital One offers a mobile app that’s available free at both the Apple App Store and Google Play Store. It’s compatible with fingerprint, and features include the ability to view statements and activate replacement or renewal cards. You can also view and redeem your miles and receive instant purchase notifications.

Other features include the ability to lock your card and to use CreditWise, Capital One’s free app that provides you with your credit score.

Capital One® Venture® Rewards Credit Card Pros and Cons
Pros
  • Strong Welcome Bonus — Earn 50,000 points after spending $3,000 on new purchases within three months of account opening. This can be worth $500 in travel statement credits or even more when transferred to airline miles.
  • Waived First-Year Annual Fee — You don’t pay the $95 annual fee until you renew your card.
  • Receive Bonus Points — Earn 10x points per dollar spent at hotels.com/venture through January 2020.
  • Transfer Rewards to Airline Miles — You can now transfer your Capital One miles to 14 different frequent flyer programs, which gives you the chance to receive more value than ever.
  • Global Entry Fee Credit — Receive a $100 credit toward the application fee for Global Entry or TSA PreCheck, which will save you a lot of time when traveling.
  • No Foreign Transaction Fees — Many cards still impose a 3% fee on all charges processed outside the United States.
Cons
  • Annual Fee — The $95 annual fee is competitive for travel rewards cards like this, but some people still don’t like having a card with an annual fee.
  • Miles Transfer Ratio — When you transfer your rewards to airline miles, you get a ratio of 2:1.5 with most airlines, and two have a ratio of 2:1. This ratio is less than the 1:1 ratio of similar credit card programs, but earning double miles on all purchases can make up for it.
  • No Airline Perks — Credit cards that are co-branded with airlines will offer you benefits like free checked bags or priority boarding. Although you can transfer your Capital One miles to airline miles, you still don’t get these kinds of benefits.
Summary

This is a credit card for those looking for an alternative to traditional airline cards. By having two different ways to redeem rewards — statement credits or transfers to airline miles — the Capital One® Venture® Rewards Credit Card makes award travel easy. At the same time, it still offers you a generous signup bonus and valuable benefits such as 10x miles for hotel bookings and up-to a $100 credit toward Global Entry or TSA PreCheck.

But the heart of this card is the ability to earn double miles on all purchases. This means that your rewards can be worth 2% of your spending as travel statement credits or as much as 1.5 airline miles per dollar. In the extremely competitive world of travel reward credit cards, this offer is as good as any.

The post Capital One® Venture® Rewards Credit Card Review 2019 – For People Who Love to Travel appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Just a few decades ago, if you had told a stock broker that you would one day enter your own investment and stock market trades from a little computer you keep in your pocket, they might have laughed. These days, it’s hard to imagine a world without online and mobile investing.

While virtually every major brokerage offers online and mobile account management, a small crop of brokers took a mobile-first approach, putting most of the power of your investment account on your smartphone. Stash, Robinhood and Acorns are three leaders in the mobile-first investment landscape.

Stash, Acorns and Robinhood tout low costs and a great user experience, but do they live up to the hype? Let’s investigate whether they may be a good fit for your investing needs.

About Stash
Rating:
8.5/10
Quick Summary
  • Minimum Investment: $5
  • Fees: First month FREE; $1/month under $5k; 0.25%/year over $5k
  • Website Access: Yes

Stash is a simple investment platform where you can invest with as little as $5. Stash supports taxable brokerage accounts, retirement accounts and custodial accounts, so you can open one for any major financial goal.

Stash charges $1 per month for taxable accounts up to $5,000 and 0.25% for larger accounts. For retirement accounts, Stash charges $2 per month for accounts with less than $5,000 and 0.25% for accounts with $5,000 or more. You can choose between a traditional and a Roth IRA.

You can invest in exchange traded funds (ETFs) or fractional shares of stocks, and Stash never charges any trading or brokerage commissions or fees.

Stash is great for people learning to invest, as it offers suggestions around building your ideal portfolio (similar to a robo advisor) while giving you the freedom to choose any supported investment. The platform supports recurring contributions and one-time deposits.

I don’t use Stash myself, but it generally gets good reviews from customers. One of the best standout features is the option to invest in industries you feel good about. More on that in just a bit.

About Robinhood
Rating:
7.5/10
Quick Summary
  • Minimum Investment: $0
  • Stock Trades: Free
  • Options Trades: Free

In the story of Robin Hood, a dashing hero leads a band of Merry Men to steal from the rich and give to the poor. While the Robinhood app doesn’t do quite the same, it does empower people from any background to get involved in the stock market. It offers zero-fee accounts with no trading fees.

Yes, you read that right. Robinhood is free and supports stocks, ETFs, options and even cryptocurrencies. (Note that new investors would be wise to avoid options and digital currencies and focus on the stock and ETF offerings.) While aggressive low-fee brokers charge $4.95 for most buy-and-sell transactions, Robinhood doesn’t charge anything. That makes it more viable to make smaller investments without losing a large percentage off the top to fees.

Robinhood recently got into hot water with regulators for a planned savings account launch, but otherwise, the company has held a good reputation. While free investment trades sounds too good to be true, with Robinhood that’s really what you get. It recently added a web version, but it started out mobile only.

I have a Robinhood account myself for testing purposes, and it does live up to the promises of free and easy investing. I particularly like the automatic notifications for news relating to investments in your portfolio — and you can’t beat free!

About Acorns
Rating:
8.5/10
Quick Summary
  • Minimum Investment: $0
  • Fees: $1/month under $1 million; 0.25%/year over $1 million; FREE for under 24 and in college; IRAs are an additional $1/month; $3/month for Spend and Later
  • Website Access: Yes

Acorns started out with only automated investing for $1 per month and expanded through acquisition to support retirement accounts and recently launched a bank account. You can still get just Acorns Core for $1 per month (or free if you are in college). Acorns Core + Acorns Later (retirement account) costs $2, and the whole suite of Acorns Core, Acorns Later and Acorns Spend (checking account with debit card) is $3 per month.

If you want to keep all of your finances in one app, Acorns may be one of the best options. But for today, we are going to focus on the investment features. It costs more than free but remains a very low-cost and attainable option for new investors.

Acorns is all about fun ways to contribute and add to your account. You can set up automated recurring investments, round up change from debit or credit purchases, and get bonus cash invested when you shop with partner brands.

I have an Acorns Core + Acorns Later account. To be honest, I have not been thrilled with the investment performance. My account is up 1.52% over the last year compared to the S&P 500’s 9.16% return. This isn’t quite an apples-to-apples comparison, but it is directionally indicative of my performance since starting with Acorns. Overall though, the account works as advertised.

How Are They the Same?

All three services offer many features. First, let’s take a look at how they’re similar.

Investment Account Types All three offer a taxable account.
Investment Types All three services allow you to invest in ETFs.
Mobile Apps All three services emphasize investing with an Android or Apple mobile device.
How Are They Different?

Let’s take a look at the areas where Stash, Robinhood and Acorns differ.

Minimum Investment There’s no minimum deposit required to invest with either Robinhood or Acorns. However, Stash requires at least $5.
Fees Robinhood is completely free to use. Acorns charges $1–3 per month for accounts under $1 million and 0.25% per year for amounts above that. Stash charges $1 per month for accounts under $5,000 and 0.25% per year for amounts above that.
Socially Responsible Investing If you’re interested in investing in designated SRI (socially responsible investing) portfolios, you’ll find this to be a focus at Stash.
Individual Stocks Both Robinhood and Stash allow you to invest in individual stocks; Acorns does not.
Unique Features Features Unique to Stash

Stash is unique in its ability to focus your investments into different themes based on your values. If you want to avoid putting your dollars into any particular industry or if you want to focus on specific sectors, you have some options to handle that with Stash.

Stash offers more than 100 investment options, made up of a limited list of popular stocks and ETFs. It is best for someone who doesn’t know a lot about investing now but wants to learn more and have some guidance while building a portfolio.

Stash offers a banking solution, which Robinhood currently does not. That makes it a viable option to hold all of your money if you choose.

Features Unique to Robinhood

Robinhood is totally free. You can buy a huge range of stocks, ETFs and other investments with no fees. It doesn’t offer extensive guidance or education resources, so it’s best for someone willing to do their learning elsewhere.

Its support of free cryptocurrency and options trades is unique, but most investors should avoid those. Also, did I mention it’s free?

Features Unique to Acorns

Acorns offers unique and fun options to fund your account and takes care of the investments for you. While you won’t pick individual stocks or ETFs as you would with the other apps, that also takes away the worry about having to know what to choose.

Its three accounts are competitive in cost with Stash and could work as a home for all of your finances.

Minimum Investments

Stash requires $5 to get started with an investment account. Neither Acorns nor Robinhood have a minimum requirement.

[compare winner=’Robinhood and Acorns win here, but keep in mind $5 is far better than the minimums required by other stock brokers.‘] Annual Fees

For accounts under $5,000, Stash charges $1 per month for the standard account and $2 per month for an IRA. For accounts with a balance of more than $5,000, the fee is 0.25%.

Robinhood charges no fees. Really. Zero. Zip. Zilch. Nada.

Acorns charges $1 per month for accounts with less than $1 million in them. Over that amount and you’ll pay 0.25% per year.

[compare winner=’Robinhood wins again because you just can’t beat free.‘] Standout Features

Many investors will find Stash appealing because it allows clients to take advantage of automated investing when they want to just set it and forget it. Or clients can take full control over their accounts if they choose.

Robinhood is a standout in that it’s a full-service stock broker that’s completely free. You can trade stocks, funds, options, whatever, all without paying a dime.

Acorns appeals to some with its fun and unique options for funding your account. For instance, you can round up your purchases and invest the spare change. You can also earn investment rewards by shopping with a number of select partners.

[compare winner=’Stash, Robinhood and Acorns all offer great features. It just depends on what you’re looking for.‘] Customer Service

Stash offers email and phone support. Both Acorns and Robinhood offer support only via email. There’s no number to call.

[compare winner=’Stash is the winner because you can call up and talk to somebody if you need help.’] Security

All three of these apps use industry-standard security and encryption. As long as you use a strong password, your account should be safe with Stash, Robinhood or Acorns. All are regulated financial companies in compliance with federal laws.

[compare winner=’Stash, Robinhood and Acorns are all winners when it comes to security.‘] Who Are They Best For?

All three of these offerings are a good fit depending on your needs.

Stash is best for new investors who want to learn. Its hybrid of self-directed and automated investing options can teach you a lot about how investing works.

Robinhood is best for active traders. This is where you’ll want to come if you have some experience and are looking for low-cost, self-directed stock, ETF, options and cryptocurrency trading.

Acorns if best for people who don’t want to be bothered with investing. You can totally set it and forget it. This is hands-off investing for the long term.

Which Is the Best?

I have one major issue with Stash and Acorns, and that’s pricing. If you’re starting out with just a very small portfolio, that $1 per month ($12 per year) can take a relatively big bite out of your portfolio gains. That’s partly why my Acorns account has hardly grown compared to the S&P 500. I’m paying $2 per month, and that comes out of my investment profits.

However, I also recognize that you’re paying for service with Acorns and Stash. The fee of a few bucks per month is for investment advice. If you can do without the advice, you can self-direct your portfolio at a discount brokerage elsewhere for no monthly or annual fees.

Because Robinhood is free and doesn’t offer any advising services for your portfolio, I would put it in a different category from the others. There could be reasons to use both Robinhood and Acorns, but Stash does roughly the same thing as the other two combined, provided you don’t need some stock or other investment Robinhood offers but Stash does not.

So which is the best? That depends on your goals and fee tolerance. If you can do it yourself, Robinhood is great. If you can’t and want to pay someone for help, Stash and Acorns are both excellent products. But be aware that the cost comes out of your investment gains, and $1 per month in fees is a cost that adds up over time.

Overall, any of these apps could be a good fit for your finances. Just make sure you fully understand the costs before getting started.

The post Stash vs. Robinhood vs. Acorns — Which Stock Broker Is Best? appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

A large number of investors like to choose their own stocks, bonds, ETFs, mutual funds, and other investments. They take a hands-on approach to their portfolio, and they like being in total control of every buy and sell decision.

That’s great for some people… but it isn’t for everyone.

Most people don’t have finance degrees. Most people are busy with jobs, kids, and hobbies and hope just to take a break every once in a while. If that sounds like you, an online financial advisor or robo advisor might be the best choice.

Wealthsimple, Betterment, and Vanguard all offer opportunities to automate your investments while keeping your costs low. If you think a robo advisor may be the right choice for your money, read on to learn about these three top options in this growing industry.

About Wealthsimple
Rating:
8.5/10
Quick Summary
  • Minimum Investment: $0
  • Fees: $0 to $100k – 0.50%/year; $100k+ – 0.40%/year
  • 401(k) Assistance: Yes

Wealthsimple is the newest of the three companies on this list. It was founded in 2014 by Michael Katchen, who is still the CEO. The company is based in Toronto and has additional offices in New York and London.

This robo advisor allows you to create an account in about five minutes. All you have to do is answer a few questions, and Wealthsimple takes care of everything else. Based on your risk assessment and goals, Wealthsimple will choose a portfolio of low-fee exchange-traded funds (ETFs) for you. You can set up automatic contributions and Wealthsimple will automatically rebalance your portfolio as needed and reinvest any dividends you earn.

Wealthsimple gives you access to a human who can answer your questions by phone or conduct a portfolio review. There’s also a high-yield, low-risk account called Wealthsimple Save that rivals online bank savings accounts.

If you have a balance of up to $100,000, you’ll qualify for a Basic account. This account charges 0.50% per year in fees. If you have $100,000 to $500,000, you will qualify for a Black account. This lowers your fee to 0.40% and includes a financial planning session and airport lounge access through Priority Pass. Over $500,000 and you get additional attention and features with the Generation account.

Wealthsimple uses 10 ETFs to make up its customer portfolios. Six of them come from Vanguard, since it’s a leader in low-fee funds. The robo advisor also uses two ETFs from iShares. The other funds are the WisdomTree Japan Hedged Equity Fund and the VanEck Vectors Fallen Angel High Yield Bond ETF. In total, Wealthsimple has CA$3 billion (about US$2.2 billion) in assets under management.

About Betterment
Rating:
9.5/10
Quick Summary
  • Minimum Investment: $0
  • Fees: Accounts Under $2 Million: Digital – 0.25%/year; Premium – 0.40%/year; Accounts Over $2 Million: Digital – 0.15%/year; Premium – 0.30%/year
  • 401(k) Assistance: Yes

Betterment was the pioneer among robo advisors. This investment company was founded in August 2008 by CEO Jon Stein. As of February 2019, Betterment managed $13.5 billion in assets, and that number continues to increase. The company is based in New York.

This robo advisor starts users with a short quiz that includes questions about your age, income, retirement goals, and risk tolerance. From there, it allocates your funds into a portfolio that lines up with your needs.

Betterment charges a 0.25% annual fee. It offers some unique high-tech investing features that can help you maximize your tax efficiency. A premium plan is available for a 0.40% fee and includes access to a CFP (certified financial planner) to answer questions about any part of your account.

Most ETFs in the Betterment portfolio come from Vanguard, Schwab, and other low-fee providers. Betterment has multiple ETFs in each category to enable its Tax Loss Harvesting+ feature. It also offers a savings-style investment account as a safe place to park your cash.

About Vanguard
Rating:
8/10
Quick Summary
  • Minimum Investment: $50,000
  • Fees: 0.30%/year
  • 401(k) Assistance: Yes

As you may have noticed, we’ve already mentioned Vanguard in the two sections above. It’s the biggest provider of mutual funds in the United States and second in ETFs to BlackRock’s iShares. Vanguard holds $5.3 trillion in assets. That is many times larger than the other two on this list, and some of those assets actually include assets managed by Betterment and Wealthsimple!

Vanguard was founded by the late John Bogle, who is considered the pioneer of the modern low-cost index fund. In some ways, none of these companies would exist without John Bogle. Vanguard is headquartered in Valley Forge, Pennsylvania. It offers a hybrid robo-advisor product called Vanguard Personal Advisor Services that competes with Betterment and Wealthsimple.

This service gives you access to both a human advisor and an automated investment product. Vanguard charges a 0.30% fee for accounts up to $5 million. You’ll work with your advisor to build your portfolio, rebalance, and optimize for taxes.

Not surprisingly, Vanguard Personal Advisors are likely to direct you toward Vanguard funds. But those Vanguard funds are popular for a reason, so that shouldn’t scare you away.

How Are They the Same?

All three services offer many features. First, let’s take a look at how they’re similar.

Investment Account Types Taxable, joint, Roth IRA, traditional IRA, rollover IRA, SEP IRA, and trust accounts
Human Assisted Advice All three services offer human-assisted advice rather than being 100% automated.
Portfolio Rebalancing All three services offer portfolio rebalancing for their clients.
How Are They Different?

Let’s take a look at the areas where Wealthsimple, Betterment, and Vanguard differ.

Minimum Investment There’s no minimum deposit required to invest with either Betterment or Wealthsimple. However, if you want to use Vanguard’s robo advisor service, you’ll be required to invest at least $50,000.
Tax Loss Harvesting Whereas Betterment and Wealthsimple both offer tax loss harvesting, Vanguard does not.
Socially Responsible Investing If you’re interested in investing in designated SRI (socially responsible investing) portfolios, you’ll find them at Wealthsimple and Betterment but not Vanguard.
Fees Wealthsimple: $0 to $100k — 0.50%/year; over $100k — 0.40%/year

Betterment: Digital — 0.25%/year; Premium — 0.40%/year

Vanguard Personal Advisors: 0.30%/year

Unique Features Features Unique to Wealthsimple

Wealthsimple has a friendly culture and an emphasis on a luxury investing experience. As far as I know, it’s the only financial advisor that can get you into airport lounges around the world.

The platform’s digital product with access to a human advisor is most similar to the higher-end account at Betterment, but it also overlaps a bit with Vanguard’s hybrid human-led experience.

Wealthsimple uses a smaller list of funds for client portfolios, but the funds it picks are low cost and good performers for their sectors.

Features Unique to Betterment

Betterment offers the most automated experience of the three, and the hands-off approach on its basic account is the lowest-cost option on this list.

Betterment also offers the best tax loss harvesting opportunity. Using an automated system, Betterment will sell some funds at a loss and immediately buy a similar fund at the same time. This locks in tax losses for you, which can offset capital gains even if you end up with a long-term profit.

Features Unique to Vanguard

Vanguard is the only one of this pack to offer its own mutual funds and ETFs. It also gives you an experience more focused on the experience with a human financial advisor. While that advisor helps you with taxes, it is not the same as tax loss harvesting at Betterment. If you want to work primarily with a person instead of a computer, Vanguard may be better for you.

Vanguard is a conservative company. While it is cutting edge in low-cost index fund investing, cutting-edge technology isn’t the main focus. You can log in and manage your account online, but that is just one part of managing your account with Vanguard, not the whole thing.

Minimum Investments

Let’s get the easiest comparison out of the way first.

  • Wealthsimple requires no minimum deposit amount for its Basic tier of service. An investment of $100,000 will move you to the Black level. Generation level requires $500,000.
  • Betterment also has no required minimum for its Digital account. If you want to sign up for Betterment Premium, you’ll need to invest at least $100,000.
  • However, to use Vanguard Personal Advisor, you’ll need to make an investment of $50,000 or more.
[compare winner=’Wealthsimple and Betterment are both good choices when it comes to no minimum investments.‘] Annual Fees

Again, it depends on what level of service you qualify for.

  • Wealthfront charges 0.50% for Basic accounts and 0.40% for both Black and Generation accounts.
  • Betterment’s fees are 0.25% for the Digital level and 0.40% for Premium.
  • Vanguard charges 0.30% for all robo-advisor accounts.
[compare winner=’Betterment has just a very slight edge on Vanguard.‘] Standout Features

Luxury-minded clients will love the Wealthsimple experience if they invest at least $100,000. Special benefits at this level include enhanced opportunities to work with an advisor and access to airport lounges.

Betterment shines with superior tax loss harvesting and automated investing that keeps things cheap, simple, and — hopefully — profitable.

Vanguard provides a more personal touch to guide you into a low-cost portfolio of Vanguard funds.

[compare winner=’Wealthsimple, Betterment, and Vanguard all offer great experiences. It just depends on what you’re looking for.‘] Customer Service

Wealthsimple offers customer service via phone and email. Hours are 9:00 a.m. to 8:00 p.m. Eastern Time, Monday through Thursday and 9:00 a.m. to 5:30 p.m. on Friday.

Betterment is available by phone or email from 9:00 a.m. to 6:00 p.m. Eastern Time, Monday through Friday and 11:00 a.m. to 6:00 p.m. on weekends.

Vanguard Personal Advisor Services is open Monday through Friday from 8:00 a.m. to 8:00 p.m Eastern Time.

[compare winner=’While Wealthsimple and Vanguard are open later on weekdays, Betterment is the winner thanks to its support seven days a week.‘] Security

All three of these companies offer a high level of security for your online account and your money. While investments can lose value, you shouldn’t worry about any of these companies pulling a Bernie Madoff.

Wealthsimple and Betterment both offer two-step verification, an added layer of security you should use everywhere it’s available. With any online account, you should use a unique, strong password so bad guys can’t get into your account even if another one is hacked.

[compare winner=’Wealthsimple, Betterment and Vanguard all shine when it comes to security.‘] Who Are They Best For?

All three of these offerings are a good fit depending on your needs.

Wealthsimple is best for investors looking for a luxury experience.. If you’ve got $100,000 or more to invest, you’ll enjoy unique perks, including access to select airport lounges.

Betterment is best for hands-off investors. If you want to set it and forget it, here’s your pick. You can select full automation and have a computer do the rest. You’ll also find the lowest fees here.

Vanguard is best if you want human help. Vanguard’s human assistance is the best of the bunch — and for a low cost, to boot. However, you need at least $50,000 to start.

Which Is the Best?

So which brokerage is the best?

If I were forced to pick a winner, I would probably choose Betterment. However, I would hate to be pigeonholed into choosing just one of these services for everyone.

Depending on where you are on your financial journey, your goals, your comfort with technology, and your tolerance of fees, any of these services could be a great fit.

The post Wealthsimple vs. Betterment vs. Vanguard — Which Robo Advisor Is Best? appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Keeping a budget can be a lot of work, but it doesn’t have to be! If you think tallying up your purchases with a pen and paper or spreadsheet is too much work, there’s an app for that!

Mint, Personal Capital and YNAB are all popular money management apps. You can connect them to your bank and other financial accounts to track spending, view all of your finances on one dashboard and more. All three offer both web and mobile apps.

I have spent time using all three of these apps for my money and still use two of them regularly. Each may be a good fit for different people, depending on their needs. Whether you are looking for granular control over your budget or a high-level view — or something in between — read along to find out which is best for you.

About Mint
Rating:
8.5/10
Quick Summary
  • Price: FREE
  • Budgeting: Yes
  • Investment Monitoring: Yes

Mint is the original online budgeting app, founded way back in 2006. Intuit, the owner of TurboTax and QuickBooks, purchased Mint in 2009. That makes it part of one of the most popular companies for personal finance apps. Mint is free to use and supported by in-app product suggestions.

This personal finance app is probably best known for its budgeting features. You can connect Mint to your bank, credit cards and other financial accounts, and it will automatically categorize your purchases into budget categories you choose. It isn’t always perfect, but it’s pretty good for a computer guessing how to categorize each purchase in your custom budget.

Mint can also automatically track financial goals, such as a debt payoff or down payment savings, based on linked accounts. Clicking on the “Trends” tab gives you useful graphics showing where and how much you’ve spent over time. I’ve been using Mint since 2007, so I know exactly how much I have spent buying Chipotle burritos… ever. Let’s just say I’ve spent an embarrassing amount for burritos.

The app has an investments section that offers basic charts and graphs along with a history of your investments. It has offered a free credit score for a while and recently expanded that section to better compete with credit score-focused Credit Karma. The “Ways to Save” tab offers financial products that may be a good fit for your needs based on the information in your Mint profile.

Mint can act as a dashboard for all of your finances. It doesn’t go as deep into credit or investments as some apps that have a primary focus in those areas. However, the price (free!) is right, and it does a great overall job of helping you understand and manage your money.

About Personal Capital
Rating:
9.5/10
Quick Summary
  • Minimum Investment: $100,000
  • Fees: Wealth Management: First $1 million: 0.89% ; $1-3 million: 0.79%; $3-5 million: 0.69%; $5-10 million: 0.59%; Over $10 million: 0.49%
  • 401(k) Assistance: Yes

Personal Capital is an investment company that offers a free online personal finance dashboard app. Like the others, you can connect your financial accounts to automatically download and categorize your transactions. The app is free to use even if you don’t subscribe to the investment management service.

I joined Personal Capital in 2012 and have always been impressed with its detailed focus on investments. I used the mutual fund analysis tool to identify my most costly funds. I rebalanced my portfolio based on that information to save more than $300 per year in investment fees.

Instead of budgeting, Personal Capital focuses on your cash flow. That makes it better for people who want a high-level view of their income and spending, rather than the detailed budgets offered by Mint and YNAB. I haven’t seen a better free investment analysis tool anywhere.

Personal Capital doesn’t have ads like Mint. Instead, it may try to sell you its own investment management service if you have investable assets of $100,000 or more. This service is optional, but Personal Capital can be a little pushy about scheduling a free consultation session with an advisor.

The cost for the online app and the great investment tools make it a good platform to use on top of Mint or YNAB for budgeting. If you’re not as focused on the budgeting features or are wealthy enough that you don’t care about a detailed budget, Personal Capital may meet all of your online money dashboard needs.

About YNAB
Rating:
8.5/10
Quick Summary
  • Price: $6.99/month
  • Budgeting: Yes
  • Investment Monitoring: Yes

YNAB is short for You Need a Budget. YNAB is an app that focuses primarily on budgeting with less emphasis on other parts of your finances. It uses the zero-based budget philosophy. This means you assign every dollar a job and get very detailed control over each transaction. For a long time, YNAB didn’t support live connections to financial accounts, but it added the feature a couple of years ago.

The biggest downside of YNAB compared to the others: It’s not free. This app charges you $6.99 per month, or $83.99 annually. On the bright side, paying means you don’t see any ads, and YNAB doesn’t try to sell you on anything else.

YNAB is best for people who want or need very detailed budget controls. Mint is excellent for budgeting by category, but it doesn’t force you to categorize every investment, loan payment, and savings dollar. YNAB makes you be responsible for your money and puts you deep in the budgeting process.

Setting it up and getting started is a bit more complicated, but once you learn the YNAB system, it takes little time to keep things updated. The app is best for people who want to look at every single transaction and are willing to pay a fee for the software.

How Are They the Same?

All three services offer many features. First, let’s take a look at how they’re similar.

Budgeting All three services offer at least one budgeting tool.
Investment Tracking All three services can help you stay on top of your investments.
Synchronization All three services can sync with outside accounts.
Mobile Apps All three services shine in the mobile app department.
How Are They Different?

Let’s take a look at the areas where Mint, Personal Capital and YNAB differ.

Pricing While Mint and Personal Capital offer free services, YNAB charges $6.99 per month.
Credit Score Monitoring Only Mint can monitor your credit score.
Bill Management While Mint and YNAB both offer bill management tools, Personal Capital does not.
Investment Management Personal Capital is the only app of the three that can manage your investments (for a fee).
Unique Features Features Unique to Mint

Mint offers the most general personal finance features of these apps. It is the only one to provide you with your credit score, and it has the most in-depth goals feature. Even if you sign up for an account with Personal Capital and YNAB, adding Mint as a general personal finance dashboard may be helpful.

Features Unique to Personal Capital

Personal Capital is the only one of these apps that will manage your investments for you, but that feature costs money. As for the free money management app, its detailed investment analysis features are unique. The app helps you understand your asset allocation, investment fees, and other details by account or across your whole portfolio. This app is useful for investors to better understand their portfolio even if they also use Mint and YNAB.

Features Unique to YNAB

YNAB is unique in its detailed budgeting tools. It’s also the only one of the three that charges for its basic version. However, if you need really detailed help with fixing a spending problem or getting out of debt, it may be worth the price.

Annual Fees

Mint is totally free. Personal Capital is free unless your portfolio tops $100,000. YNAB charges $6.99 per month, or $83.99 per year.

[compare winner=’Mint is the winner, since there are never any fees.‘] Standout Features

Mint is beloved by users for its pretty darn accurate budgeting features, as well as its goal tracking and the ability to see your credit score.

Personal Capital, on the other hand, offers analysis of your investments, as well as showing how you’re spending money.

YNAB uses robust zero-based budgeting to help you get your spending in line.

[compare winner=’Mint offers the most features and is free to boot.‘] Customer Service

Mint offers email support. This is probably the biggest weakness of Mint, compared to the others. Sometimes you just want to reach out to a live person in real time. In addition, some customers have found Mint’s support to not always be entirely helpful.

From my experience, Personal Capital’s free app support has been timely and helpful.

However, YNAB really shines when it comes to customer service. The company knows you are paying for the service, so the support is topnotch. The YNAB team is fast, friendly and very helpful.

[compare winner=’YNAB is the clear winner here.‘] Security

All of these apps use bank-level security, SSL, for a secure connection to your web browser and the most secure method possible to maintain a connection to your bank. However, some people may not want to hand over the passwords to their online financial accounts. If you don’t, you won’t be able to access some of the most useful features. Only YNAB offers an option that doesn’t link to your accounts.

However, in more than a decade, these types of apps have shown they take security seriously. While there is never a 100% guarantee that hackers won’t get in, I trust each of these apps with my information and would not hesitate for security reasons to recommend them to friends or family.

[compare winner=’Mint, Personal Capital and YNAB are all equally safe and secure.‘] Who Are They Best For?

Mint is best for most people and the average user. If you’re looking for just personal financial management, Mint is a good fit for you. The app offers a wide selection of budgeting, tracking and goal-setting tools. Plus, it’s free!

Personal Capital is best for investors. If you’re looking for a way to manage and analyze your investments, this is the right pick for you. Although the free version offers some budgeting features, Personal Capital is really an investor’s app.

YNAB is best for people looking for very detailed budgeting. If you’re serious about tackling your finances head-on — and find free services such as Mint lacking — YNAB may be a good choice for you.

Which Is the Best?

So which app is the best?

I use both Mint and Personal Capital regularly. If you’re a money nerd like me, you should definitely sign up for both. If you want just one, Mint is your best choice. YNAB is good for people who want to keep the most detailed budget, but for most people, what you get free from Mint.com is more than adequate.

In the end, the choice is up to you.

The post Mint vs. Personal Capital vs. YNAB appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

During all my years of writing about the fintech (financial tech) industry, I’ve seen many startups come and go. That’s one of the reasons I’m so impressed with Betterment — a company that started small but that has grown into one of the industry’s leading robo advisors, with more than $16.9 billion in assets under management (as of April 2019).

I was excited to have the chance to ask Betterment’s CEO and founder, Jon Stein, some questions for Investor Junkie readers. Here’s what he had to say.

Investor Junkie: What was your inspiration for founding Betterment?

Jon Stein: I started Betterment when it occurred to me that the concepts I’d learned while studying behavioral economics and biology in college could actually apply to the many mistakes I was making in managing my own investments.

While economics is good at explaining the world at a macro level, it fails to explain human behavior. At a micro level, economics assumes that humans are rational, and they’re far from rational. Especially when it comes to their money — people heavily discount the future, they withdraw when markets crash — and it’s because our emotions drive our decisions.

As the example of bad investing behavior, I was investing my money through seven different brokerage accounts. I was constantly monitoring my accounts (bad behavior) and trying to time the market (worse behavior), and the result was wasting time, taxes, and transaction costs, without making any more than I would have in an index fund (bad outcome).

I wanted a service that did all of this for me, told me what to do with my money, and then did it. I realized that the only way I was going to get something like that was to build it myself.

I started Betterment to reinvent the investing industry — so that it would work as we want it to. What we really want, when we consider things rationally, is the best return (factoring costs) for the least risk. So what we really need is a convenient way to invest in the market portfolio.

Since we launched, we’ve become the largest independent robo advisor. Our promise is to invest your money at a low cost and manage it in a way that gives you a better outcome


IJ: Why should people choose a robo advisor over hiring a live human advisor?

Jon: We don’t believe robo-advice is about humans versus technology — where one will win and one will lose. We believe it’s about how humans employ technology to make their lives better, easier, and more efficient. Additionally, if you ever have questions about Betterment, our live customer support is here seven days a week to speak with you on the phone.

Betterment can service any client however that client wants to be serviced, whether it’s through our existing digital offering or if they want to work with a human.

For those who prefer a purely digital offering, we have the best-in-class product.

If you are the type of person who wants perhaps an annual consultation or have a question answered every now and then, we’ve got a great offering for that customer.

And if you’re the potential customer who wants to have a dedicated advisor with whom you’ll always work, we will now refer you out to an independent RIA [registered investment advisor] who uses Betterment to manage their clients’ assets.

All of these customers of course will be able to access our award-winning customer support.

IJ: Can investors really trust robo advisors and computer algorithms with their hard-earned money? Why?

Jon: Robo advisors have several benefits, including the ability to offer complete transparency.

You can log in from the web or mobile to see exactly the activity that’s happening in your account. That’s what we do at Betterment. A robo advisor does not wake up on the wrong side of the bed — or get fearful when the markets fall. It does the job it was programmed to do: optimize investments based on quantifiable research to help set you on the path to maximizing your expected returns.

Betterment also has no conflict of interest. The Department of Labor (DoL) fiduciary rule is encouraging.

The DoL reached out to and engaged with us to get input on the rule and highlighted us as a counter argument to fight against the rule to keep high-fee structures in place. They even modified some of the core components in the rule based on a letter we sent them.

Robos played a critical part in the rule’s passing, because the argument from naysayers was that you can’t possibly service accounts without kickback revenue streams and other misaligned ways to extract fees from investors. Robos provide a clear counterexample.

The old way of investing is fighting hard to hold on. It feels like the old Wall Street firms are looking at this as an opportunity to repeal regulations that are harmful to their profits. We need to pay attention to what’s good for the protection of consumers and the U.S. economy.

Americans lose more than $17 billion a year to conflicted advice. Americans have a right to honest financial advice, and that right is at risk. You don’t want your children to invest in a world where they can get ripped off, where people can provide advice that is pure sales while claiming they’re financial advisors.

We’re going to keep doing the same thing we always have. We’re going to keep providing independent fiduciary advice and fight for the right of investors regardless. As a fiduciary, existing and prospective clients can be sure that Betterment acts in clients’ best interests at all times.

IJ: Can you tell us in your own words what Betterment does and how it can help anyone with their finances?

Jon: Betterment takes everything a great financial advisor would do and makes it lower cost, easier to use and more tax efficient through the use of technology.

The estimated incremental value of Betterment’s offering to a representative customer saving for retirement who is already investing in low-cost ETFs [exchange-traded funds] on their own is 1.03% per year.

When we include the evidence that Betterment’s fund recommendations are lower cost than what the typical investor saving for retirement may often choose, that value increases to an estimated 1.61%. Over 30 years, that’s a projected 43% more cash after tax in retirement.

IJ: Can you tell us about Betterment’s fee structure?
Jon: Our Digital plan — the most popular — has an annual fee of 0.25%.

The Digital plan includes the following:
  • Personalized financial advice
  • Guidance on how much to invest, your recommended asset allocation and more
  • Low-cost, globally diversified investment portfolios
  • Funds chosen to help maximize your money at various levels of risk
  • Automatic rebalancing
  • Maintain your target allocation when the market causes it to shift
  • Advanced tax-saving strategies
  • Automated tax-loss harvesting and asset location to increase your after-tax returns
  • Everything in one place
  • Synced external accounts to get a clear view of your money
  • Reliable customer service with the Customer Support Team available seven days a week
Our Premium offering has an annual fee of 0.40% and requires a $100,000 minimum balance.
  • All of the benefits of our Digital plan
  • In-depth advice on investments outside of Betterment
  • Assistance in creating a plan for managing 401(k)s, real estate and individual stocks
Plus, you’ll receive unlimited access to our CFP professionals for guidance on life events:
  • Getting married? Make sure your goals are aligned, decide how to combine your money, set financial boundaries and decide how to allocate your money across your retirement plans.
  • Having a child? Save for college, prioritize family goals, select life insurance and discuss your estate plan.
  • Managing equity-based compensation? Understand your plan, walk through possible tax implications and manage the potential risks.
  • Retiring? Plan for your transition from saving to spending and create a tax-smart withdrawal strategy.

IJ: How does Betterment select the ETFs for its portfolio strategy? And why ETFs instead of, say, mutual funds?

Jon: We use ETFs for multiple different reasons. Our website outlines all of them in a really clear and concise way.

IJ: What’s the coolest thing Betterment does that isn’t obvious to most people?

Jon: While I think everything we do at Betterment is cool, one of the more interesting things we have built into the product is behavioral guardrails. Betterment’s rigorous testing helps to ensure that we know what works (and what doesn’t) when it comes to improving design and investor outcomes.

IJ: Are Gen Xers and baby boomers using robo advisors? Or is the main audience the Millennial generation?

Jon: There is a common misconception that robo-advice is for Millennials — but our data would suggest that’s not the case. The vast majority of our assets come from non-Millennials.

The average age for our customers is 36; however, 30% of our assets come from the 50-plus segment. 66% of our assets are not from Millennials; two-thirds of our assets are held by users over 35.

IJ: What do you think the future holds for the robo-advisor industry?

Jon: We’ll continue to see capital flowing into fintech. We’ll also likely start to see more consolidation in the space as incumbents look to more aggressively enter spaces where the new players are getting substantial traction. Robo-advising and robos-in-retirement are inevitable, and eventually everyone will be adopting this. We continue to grow fast as incumbents enter this space.

IJ: Do you use Betterment for yourself?

Jon: Of course!

Rating:
9.5/10
Quick Summary
  • Minimum Investment: $0
  • Fees: Digital – 0.15-0.25%/year; Premium – 0.30-0.40%/year
  • 401(k) Assistance: Yes

If you’d like to learn more about Betterment, read our in-depth review, as well as this guide to setting up a new account.

The post How Can Betterment Grow Your Portfolio? A Q&A With CEO Jon Stein appeared first on Investor Junkie.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Considering a no-penalty CD? These savings vehicles are slowly gaining in popularity. Let’s take a look at how these certificates of deposit work and where the best rates can be found.

Why Invest in a No-Penalty CD?

If you’re putting your money in low interest-paying savings accounts, you may be thinking it’s time to switch to a certificate of deposit (CD). However, the biggest drawback to investing in a CD is that you can’t withdraw your money before maturity without being charged a fee.

Let’s say your car unexpectedly gives up the ghost. The $5,000 you have been earning a tidy 2.70% interest on in a one-year CD at the bank sure would come in handy for making a down payment on a new ride.

However, you opened that CD just six months ago, and the penalty for withdrawing your own money early is six months’ worth of interest! That means the interest-earning abilities of your CD might as well be zilch. (Penalties vary per bank and per CD.)

No matter how much of a sob story you present to the bank’s customer service team on the phone, the answer is the same: We’re sorry you’ve got an emergency, but if you want your money now, you’re going to be penalized.

Now, I realize this isn’t a huge loss of cash, but your goal is to make the most of your money, right? Losing out to fees just plain sucks.

Enter the no-penalty CD…

The Best No-Penalty CD Rates

Banks have slowly been catching on that penalty-free CDs have a lot of appeal. That said, right now there are only a few truly no-penalty CDs on offer.

Let’s take a look at our two favorites.

Overall Rating
8.5/10
Why It's The Best:

With attractively high interest rates and low fees, CIT Bank makes an attractive choice for an online savings account. However, if you're looking for a checking account, you'll have to go elsewhere.

Pros and Cons
Pros
  • High-Paying Interest
  • No-Fee Banking
  • Flexible CDs
Cons
  • No Checking Account
  • No Loans or Cards
  • No IRA Options

CIT Bank is a great online-only bank that offers generous interest rates on savings products.

Along with traditional CDs, CIT offers long-term RampUp CDs that let you adjust your APY if rates increase, Jumbo CDs for deposits of $100,000 or more, and — you guessed it — No-Penalty CDs.

Beginning on the seventh day after opening, you can withdraw your total balance, including any interest earned, without having to pay any fees.

Unlike Ally (see below), CIT requires a minimum deposit of $1,000 for these CDs.

Here’s the current rate for these 11-month certificates of deposit:

Deposit Amount APY
$1,000 or More 2.05%

Clearly, this is a particularly good deal if you have between $1,000 and $5,000 to invest (beyond which Ally’s APY is higher).

Overall Rating
9/10
Why It's The Best:

We like Ally Bank for its interest-paying checking and savings accounts, as well as CDs and money market accounts. Its APYs are much higher than what you'll find at a brick-and-mortar bank and are in line with other online-only institutions.

Promotion: None
Pros and Cons
Pros
  • No Fees
  • No Account Minimums
  • Interest-Paying Checking
  • 24/7 Customer Service
  • Competitive Rates
  • Easy-to-Use Online Interface
  • eCheck Deposit
  • Ally Invest
Cons
  • Transaction Limits for Savings
  • No Cash Deposits
  • No Brick-and-Mortar Locations

Ally Bank is hands-down one of our favorite banks. It consistently shines with low or no fees, generous interest rates and online features.

This bank is 100% online — there are no branch offices anywhere. While that means no free lollipops, it also means Ally passes the savings from not having brick-and-mortar overhead along to you. In a large part, Ally does this by eliminating fees and paying higher-than-average interest on savings accounts, money markets, and CDs.

Ally is currently offering an 11-month no-penalty CD. There’s no required minimum, but the size of your deposit will determine how much interest you earn:

Deposit Amount APY
Up to $5,000 1.80%
$5,000–$24,999 2.15%
$25,000 or more 2.30%

That’s better than what you’ll earn with many traditional CDs at brick-and-mortar banks.

Keep in mind that you must wait six days after opening the account before you can withdraw the entire balance. When your Ally No Penalty CD comes to maturity, you can also choose to have it automatically renewed at a potentially different APY.

Conclusion

If the idea of not being able to withdraw your money on demand bothers you, opening a no-penalty CD at either Ally Bank or CIT Bank might be a comforting choice for you.

However, note that you can also open a regular savings account at several online banks and receive just as high an APY — and maybe even higher. This might make better sense for your emergency fund.

The post The Best No-Penalty CD Rates for 2019 appeared first on Investor Junkie.

Read Full Article

Read for later

Articles marked as Favorite are saved for later viewing.
close
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Separate tags by commas
To access this feature, please upgrade your account.
Start your free month
Free Preview