Radius Bank review: Strong cash-back checking account, and no monthly fees on checking or savings - Business Insider

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Radius Bank review: Strong cash-back checking account, and no monthly fees on checking or savings - Business Insider Posted: 04 Sep 2020 01:39 PM PDT Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective. Radius Bank (Member FDIC) is an online bank with one branch in Boston, Massachusetts. The bank's best product is its rewards checking account, which pays interest and lets you earn unlimited cash back, as long as you maintain a $2,500 balance. Radius' savings account and CDs are decent, but you'll find higher rates at other online banks. Radius only compounds interest monthly for most accounts, and quarterly for 5-year CDs; many online banks compound interest daily so you can earn more. See Business Insider's picks for the best online banks » You might like Radius if you: Are comfortable banking digitally Want a cash-back checking account Want a checking account that lets you contribute money to a charity Would like to receive your paycheck up to two days early Can maintain a $2,500 balance in your savings and checking accounts You might not like Radius if you: Aren't comfortable banking digitally Can't maintain a $2,500 balance in your savings or checking account Are searching for the highest APY on savings or CDs Want to open a CD that requires in-person application, but don't live near the Boston branch The bottom line: The Radius Rewards Checking Account is its strongest product, and you can earn good perks if you have at least $2,500. APY 0% to 0.25% APY Min Deposit $100 Featured Reward None Editor's Rating Details Pros & Cons Earn 0.15% APY on balances of $2,500 to $24,999; earn 0.25% APY on balances of $25,000 or more Interest compounded and paid monthly FDIC insured Pros No monthly service fee Link to your checking account for overdraft protection Cons $100 minimum opening deposit Only earn interest on balances of $2,500 and up Interest compounds monthly, not daily Find higher APY elsewhere Radius could be a good option if you're looking for a savings account with no monthly fees. Related The best online high-yield savings accounts of September 2020 Radius pays higher rates than brick-and-mortar banks do, but you can find better deals at other online banks. With Radius, you'll only earn interest on balances of at least $2,500. Radius also only compounds interest monthly. Many banks compound daily, which helps you earn more money over time. APY 0.10% - 0.15% APY Min Deposit $100 Featured Reward None Editor's Rating Details Pros & Cons Earn 1% cash back on all purchases, and 1.5% cash back on certain purchases in the health, food, entertainment, and social good categories Select "credit" when you swipe your debit card to earn cash back Earn 0.10% APY on balances of $2,500 to $99,999, and 0.15% APY on balances of $100,000 and up Interest compounded monthly, paid monthly Pros Earn 1% - 1.5% cash back Earn cash back on an unlimited amount of purchases Earn interest on your checking balance No monthly service fee Receive your paycheck 2 days early Reimburses out-of-network ATM fees Overdraft protection available if you have another Radius account Cons $100 opening deposit Minimum balance of $2,500 to earn APY $25 overdraft fee $5 daily overdraft fee after the 5th consecutive day of a negative balance Interest compounds monthly, not daily The Radius Rewards Checking Account is a strong option if you can maintain a $2,500 balance. With this minimum balance, you qualify to earn interest and receive cash back. Related The best rewards checking accounts right now Many cash-back checking accounts limit how much cash back you can earn in a month. But as long as you have a $2,500 balance, Radius lets you earn cash back on an unlimited amount. You can also receive your paycheck up to two days early with the Radius Rewards Checking Account, so you can access your cash faster and start earning interest sooner. Radius also has a Superhero Checking Account. This account gives you the opportunity to contribute to March of Dimes, a nonprofit that supports the health of mothers and babies. APY 0.25% to 0.50% APY Min Deposit $500 or $1,000 Featured Reward None Editor's Rating Details Pros & Cons Terms ranging from 3 months to 5 years $1,000 minimum deposit for terms under 1 year, $500 minimum deposit for terms of 1 year or more Earn higher APY with terms of 1 year or more Only open 1-year, 18-month, and 3-year CDs online; others must be in person Early withdrawal penalties are as follows: 3 months simple interest for 3-month and 6-month terms, 180 days interest for 9 month terms, 365 days interest for terms of 1 year or more Interest compounded monthly, except 5-year CDs, which compound quarterly FDIC insured Pros $500 minimum deposit for longer terms Higher APY than at brick-and-mortar banks Cons Only able to open certain CDs online $1,000 minimum deposit for shorter terms Find higher APY elsewhere Interest compounds monthly or quarterly, not daily Standard-to-high early withdrawal penalties You can open 1-year, 18-month, and 3-year CDs online, but you must open CDs with other term lengths at Radius' one branch in Boston, Massachussetts. Related The best CD rates of September 2020 Radius pays higher rates on CDs than many brick-and-mortar banks, but you can still find higher rates at other online banks. Radius also compounds interest monthly for most CDs, and only quarterly for 5-year terms. Most online banks will compound your interest daily. Radius is an online bank that offers savings accounts, checking accounts, and CDs. It compounds interest monthly, except for its 5-year CD, which compounds interest quarterly. The bank's mobile app has received mostly positive reviews. It has 4.5 out of 5 stars in the Apple store, and 4.3 out of 5 stars in the Google Play store. You can speak with a live representative either on the phone or via online chat. Both options are available Monday through Friday, 8:30 a.m. to 12:00 a.m. ET, or weekends from 8:00 a.m. to 8:00 p.m. ET. Your deposits are FDIC insured for $250,000, or $500,000 for joint accounts. Because its cash-back checking account is Radius' best product, we've compared the bank to two other banks with cash-back debit accounts: Discover and Axos. Radius Bank Rewards Checking Discover Bank Axos Rewards Checking Cash back 1% - 1.5% on an unlimited amount Cash back 1% on up to $3,000/month Cash back Up to 1%, up to $2,000 in cash back/month Minimum balance to earn cash back $2,500 Minimum balance to earn cash back None Minimum balance to earn cash back $1,500 Checking APY 0.10% - 0.15% APY Checking APY None Checking APY 0% - 1.25% Savings APY 0% to 0.25% APY Savings APY 0.70% APY Savings APY 0.90% APY Open an Account Open an Account Open an Account Radius Bank review vs. Discover Bank review If you don't feel confident you can maintain a $2,500 balance in your checking account, then Discover could be a better fit than Radius. You don't need a minimum balance to qualify to earn cash back with Discover. Related Discover is an online bank that offers competitive interest rates and 24/7 customer service But if you know you'll keep $2,500 in your account, then you might prefer Radius. You'll earn a higher cash-back reward for certain purchases, such as entertainment or food. You can also earn cash back on an unlimited amount in purchases and earn interest on your balance. Discover pays a significantly higher rate on its savings account than Radius, so if earning a high APY is important to you, then you might like Discover. Radius Bank review vs. Axos Bank review When it comes to cash back, Axos' main advantage over Radius is its lower minimum balance requirement. You must maintain $2,500 to earn rewards with Radius, but $1,500 to earn cash back with Axos. If your balance falls under $1,500, you can still earn some cash back — 0.50% instead of 1.00%. Axos lets you earn up to $2,000 per month in cash back. If you think you could earn more than $2,000 in a month, then you may prefer Radius. Axos also doesn't pay interest on your checking balance, while Radius does. But if earning interest on your checking balance is important to you, then the Axos Bank Rewards Checking account is a good option. You might like Axos if a high savings APY is important to you. Its rate is much higher than what Radius pays. More Savings Coverage Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Even if the interest rate on your high-yield savings account has dropped, you should still leave your money alone - Business Insider Posted: 04 Sep 2020 02:54 PM PDT Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective. The interest rate on my high-yield savings account has been dropping for months, but I know it's because of the pandemic and the Fed's interest rate cut. That's why I've decided to leave my savings alone and not chase a higher rate — it's not worth the hassle of opening a new bank account, changing my transfers, etc. A high-yield savings account is the best place for your savings even though rates are low — they're still substantially higher than typical bank savings accounts. See Business Insider's picks for the best high-yield savings accounts » A few weeks ago, I got a notice from my bank that the interest rate on my savings account was going down. It was being decreased from 1% to .80%.  That's not the first time my bank has decreased its rate this year. Back in May, the rate changed from 1.5% to 1.25%. Somewhere in between May and August, it changed again to 1%. At first, I was upset, but after some quick Googling, I noticed that this was happening at banks across the board. Instead of getting mad and switching banks, I took a deep breath and realized that these fluctuations are a symptom of the COVID-19 pandemic and global recession. But soon I saw that all my friends were complaining about this, too. So here's what's going on — and why this doesn't mean you should close your account and go to a different bank. Why interest rates on high-yield savings accounts are going down The Federal Reserve is in charge of setting interest rates, and banks and lenders adjust their rates to match these changes. When the Fed increases rates, banks and lenders will increase rates on loans and savings accounts accordingly. Because the Fed has cut rates this year, many high-yield savings account rates have also dropped. But rates on savings accounts can change at any time, sometimes with little warning. In fact, some banks may not even notify customers directly before changing their rates. Why a high-yield savings account is still worth it Even though rates on high-yield accounts are decreasing, they're still better than traditional savings accounts. According to the FDIC, the average interest rate on a typical savings account is around .06% APY. Rates for high-yield accounts at various national online banks are still much higher, between .75% and .8%. If you have $5,000 in a high-yield savings account with .8 % APY, you'll earn $40.16  in interest in one year. If you keep it in a savings account with .06% APY, you'll only earn $3 in interest. After five years, the difference between the two savings accounts will be $189.03. That's a huge chunk of change considering it doesn't cost anything extra to open a high-yield savings account. Should you switch savings accounts? If you were notified that your savings account rate has decreased, you may be tempted to switch to a different bank. But don't rush to close your account. The difference between an account that pays .8% APY and one that pays .75% is $2.52 a year if you have $5,000 in the account. Is it worth taking the time to switch your accounts, move the money, change your direct deposit information, make sure your transfers are canceled — all to earn a few bucks? How to minimize the effect of rate fluctuations One way to minimize the effect of savings account interest rate decreases is to use a Certificate of Deposit (CD) instead of a savings account. A CD usually has comparable rates to a savings account, but the difference is that the rates are locked in place when you open the CD. If you open a CD with a 2% interest rate, it will remain at 2% until it matures. When you open a savings account, the interest rate is subject to change at any time. The downside to opening a CD is that the money is locked in the CD until the maturity date, which can range from six months to five years. If you want to withdraw funds from a CD before the maturity date, you may have to forfeit a portion of the interest.  That's what makes CDs different than savings accounts. With a savings account, you can withdraw money any time without a penalty. The liquidity of a savings account is much better than a CD. Another way to maximize your money is to open a high-yield checking account. These accounts have higher interest rates than savings accounts, but come with more requirements. You may have to switch your direct deposit to that account and make a certain number of purchases with the debit card. Also, some high-yield checking accounts have limits on how much money will earn the highest interest rate. If you have an account with $50,000, you may only earn the highest rate on $10,000. More Savings Coverage Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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