If you’ve been out of work and can’t pay rent, the end of the federal moratorium on evictions is guaranteed to dredge up a ton of stress. But now’s not the time to bury your head in the sand.
By exercising your negotiation muscle, you may be able to strike a deal with your landlord that prevents the worst-case scenario: getting kicked out of your home.
Negotiating a Deal With Your Landlord If You Can’t Pay Rent
When you think you can’t pay rent for the upcoming month, it’s best to talk to your landlord sooner rather than later. Even if you’ve been letting late payment notices stack up, coming to a fair agreement with your landlord can help alleviate some of that financial stress.
Here’s what you should do.
First, Know Your Rights
Matt Koz, finance director for the Tenant Resource Center in Madison, Wisc., recommends that renters do their due diligence to research the eviction laws in their area and see if their city, county or state has a moratorium on eviction proceedings during the pandemic.
There may be an eviction moratorium in your local area that extends past the federal moratorium. For example, New York City’s rental eviction moratorium is in place through the end of August.
Being educated about the tenant laws in your state doesn’t just give peace of mind about whether or not your landlord can evict you during this crisis. It can also help you decide how to best proceed when reaching out to your landlord.
For example, Koz said there could be laws where you live that make it disadvantageous to pay partial rent, if you were thinking of suggesting that to your landlord.
“In some cases, it may be better not to offer terms and wait to see what recourse is available to you,” he said.
Approach Your Landlord with Empathy
You may just think of your landlord as a faceless entity that takes the biggest single chunk of your money every month. But a little kindness can go a long way.
“Lead with empathy,” advises Michael Thomas, an accredited financial counselor and faculty member at the University of Georgia. “It’s very easy to become self-absorbed when we’re experiencing a financial shock.”
He says taking the time out to ask how your landlord is doing and working to establish a relationship can make them more willing to work with you. Understanding where each person is coming from can lead to a resolution that’s best for both parties.
Provide Realistic Solutions
Offering up a solution to your situation can show your willingness to work with your landlord.
You might propose to make a partial payment with a promise to pay the remainder of the rent by a certain date. If you don’t know when you’d be able to make the remaining payment, Koz said it’s reasonable to make an agreement based upon a specific occurrence.
For example, you might ask if you can pay the remainder once your kids’ school starts and you can pick up more hours at work.
Instead of suggesting a partial payment, you could ask to skip paying for one month and spread that payment over the remainder of your lease if you think you’ll be able to pay the following month. Or you could negotiate for an overall reduction in rent given that you sign a new lease locking you in for a longer term.
Another option: Ask your landlord to apply your security deposit to the upcoming rent payment, agreeing to replace it at a later date. Or if you paid your last month’s rent upfront when you first signed your lease, you could ask to apply that money to next month’s rent.
When trying to come up with a rent solution for the upcoming month, make sure you’re not creating a worse financial situation for yourself later on.
Something else you might consider is bartering. For example, you could agree to do landscape work for your landlord’s properties in exchange for a break on rent.
When trying to strike a deal, Thomas suggests coming up with at least three plausible solutions that work for your budget.
“Go with your best-case scenario first,” he said.
If your landlord won’t agree to that, ask for their input on mitigating the situation before presenting your other options.
Get Agreements in Writing
If you and your landlord are able to agree on an alternative plan for paying rent, make sure to get that deal in writing.
“If [your landlord] were to come back and say we didn’t agree to that, [you can say]: Actually we did and here’s proof,” said Pamela Capalad, a New York-based Certified Financial Planner and founder of Brunch and Budget.
Putting things in writing also helps eliminate misinterpretations of your agreement, she said.
However, when signing a lease addendum or other paperwork, don’t rush into a contract with terms you don’t understand.
“If you’re not sure what you’re signing, you can always try to contact a tenants rights organization or an attorney,” Koz said. “Whatever you sign is something that you’re held to. If you don’t meet the terms of that agreement, you’re back where you started.”
Remember, You’re Not Alone
You may experience shame over not paying rent or fear over potentially losing your home, but try not to let that lead you to making drastic decisions.
“The thing I would recommend, if you can avoid it, is to not take out loans to pay rent,” Capalad said.
It can be comforting to put things in perspective and realize you’re not the only one who can’t pay your rent right now, she said.
4 Additional Solutions If You Can’t Pay Rent
In the event that your landlord won’t budge on requiring you to pay your rent in full, it’s good to have a backup plan. Here are a few ideas.
1. Seek Housing Assistance
Look into local housing assistance or eviction prevention programs for emergency funding to help keep you in your home.
The United Way’s 211 network is a great way to connect to resources in your community. Other charities, like Modest Needs, may also be able to help. Your landlord may even know of housing assistance options in your area.
2. Bring In a Roommate
If you can find a good roommate, you can split housing expenses and lower your financial obligation. Just make sure you properly vet the potential roommate and your landlord approves of the new tenant.
Subleasing your place could be another route to take, provided your landlord allows it and you have somewhere else you can crash in the meantime.
3. Sell Something
Make some extra dough by selling unwanted items around your home. Put that money toward the rent.
You can even make sales while practicing social distancing. Check out these 14 websites for selling things online.
4. Get Another Gig
Get money for rent by landing a new job — or securing a second source of income.
Consider a side gig, like a food delivery driver or a pet sitter, where you’re paid based on how much work you take on. These jobs often pay faster than traditional jobs that run on a biweekly schedule.
Many retailers and restaurants are hiring to make up for a shortage of workers. Some are even offering sweet sign-on bonuses.
Now is also a great time to find a job where you can work remotely. There are several gigs that are perfect for doing virtually, like freelance writing. Check out The Penny Hoarder’s work-from-home job portal for new job opportunities posted every weekday.
Feeling overwhelmed? Create a budget that works for you with our budgeting bootcamp!
Nicole Dow is a senior writer at The Penny Hoarder.
The internet can be a scary place — hackers, fraudsters and schemers are standing in the proverbial shadows, just waiting for you to drop your guard.
And every seven seconds someone does let their guard down — which, according to a 2020 report from the U.S. FTC, resulted in more than $3.3 BILLION in identity theft and fraud losses in 2020 alone.*
It’s way too easy to open yourself up to a credit-score destroying, identity-stealing criminal. And they know it.
Things as innocent as swiping your credit card at a gas station, connecting to a public WiFi or answering a Facebook quiz about your first pet and the street you grew up on could be handing these bad guys your personal information. And most of us don’t even realize it.
That’s where a digital security company called Aura comes in. It guards your money, personal info and devices against identity theft and fraud all in one place. It’s the most uncomplicated way to protect yourself online.
Safeguard Your Money, ID and Devices All at Once
Normally, if you want to protect yourself, your money and your network, you’d have to buy three products, set up three services and wade through three customer service centers to solve any problems. Talk about a mess.
But when you sign up with Aura, you get identity theft, financial fraud and device and network protection in one subscription. For just a few bucks a month, Aura’s tech will protect you from financial, credit and identity theft, plus malware, ransomware, scam sites and more.
Here’s how it works: Aura will monitor the web —and your credit — for leaks and breaches of your personal information, which you provide to Aura, and alert you of any suspicious changes or charges. Plus, they do this four times faster than the average identity theft product. If you do experience identity theft or fraud, you’ll be assigned a US-based personal case manager to help fix it.
And for some peace of mind, you’ll also be covered with a $1 million identity theft insurance policy for eligible losses.
As for your devices, Aura stops malware from infecting your phone or computer and will even block you from scam and phishing sites that could steal your info. It works across Android, iOS and Windows.
There are three plans to choose from, ranging from a basic plan to ultimate protection.
More than one million people are protecting themselves with Aura. It takes just two minutes to sign up, and your identity, money and devices could be safer, too.
Kari Faber is a staff writer at The Penny Hoarder.
My spouse was in the Air Force National Guard on and off. He owned a private, profitable tree work, gutter cleaning, snow-plowing and roof-raking company. He hasn’t filed business or personal taxes since the mid-’90s. He NEVER paid into Social Security and has been involved in fraudulent activities. Is he still entitled to 50% of my Social Security?
I’ve been disabled since 2000. I’ve paid all the bills, while he has been stashing cash and trying to get me to return to work, all while working only on bending his right elbow and lying in court.
His attorney told the court outright that he will NOT file taxes. Since he’s a hoarder, I believe he filled his friend’s dumpster and disposed of his paperwork in the friend’s outside furnace to impress his mistress.
-Hands Off My Social Security
Dear Hands Off,
Unfortunately, Social Security doesn’t have special rules for lying, cheating, no-good rotten scoundrel spouses. The rules that were meant to protect spouses who stayed at home for much of their marriage, often caring for a family, also apply to guys like your husband.
So yes, he’ll probably be able to collect up to 50% of your full retirement age benefit, whether you’re still married or you’re divorced.
You say your husband has been involved in fraudulent activities. Technically, if your husband were incarcerated for more than 30 days, any Social Security benefits would be suspended until his release. But this sounds like it’s a nasty divorce involving a deadbeat husband, rather than a criminal case.
That’s the bad news. The good news is that even if your ex gets Social Security based on your work record, it will never, EVER affect your benefit. If you remarry at some point, his benefit also wouldn’t have any impact on your current spouse.
Since your husband was in the National Guard off and on, I’m guessing he paid at least something into Social Security, even if it wasn’t much. What happens in this situation is that Social Security looks at whatever your husband qualifies for based on his own work record. Then they use his current or ex-spouse’s record to qualify him for extra benefits if applicable.
It sounds like this divorce is still underway. You’re probably not going to be able to prove how much cash he’s earned over the years or whether he torched his business records. Focus on what you can control. For example, anything you can do to prove you shouldn’t pay alimony or that any assets should go to you would be a far better use of your time and energy than worrying about his Social Security.
Hang on to any financial documentation you have, like bank statements and copies of bills you’ve paid, so that you can present them to an attorney. If you can’t afford an attorney, search the American Bar Association’s website to see if free legal assistance is available in your area.
Your ex’s Social Security benefit is out of your hands, and it doesn’t affect you. You can’t undo what sounds like a miserable couple of decades with this guy. But rather than getting angry about his Social Security, channel your energy toward building a life that he’s not part of.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
When is the last time you checked to see how much your checking or savings account was earning you, just for having money in it?
If you bank with a traditional brick-and-mortar bank, it might have been a while — and that’s not surprising.
When financial institutions like Wells Fargo and Bank of America offer annual percentage yields (APYs) as low as 0.01% on their savings and checking accounts, it’s easy to become accustomed to your money being stagnant.
But savings accounts and even checking accounts can earn you money if you choose the right bank or credit union. Increasingly, you’ll find the best APYs (annual percentage yields) through online banks. Here are the best of the best for 2021, whether you want to open a checking account, a savings account, or even a money market account:
Best Online Banks of 2021, Ranked
These are the best online banks of 2021 for checking, savings and money market accounts, starting with our top pick.
Editor’s note: APYs are accurate as of July 17, 2021.
1. Axos Bank
Why we like this online bank: Axos (formerly known as Bank of Internet USA) tops our list of the best online banks. For starters, it gives consumers plenty of options when it comes to checking accounts:
The Rewards Checking account has the highest APY on our list at 1.25%, but earning that requires that you:
Receive monthly direct deposits of $1,000 or more;
Use your Axos-provided Visa debit card for at least 10 transactions of at least $3; and
Use it an additional five times (for at least $3 each time).
If you just achieve one of the three criteria, the APY is 0.4166%; if you achieve two, it doubles; and when you achieve all three, you get the full 1.25%.
This account also offers unlimited domestic ATM fee reimbursements and promises no overdraft or non-sufficient funds fees.
The Essential Checking account is all about no fees: unlimited domestic ATM fee reimbursements, no monthly maintenance fees and no overdraft or non-sufficient fund fees. You can also get your paycheck up to two days early with direct deposit express.
The Cashback Checking account lets you earn up to 1.00% cash back on all transactions requiring a signature. As with the Essential Checking account, there are no monthly maintenance fees, and you’ll get unlimited domestic ATM fee reimbursement.
In addition, Axos offers specific checking accounts for teengers and senior citizens.
The Axos online high-yield savings account is also impressive, with a 0.61% APY.
Potential pitfalls: Axos offers a lot of options. Just determining the right checking account can be stressful. And once you choose a checking account, you’ve got to keep track of quite a bit to either earn the full APY or to ensure you’re spending enough to make the 1.00% cash back on purchases requiring a signature worth your while. The $250 minimum balance for opening the savings account is also steep.
Check out our current list of bank promotions for a chance to gain a monetary bonus when signing up for a new bank account.
2. Capital One 360
Why we like this online bank: Capital One 360 doesn’t have the most attractive APYs for either its online checking or savings account (0.10% for checking and 0.40% for savings), but the online bank makes up for it with the industry’s second-highest-rated app according to J.D. Power, with users citing the app’s speed, easy-to-use interface and self-service options that are simple to use.
In addition, Capital One’s accounts include zero monthly fees and offer easy bank account integration. With the checking account, you have access to more than 70,000 fee-free ATMs, and unlike some online banks, Capital One does have physical branches — and Capital One Cafés, where you can enjoy Peet’s Coffee, take advantage of a shared work space, get one-on-one money coaching, attend workshops and even host events for nonprofits. You can also get your paycheck two days early.
Potential pitfalls: The APY for the savings account is not the strongest on this list. It’s also not possible to categorize your savings into sub-accounts within the app, which makes tracking toward multiple goals challenging.
3. Ally Bank
Why we like this online bank: Ally offers both online checking and savings accounts.
APYs, though now lower because of the pandemic and federal adjustments, are still high, with a 0.50% APY for savings accounts and up to 0.25% APY for checking accounts. You can also apply for loans through Ally, and ATM access is never a problem. That’s because Ally gets you access to more than 43,000 Allpoint ATMs nationwide and reimburses up to $10 in ATM fees each month.
Other hallmarks of Ally’s online banking include its lack of monthly fees (a true free checking account) and minimum balance requirements, and its top-rated mobile app with mobile check deposit.
Potential pitfalls: If you travel outside the country frequently, don’t use your Ally Bank debit card — it carries a 1% foreign transaction fee. Travel credit cards are a better option when traveling abroad.
In addition, don’t be fooled by the draw of a 0.25% APY for a checking account; you need at least $15,000 in the account, or else you’ll earn just 0.10%. However, if you have $15K to spare, you’d be better off storing that in a high-yield savings or money market account.
Why we like this online bank: LendingClub Banking (formerly Radius Bank) may not compete with the current savings APYs found at some of the top contenders on this list, but it makes up for that with a unique free checking account that offers 1.00% cash back on everyday purchases. That means for every $100 you spend, you earn $1.
Currently, LendingClub is also offering 1.50% cash back in certain categories, including food, health, entertainment and social good. LendingClub’s checking accounts also offer a 0.15% APY.
LendingClub Bank’s online checking comes with several perks, but ATM usage is one of the best. When you bank with Radius, you can visit any ATM at any time; Radius will reimburse you for all ATM fees.
Other advantages include payment up to two days earlier than your direct deposit, an innovative mobile app with location-based restrictions and spending caps, alerts when you or someone else uses your card and the ability to turn off lost or missing debit cards.
The LendingClub savings account offers either a 0.15% or 0.25% APY, depending on how much you have in the account.
Potential pitfalls: LendingClub requires a $100 minimum deposit for the checking account, and the 0.15% APY for the savings account doesn’t kick in until you have at least $2,500 saved up.
Something that’s likely to be more frustrating to those with imperfect financial pasts are the requirements put in place for the rewards checking account. Not everyone qualifies for the rewards portion of the checking account, meaning you may miss out on the cash back.
However, if you don’t qualify for the rewards checking account now, LendingClub makes it possible to eventually upgrade to that account through its Tailored Checking Account. That account, which doesn’t offer a cash back option, carries a monthly service charge unless for the first $5,000 (all other banks on our list carry no monthly fees), and there are caps on daily deposits and debit card usage. However, if you exhibit 12 months of positive banking history, you may be able to upgrade to the Rewards Checking Account.
5. Alliant Credit Union
Why we like this online bank: ATM access is almost always guaranteed when you bank with Alliant, as it has more than 80,000 ATMs in its network and offers $20 in monthly ATM reimbursement for out-of-network usage. Alliant also operates one of the highest-rated apps for both checking and savings accounts and has physical locations in the Chicago area.
Currently, Alliant’s checking account APY stands at 0.25%. The account has no monthly service fee or minimum balance requirements and comes with a free Visa contactless debit card.
The savings account is equally impressive with a 0.55% APY. Though the account requires a minimum initial deposit of $5, Alliant will pay it for you. (Hey, that’s a free $5!)
Potential pitfalls: Credit unions can be more challenging to join, and Alliant is no different. Overdrafting can get expensive, with high fees and no limit on daily charges. Alliant currently does not participate in shared branching, a system that allows you to conduct your banking business at other credit unions in the same network throughout the country. This is often a hallmark of other credit unions.
Why we like this online bank: nbkc (the National Bank of Kansas City) keeps things simple by combining checking and savings into one single account, called the Everything Account. You’ll earn an APY of 0.15% across the board with this account.
Even better: there are no fees to bank with nbkc. We’re not just talking monthly maintenance fees; you also don’t have to worry about minimum balance fees, foreign transaction fees or even overdraft fees.
This bank also offers an extensive ATM network (37,000 and counting) with $12 in monthly reimbursements when you use an out-of-network ATM. The mobile app is easy to use, includes Savings Goals for organizing your money, and offers a Pay Bills feature.
Potential pitfalls: Its savings APY (0.15%) is not the most competitive of the accounts listed here. Actual member locations are limited to Kansas City, Missouri. Finally, it costs $5 to open the account. That’s obviously not substantial, but most accounts on our list are free to open.
Why we like this online bank: Synchrony has a healthy 0.50% APY for the savings account, which also includes a convenience card for ATM access.
Though low by 2019’s standards, the fact that Synchrony still offers an APY that’s 50 times larger than Bank of America’s — even amid a pandemic — is quite impressive. Its lack of fees (even for withdrawals past the maximum six per month) is another highlight.
Also noteworthy: Synchrony has joined the ranks of other top banks by creating an app, called Synchrony Bank (not to be confused with MySynchrony, which is the bank’s retail portal).
Potential pitfalls: Synchrony doesn’t offer a checking account, meaning you’ll need to rely on an external account or direct deposit to fund your account.
If you want check-writing capabilities, you can open a money market account — but the APY is lower (0.35%) than that of its savings account. Synchrony also lacks home and auto loans.
Why we like this mobile bank: Chime is great for first-time savers and spenders. Chime has no monthly service fees, no overdraft fees (you can overdraw up to $100 on debit cards without incurring a fee), no minimum balance requirements, no foreign-transaction fees and access to more than 60,000 fee-free ATMs nationwide.
More importantly, it can be set up to automatically transfer a percentage of any direct deposit into the linked savings account and/or to automatically round up to the nearest dollar on all purchases, depositing the extra change into the savings account. You might also have access to your paycheck up to two days early with direct deposit.
If you’re looking to save, you will want to open a Chime Savings Account (only possible if you have a Chime Spending Account). The savings account has an APY of .50%.
Potential pitfalls: Chime is a newer option and could face growing pains. There is no in-person service, and reviewers regularly complain of slow customer service.
Further, Chime is not a full suite bank (no loans, for example).
More information: Chime Bank review
9. CIT Bank
Why we like this online bank: In previous years, CIT offered the highest interest rate for any savings account on our list, but following the fallout from the COVID-19 pandemic, rates have dropped dramatically, far below some of its competitors.
Right now, APYs are set at 0.42% or 0.50%, depending on your balance and/or monthly deposits. While not as high as they used to be, we still appreciate the APYs, especially compared to the national average (0.05%).
Note: These APYs only apply to an introductory period. They then drop slightly.
The eChecking account, a new addition to the portfolio, is attractive, with a 0.10% APY on balances under $25,000 and 0.25% on balances at or above $25,000 — but it rarely makes sense to keep so much in a checking account. The account does pay out $30 a month in ATM reimbursements, and CIT’s mobile app has great reviews on the App Store and Google Play. You can also get home loans through CIT.
Potential pitfalls: CIT’s dip in offered APYs for its savings account is one of the biggest we’ve seen. Further, the CIT Savings Builder account suffers from its lack of ATM access and a minimum balance requirement ($100).
10. Discover Bank
Why we like this online bank: Discover Bank features both savings and checking accounts. Discover’s checking account is a rewards account, meaning you earn cash back for debit card purchases instead of interest on the money in the bank account. Right now, you can earn 1% cash back on up to $3,000 in debit card purchases each month, for up to $30 a month and $360 a year. You’ll also have access to more than 60,000 fee-free ATMs, and you won’t have to worry about monthly maintenance fees.
Discover’s savings account stands at 0.40% APY. Like CIT, this is a stark drop from previous years, but no online bank has been immune to the effects of COVID-19.
Potential pitfalls: You cannot get an auto or home loan through Discover Bank. Cash back on checking accounts is helpful, but big spenders will earn more when using a credit card without a monthly limit on cash back.
Why we like this online bank: Barclays offers a competitive 0.40% APY on its online savings account. While not super attractive, it is still far above the 0.01% you will earn at Chase. Its mobile app is highly rated.
Potential pitfalls: You cannot open a checking account with Barclays, complicating access to funds.
12. Charles Schwab
Why we like this online bank: Charles Schwab is great for those who like to travel — it has no foreign transaction fees and offers unlimited ATM reimbursement worldwide.
Charles Schwab is, however, more ideally suited for investing than saving and spending, thanks to its wide range of investment options. As such, the checking account — called High Yield Investor — is built with investors in mind with a direct link to a customer’s brokerage account for easy funding.
Potential pitfalls: APYs are low: 0.05% for the savings account and 0.03% for the checking account.
Charles Schwab is great for investors looking for a brokerage account, but savers and spenders looking for basic, high-yield online savings and checking accounts should look elsewhere.
Why We Picked These Banks
To determine the online banks and credit unions for this list, we reviewed nearly 40 of the most popular banks. We chose the 12 banks on our list because of their combination of high APYs, low minimum balances and low or no fees. Customer service, easy (and free) access to ATMs, mobile/online experience and ease of funds transfers were also important considerations.
All banks on this list are FDIC-insured (Federal Deposit Insurance Corporation) or NCUA-insured (National Credit Union Administration) and have no monthly fees (or offer a way to waive them).
Savings Account APY
Checking Account APY
Mortgage and Auto Loans
What Makes This Bank Great
And What Doesn’t
Alliant Credit Union
Great mobile app; access to 80,000+ fee-free ATMs (and limited out-of-network ATM reimbursement); decent APYs and fantastic app
Foreign transaction fees; no shared branching; high overdraft fees
Up to 0.25% APY
Great mobile app; access to Allpoint ATMs (and limited out-of-network ATM reimbursement); no overdraft fees
Foreign transaction fees
Unlimited ATM reimbursement; high APY for checking and savings
Poor mobile app; foreign transaction fees; too many choices and guidelines to manage
Great mobile app
Limited access to funds (no checking account)
Capital One 360
Auto loans, but no mortgage loans
No. 2 mobile app (J.D. Power); access to Capital One and Allpoint ATMs; no foreign transaction fees; unique Capital One Cafe locations
Lower APYs than other online contenders; overdraft fees
Mortgage loans, but no auto loans
Great mobile app; unlimited ATM reimbursement worldwide; no foreign transaction fees
Overdraft fees if funds aren’t available in linked account; built more for investing, not spending and saving
Encourages first-time savers to be better with finances with Automatic Savings Account; access to paycheck before actual deposit; access to 60,000+ ATMs nationwide
Not a full suite bank; slow customer service
Up to 0.45% APY
Up to 0.25%
Mortgage loans, but no auto loans
Great mobile app; decent ATM reimbursement plan
Dramatically reduced APY over the last couple of years; requires minimum balance of $100
Up to 0.50% APY
1% cash back on up to $3,000 in monthly purchases
Mortgage loans, but no auto loans
Great mobile app; access to 60,000+ fee-free ATMs; no foreign transaction fees; cash back rewards
No traditional APY for checking account, but cash back is still enticing (rewards checking account)
Only lending to those in Kansas City, Missouri, area
Unique account combines checking and savings; access to Moneypass fee-free ATMs; limited ATM reimbursement; no foreign transaction and overdraft fees
Brick-and-mortar branches in KC area only; $5 minimum deposit
Up to 0.25% APY
0.15% APY, plus 1.00% to 1.50% cash back
Mortgage loans and yacht loans
Fee-free access to ATMs; cash back rewards on the checking account
$100 minimum deposit
Convenience card for access to ATMs (nice touch for a savings-only account); no checking account, but can open money market account (0.50% APY) for check-writing capabilities; limited ATM reimbursement
No checking account
The Benefits of Online Banking
The biggest allure of online banking is the high annual percentage yield (APY). APY is the interest (including compound interest) that you’ll earn on your money in a year.
Because online banks rarely have physical locations and need fewer employees, they have low overhead and can pass those savings over to customers.
The average APY for the online banks with checking accounts awarded in our 2021 list is roughly 0.27%; some accounts also offer cash back on debit card purchases. The average APY for our best online high-yield savings accounts is even higher: roughly 0.45%.
A note on lower rates: These APYs are significantly lower than we’ve seen in previous years. In 2019, the average checking APY on our list was 1.40%, and the average savings account was roughly 2.00%. The COVID-19 pandemic has led to lower interest rates across the industry. It is not clear how long these rates will stay so low.
Remember, traditional banks offer interest rates as low as 0.01% for both checking accounts and savings accounts. (The national average for savings accounts is just 0.05%.)
But online bank accounts have many benefits outside of high interest rates. Here are just a few:
Low (or no) fees, including monthly maintenance fees (sometimes called monthly service fees or simply monthly fees), overdraft fees, foreign transaction fees and ATM fees. Some online banks even offer reimbursement for out-of-network ATM fees.
Low or no minimum balance requirements.
Strong online and mobile banking experiences, including apps and two-factor authentication.
FDIC and NCUA insurance up to $250,000.
Accessible customer service online or by phone.
Drawbacks of Online Banks
Online banking isn’t without its issues, but customers generally find the high-yield returns, stellar mobile experiences and lack of fees more than make up for online banks’ pitfalls.
Below are some of the most common drawbacks of online banks:
Limited Options for Cash Deposits
Depositing cash is the biggest challenge of online banks because they lack physical locations. Even online banks that have partnerships with brick-and-mortar banks for in-network ATMs often cannot accept cash deposits via ATM.
If you intend to deposit cash regularly (like if you’re a server or hair stylist who depends on cash tips) but still want the benefits of an online account, open an account with a brick-and-mortar bank solely to deposit cash and electronically transfer it to your online account.
Challenges With Transferring Funds
Online checking accounts generally make it easy to access your money with debit cards that work at thousands of ATMs. Some also offer checkbooks, no matter how archaic they may seem.
Online savings accounts, on the other hand, can be more challenging to access in emergencies than accounts at brick-and-mortar banks, but thanks to improvements in the speed of electronic transfer (ACH deposits) and new solutions from online savings accounts (like convenience cards), this issue has been largely reduced.
No Face-to-Face Support
If you’re more old school about your money management and like the idea of walking into a branch and singing your sorrows to a bank teller who can help you figure out your financial problems, an online bank might not be for you.
Online banks offer incredible customer service online and over the phone, but you can only get comforting in-person help for your accounts at a brick-and-mortar traditional bank.
How to Choose an Online Bank
If an online bank makes sense for your finances, you’re now faced with the task of choosing one. While reviewing our list of the best online banks is a great place to start, you will need to assess your specific needs out of a bank to determine which on our best online banks list actually works best for you.Here are some things to consider:
Which bank has the highest APY? If earning the most in interest is what’s most important to you, your task is easy. Do note, however, the APYs can fluctuate. So if two of your top banks are neck and neck, but the bank with the slightly lower APY has better customer service and easier access to brick-and-mortar, it might actually be wiser to go with that one. In a few months, the interest rate may be higher than the current leading bank.
Are there other rewards? APYs are only one piece of the puzzle. Certain checking accounts offer cash back rewards, and some accounts — savings, checking and money market accounts — even come with sign-up bonuses.
How often do you use an ATM? If ATM usage is a part of your weekly routine, consider only online banks that have free access to a large network of ATMs. Otherwise, fees will add up.
What are the fees? The beauty of most online banks is the lack of monthly fees. However, this can vary. If you travel to foreign countries regularly, for instance, and plan to use your bank’s debit card, look for a bank that doesn’t charge foreign transaction fees.
Are you a mobile power user? If you live in your financial institution’s app, chances are good you will want one with an intuitive user interface and lightning speed. Check out reviews of mobile apps before committing to a specific bank.
How often will you need to talk to a customer service rep? Online banks are known for a lot of things, but stellar customer service is not typically one of them. If you need to chat with someone regularly about your money or tend to ask a lot of questions, look for an online bank with a good reputation for customer service.
What about money market accounts? For our list of the best online banks, we primarily considered personal checking and savings accounts. Money market accounts are quite similar to savings, but not every bank offers them.
Online Banking FAQs
Still have questions? You’re not alone. Here are some frequently asked questions about online banking—with answers.
Which Is the Best Online Bank in the U.S.?
This year, we have ranked Axos Bank as the No. 1 online bank in the US. However, these ratings are subject to change, and any bank that made our list of the top 12 online banks is a quality choice.
Are Online Banks Safe to Use?
Yes, online banks are safe to use. Just make sure your bank is insured by the FDIC (or, if it’s an online credit union, by the NCUA). As with all websites, only input financial information if you see the HTTPS and a lock symbol. Don’t use the same password for any other accounts, and consider utilizing a password manager. Multi-factor authentication, as well as biometric screenings, are a great way to protect your account as well.
Which Is the Most Secure Online Bank?
Secure banking hinges upon strong apps, multi-factor authentication and biometric screening. Some of the top online banks that utilize such security practices include Citibank, Bank of America, Starling Bank, Barclays and HSBC. However, every bank included on our list above has been deemed to be tremendously safe and is backed by the FDIC or NCUA.
Timothy Moore is a managing editor for WDW Magazine, and a freelance writer and editor covering topics on personal finance, travel, careers, education, pet care and automotive. He has worked in the field since 2012 with publications such as The Penny Hoarder, Debt.com, Ladders, Glassdoor, Aol and The News Wheel.
Is your monthly car payment a burden to your budget? Paying off your car loan early can earn you much-needed financial freedom and save you potentially hundreds (or thousands) of dollars in would-be interest.
You can pay off your car loan early using several effective strategies, but before you do, consider any potential penalties and effects to your credit score.
The True Cost of a Car Loan
It’s no secret that cars are our worst big-ticket investment. Unlike houses, which typically increase in value over time, and education, which theoretically opens the door to higher earning potential, cars lose their value over time. In fact, a new car depreciates in value as soon as you drive it off the lot and will lose 20% to 30% of its value in the first year.
That’s a big deal, especially given the average cost Americans are spending on new cars in 2021. According to KBB, that hard-to-swallow number is over $40,000, up more than 4% over 2020.
That means Americans are shelling out $40,000 for a car that, in a year, will be worth anywhere from $28,000 to $32,000, representing an $8,000 to $12,000 loss.
But there’s more than just the sticker price to consider. In addition to sales tax (average of 10.12% in 2020, though it varies by state), be prepared to pay interest on your car loan. Right now, the average car loan interest rate (also referred to as APR, the annual percentage rate, though there’s a difference) is over 4%.
APR includes the interest rate, in addition to other fees, like loan origination fees or mortgage insurance. You should use the APR, not the flat interest rate, when calculating what you’re paying.
Your APR will depend on the current market and your credit score. The better your credit score, the lower your APR. If you have a weak credit score and can put off buying a car, it is advisable to build up your credit score before applying for a loan.
For 2021, rates are expected to hover between 4% and 5% for 48-month (four-year) and 60-month (five-year) loans.
Car Loan Calculator: An Example
Interest on a car loan adds up. Let’s take the $40,000 new car as an example, with a $995 dealer fee. Assume you put $2,000 down and have a tax rate of a clean 10% and an APR of 5%. You’ve agreed to pay off the loan over 60 months, or five years. (The typical car loan is anywhere from three to seven years; the shorter the loan period, the higher the monthly payment.)
In this scenario, the total cost of the vehicle after tax and dealer fees is $44,995, minus your $2,000 down payment. That leaves $42,995 to be financed. Given the 5% interest rate over 60 months, your monthly payment would be $811.37.
Over 60 months, you will end up having paid $50,682.20 (including down payment) for a car that, with taxes and dealer fees, cost just $44,995. That means, over five years, you’ve paid $5,687.20 in interest.
And let’s just ignore the fact that, due to depreciation, that car that you’ve just paid $50,000+ on is now worth just $18,752.41 (average value of 37% of original cost after five years).
Use The Penny Hoarder’s car loan calculator to figure out how much you’ll pay with real-life numbers that match your scenario.
How Car Loan Interest Rates Work
Paying off your car loan early, if you can afford it, seems like a no-brainer then. However, before you start strategizing about how to pay off your car loan ahead of schedule, do some digging to determine what kind of car loan you have.
In an ideal world, your loan will be a simple interest loan. If you have not yet purchased your car, only consider lenders that will offer you a simple interest loan. This means the interest is calculated entirely on the principal balance of the loan.
But if your lender charges precomputed interest, that means they will calculate how much you will pay in interest over the life of the loan and include that in your total balance. That means, even if you pay off your car early, the payoff quote will include all the interest you would have paid had you kept the loan open. In this case, there are absolutely no financial savings in paying your car loan off early.
One other element of your loan to research is payoff penalties. Payoff penalties are legal in 36 states and allow lenders to charge you a penalty (usually a fixed percentage of the remaining balance) for paying off your car loan early. In this case, it may be more expensive than what you would have paid in interest over the life of the car loan.
Will Paying Off Your Car Loan Early Hurt Your Credit Score
It is not likely that paying off a car loan early will hurt your credit score, but it could be keeping you from growing your credit score. Regular, on-time payments account for roughly 35% of your FICO credit score, making it the most important factor. Making monthly payments on a car loan is a great way to show lenders you are responsible with repaying your debts.
In addition, lenders like to see a nice mix of credit (mortgage, car loan and credit cards are the big three). Keeping your car loan open also helps extend the length of your credit history. If you have no other open credit (like a credit card), keeping your car loan open may be advantageous in building up your score if you eventually intend to buy a house.
5 Strategies for Paying Off Your Car Loan Early
If you have a simple interest car loan, your credit is in good standing and your loan doesn’t have any payoff penalties, it may be wise to pay off your car loan ahead of schedule. Not only will you avoid spending heaps of money on interest, but it will also give you the financial freedom of hundreds of dollars back in your monthly budget.
The best advice for paying off a car loan early: treat it like a mortgage. If you are a homeowner, you have likely heard that making an extra (13th) payment toward your mortgage principal every year can shave years off your loan. If you pay even more toward the principal each year, you can easily get your 30-year mortgage down to 15 years—and you’ll be able to drop PMI (private mortgage insurance) costs much earlier.
Of course, home loans tend to be much bigger than vehicle loans, so the potential to save is much larger, but the logic works the same with your car loan.
These strategies for early payoff are all effective, if done right:
1. Make One Large Extra Payment Every Year
If you can count on your grandma slipping a fat check into your Christmas card every year without fail, don’t use that money to splurge on alcoholic eggnog (OK, maybe one bottle). Instead, apply it directly to your car loan as a lump sum.
If you have autopay scheduled online, you can log into your account and simply arrange to make a one-time payment. If you’re old-fashioned and pay by phone or mail, simply call your lender and let them know you’d like to make an extra, one-time payment toward the principal.
Apply this logic to any unbudgeted (aka, not-planned-for) funds, like a bonus at work or a tax refund.
2. Make a Half Payment Every Two Weeks
Talk with your lender to see if you can switch to biweekly payments, instead of monthly. If your lender allows you to pay half of your monthly loan amount every two weeks, you will wind up making 26 half payments. Divide 26 by 2, and you get 13 full months of payments, paid over 12 months. That means, by the end of the year, you will have essentially made an extra car payment.
Just check your budget first to ensure that kind of payment plan is feasible.
3. Round Up
Rounding up to the nearest $50 or even $100, if you can swing it, is a great way to add extra money every month to the principal. For example, if your monthly payment is $337, you could round up to $350 or even $400 to essentially pay an extra $13 or $63 a month. This will wind up knocking a few months off the life of your loan.
If you have autopay scheduled, log onto your loan platform and see if you can add the additional funds toward the principal each month so you don’t even have to think about it.
4. Resist the Urge to Skip a Payment
Some lenders may let you skip one or two payments a year. So kind of them, right? Wrong. They do this knowing it will extend the life of your loan, meaning they will rake in even more of your hard-earned cash in interest fees.
Unless you fall on very hard times, fight the urge to skip a payment. You will wind up paying more in the end if you do.
5. Refinance, but Exercise Caution
If you had a poor credit score when you bought your car and opted for a seven-year loan to keep payments low, it might make sense to refinance. Perhaps you’re two years into the loan, you’ve got a higher-paying job, and your credit score is in great shape. You could potentially refinance at a lower APR and build the loan out over 36 months, saving you two years and lots of money in interest.
But borrower beware: Don’t refinance to get a lower monthly payment by extending a loan, as you will end up just paying more in interest.
When You Shouldn’t Pay Off Your Car Loan Early
As we’ve seen, it doesn’t always make sense to pay off your car loan early. But there are more reasons to hold your horses than just payoff penalties and precomputed interest.
Here are some other reasons not to pay off your car loan early:
Lack of emergency savings. Bankrate reported early in 2021 that most Americans could not afford a $1,000 emergency. Just 39% have enough to cover such an unexpected expense. If you are a part of that 61% without a well-padded emergency fund, prioritize adding funds to a high-yield savings account to protect yourself and your family should the unthinkable happen. And it’s not just your family’s medical emergencies; you may need to cover a deductible on your renter’s insurance in the case of a break-in, the cost of an unexpected car repair or even a terrifying trip to the vet when your dog eats something he shouldn’t.
Higher-interest loans. If you have a reasonable interest rate on your car loan but are drowning in credit card debt, focus on the debt that has the highest interest rate. Credit cards historically have interest rates in the high teens, so they make the most sense to pay off first. If you are free of credit card debt but have a mortgage or student loans, compare those interest rates to that of your car loan to figure out which makes the most sense to pay down with extra funds.
Lack of credit history. If you refuse to get a credit card and don’t yet have a house, a car loan is your best bet for building your credit score. Keeping your car loan open could positively affect your credit score.
Investments. For most drivers, car loan APRs are not terrible. If you have some extra funds and are thinking about paying off your low-interest car loan, consider instead investing in your retirement fund or even buying a few stocks on your own. The average stock market return is about 10%. Obviously, you could wind up losing money, but in general, if you invest and hold, over time, you should expect your money to grow.
Timothy Moore is a managing editor for WDW Magazine, and a freelance writer and editor covering topics on personal finance, travel, careers, education, pet care and automotive. He has worked in the field since 2012 with publications like The Penny Hoarder, Debt.com, Ladders, Glassdoor, Aol and The News Wheel.
I am 74 and have fallen for a 24-year-old. He says he wants to get married, but he has only the house he inherited.
I’m self-employed but have only a meager income. It makes me uneasy that I have to pay for everything. He may be able to work eventually, but for now all he finds are part-time jobs. Should I break off this relationship due to poor finances?
-Too Much in Love
Dear In Love,
I’m going to attempt the impossible, which is to put aside this glaring age difference for a minute.
Here’s what I would have told you if you hadn’t mentioned your ages: You’re pulling all the weight here, and you don’t feel good about it. Your boyfriend doesn’t sound very responsible. Nine times out of 10, when someone writes to me, a stranger, to ask whether they should end their relationship, the answer is: “Yes! End this relationship.”
Now, let’s talk about this gaping age discrepancy. There’s no way I can make myself not worry that your boyfriend is taking advantage of your generosity here. Yes, plenty of people fall in love with someone way older or younger than they’d ever imagined. So I don’t want to make any sweeping generalizations about what constitutes too young for someone of 74.
But I think an age difference becomes too much when you’re in vastly different places in life. Even if you’re both in love with perfectly pure intentions, surely this is one of those times.
Aside from the fact that he’s dating a 74-year-old, your boyfriend doesn’t sound that unusual for someone who’s only 24. Most twentysomethings haven’t acquired much in the way of assets. It’s not unusual for someone this age to have a string of part-time jobs and side hustles instead of a career.
Meanwhile, you’re 74 and don’t have much income, which certainly isn’t unusual for someone who’s retirement age. You deserve to retire at some point. I’m afraid you can’t afford to wait for your boyfriend. You say he may “eventually” be able to work. Somehow, I think “eventually” will happen a lot faster when he has no choice but to pay his own bills.
You say you’re paying for everything, so I’ll assume he’s living in your home. Since you say he inherited a house, hopefully he can move in there and you can make a clean break.
Whenever you end a relationship, you need to act quickly to unmingle your finances. That includes closing any joint bank accounts and removing your boyfriend if he’s an authorized user on any of your credit accounts. If you’ve listed him as a beneficiary on a retirement account or life insurance policy, or included him in your will, be sure to remove him as well.
And yet, untangling the heart can be even more complicated than separating your money. There’s nothing I can say to make that part easier.
Just know that it’s not too late for you to fall in love all over again. But make sure that anyone you’d consider dating in the future is at a similar place in life as you are. That doesn’t mean you need to be the same age. But that person needs to be a mature and independent adult, not someone who mooches off you. Anyone who’s not willing to be your equal partner doesn’t deserve your time.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
Money transfer apps have changed how we pay each other.
Gone are the days when we would wonder if we’d ever see the money someone promised to pay us for their share of something. Now we know they don’t need cash or a checkbook to pony up. And we also know that the best money transfer app is the one that works for you.
We pulled together this list of the best money transfer apps out there, plus some guidelines for proper payback etiquette for those of you who find yourself constantly saying, “I’ll Venmo you.”
How Money Transfer Apps Work
Money transfer apps are an easy, secure way to exchange money between friends or family. By downloading an app on your phone, or in some cases going to a web site, you can send money to people. All you need is their mobile phone number or email address.
The apps are linked to bank accounts, debit cards or credit cards, which is how they access your funds and transfer money with just a few taps. Some payments are free, but others have fees, which often depends on how you fund the transfer.
When someone sends you money through the app, you can get access to the money by initiating a transfer to your bank account. Some apps allow you to store money with their service for easy access.
These types of apps are not the same as the payment-processing apps businesses use for transactions, but some companies do offer both.
All of the apps are available wherever you usually get apps for your phone.
What to Look for With Money Transfer Apps
When looking at the different apps, here are some things to look for.
Fees: Some apps charge a fee for paying someone by credit card or sending money internationally.
Transfer time: How long does it take to get your money? Some are instant, while some take some time.
Security: Is the transaction encrypted on both ends?
Limits: Some apps limit the number of transactions you can do in a set period of time. Others limit the amount of money you can send.
Customer service: How can you contact someone if there is a mistake with a transfer or a transfer happens that you didn’t authorize?
Protection: Unlike bank accounts, many balances in money transfer apps are not insured against loss or fraud.
Correct information: Make sure you check and double check the recipient’s information before you confirm a payment. Once you send a payment, is it often impossible to get it back unless the recipient refuses it.
How the Best Money Transfer Apps Stack Up
The best app for you might not be the best for someone else. It all depends how you plan to use them. Chances are, you’ll use different ones for different purposes.
Speed of Transfer
Protection & Security
None for transfers between bank accounts; can also enroll debit cards tied to a bank account
Uses bank’s security infrastructure, so it is as secure as your bank
New as of Aug. 2, 2021: Free for linked bank account, 2.9% for credit or debit card
A few days for bank account, instant transfers cost 1.5%
Uses credit cards, debit cards, or PayPal account, does not link directly to a bank account; No fees
Up to one business day
Most socially connected
Can create a PIN or use device’s biometric security
With debit card up to 24 hours; 3 to 4 days with bank account
Multiple layers of security protection
1 to 3 days or 30 minutes with Instant Transfer linked to eligible debit card
Like Google Pay, also an adaptable app
Multiple layers of security protection
PayPal: Most Experienced Money Transfer App
PayPal is the grandparent of money transfer apps, as it’s been around the longest and is probably the most familiar to many people.
How it works: PayPal is secure and you can send money both domestically and internationally, although fees apply for international transfers. You can also use PayPal online and not just from a phone app.
To send money via PayPal, you’ll need to know the email address or mobile number of the person you’re sending money to. Both the payer and the recipient will need PayPal accounts to transfer money.
People can also request payments through PayPal.
Fees: The fee structure for PayPal can get a bit confusing. You won’t pay any fees if you’re sending money from a linked bank account or through the app. However, if you want to use a credit or debit card, you’ll have to fork over a 2.9% fee (plus a transaction fee if you’re using a currency other than the U.S. dollar). Those transaction fees vary.
Transferring the money from PayPal to a linked bank account is free, but can take a few days. Instant transfers are available for a 1% fee. That fee increases to 1.5% on Aug. 2, 2021. You can also have PayPal mail a paper check to you for $1.50.
International transfers: You can transfer money internationally, but if you’re sending money to someone outside of the United States, be aware that you’ll be subject to a different fee structure.
PayPal also offers business accounts, which can be a simple way to get paid for goods and services you provide through your job or business. Please note the fees are different for merchant accounts. Many fees for business users increase Aug. 2, 2021.
Pros and Cons: PayPal has many protections in place to keep you from losing money. If either the sender or recipient has an issue, PayPal will put a hold on the funds. There are also business accounts to pay for goods and services, but the fees are higher than for personal use.
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Venmo: Most Like Social Media Money Transfer App
Venmo serves two purposes: It’s a secure way to pay while also connecting you with the people you pay. (Venmo’s parent company is PayPal.)
Venmo has a social media feel, including a feed that allows you to share who you paid and what you paid them for. (You can even use emoji!) Venmo says the average user checks the app several times a week to see what their friends are up to. Venmo can also link up with your phone or Facebook contacts.
If you’re not interested in publicizing your financial transactions with friends and family, you can turn this option off.
How it works: You can send money to anyone, as long as they also have a Venmo account. You just need their mobile number or email address. Users can also request payments.
Fees: Venmo is secure and is free to send money using a balance within the Venmo app, linked bank account, debit card or prepaid card. You’ll pay a 3% fee when you use a credit card to send money.
Transferring money from Venmo to your linked bank account is free with a standard transfer. This could take some time, usually 1-3 business days.
If you’re short on time, you can initiate an instant transfer, which carries a 1% fee or a minimum of $.25 and a maximum of $10. These fees increase Aug. 2, 2021 to 1.5% to transfer instantly with the same minimum but an increased maximum fee of $15.
Venmo users can also buy or sell cryptocurrencies with fees attached.
International transfers: Both sender and receiver need to have U.S. bank accounts, so sending money abroad isn’t possible.
Pros and Cons: The fact Venmo feels like social media can be both good or bad, depending how you look at it. Others you are connected to will know who you’re conducting business with and when. For those of us who are bad at math, a function of the app will help you split bills. It is also easy to request money from people within the app.
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Zelle: Most Accommodating Money Transfer App
Zelle is part of most banking apps and allows you to securely send money almost instantly between bank accounts. It works with hundreds of US banks.
Each bank determines the types of accounts that are eligible to be part of Zelle. Credit cards, international debit cards or international bank accounts cannot link to Zelle.
How it works: You need an email address or a phone number to send money. The sender and recipient don’t need to be customers of the same bank; they only need to both be enrolled in Zelle.
In most cases, you’ll need your regular online banking user name and password to enroll and link accounts within Zelle. However, if you want to use the Zelle app — instead of initiating transfers using your bank’s app — you’ll need a separate login.
If you don’t have a smartphone, you can also send money using Zelle at your bank’s website.
Fees: Zelle charges no fees for sending or receiving money. However, individual banks might have a fee.
Pros and Cons: The fact you probably already have the capability of using Zelle within your online or mobile banking app or line is a definite plus. The only thing you need to do is to sign up using an email or mobile phone number and you can start sending and receiving money right away. The fact transfers are also almost immediate is a good thing because you get paid quickly, just make sure you’re sending money to the right person. Also, it is not possible to use a credit card with Zelle, just linked bank accounts. Back to top ↑
Cash App (Formerly Square Cash): Most Global-Friendly Money Transfer App
Cash App sets itself apart in a couple of ways. For one, it not only handles regular currencies; it also handles cryptocurrency.
You can also get special offers called “cash boosts,” which can include discounts like 20% off DoorDash or 15% off Chipotle. The cash boosts change regularly, which many users say makes the app worth checking out on a regular basis.
How it works: To send money, you need to know the recipient’s email address, phone number or unique ID the app calls a $cashtag.
When you sign up, you’ll need to link at least one bank account to the app. You can also store funds in the app.
Fees: There are no fees to send or receive money between friends if you have a linked bank account or debit card with accepted financial institutions. There is a 3% fee to send money using a credit card.
Like the other apps, Cash App is secure and transferring your money to your bank account is free but can take a few days. Instant cash outs will cost 1.5% with a $.25 minimum.
Cash App allows you to use your money to buy stocks or convert dollars to bitcoin, but there are fees associated with these services.
International transfers: Cash App is mostly used within the United States, but it can also be used to facilitate transfers between the U.S. and the United Kingdom.
Pros and Cons: Cash App markets itself as more than just a money transfer app. The app also has a banking-type feature that allows users to receive their paychecks and other direct deposits earlier than most banks. But be aware, the money you leave in the app isn’t insured.
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Facebook Pay: Most Socially Connected Money Transfer App
If you want to send money to people you’re already connected with on Facebook, Messenger, Instagram. Portal and WhatsApp (in limited places and eventually more), Facebook Pay might work for you.
You can also use Facebook Pay to buy many items you see in Facebook or Instagram ads or from Facebook Marketplace or Facebook Shop Through fundraisers, you can even use it to donate to a cause or make in-game purchases.
How it works: Facebook Pay isn’t a standalone app, but rather an enhancement to those primary social media apps, so you’ll need to set it up in each app.
To set up Facebook Pay:
Instagram: You can first set things up on Facebook or Messenger and then connect the payment info through the Instagram app, or you can set it up directly in the Instagram app. Messenger: You can connect your Facebook Pay information to Messenger or set it up in the Messenger app. Once everything is working, you just attach a payment like you attach a photo.
Portal: Just connect your existing Facebook Pay information to Portal or you can do it separately.
WhatsApp: Brazil was the first country where WhatsApp rolled out a way to send money and that happened in June of 2020. The feature is expected to expand to other countries in the future.
One big difference between Facebook Pay and other money transfer apps is you cannot link it directly to a bank account. Instead, you connect the service to a credit card, debit card or PayPal account.
Facebook Pay is secure, but if you want added security, you can create a PIN or use your device’s biometrics security every time you make a payment.
Fees: There is no fee to send or receive money through Facebook Pay.
International transfers: Facebook Pay is expanding to other countries outside of the United States.
Pros and Cons: It’s super-convenient to be able to send money, donate money, and buy things from whatever app you might be using and familiar with. You might want to set up extra security features just in case someone gets a hold of your accounts. Customer support is available 24/7 via chat or email. Back to top ↑
Google Pay and Apple Pay: Most Adaptable Money Transfer Apps
Apple Pay started as ways to store your personal payment information, like credit and debit card numbers, and to make contactless payments using your phone and an encrypted number instead of your actual credit card number.
How they work: Now they’re also handling peer-to-peer payments, which means you can send or receive money if you have the other person’s email address or phone number.
Google Pay makes peer-peer-payment using debit card information. The app has a rewards program where you can earn cashback rewards if you activate certain offers. Some offers might include cash back with a minimum spend at places like REI, Target, or Warby Parker.
Soon, Google Pay has plans to offer a program called Plex which is a digital bank account with a variety of banks and credit unions.
Apple Pay goes a step further and allows you to pay someone in the iMessages messaging app. Apple Pay is built into devices so there is no separate app to download. Apple says more than 85% of retailers in the United States accept it.
Both Apple Pay and Google Pay payment methods are secure.
Fees: No fees for transfer of money to family or friends, and also no payment when you use the app to pay for purchases. There are fees if you use the apps to buy on credit. Up to 4% on Google and %3 on Apple.
Pros and Cons: The apps are easy to set up and use and they keep a good record of what you’ve spent and where. Some users say the communication about platform changes along with terms and conditions could be better. Back to top ↑
Transferring Money Internationally
While some of the above money transfer apps can be used to transfer internationally, other apps and websites focus primarily on transferring large sums of money internationally. Check exchange rates in each app when you send money internationally.
From our research, you don’t need dedicated international money transfer apps. One of the apps discussed in this story will work as an international money transfer service.
However, popular apps for international money transfers are:
WorldRemit: People in more than 50 countries can send money to people in more than 130 countries using a phone or computer. Many of the transfers happen instantly. Fees vary. One recent change is WorldRemit no longer accepts Google Pay.
Western Union: Has been around for years and works in more than 200 countries and territories.
OFX: Competitive rates compared to banks and has a minimum of $1,000.
Azimo Money Transfer: The first two transfers are free. Instant or one-hour transfers are possible to many countries.
Remitly: This app adds the possibility of physically delivering the money to the recipient’s home instead of just a cash pickup or depositing it into a bank account. The rates vary by country.
Pros and Cons: Sending money internationally has never been easier, however the fees can really add up.
Money Transfer Etiquette
In today’s world of instant gratification and constant connections, what is proper money transfer etiquette?
In July 2019, Venmo surveyed 1,000 users and then partnered with an etiquette expert to help create some modern money manners.
Here are a few of the survey’s findings:
75% said it’s appropriate to wait 24 hours before issuing a request for payment.
24 hours is the longest you should wait before paying someone.
42% said the person who pays for dinner when the check comes back for the entire group should be paid immediately — before anyone leaves the table.
24% said no amount is too small to ask for, even $1 to $5.
As for advice from the etiquette expert, Venmo suggests:
Practice social awareness: When using apps that have a social component, be careful of emojis and inside jokes that could embarrass someone. You never know who might see it.
Respond quickly: If you can’t pay someone within 24 hours, send the person a text or email saying why you can’t pay them back.
Stay in contact: Don’t just ghost someone and make your friends and family track you down. It isn’t fun.
Discuss: If you’re going to split payments, discuss this plan before an event. Don’t surprise someone with a money request. Also, if you pick up the check and say something like “I got this,” don’t expect people to pay you back.
Correct mistakes: If a money request has the wrong amount, politely point out the discrepancy, and decline the transaction. Send back money if someone sends you more than you were expecting.
The survey also found 65% of people say it’s more stressful to owe someone money than to be owed money. The money transfer apps make it easy to relieve that stress — by paying up.
Frequently Asked Questions (FAQ)
What Is The Safest App to Transfer Money?
All of the apps mentioned have several security features in place to keep your account numbers and personal information private. Just make sure you send money to the right person. Once you tap send, it’s sometimes difficult to get the money back.
What App Transfers Money Instantly to a Bank Account?
Zelle provides instant transfers between bank accounts for free. Most of the other apps will do instant transfers, but there is a cost associated with them.
What Happens If I Send Money to the Wrong Person?
Sadly, that depends on the app. In some cases, you can contact customer service and they can help reverse the process. In others, you have to rely on the honesty of the wrong recipient to decline the transfer
Do I Need a Smartphone to Use Money Transfer Apps?
The answer is, it depends. If your bank or credit union uses Zelle, you can often send and receive money from the financial institution’s website. It’s similar for PayPal. Venmo has some services available online, but not all.
Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.
If you’re determined to have the lowest cost of living among every other human being in the United States, move to Mississippi.
Seriously — it has the lowest cost of living overall, taking into account grocery, housing and transportation expenses.
Dollar for dollar, your cash will probably go further in the Magnolia State than if you were to live in a major urban cluster like New York, California or Florida. And you’ll definitely get more bang for your buck than if you lived in Hawaii — the state with the highest cost of living.
But packing up everything you own and moving somewhere just because it’s cheaper doesn’t actually make sense for most people. Jobs, family, friends and just plain old loving where you live means buying a piece of property outside Jackson isn’t always a viable option.
So whether you live in Huntsville or The Hamptons, you can cut your cost of living anyway. Take these steps to slash your bills and give your budget a Mississippi makeover.
1. Knock $489/Year From Your Car Insurance in Minutes
When’s the last time you checked car insurance prices? Unless you live in Ohio, North Carolina or New Hampshire — the cheapest states to get car insurance in 2021 — you’re probably paying too much. And that can make a big dent in your lower cost of living.
But no matter where you live, you should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.
A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.
Using Insure.com, people have saved an average of $489 a year.
Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.
2. See if You’re Wasting $690/Year on Homeowners Insurance
You’re probably wasting money right now. And it’s probably on something you’d never expect — your homeowners insurance policy. But if you’re living in a place where housing is more expensive, this is the one cost you can actually control.
This isn’t something you actively think about — you just know you’re required to have it.
The problem is, you’re paying too much. Luckily, an insurance company called Policygenius makes it easy to find out how much you’re overpaying. It finds you cheaper policies and special discounts in minutes.
In fact, it saves users an average of $690 a year — or $57.50 a month. It’ll even help you break up with your old insurance company. (You’re allowed to cancel your policy at any time, and your company should issue you a refund.)
And just because you’re saving money doesn’t mean you’re skimping on coverage. Policygenius will make sure you have what you need.
Just answer a few questions about your home to see how much money you’re wasting.
3. Stop Paying Your Credit Card Company
What does your credit card have to do with your cost of living? Well, no matter where you live, credit card debt payments can be keeping you from saving more money and investing it somewhere smart.
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all. Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
It takes less than a minute and just 10 questions to see what loans you qualify for — you don’t even need to enter your Social Security number. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.
4. Find Out If You’re Overpaying
Wouldn’t it be nice if you got an alert when you’re shopping online at Target and are about to overpay?
That’s exactly what this free service does. And if you want to have a lower cost of living, you should be taking advantage of the lowest prices available on the internet.
Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.
Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.
In the last year, this has saved people $160 million.
You can get started in just a few clicks to see if you’re overpaying online.
Capital One Shopping compensates us when you get the extension using the links provided.
Kari Faber is a staff writer at The Penny Hoarder. She has only lived in the most expensive states the last 10 years and has definitely paid for it.
The 2021 wedding season is projected to be among the busiest in a decade with an estimated 2.77 million weddings, which is over half a million more than usual.
This is great news for catering companies, whose income evaporated during 2020, and it can be great news for your wallet if you explore this lucrative yet under-appreciated side hustle.
I first discovered catering in graduate school, when a friend who worked for a catering staffing company offered me a job. I had an hour-long training from the staffing company. On my first shift, a wedding at a historic estate with ocean views, I dropped a tray of champagne flutes.
Despite my non-illustrious start, I stuck with catering. The money is consistent and the perks, if you work for the right caterer, add up. As I write this, I’ve been eating catering leftovers all week.
Find out how to get started in catering, how much money you can make catering, plus what skills caterers need right now.
How to Find Local Catering Jobs
Event caterers are everywhere: big cities, college towns, and rural areas cashing in on the rustic wedding trend. Wherever you go, you’ll find a local catering company. If you find yourself in between jobs, catering income can give you a buffer until you land something else.
Plus, the jobs are often on Friday nights or weekends anytime, a bonus for a Monday-through-Friday worker looking to bring in more money.
Given the part-time, seasonal nature of the industry, workers tend to come and go. As a result, catering companies are often hiring. Many caterers love working with college students who are home for the summer or teachers looking for extra money on their summers off.
During the wedding season, the best catering companies will have two to three weddings on the same day and you’ll be able to work every weekend if you want.
In many markets, the catering season extends beyond summer weddings. University towns have receptions, graduations, and college reunions. Individuals have private parties for milestone events.
Companies host holiday parties, summer picnics, and other employee engagement events, although Jackie Spigener, who owns Silver Sycamore Events Resort, a wedding and event venue in Pasadena, Texas, says corporate events haven’t yet returned fully.
There will always be more opportunities if you live in a bigger city, simply because catering will serve multiple markets, but even in my part of upstate New York, I could get a shift every single weekend from May to October if I wanted.
Jobs in Catering
Catering jobs include bartender, server, and cook. Bartender and cook jobs tend to go to people with previous experience in that role.
A typical catering shift lasts anywhere from 7 to 10 hours and you may need to travel to the location (I’ve gone as far as two hours, but been paid for travel time). The work is physical, the hours are long, and you’ll be on your feet the entire time.
There are perks. You’ll be a fly on the wall at events held in beautiful locations. If you’re the sort who gets bored easily, you’ll appreciate having different work environments, since many caterers travel to several event venues in the region.
“Catering is an extremely fun job as every event is different, and you can see a lot of really cool venues and be a part of some amazing events,” says Daniel Wolfe, owner of Wolfe and Wine Catering in Houston.
Eating on the Job
You’ll be fed on your shift; this might be the same food guests are eating or a separate, simple meal. Food that was not served to the guests and would otherwise be wasted is typically up for grabs at the end of the night. I’ve also taken home wedding decor, bouquets, and opened bottles of wine.
While it helps if you have previous experience, this is absolutely not necessary.
“All of the catering/food serving skills can be trained if the work ethic and personality for customer/guest service is there,” says Spigener.
Catering Side Gig Jobs
Depending on how big the event is, the caterer could need dozens of people. Some will need high-level culinary skills but that’s not what you will probably be doing. Think of your as the muscle and if you’re dealing with guests, a server with a good attitude.
There are positions for people of all skill levels. For example:
Jobs for New Hires
Refill water glasses
Clean up during cocktail hour
Clean up after event
Jobs for Experienced Workers
Tend the bar
Serve people sitting at head table
While I started with a catering staffing company, I wouldn’t recommend doing this. I was basically a temp sent to bolster catering agency staff, who earned more than I did.
The agency agreement prohibited temps from being hired on by any caterer we’d temped for, which kept us corralled in lower-wage, disposable work.
Approaching companies directly is the better option. While catering companies are typically looking to hire in spring, this year’s labor shortage means that many are understaffed. You can find local caterers who are looking to hire on Craigslist or by searching for event venues and catering companies in your market and reaching out directly.
If you know someone who works for a restaurant or hotel that has a banquet facility, they may be able to refer you.
How Much Money Can You Make Catering?
Restaurant workers in most American markets receive a well-below-minimum-wage shift payment and make most of their money in tips. Catering workers tend to be paid competitive hourly wages, plus tips.
Thanks to the hospitality industry labor shortage, it’s a worker’s market. Employers all need to staff up at the same time, so companies have to compete on wages. Reach out to several companies at the same time, then take your pick of one or more that pay the most.
The Hourly Wage
Wolfe currently pays $12-$15 per hour for servers and $15 per hour for cooks. Bartenders earn $10 per hour with a tip jar visible or $25 per hour with no tip jar. Wolfe says he pays based on the cost of living and would probably pay 20 to 30 percent more if he were located in a market like California or New York.
Private party shifts tend to be shorter — a skeleton crew will be working in (or outside) someone’s home for a dinner service or cocktail party — but the odds of a direct cash tip at the end of the night increase significantly.
Spigener says she currently starts catering staff at $10 per hour.
LaSonya Holmes-Boulware, who owns My Girls Catering and Food Truck in Greensboro, North Carolina, starts catering servers at $10 per hour and cooks at $15 per hour. Experienced workers can be paid more for working elite events.
What the Bosses are looking For
When hiring, Spigener looks for personality (“courteous and mannered well”) and a willingness to pitch in. Wolfe values punctuality (because “an upset client is a lost client”) and flexibility, since it’s difficult to predict when shifts will end.
Attention to detail, a good work ethic, and a positive attitude are his top desired skills. Holmes-Boulware seeks out people who are willing to work flexible schedules, like Wolfe, and prefers those who have prior experience with events.
I’ve worked in restaurants and for caterers. Catering has always paid me more per hour, in every market I’ve worked. The seasonal nature of the job makes it an ideal side gig. If you can get in with a top-notch caterer now, when the need is high, you can secure a lucrative side hustle for as long as you need or want one.
The Penny Hoarder contributor Lindsey Danis is a Hudson Valley-based writer who specializes in food, freelancing advice, and personal finance. Her work has appeared in Business Insider, NextAdvisor, Greatist, and more.
More than a third of American households are inhabited by renters and that means the tenants who live in those housing units have landlords.
The relationship between the two can sometimes be tricky.
Renters have rights, as do the landlords who own the properties their tenants live in.
Renters rights vary by state and local jurisdiction, so this serves as a general guide to those rights and who — the tenant or the landlord— is responsible for what.
General Rights of Renters
The most basic right is to a residence that is in good enough condition to be lived in, also known as a warranty of habitability.
That often includes a space that:
Is safe to live in.
Is structurally sound.
Has working utilities.
Has working plumbing with hot and cold water.
Has usable heat or air conditioning (depending on jurisdiction)
Is equipped with doors and windows that are not broken and locked.
Is free from vermin or other pests.
Has working smoke detectors (a requirement in some jurisdictions[TS1] )
Often, there is a lease or formal agreement between the two parties outlining some of these responsibilities like the amount of money owed and when it is due, what happens if rent is late, the length of time the tenant is allowed to live in the dwelling, etc.
“That right or that warranty [of habitability] exists whether there is a lease or not,” said Marcos Segura, staff attorney for the National Housing Law Project. All states except Arkansas have recognized that warranty in residential leases.
A renter also has a right to privacy, meaning once they rent a dwelling, it is theirs to lawfully use.
The landlord can only enter the premises to inspect it or make agreed upon or necessary repairs. Entry can only happen during certain hours and with sufficient notice.
“But there are exceptions where you don’t have to give notice to a tenant and that is in situations where there is some sort of imminent emergency like a gas leak, fire, or an alarm going off,” Segura said.
Concerning rent, unless a jurisdiction allows it, a tenant’s rent cannot be raised during the terms of the lease. Some leases require notice if a tenant does not intend to stay after the lease ends.
The Accidental Landlord
According to the American Apartment Owners Association, half of all landlords are not big corporations, but rather people who own one or just a few properties.
“There are a lot of what we would call accidental landlords. They didn’t even try to be landlords,” said Alexandra Alvarado, director of marketing and education for AAOA. The membership organization represents landlords who own and rent a single house to large property management companies.
“Accidental landlords” might have inherited a home or moved to another home and chose to rent out a property. Alvarado said they call organizations like the AAOA for help because they are often new to renting properties.
“It’s in the interest of the landlord ultimately to make their tenants happy. In the long run, it’s way harder to find a good tenant to replace another than it is to just keep a good tenant happy and keep them in the unit.”
General Obligations of Renters Beyond Pay Rent
Landlords must provide a habitable space for renters, but renters have some responsibility for maintaining the quality of the property.
A renter must:
Pay the rent according to the rental agreement or lease.
Comply with building or local housing and health codes.
Maintain the unit and keep it clean.
Not cause any damage.
Not violate any laws or allow guests to do so.
Not allow anyone to use the rental unit for illegal purposes.
“Wear and tear is okay, there is no way to prevent that and it is not something that a tenant is responsible for, but [a tenant must] take care of the property and not do anything to destroy or damage it,” Segura explained.
Renters are responsible for keeping the peace by not disrupting neighbors with noisy equipment cranked up late at night or early in the morning, or by playing loud music when most folks are sleeping.
So, what happens if a tenant keeps the place generally clean, but mice find their way in? Or if a faucet starts to leak and damages the cabinet below? Or an appliance breaks?
“That’s the advantage of being a renter versus a homeowner is the landlord is the one that takes care of all the maintenance, unless it’s the tenant’s fault,” Alvarado said, adding sometimes it is difficult to tell the difference between normal wear and actual damage.
A tenant needs to report any problems with their rental unit to the landlord. Knowing how to contact that landlord should be clear from the beginning of the rental term.
“Typically, every lease will have some stipulation in there that you have an obligation to report issues as soon as you notice them,” Segura said. “If you don’t, and it becomes a bigger issue, then the tenant might be liable for that.”
In some rental situations, especially with single-family homes, some maintenance is the tenant’s responsibility, like lawn care.
Alvarado said larger property management companies often have an online system to report maintenance requests or problems and landlords with fewer properties often give tenants their cell phone numbers or email addresses.
Giving a landlord 24 to 48 hours to respond to a problem or request and about a week to fix it is the norm. If it’s a habitability issue, tenants should expect a quicker response. Landlords should keep their tenants informed about the progress they are making to address the concerns.
Usually, renters pay a security deposit to the landlord to protect against damage that could happen to the property.
The landlord holds this deposit while the tenant is living in the property and returns it to the tenant within a set amount of time after they vacate the unit.
As a tenant, don’t forget to tell your landlord where to send your security deposit.
If the landlord does not plan to give back the deposit or just part of it, the landlord should present the tenant with an itemized list of problems.
If a rental allows pets, often landlords collect a pet deposit and may have restrictions such as the weight of the pet or the number and type of animals. Some landlords might allow cats and not dogs.
Segura said a violation of pet rules can be grounds for eviction and landlords have a right to prohibit or restrict pets in most circumstances. An exception is a trained service dog.
“The biggest issue with pets is that people either don’t notice that there’s a prohibition on pets or they do and don’t care and they try to get away with it. Then the landlord finds out about it six months later, and now you either have to get rid of your pet or you have to move. So, the first thing is you want to be upfront with the landlord.”
How and When to Complain or Seek Legal Help
Disputes between tenants and landlords often involve four things; unpaid or late rent, security deposits, damage, or needed repairs.
It might be time to get help if you have notified your landlord in writing about a problem and nothing has been done in a reasonable amount of time.
But don’t just stop paying rent. Segura said there are few circumstances where it is okay to withhold payment. Legally, landlords cannot charge rent if the dwelling is not habitable, but there are very specific definitions of that condition.
“It should be the very last resort because inevitably what will happen is the landlord is going to hit you with an eviction for non-payment of rent,” he said.
To Pay Rent or Not
If you reach the point of thinking about withholding rent or you’re at a stalemate with your landlord, Segura advised seeking legal representation either with a private attorney or legal aid office.
“At some point, you’re going to get some notice saying either pay rent, fix this, or remove this pet, whatever the case might be. Without question, at that point, you want to seek legal help.”
The required notice is the first step in the legal process.
“Once that notice has been served, the landlord is going to move to evict and it’s really difficult to get a landlord to back off from that,” he said.
In almost all cases, a landlord cannot evict a tenant immediately. There is an eviction process. Also, a landlord cannot lock a tenant out, cut off utilities, or forcibly remove a tenant or a tenant’s belongings.
Ways to Protect Your Renter’s Rights
Read the entire lease and make sure you understand everything in it, including your responsibilities, before you sign it. If you don’t understand something, ask.
Other ways to protect yourself:
Take photos: When you move in, take photos of the condition of everything. Send that document to your landlord and ask for a signature. Repeat the process when you move out.
Receipts: Get and keep receipts for all rent payments. Take photos of checks or account transfer confirmations. This is especially important if you pay rent in cash.
Insurance: Get renters insurance to protect your personal belongings from theft or damage.
Requests: When there are problems or you need something, report the issue to your landlord as quickly as possible. Put all requests in writing. Certified return receipt mail is one option for correspondence done by snail mail. Return receipts are an option for email.
One of the best ways to protect yourself is to try to have open communication with your landlord from the beginning.
“Once an issue arises, your relationship with your landlord makes a huge difference as to whether it gets taken care of the way it’s supposed to be, or whether it’s going to result in some bigger issue, which ultimately could be like an eviction,” Segura warned.
Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.