As featured in The Wall Street Journal, Money Magazine, and more!

avatar You are viewing an archive of articles by Michael Pruser.

Michael Pruser

Is Betterment a smart way to invest your money? Our detailed Betterment review gives you everything you need to make a sound investing decision.

Betterment Review

Betterment is a different type of brokerage. Most discount brokerages want to get customers to trade as frequently as possible. But Betterment is looking to be your asset manager.

Currently, the brokerage is offering an incentive for new customers. But the way they do business is a bit different than most brokerages you may be familiar with. This uniqueness is evident as early as the account sign-up process.

When you apply for an account with a typical discount brokerage, the application asks about income, net worth, and investment experience. Betterment asks about the goals and purposes of your investments. The service encourages each new account holder to designate a main account goal, like retirement, a major purchase, or a vacation. Betterment will also ask how many years you expect to take to reach that target or the age at which you’d like to achieve a goal.

What is Betterment All About?

The core philosophy for investing with Betterment is the asset allocation. This is the type of simplicity that I’ve seen with 401(k) accounts. These retirement investments often try to take an important concept of investing–asset allocation–and make it simple. This way, busy employees can simply submit a risk profile, and the investment will use this information to determine their ideal mix of stocks and bonds. Betterment takes this concept further, making the process incredibly simple.

Fees

Because of this simplicity, Betterment’s fees can be lower than other forms of investing. Although you could have a free account with a discount brokerage and never pay a transaction fee, you may still be subject to fees built into the investments, like expense ratios or front-end load fees. Betterment’s approach is to charge a percentage of your account’s value–or assets under management. This is the custom among professional asset managers who generally work with high-net worth clients.

This fee might depend on how much you invest with Betterment. For those looking to have a hands off approach, the annual fee is 0.25% (digital plan).  For those looking to take advantage of the premium service ($100,000 account minimum) the fee is 0.40%.  The premium service includes everything in the digital package plus in-depth advice on investments outside of Betterment and access to their CFP professionals.

And now for a limited time, Betterment is offering a promotion of up to 1 year managed for FREE.  Six different levels and timelines are available for the bonus; outlined below.

  • $5,000 – $24,999 – 1 month free
  • $25,000 – $49,999 – 2 months free
  • $50,000 – $99,999 – 3 months free
  • $100,000 – $249,999 – 6 months free
  • $250,000 – $499,999 – 9 months free
  • $500,000+ – 1 year free

Investment Management

With Vanguard investing, you’re mostly on your own. You alone decide your asset allocation, and many investors do not consider asset allocation at all. Betterment can be more expensive, but they are also providing a service that, depending on your needs and interests, may be worth the extra cost. At the same time, it’s less expensive than having a dedicated asset manager while offering many of the same features.

You’d have to be a hands-off individual to like the type of service offered by Betterment. You don’t choose your own investments like you would with a typical full-service or discount brokerage. Betterment chooses the investments for you, and their selections are based on a mix of index exchange-traded funds (ETFs). Betterment reinforces the idea that individual investors should not try to beat the market. For the most part, investors fail when they try. And their investments would have fared better had they remained diversified across a broad selection of investments and refrained from changing their risk profile.

Betterment Investments

Betterment‘s investments include baskets. Each basket represents exposure to a type of assets. To help an investment portfolio match a risk profile, the portfolio could include a combination including a stock market basket and a treasury bond basket. Betterment will rearrange the balance between the different stock index ETFs as it sees fit, but investors control the relationship between stocks and treasury bonds through the risk profile.

The treasury bond basket is split evenly between two investments, TIP: iShares Barclays TIPS Bond Fund and SHY: iShares Barclays 1-3 Year Treasury Bond Fund. The stock market basket includes these investments:

  • (VTI) Vanguard Total Stock Market
  • (VTV) Vanguard US Large-Cap Value Index ETF
  • (VOE) Vanguard US Mid-Cap Value Index ETF
  • (VBR) Vanguard US Small-Cap Value Index ETF
  • (VEA) Vanguard FTSE Developed Market Index ETF
  • (VWO) Vanguard FTSE Emerging Index ETF

Betterment IRAs

Previously Betterment’s investing plans were limited to the form of a standard brokerage account. But the service now offers IRAs. You can now use the government-designated accounts for saving for retirement through Betterment’s service. Some of the benefits of owning a Betterment IRA are:

  • IRA fees are a fraction of a standard 401(k) provider
  • You choose your personal risk strategy
  • Betterment regularly rebalances your portfolio

Opening a Betterment Account

Opening my account at Betterment was easy, and they approved my account right away. Like any new financial account accepting electronic deposits from other banks, I needed to confirm my ownership of the linked account through the familiar process of verifying test deposits. I’m waiting for my external checking account to receive the test deposits so I can begin investing with Betterment.

Betterment is a fairly new player in the word of finance. This is an industry where the major companies have been around for a century or more. But Betterment protects your assets just like any other major investment firm. Betterment is a Registered Investment Advisor with the Securities and Exchange Commission and is regulated by FINRA and the SEC. Accounts are insured by SIPC up to $500,000 per owner.

This doesn’t protect investors from having their investments lose value, but it does protect the value if the brokerage were to fail. If Betterment were to go bankrupt or to go into receivership, the insurance coverage would allow you to access your account.

Why Use Betterment?

For the micro-manager, Betterment might not be the perfect way to invest. It’s also not the appropriate service for someone who wants to trade their investments frequently or delve into investing in individual companies. Betterment’s services may be right for investors with the opportunity to save for their future outside of retirement accounts who want the simplicity of diversified investments, risk-based asset allocation, and a buy-and-hold-and-rebalance investing philosophy.

Their published returns are nothing to scoff at, and their fee structure works especially well for smaller investors who are looking to avoid day to day interaction.

{ 14 comments }

It’s the only card that pays you 3% cash back on every purchase the first year. And with no annual fee. The details are in our Discover it Miles review.

Discover it Miles review

Some time ago, Discover made the conscious decision to re-brand its entire line of credit cards. Previously known as “More” credit cards, Discover decided to go even shorter. Discover “it” is now the brand name and it encompasses credit card categories like cash back, balance transfer, student, and travel.

The travel version of the Discover it brand comes in the form of the Discover it® Miles. A somewhat nondescript, blue credit card with all of your personal information on the back, the Discover it® Miles packs one heck of a punch for its cardholders. From triple miles, to enhanced security features and no fees of any kind, this credit card gets high marks for just about everything.

Here’s a full look at what the Discover it® Miles has to offer.

Discover it® Miles Rewards Program–3% Cash Back

Learn More

For the first year you’re a Discover it® Miles cardholders, you’ll earn 3 miles per dollar spent. You see, Discover’s usual rewards rate on this travel rewards card is 1.5%. For the first year, however, Discover doubles all of the miles you’ve earned.  On your anniversary date, Discover will do a “Miles Dump”. All of the miles you’ve earned for the first year will appear again on that day. So if you earned 50,000 miles the first year, you’ll see another 50,000 show up on day 366.

Miles can be redeemed in the following ways:

  • Credit to your account for travel purchases made within the last 180 days
  • Electronic deposit into an account you designate
  • Pay with miles at merchants through Discover.com/paywithmiles

In all scenarios, the value of your Miles is one mile = one penny. There are no transfer options for miles, so in effect, this card acts as a cash back rewards card. Discover simply puts the moniker “miles” on it and BAM, you think travel rewards.

Miles never expire so long as your account is open and not used for any illegal transactions. You will not earn any miles for balance transfers, cash advances, or illegal transactions. If you close your account with Discover and have a miles balance, they’ll automatically credit your account for the rewards you’ve earned.

Feel Secure with the Discover it® Miles

Unlike many other credit cards, the Discover it puts a lot of focus on credit security. From free FICO scores to credit freezes, here’s a look at what the Discover it® Miles has to offer to protect your credit profile:

  • Free social security number alerts
  • Free FICO score every month
  • The ability to freeze your Discover account is seconds.
  • Free credit account alerts
  • Free overnight shipping to replace any lost or stolen credit card

Discover is now offering free social security number alerts. Anytime your social security number pops up on a risky website which Discover monitors (thousands), they’ll let you know. You also have the ability to freeze your account at a moment’s notice. A quick click of the mouse and no one will be able to use your card to make purchases.

Your FICO score will also be available every month you receive your Discover statement, either by mail or online. The score can always be visible when you log into your Discover it® Miles account, but it only updates once a month.

Discover it® Miles APR and Pricing Details

New cardholders will receive a 0% intro APR on purchases for a full 14 months. Once that intro rate expires, the ongoing APR becomes 11.99% – 23.99% variable. The other interest rates and fees you need to be aware of if applying:

  • 25.99% APR for cash advances
  • $10 or 5% cash advance fee
  • 3% balance transfer fee

Discover also boasts one of the great perks of owning a Discover it® credit card. The first time you miss a scheduled payment, no fee is charged. When you go over your credit limit, no fee is charged. Discover also won’t raise your APR to the penalty level if you are a habitually late payer. No pay-by-phone fees or foreign transaction fees to speak of. And last but not least, no annual fee.

All of this is to say if Discover charges you a fee outside of interest, you must have done something pretty awful!

How Much Can You Earn

We got out our calculator to see just how much money you might earn with this card. According to the most recent Consumer Expenditure Survey conducted by the Bureau of Labor Statistics, the average family spends $63,784.

Not all of this could be charged to a credit card. For example, 11% of this total is paid in taxes. And you can’t typically pay your mortgage and certain other debt with a credit card.

We’ve assumed, however, that you can put 50% of your spending in the Discover it® Miles card. This would include food, clothing, travel, entertainment, and many monthly bills.

Now to the math. Half of $63,784 gets us to $31,892 charged to the card. At a 3% reward rate the first year, you would earn $956.76 in rewards. Earning almost $1,000 in year one for using a credit card is one of the best deals we’ve found.

When to Take Advantage of the Discover it® Miles

Whether you’re in need of a cash back credit card or travel rewards credit card, the Discover it® Miles can help. During the first 12 months, getting an effective rate of three miles for every single dollar you spend is unmatched. When you consider that the first 14 months of purchasing are interest free, there’s really no better option available for everyday spending.

And perhaps the best feature of the Discover it® Miles is that it comes to you fee free. I’m always annoyed when I miss a payment date by a single day, and a $35 fee shows up. Chase, Citi, Capital One … they all take advantage of the late payment fee. But Discover let’s it slide, and let’s it slide often.

No annual fee, no interest early on and triple miles for every dollar spent for the first full year. What more can a credit card provide?

Learn More

{ 0 comments }

In our SFGI Direct savings account review, we were frankly surprised at the high rates offered by this bank many have never heard of. It beats almost all existing online banks. Here are the details.

SFGI Direct Savings Account Review

If you haven’t considered an online savings account before, here’s why you should now. Below we review the SFGI Direct Savings Account. And what it has to offer you that may beat your current bank.

Over the last decade, most banks have made a conscious decision to move their business online. As a result, some of the best interest rates and product features available today come from banks that have no physical presence. Are there any Ally Banks on your street? When is the last time you saw a sign that said: “Synchrony Bank parking only?”

SFGI Direct is a little known online bank that offers one amazing feature. The interest rate on their online savings account is a whopping 1.31%. That APY is one of the best of any bank, online or otherwise. SFGI Direct has just 30 branches, all located in West Virginia and Virginia. This allows the bank to increase the value it provides to you.

Let’s take a look at their online savings account and see if your money belongs with SFGI Direct.

SFGI Direct Account Opening Process

SFGI Direct is the online banking division of Summit Community Bank, based in Moorefield, West Virginia. Deposits at Summit and SFGI Direct are covered by the FDIC as you would expect for any legitimate bank in the United States. To open the online savings account at SFGI Direct, you will need to provide the typical personal information, including Social Security number and employment information. The account requires a $500 minimum balance, and initial funding deposits are limited to a maximum of $25,000.

For some people, SFGI Direct may be one of the fastest bank account opening processes from application to use. Like a small number of other banks, SFGI Direct allows “Instant Verification.” Most banks still offer only “Micro-Deposit Verification,” or the even more antiquated “Check Verification.”

Basically, once your application is approved, you can link your existing bank account right away. This feature is dependent on your current bank’s systems. But it can get you out of waiting two or three days for Micro-Deposit Verification. SFGI Direct will securely and privately confirm your account details with the external bank and allow you to immediately initiate your initial funding deposit.

SFGI Direct Savings Account

In September of 2017, SFGI Direct increased the interest rate on their savings account from 1.21% to 1.31%. The minimum to open an account is $500, but there is no minimum balance required to keep the account active. That said, SFGI Direct will impose a “dormant” fee on your account if there is no activity for a period of seven years. Each month following the seven year period, you will be charged a $5 dormant fee. Once you make a deposit or withdrawal, the clock starts over.

The Downside to SFGI Direct

SFGI Direct, while offering a terrific APY on their online savings account, is truly a one-hit wonder. They offer no other deposit products, and the way in which you can use your savings account is limited to transfers in and transfers out.

Here are some frequently asked questions from consumers that use the bank for their online savings account:

  • Can I use checks with my SFGI Direct Savings account?
  • Can I fund my account with a paper check?
  • Are wires allowed in and out of SFGI Direct?

The answer to all of those questions is the same: NO. SFGI Direct will allow you to set up external transfers so you can bring money in and out of your account. But you cannot fund your account in any other way. You can’t use checks at all. And the bank does not offer CD’s, IRAs, or anything else you might find with another online bank.

Why Use SFGI Direct?

The answer to this question is as simple. SFGI Direct offers an interest rate currently in the top tenth of 1% of all banks in the United States. The 1.31% APY on a savings account is the highest we can find online, beating out banks like Ally, Synchrony, Barclays and others.

So long as you don’t mind waiting a couple of days to use your funds, SFGI Direct is one of the best places to actually park your money right now. Sure, they lack the features and flexibility to do other things. But does that matter? When I choose an online savings account, the primary factor is interest rate. I’m looking for a bank that will provide me the best return on my money. If I need money immediately, I can simply transfer it from my SFGI Direct account into my checking account in two business days. No muss, no fuss.

If you’re in need of a simple, straightforward online savings account with no minimum balance requirement, check out SFGI Direct and their 1.31% APY.

{ 0 comments }

We track the best 12 month CD rates of 2017. You’ll find information on fees, penalties, and minimum deposits for these certificates of deposit, too.

best 12 month cd rates

If you compare today’s best 12 month CD rates with historical rates, they may not be impressive. With the Federal Reserve keeping interest rates low for the near future, deposit accounts will not command the interest rates that were common before the recession.

Therefore, it may not make sense to lock in a rate for a long period of time. Once you agree to a term like five years, you’ll be stuck with it. Even if rates rise in the meantime.

This is a good approach in an environment where rates are high and possibly falling, but not a great idea when rates are low and possibly increasing. Nevertheless, you can often find better rates for CDs than for savings and money market accounts. So if you know you won’t need your savings for three months, six months, or a year, you might be able to achieve slightly higher interest payments from the bank. One drawback is there is often a penalty for accessing your cash before your term is up.

For the uninitiated, a certificate of deposit (CD) is considered a “time deposit.” CDs are generally considered cash or savings when it comes to asset allocation, but the “time” requirement presents a maturity date like a bond. This probably doesn’t matter for most individual savers and investors. But it does carry an important distinction for businesses whose investments are reported to regulatory authorities.

Like savings accounts, CD interest rates are compared using APY, annual percentage yield.

Best 12 Month CD Rates

Synchrony Bank Savings AccountSynchrony Bank just made a few shock waves by offering a 15 month CD at a 1.65% APY.  Yes, that’s three months more than the standard 12 month CD, but the 1.65% APY is as good a rate as you’ll find anywhere. Especially for any CD under 24 months.  They require a $2,000 minimum deposit to open the 15 month CD and Synchrony even  increased their savings rate to a robust 1.30% (just a week ago).

Synchrony Bank also has a 12 month CD with a term of 1.50% APY.  As you can see from our list below, that’s still the best of the best so you can’t go wrong with either CD term.


Discover Bank CDDiscover Bank offers a hassle-free banking experience. I am a current, happy customer. Discover offers a rate of 1.35% APY for their 12-month CD.  Discover Bank also offers up a cash back checking account and high yield online savings account.


Ally Bank CDAlly Bank offers two unique types of CDs in addition to a traditional CD. The Ally Bank Raise Your Rate CD has a feature that mitigates the risk of CD rates increasing while you’re locked in. You’ll have one opportunity during the term of the CD to lock in the market interest rate. The shortest term offered is two years, though, not 12 months. The rate for this 2-year product is 1.50% APY as of June 21, 2017.

Ally Bank also offers a No-Penalty CD, where you can withdraw your money at any time without a penalty. This term is slightly less than a year at 11 months, and the current rate is 1.50% APY for balances of greater than $25,000.  For balances between $5,000 and $25,000 the rate is 1.25% APY and for balances less than $5,000, the rate is 1.00% APY.

The standard 12 month high yield CD nets an APY of 1.35%.  There is no minimum balance required


GS Bank – Goldman Sachs recently threw their hat into the consumer deposits ring and are offering a 12 month CD at a great 1.50% APY.  GS Bank also has an online savings account which offers an APY of 1.20%.  There is a $500 minimum to open a CD and no minimum deposit to open a savings account.

GS Bank was recently named the best Stand-Alone Account for Savings by MONEY magazine.  It’s rates are always in the top 1% of banks. However they do not offer any deposit products beyond savings and CD’s.


American Express Bank CDCapital One 360, the brand that emerged from Capital One’s acquisition of ING DIRECT, remains a mainstay of online banking and continues to set the standard for all other online banks. Like ING before it, Capital One 360 offers state-of-the-art banking products and delivers excellent customer service. The interest rate for Capital One 360’s 12-month CD is 0.90% APY


American Express Bank CDAmerican Express is a relative newcomer to online banking, but their products are compelling to offer here. I like my account with American Express. This bank offers a wide range of terms for CDs from six months to 60 months, with many intermediate terms. The interest rate American Express offers on their 12 month CD is 0.55% APY.


Sallie Mae CDSallie Mae Bank is also new to offering banking products, having been established in 2005. My account with Sallie Mae was the easiest to open. My only criticism is the lack of integration with Quicken and online tracking tools. Sallie Mae offers a strong 1.50% APY on the 12 month certificate of deposit.

Sallie Mae also offers a variety of other deposit options, including a Upromise Goal Saver account which allows you to save for college! (For yourself or one of your children).


One Year CD Rates vs. Online Savings Accounts

You may notice that a lot of CD rates above are better than the rates that a high yield online savings account can provide.  So why not simply take your money and invest in a 12 month CD?  Well there are two main reasons that banks can provide you a slightly higher APY.

  1. CD terms are absolute.  Once you open a CD and deposit your money, you cannot withdraw the funds until the CD comes to full term.  You stand to lose up to six months worth of interest by withdrawing early.
  2. Interest rates are locked.  When a bank knows exactly what it’s paying you, it can lend your money for a better rate somewhere else.  Savings accounts have fluctuating rates, so the rate you receive today may not be the one you get tomorrow.

If time deposits aren’t right for you and you’d like the ability to withdraw your money as needed, consider a high yield savings account from one of the best online banks. If you do like the idea of saving with CDs, consider creating a CD ladder to make the most of the highest CD rates.

Do you have a favorite bank, offering a compelling CD product, you’d like to see added to this list? Let me know by leaving a comment below.

{ 9 comments }

Best Online Brokers of 2017

by Michael Pruser

Let’s get this out of the way. There is no one best online discount broker for everybody. What will be the best choice for you will depend on many factors. And what works for you may not be the ideal option for somebody else. We’ve used a number of brokers, including Scottrade, Ally Invest, OptionsHouse, […]

44 comments Read the full article →

Verizon Unlimited Data Plan Review

by Michael Pruser
verizon unlimited data plan review

Americans are spending more time than ever on their cell phones.  Ironically, the time is not spent talking. Rather, its spent online and texting friends and family. This means that the more important part of your cell phone plan isn’t the talk time, but the data and the reliability. Earlier this year Verizon decided to […]

1 comment Read the full article →

A Review of Aspiration Summit Checking Account

by Michael Pruser

Aspiration Summit checking account offers a unique blend of features. From an excellent interest rate to virtually no fees, Aspiration is ideal for consumers looking to be treated fairly by a bank. Read our Aspiration Summit checking account review for all the details. In the world of cash back and interest rates, I try to […]

0 comments Read the full article →

Capital One Spark Business Checking Account Review

by Michael Pruser

I created my small business in 2010. One of the very first things I did was sign up for a business checking account. Living in Miami at the time, there was a brick-and-mortar Citi location just a half block away. So, that is the bank I signed on with. The “green” business checking account was […]

0 comments Read the full article →

Are You Earning 1.12% On Your Savings? SmartyPig Members Are

by Michael Pruser

If you’ve been paying attention to high yield savings rates over the past few months, you may have noticed they’re on their way up. No, not to the 4 percent – 5 percent levels we saw about a decade ago. But, slowly, interest rates are creeping in a positive direction. SmartyPig is one of the high yield […]

0 comments Read the full article →

How the New AHCA Bill Will Affect Your Healthcare

by Michael Pruser

Yesterday, the U.S. House of Representatives narrowly passed the American Health Care Act (or as many are calling it, “Trumpcare”) by a vote of 217 to 213. Initially, it was determined by Republican House leadership that the bill was not strong enough to pass a vote. The discussion appeared to be tabled indefinitely. However, after […]

3 comments Read the full article →
Page 1 of 3123