The pandemic’s effect on the economy has led the Federal Reserve to cut its benchmark interest rate to almost zero to stave off a recession. While this is great for borrowing, those with cash are less pleased. The annual percentage yield (APY) for a high-yield savings account last year was hovering around 2 to 2.5%. Today, it’s half that, at best. It looks like the historically low rates are here until 2022.
[ Read: The Best Savings Accounts in 2020 ]
Finding somewhere to park your cash and gain a decent return to keep up with inflation is hard right now. Fortunately, HMBradley, a new digital bank using fintech to disrupt the traditional banking model, is running a promotion offering a high interest rate of 3% APY on your direct deposit income — if you’re willing to adjust your savings habits.
How do the rate tiers work for me?
As HMBradley explains, “Banking is old, building is new.” To take advantage of the industry-topping interest rate, you’ll need to get into a savings mindset to grow your bottom dollar. Most banks award you with an APY based on the balance you hold in your savings account. HMBradley uses fintech to do things differently — you’ll be awarded an interest rate based on your savings habits.
The bank will track your direct deposit and spending activity to assign you to a savings tier. Everyone starts at Tier 3 to earn a 1% APY. You’ll move up or down four tiers based on how much money you set aside in savings:
- Tier 1: Earn 3.0% APY when you save at least 20% of your income
- Tier 2: Earn 2.0% APY when you save at least 15% of your income
- Tier 3: Earn 1.0% APY when you save at least 10% of your income
- Tier 4: Earn 0.5% APY when you save at least 5% of your income
The savings rate is based on all deposits and withdrawals
HMBradley’s high-yield savings program is based on your banking activity. The digital bank will need to track your banking activity, such as direct deposit and spending transactions, to calculate your savings rate and award you with an APY tier. To qualify, you’ll need to follow steps that make tracking your spending and savings activity possible. The process is fairly simple and HMBradley will not check your credit to approve you for a bank account. To get started:
- Apply for an account online
- Download the HMBradley mobile app from the Apple Store or Google Play
- Set up direct deposit
- Save at least 20% of your income to maximize your APY earnings
[ Read: The Best Money Market Account Rates for 2020 ]
HMBradley will monitor your spending and review your rate of savings quarterly. Depending on the percentage of savings you put aside, you’ll earn between 0.5% to 3.0% APY.
Additional features
HMBradley aims to make the process flexible and hassle-free. There are a few features you should take advantage of to earn the most out of your savings.
HMBradley credit card
Sign up for an HMBradley credit card to boost your earnings potential. You can earn 3% cash back for your most frequent expenses paid with the card, 2% for the second-largest spending categories and 1% back on all other purchases. Also, spend at least $ 100 per month on the card and you’ll get boosted to the next higher-earning tier the following quarter.
Savings Tier rewind
Everyone faces a month or two when your expenses are greater than your savings. HMBradley awards customers with Savings Tier Rewinds you can use to reset your current Savings Tier to the previous quarter’s. This will come in handy if you drop down a Savings Tier. You’ll still earn the best rate and have a full three months to get back on track.
Automatic savings
Pay your savings account first. You can set up automatic contributions through the digital bank website or app, so the moment your direct deposit comes in, a portion is transferred to your savings account.
Too long, didn’t read?
There’s no reason to let your emergency savings fund languish at an APY of 0.01%. If you’re comfortable with online banking, consider moving your funds over to HMBradley, setting up direct deposit and taking control of your spending. As long as you’re setting aside at least 20% of your income towards savings, you’ll earn 3%. You’ll earn one of the highest interest rates available on your money without having to lock it into a long-term CD and pick up a healthy new habit of regularly saving a healthy portion of your paycheck.
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