FREE MONEY GIVEAWAY!

By Deacon Jason Goods

Fans of Comedy Central’s Chappelle’s Show will recall a sketch where Tyrone Biggums, a popular show staple, was lured into an intervention under the auspice of a “FREE GIVEWAY." Unlike the episode, there will be no such intervention today, however the claims of “FREE MONEY” are 105% real. I am hopeful the catchy title and Chappelle’s Show reference will pique your interest in reading further.

From the cost of a dozen eggs skyrocketing to upwards of $5 per dozen earlier this year, to the rising costs to fill up your gas tank, few have been immune to the effects of the post-pandemic higher inflation. The Federal Reserve has raised interest rates a staggering eleven times since March 2022 from the pandemic lows of 0.25% to 5.5% as of September 2023 in attempts to tame the out-of-control inflation. The expectation is that there will be at least one more rate hike before the end of 2023.

If you’re still reading, here is where the “ FREE MONEY” details begin! The “Higher for Longer” gloom. After decades of earning next to nothing (0.10%) on savings account balances, savers are now able to reap the benefits of these higher interest rates.

Some financial institutions are enticing customers with 5% or more interest income on their savings, money market and certificate of deposits (CD) balances. Assuming a 5% annual interest rate, your $5,000 balance (without any additional contributions or effort) would grow to approximately $5,256 with the interest earned over 12 months. Even if you don’t have $5,000 in your savings account, a $1,000 balance would still grow to approximately $1,051 over the same 12-month period. Still “Free Money!"

The financial term for this “FREE MONEY” is referred to as passive income. Passive income includes income from interest and dividends, typically requires minimal effort to obtain, and has been one of the secrets to generational wealth building for many of the world’s most affluent individuals. Basically, it’s getting paid while you sleep!

As always, there are some strings attached to obtaining these higher yields. Unless you are sitting on stacks and racks of cash, most brick-and-mortar financial institutions like M&T and your local credit union are not going to offer yields anywhere close to 5%. You will likely have to open an account with a reliable internet-based financial institution. If you choose an FDIC insured bank, your balances up to $250,000 are guaranteed, so there is absolutely no risk in transitioning to an online bank!

Source: Forbes.com

These higher interest rates impact credit cards, auto loans and mortgages. While the higher interest rates have successfully tamed inflation, it has inherently made all major purchases more expensive!

While you should always perform your own due diligence, here is a link I used to evaluate my options: 2023 Best Savings Accounts - Compare rates at Bankrate.com

CIT Bank – (NOTE: Requires Minimum Balance of $5,000 for 5.05% rate) https://www.cit.com/cit-bank/bank/savings/platinum-savings-account

CFG Bank – ADDED

Benefits

Fells Point and Lutherville Local Branches and Only Requires Minimum Balance of $1,000 for 5.25% rate https://www.cfg.bank/personal-banking/personal-deposit-rates/

Earlier this year, I moved our savings from a credit union to an internet bank and online brokerage and have been extremely pleased with the smoother than expected transition. The first month’s interest income amount was more than we received over the past three years combined from the credit union!