One of the things I like doing is figuring out ways to get the maximum yield on my cash. Most people just accept whatever their bank offers them. The problem is that even your highest yielding savings account pays you just 1% interest these days.
What a lot of people don’t know is that there’s an entire world of super high yield savings accounts out there. These are savings accounts that pay way more than even your highest paying online savings accounts. The thing about these accounts is that you won’t find them at any normal bank. They’re sort of secret, and you can only find them “hidden” in prepaid debit card products.
I previously thought that it was only possible to get 5% interest on up to $10,000 by using the cards available from Netspend. However, a reader of this blog – Mr. PTM – reminded me that there are a few more options out there that allow you to put even more money away earning 5% guaranteed interest.
As a result, I finally pulled the trigger and snagged myself a couple of Insight Cards.
If you sign up for these in combination with the Netspend cards that I’ve talked about in a previous post, then you could put away up to $50,000 earning 5% guaranteed interest per year. For the vast majority of households, $50,000 is more than enough to serve as a massive emergency fund. And since you’re getting 5% interest each year, you won’t have to worry about the low returns that normally come with keeping a big pile of cash. As a point of comparison, you would need to save $250,000 in your standard online bank account in order to get the same returns as you would get on this $50,000. That’s a huge difference!
The thing that turns most people away from these accounts is that they take a little bit of upfront work to set up. In reality, it’s not really as much work as you’d think. A lot of people spend way more time figuring out how to travel hack or clip coupons. This is just another way to optimize your finances. Plus, once you understand how these savings accounts work, it’s possible to set them up and have everything fully automated in just a few minutes.
*This post is the second part of a two part series. Be sure to also read part one, Netspend Account: 5% Interest Savings and $20 Signup Bonus, if you want to learn how to fully maximize your 5% interest savings and snag a $20 signup bonus in the process.
What Is An Insight Card?
Briefly, an Insight Card is a prepaid debit card. These products generally come riddled with high fees and are designed primarily to prey on the poor and unbanked.
We’re not interested in the prepaid debit card. What we want is to gain access to the 5% interest FDIC-insured savings account that comes with each Insight Card. The good thing is that if you follow the steps in this post, you’ll earn 5% guaranteed interest and never pay any fees. I like to think that we’re fighting back in a way.
So how the heck does an Insight Card work? It’s easiest to think of it in two parts. The first part is a prepaid debit card. The second part is the 5% interest savings account which allows you to earn 5% interest on up to $5,000 per card (you can generally get a total of four Insight cards per person). The important thing to know is that you can’t get access to the savings account without first getting the prepaid debit card. Think of it as looking a bit like the below diagram:
In order to get money into your 5% interest savings account, you need to first send it over to the prepaid debit card. From there, the money then goes into the 5% interest account. The prepaid debit card acts sort of like a funnel, getting the money from your bank into the 5% interest savings account.
How To Set Up Your Insight Card
First, if you haven’t already, you should start here. In that post, I explain exactly how I’m able to use my Netspend accounts in order to put away $5,000 earning a guaranteed 5% interest per year ($10,000 if you’re a two-person household). If you want to maximize your 5% interest savings, you’re going to want to read both of these posts. You’ll especially want to read the previous post in order to understand how to withdraw money from your prepaid debit card accounts (although I’ll touch upon it below as well).
The process for setting up an Insight Card is largely the same as with Netspend.
1. Set Up A Bank Account With A Normal, Online Bank.
First, you need to have a bank account with a normal, online bank. I highly recommend using Ally Bank. It’s the only bank I’ve used with these accounts and the only one that I know will work perfectly with your Insight Cards. The good thing is that Ally allows you to connect up to 20 external bank accounts. We’ll need to potentially link as many as nine external accounts if we want to max out our 5% savings. If you don’t have an Ally account, I recommend getting one. It only takes a few minutes and you can do it all online.
2. Sign Up For Your Insight Card.
Next, sign up for your Insight Card. On the main page, click the “Get A Card” button. It should then bring you to a page that looks like this:
Click the button that says “Click Here To Get Started” and then enter in all of the information requested. You’ll notice a section in the sign-up process that asks you what type of plan you want to sign up for. Make sure you select the “Pay As You Go” Plan. That way, you won’t pay any monthly fees.
3. Wait For Your Insight Card To Arrive, Then Activate It.
Once you sign up for your Insight Card, you’ll get a confirmation telling you to wait 7-10 days for your card. All of my cards have typically arrived within a week. When the card arrives, call the number on the front of the card and follow the directions to activate your account. It shouldn’t take more than a few minutes.
Remember to also set up your online account with Insight. Just go to the Insight Card login screen and register as a first time user in order to set up your online account.
4. Link Your Insight Card With Your Normal Bank Account.
In the packet of stuff you received, there should be a voided check. This has your routing number and account number. Make sure to keep that information in a safe place. Use that information to link your Insight Card as an external account with your normal bank.
For me, I logged into my Ally account and entered in the routing and account number for my Insight Card. Ally then sent two test deposits that I needed to confirm in order to complete the link with my bank.
Once you’ve linked all of your 5% interest accounts, your external bank account screen should look something like this:
5. Move Money From Your Bank Account Onto Your Insight Card.
From your normal bank account, set up a transfer to your Insight Card. Since Insight allows us to have $5,000 earning 5% interest, I’d recommend transferring the full $5,000 onto your Insight Card.
6. Activate Your 5% Interest Savings Account and Transfer Money Into It From Your Prepaid Debit Card.
Once you’ve transferred at least $10 onto your Insight Card, you’ll get the option of activating your 5% interest savings account. The screen to do that should be in the savings tab and should look like this:
Once activated, transfer your money from your Insight Card into your % interest savings account. That screen should look like this:
7. Set Up An Automatic Transfer of $1 Every 2 Months Onto Your Insight Card In Order To Avoid Any Inactivity Fees.
The last step is to automate a $1 transfer onto your Insight Card every two months. This is very easy to do in Ally. It should look like this:
Once you’ve done this, you’ll avoid any inactivity fees and you’ll never even have to think about the account other than if you want to pull out any interest you’ve accumulated.
One thing to note is that, if you’re automating transfers from your savings account, you’ll have to deal with the six transactions per statement limit that applies to savings accounts. Your choices are to either stagger your $1 transfers (i.e. do 5 transfers 1 month and 4 transfers in the next month), or a simpler solution is to create a checking account and automate all of your $1 transfers from that account.
I used to stagger my transfers but recently decided to just open up an Ally checking account and do all of my $1 transfers at once from that account. I think it’s easier that way.
8. Open Up A Second, Third, and Fourth Insight Card For Yourself And Repeat The Same Steps With Your Spouse.
A little-known fact is that Insight allows you to open up four accounts per person (it used to be two accounts per person, but I’ve since discovered that it’s possible to open up four total cards per person – I currently have four cards myself). If you open up four Insight cards per person, that’s $20,000 you can put away for yourself and $40,000 your household can put away into just these accounts. Combine that with the 5 accounts that you can open with Netspend and you’re looking at putting away a total of $25,000 per person or $50,000 per household.
In terms of how we did it, I first signed up for my Insight Card, funded it, and activated the savings account. I then signed up my wife, funded her card and activated her savings account. I then repeated the sign-up process for myself.
Oddly, however, when I tried to repeat the process for Mrs. FP, we received an error message saying that she couldn’t sign up for another Insight Card online and that it had to be done at a store. About a week later, the card randomly arrived. We’re not sure why that happened, but if you’re having issues, you could consider waiting a week or two just to see if your second card arrives.
I had no issues ordering my third or fourth card and neither did Mrs. FP.
Any Potential Cons With The Insight Card?
The only potential con are reports that Insight might limit the amount that you can withdraw to your bank account to $1,500 per 24-hour period. I don’t think this limit is enforced anymore, but it is something to consider if you’re worried about liquidity. If this restriction does exist, you’d need a few days to liquidate the entire account.
I personally don’t think this is too bad of a limitation. There are very few emergencies where you’ll need a huge sum of money immediately (I literally can’t think of any situation in which I’d need cash in my hand right away – maybe if I had a family member being held for ransom?). Most people can probably wait a week to get all their money out.
And, if worst case scenario really did come up, you could just use the prepaid debit card to liquidate the account all at once and pay the small fees that come with using the debit card. Even with the fees, you’d still come out ahead on the interest front.
In What Order Should You Open These Accounts?
There are two ways you can go about opening up these accounts.
The first way is to start with one of the Netspend cards in order to snag yourself a $20 bonus. Insight, unfortunately, doesn’t offer any signup bonus, so in my opinion, I think it’s better to get the free $20 signup bonus from Netspend first before going for the Insight Cards.
If you want to start off with a $20 signup bonus , you’ll want to follow this order:
- First, sign up for a regular Netspend card, fund it, and snag a $20 bonus. If you use my sign up link here, you’ll get a $20 bonus once you deposit $40 or more (note, I’ll also receive $20 as a referral bonus). Make sure that the code 1450481187 is in the Referral Code section of the sign-up form in order to qualify for the $20 bonus. At this point, you can put away $1,000 earning 5% interest.
- Second, use your Netspend referral code and refer your spouse or partner to Netspend. If you do that, you’ll get another $20 referral bonus and your spouse will get a $20 signup bonus. Altogether, that’s a cool $60 for opening up two Netspend accounts ($40 for you and $20 for your spouse). You’ll now have a total of $2,000 earning 5% interest.
- Third, open up all of the Insight Cards you can. You should be able to open up four Insight cards per person. If you’ve managed to open up all of them, you should now be able to save a total of $42,000 earning 5% interest.
- Fourth, open up an Ace Elite prepaid debit card. You should now have $43,000 earning 5% interest.
- Fifth, open up the Western Union prepaid debit card. You now have $44,000 earning 5% interest.
- Sixth, open up the H-E-B prepaid debit card. The one thing to note about the H-E-B card is that it comes with a $2.95 activation fee. They deduct this right out of your account, so the account starts off in the negative once you sign up. The $2.95 activation fee is worth it, though, because we’re going to get much more back in interest. You should now have $45,000 earning 5% interest.
- Seventh, open up the Brinks prepaid Mastercard. There are reports that this card requires a real direct deposit to set up the savings account, but I found that when I transferred money from Ally, it activated the savings account with no problems. You’ll now have $46,000 earning 5% interest.
- Finally, repeat the Ace Elite, Western Union, H-E-B, and Brinks cards with your spouse. You now have $50,000 earning 5% interest.
If you don’t have a spouse, then just ignore the steps involving a spouse and do the steps that apply only to you.
If the $20-$60 signup bonus doesn’t matter to you, then you should start by opening up all of the Insight Cards first, then moving on to the Netspend cards in the order I’ve outlined above.
Remember, take it slowly. Don’t open up the next card until you have the previous card fully set up. If you have every account set up and maxed out, it should look like this:
Important Things To Remember About Your Insight Card
- Interest Is Paid Quarterly. Expect to see interest posted on January 1st, April 1st, July 1st, and October 1st of each year. If you ever plan to close these accounts, make sure that the interest posts first. Otherwise, you lose the interest.
- Each Insight Savings Account Is Limited to $5,000. You can’t put more than $5,000 into each savings account. Notably, however, it appears that any interest you accumulate above $5,000 in each account still earns 5% interest. In other words, you can just leave the accumulated interest in each savings account if you want, even if it takes the savings accounts above $5,000.
- You Can Open Up Four (4) Insight Cards Per Person. It isn’t advertised, but every person in your household can have four different Insight cards, effectively allowing each person to save $20,000 total by saving $5,000 into each account. A household looking to maximize their savings using Insight Cards should have a total of eight cards, with $5,000 put into each savings account. If you max out all eight Insight accounts, you should be able to have a total of $40,000 earning 5% interest.
- There’s No Hard Credit Check. Opening an Insight Card does not result in a hard credit pull. As far as I know, there isn’t even a soft credit pull. There’s also no Chex Report inquiry.
- No Minimum Balance Requirement. You don’t need to keep any minimum balance in the savings account. The only fee you’d ever need to worry about is the inactivity fee. However, if you’ve automated the periodic $1 transfer onto the Insight Card (as described above), then you shouldn’t have to worry about the inactivity fee either. Any usage fees don’t matter because we’ll never use the card for anything.
- Make Sure You Understand How To Withdraw Money From Your Insight Card. Just remember that if you’re withdrawing money, you need to have the money on the Insight Card first. Then, when you want to withdraw the money, you initiate the ACH pull from your normal bank account. Make sure to check out Part 1 of this series if you’re not quite sure how to withdraw your money.
To quickly recap the process of setting up your Insight 5% interest savings accounts:
- Set up an online bank account with a bank like Ally.
- Sign up for your first Insight Card.
- Get your Insight Card in the mail and activate your account.
- Link your bank account with your Insight Card.
- Transfer money from your bank account onto your Insight Card.
- Activate the 5% interest savings account.
- Transfer money from your Insight Card to your 5% interest savings account.
- Automate a $1 transfer to the Insight Card for every 2 months.
- Sign up for a second, third, and fourth Insight Card and repeat the same steps.
- If you have a spouse, follow the same steps with your spouse.
I didn’t have any issues when I signed up for my Insight Cards, but we did have some issues with setting up the second card for my spouse. Here are the most common issues that you might encounter when setting up your Insight Card and how to resolve them.
1. Issues Linking Your Insight Card With Your Ally Bank Account.
Some people have reported issues with linking their bank account with Insight. We actually had this same issue when we attempted to set up my spouse’s second Insight Card.
The reason for this has to do with Ally sometimes being unable to pull back test deposits from Insight. For some reason, Insight sometimes blocks those test deposits from getting pulled back, which results in an error on Ally’s end. I found that the solution to this was to wait a week, unlink your Ally account from Insight, and then relink your Ally account again. You should be able to confirm your account the second time around.
If you’re wondering why you need to wait a week, it’s because the Ally system needs a little bit of time to cancel the transfer that it’s unable to pull back. If you try to unlink it right away, you’ll receive an error message from Ally saying it can’t be unlinked. Just wait a week and you should be able to unlink it and relink it up again.
2. Getting An Error Message When Attempting To Order The Second Card
This probably won’t happen when you’re ordering your first Insight card, but it can happen with your second card. When you attempt to order the second Insight Card, you might receive the following error message:
I didn’t get this error myself when I ordered my second Insight Card, but my wife did. There are two solutions here.
The first is to just wait and see if the card comes anyway. When we got this message for my wife’s second card, I went ahead and kept trying to resubmit the information each day. Every day, I received the same error message. For some reason, however, the card randomly came about a week later. I’m not sure why it arrived since I kept getting the same error message, but it seems possible that, even with the error message, your second Insight Card will eventually arrive in a week or two.
The other solution is to go to a store that carries the Insight Card and get it in person. Insight lists the below retailers as Insight partners, so I’d think you could get the second card at one of those places. I haven’t tried to get the card in person, so if anyone is ever successful in doing that, let me know.
Maximize The Yield On Your Cash
If you follow my steps, a single person can get themselves $5,000 earning 5% interest in a FDIC insured savings account using an Insight Card. If there are two people in your household, you can put away $5,000 more, for a total of $10,000 earning 5% guaranteed interest. Open up three more Insight Cards for each person, plus open up every Netspend card you can, and a household could put away up to $50,000 earning 5% guaranteed interest.
That’s good for $2,500 of interest per year. You’d have to save $250,000 if you wanted to get that much interest from a normal high-yield savings account. That’s a significant difference that makes doing this all worth it.
And the good thing is that once these accounts are set up, they require no time on your end. Everything is fully automated. You won’t even have to think about these accounts.
Your cash doesn’t have to earn just 1% interest. Follow these steps and you can increase the yield on your cash savings to a point where you won’t be worried about holding your money in cash. So many people spend time travel hacking and figuring out how to save money in other areas. Why not spend a little bit of time figuring out how to maximize the interest on your cash too? 5% interest in an FDIC-insured savings account is nothing to sneeze at.
***Make sure that you don’t read this post just by itself. Go back to Part 1 of this series – Netspend Account: 5% Interest Savings and $20 Signup Bonus, in order to maximize your 5% interest savings and snag a $20 signup bonus in the process.
*UPDATE: It looks like Axiom Bank is closing the accounts it has with Insight. No need to worry though! You’ll still get your 5% interest. If your Insight Card is provided through Republic Bank of Chicago, you don’t need to do anything. If you have a card provided by Axiom Bank, all you have to do is order another Insight Card through this link. Once July 1st comes around, I’ll move all of my funds from my first Insight Card to my replacement card. The reason for this is so that you still get your interest for the quarter.
**ADDITIONAL UPDATE: I personally ordered another Insight card to replace the Insight card that I had through Axiom Bank. My card arrived right away and it also comes with the 5% interest savings account. In other words, every person should still be able to get 2 Insight cards and put away $5,000 in each one.
**ANOTHER UPDATE (5/27/17): I just ordered a THIRD Insight Card and it went through. There are reports that it’s possible to get up to four Insight Cards per person. If this is true, that’s huge. It means a household could potentially put away $50,000 earning a guaranteed 5% every single year if they combine all of the available Insight Cards and Netspend Cards. I’ll report back with more information once I’m able to successfully fund another Insight savings account.
**UPDATE: (6/22/17): I currently have a total of four Insight cards. My wife has four Insight cards as well. Barring any issues, most people should be able to get 4 Insight cards per person.