APY GUY: Maximize Your Savings & Earnings

Robo-Advisors

Betterment Cash Reserve Account – Now 3.75% APY!

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[đź“Ś Update December, 2022 – The Betterment High-Yield Cash Reserve account has seen its APY (annual percentage yield) increase by 0.55% APY following the FED’s latest rate hike of 0.50% on December 14th. The account now provides an APY of 3.75%. This is up from 3.20% APY in November. See more details about the account below.]

You may have heard of Betterment before as they were one of the original robo-advisor pioneers.

Today, however, they offer a suite of products beyond robo-advising. In this review, we will be focussing on their Cash Reserve account. This account features an excellent APY as well as expanded FDIC-insurance beyond the traditional $250,000 per depositor that banks and credit unions offer.

Continue reading our review to see if this account is right for you.

Betterment Cash Reserve Rate + Account Details

The Betterment Cash Reserve account is for the most part an online savings account. The main difference is that Betterment is not an actual bank, but rather an investment services company that partners with several FDIC-insured banks to leverage their FDIC insurance. This allows Betterment to provide FDIC insurance on deposits up to $1,000,000 ($2m for joint accounts) rather than the standard 250,000 per depositor.

These banks use demand deposits and money market accounts to hold your funds, but from the consumers’ perspective, you’ll only interact with Betterment. 

Betterment partners with 6 banks. These are referred to as their “Program Banks.” If for whatever reason you wish not to partner with any of these institutions you may contact customer service and let them know which one(s) to exclude.

Betterment Bank Partners

The Bancorp Bank
Barclays Bank Delaware
Cross River Bank
HSBC Bank USA
State Street Bank and Trust Company
Wells Fargo Bank

Cash Reserve Rate

This account has no minimum balance requirement to earn the advertised rate and no monthly maintenance fees.

Min BalanceAPY
$03.75%
APY = Annual Percentage Yield

To put this yield into perspective the national average for a money market account and a savings account sit at just 0.38% APY and 0.30% APY, respectively, according to FDIC data.

This is a variable rate that can change at any time without notice.

Interest is paid monthly – generally the first business day of each month unless it is a bank holiday.

Managing your Account

Betterment has apps for both IOS and Android where they score a 4.7 stars out of 5 and 4.5 stars out of 5, respectively.

Moving money around is very easy and straightforward with either of their apps. There are no limits on how often you can send or receive money, and zero fees to do so. You can withdraw funds in just 1–2 business days.

If you already have (or choose to open) the Betterment checking account to go along with the Cash Reserve, you would be able to withdraw cash from any ATM worldwide without incurring a fee. Betterment reimburses all ATM fees worldwide on its checking account.

If you only have the Cash Reserve account the only way to transfer funds is by using an online transfer through the app or website to a linked checking account.

Mobile check deposit is only available with the checking account and you must be a customer for a minimum of 30 days with a monthly direct deposit set up of $500 or more.

Final Thoughts

If you’re in the market for a high yield then the Betterment Cash Reserve account is a solid option as it has no minimum deposit or balance requirements and pays out a generous APY of 3.75% with expanded FDIC coverage of $1m.

That said, there are now some online banks and credit unions paying over the 4.00% APY mark for online savings accounts, however these only come with the standard $250,000 FDIC coverage.

Ally Invest Review + Up to $3000 Sign Up Bonus!

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Ally Bank has long been a strong competitor in the personal finance world for its high-interest digital deposit accounts and above-average customer service. A division of the popular online bank, Ally Invest has been getting similarly positive reviews and was named one of the best stock trading apps by Business Insider in 2021.

In this review, we’re going to go over everything you need to know about Ally Invest’s self-directed platform. 

What Is It?

image credit: ally.com

Ally Invest is a self-directed trading platform that charges no commission fees on many different trades and offers a wide variety of assets to choose from. You can start trading ETFs, stocks, options, and more with as little as $1.

If you don’t want to choose your own trades, you can use the firm’s robo portfolios and select a profile that meets your investing goals and personal values.

How It Works

You can trade the following assets through Ally Invest:

  • ETFs (Vanguard)
  • Stocks
  • Options
  • Bonds
  • Mutual funds
  • Margin account

Stocks, ETFs, and options carry no commission fees when you invest with Ally.

You can fund your account via ACH bank transfer, wire transfer, mailed-in check, or cashier’s check and start trading as soon as your deposit goes through. You can also transfer money from an Ally Bank account to your Ally Invest account almost instantly. The daily limit when doing this is $250,000 and there are no transfer fees.

There are no account minimums for trading stocks, ETFs, or options. However, there is a $100 minimum opening purchase of $100 for Pink Sheet and OTCBB stocks. 

Robo Portfolios

If self-direct investing isn’t what you’re looking for, you might be interested in Ally Invest’s other offering: Robo Portfolios. These robo-advisors invest in a variety of ETFs for you depending on which kind of portfolio you pick.

Choose from the following four types of portfolios: 

  • Socially responsible – prioritize investments in ethical businesses with green initiatives
  • Tax optimized – maximize your investments by investing your after-tax income
  • Core – diversified investments in fixed-income assets within your specified risk tolerance
  • Income – invest conservatively and enjoy higher dividends

After you select your portfolio type and let the program know your main goal (retirement, major purchase, generate income, or building wealth) and timeline (between five years or less and 21 years or more), the robo-advisor will invest and rebalance your portfolio for you as needed. 

You only need $100 to get started and there are no advisory fees or annual charges for using this service. 30% of your portfolio will be automatically set aside to earn interest and protect against volatility.

Securities Available

Let’s break down what it looks like to trade different securities with Ally Invest. We’ll include account minimums, fees, and other considerations here.

ETFs

If you want to trade ETFs, there are a few different ways to narrow down your choices and find the right stocks for you. You can search a specific stock that you have in mind or browse within a category like tech or finance. There are thousands of ETFs to choose from and Ally Invest provides a Morningstar rating to give you a good idea of past performance and value for each stock. There are many $0 commission stocks available and no account minimum requirements. 

Stocks

You can trade many stocks commission-free and there are a number of securities available for low prices. For low-priced securities under $2, Ally charges a base commission of $4.95 each and a $0.01 per share fee on top of this. You will not usually pay more than 5% of a trade’s value in commission. There are no account minimums required to start trading stocks.

Options

There is a contract fee of $0.50 when you trade options on this platform and you may incur an additional fee for index option trading if an exchange charges fees. Through Ally Invest, you will pay a fee of $0.35 per contract for indexes including the S&P 500, the CBOE Volatility, and others.

There is no account minimum for options trading and Ally Invest’s offerings for this kind of trading are extensive. 

And because options trading is complicated, Ally provides an Options Playbook that can help you navigate this kind of investing. It gives an overview of the terms you’ll need to know, the risks that come with trading options, different strategies you may want to try, and more. This guide was put together by the Senior Options Analyst at Ally Invest.

Bonds

Choose from various loan and government bonds and certificates of deposit if you’re looking for a low-risk, longer-term investment. You’ll make back your principal with interest over time for a nice trickle of income. 

There is a flat fee of $1 charged for every bond you purchase with a $10 transaction minimum and $250 maximum. Certificates of Deposit carry a fee of $24.95 per transaction.

Mutual Funds

There are over 12,000 mutual funds to choose from including over 500 U.S.-based fund families.

The fee for No-Load mutual funds is $9.95 when you make either a purchase or a sale. This is fairly low compared to competitors, but Ally does not offer any fee-free mutual funds as many larger investment firms are doing. Ally Invest doesn’t charge any fees when you purchase or sell a Load mutual fund, but you may incur third-party fees from the funds themselves.

Fees

It’s possible to trade without paying any commission fees, but if you want to invest in mutual funds, bonds, or margin accounts, you’re going to have to pay some fees. (See the above section for more specific information about those fees in particular.)

[Related: See how Ally Invest stacks up against the competition in our rundown of the best free stock trading apps of 2022.]

First, there is a $0.50 per-contract fee for options trading. There are no fees for exercising or assigning options. However, you may incur the following fees:

  • Option Position Management: $100 + regular commission.
  • Optional Expiration Sellouts: $40 + regular commission

Other fees include:

  • an ACAT Transfer Out fee of $50,
  • an Outgoing Domestic Wire Transfer fee of $30,
  • a Worthless Securities Processing fee of $30,
  • a $50 fee for foreign stock transactions (+ regular commission),
  • and a $40 fee margin sellout fee (also + regular commission).

There are no low balance fees, inactivity fees, or low balance fees for using the platform.

Ally Invest will reimburse up to $150 in transfer fees when you move more than $2,500 from another brokerage to this account.

For a complete list of fees, see this page.

How to Open an Account

If you want to transfer funds from another brokerage account, you can request a transfer online using this online form. You don’t need any other accounts with Ally Bank to get started but you can link one of these accounts to your Ally Invest account to transfer funds and pay fees.

Cash Bonus

image credit: ally.com

When you open a new Ally Invest account, you qualify for a cash bonus of up to $3,000 depending on how much money you deposit into your account. You must deposit at least $10,000 to earn a bonus and over $2 million in order to get the full $3,000.

DepositBonus
$10,000 – $24,900$100
$25,000 – $99,900$250
$100,000 – $249,900$300
$250,000 – $499,900$600
$500,000 – $999,900$1,200
$1,000,000 – $1,999,000$2,000
$2,000,000+$3,000

If you qualify for a bonus, it will be deposited into your account 10 business days after your deposit is received.

Pros and Cons

The best thing about Ally Invest is that it is both beginner-friendly and advanced enough to give intermediate investors some of the options and flexibility they’re looking for. The platform itself is easy to use and intuitive, if a little bit old-school. Note that some features look a little different between mobile and the online portal and others are available only through the online portal. 

Also working in Ally Invest’s favor is the selection. Options traders especially will appreciate the range of products available and the low contract fees.

Another thing Ally Invest does better than a lot of similar platforms is providing a number of educational resources. The most notable is the Options Playbook, which details everything you need to know to get started with options trading (see “Options” for more information). There’s also a great selection of informational articles you might find helpful if you’re new to investing on the site itself. Everything is free to access. 

However, when it comes down to actual investing tools and insight, Ally could do a better job sharing market research and data with investors. You won’t get a whole lot of information outside of how an asset is performing when you’re looking for a trade. 

It’s also cheaper and easier to get started with Ally Invest than a lot of platforms. Ally Invest has low account minimum requirements and plenty of commission-free securities, so it isn’t expensive to sign up and there’s little commitment. 

Unfortunately, uninvested money doesn’t earn interest with this account. Although this is pretty common, it would be nice to see the bank–known for such great interest rates on savings accounts, CDs, and MMAs–to at least give users something for the cash not invested.

Another potential disadvantage is that you can’t trade cryptocurrency or futures with Ally Invest. There are also no mutual funds you can invest in without incurring a transaction fee, which might be a bummer if you were planning on doing some or all of your investing in mutual funds. 

Finally, you can find a firm that charges lower fees for general account maintenance such as transfers and trades themselves. Though not bad by any means, Ally’s not the cheapest option in this respect.

Is It Safe?

All Ally Invest accounts are covered by SIPC protection up to $500,000 per depositor which includes $250,000 for cash claims. Ally is safe to use with a highly secured platform that keeps your information safe and protects your assets against cyber attacks.

Consumer Sentiment

Ally Invest gets solid marks all around for the quality and convenience of its customer support. The firm itself seems to deliver a satisfactory customer experience when you contact them with questions or concerns, and most users don’t have any major issues to report about their accounts. With that said, depending on when you call, you might have trouble reaching a representative. 

The Ally mobile app, which is the same app you’d use to manage any other Ally Bank accounts you might have, is pretty good. It has a score of 3.9 out of 5 stars on Google Play and 4.7 out of 5 stars in the App Store. Overall, it’s easy to get around in the app but you won’t find all of the advanced tech features of some larger firms.

To contact customer support for Ally Invest, call 1 (855) 880-2559. This phone line is separate from Ally Bank and open 24/7. You can also chat with an agent through the app or online or email your question to support@invest.ally.com.

Final Thoughts

If you’re looking for a self-directed investing platform that is easy to use with low opening deposit requirements and securities with $0 commission, Ally Invest might be the account for you. Those looking to trade stocks, ETFs, and options will likely benefit the most from the features this account offers.

Since you can really start trading with as little as $1, this firm is also an all-around great choice for beginners who might not have a lot of money to invest yet. Consider a larger firm if you’re an intermediate investor as Ally’s offerings aren’t as advanced.

Titan Invest Review: Hedge Fund Investing For Everyday People

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image credit: titanvest.com
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Titan Invest is a robo-advisor that offers investment services similar to those of a professionally managed hedge fund.

It was founded in 2018 by Joe Percoco, Clayton Gardner, and Max Bernardy and passed $150 million in assets under management in Q3 of 2020.

Joe and Clayton have several years experience in hedge fund investing between the two of them – working for companies such as Goldman Sachs, Cerberus Capital and McKinsey and Co.

Their technical co-founder, Max Bernardy, is a graduate of Stanford University with a degree in computer science. He has also been the technical lead for several early-stage technology companies prior to joining Titan Invest.

Titan Invest, as a platform, uses cutting edge technology combined with an innovative business model to provide users with access to world-class investment opportunities while letting their algorithms do all the heavy lifting. Investors can invest capital and track the growth of their portfolio through the highly-rated Titan app for Apple and Android.

You can get started here for mobile downloads.

Hedge funds are normally inaccessible to the average Joe and generally require one to be an accredited investor to participate. What Titan Invest aims to do is bring this investing technique to a demographic that hasn’t been privy to the opportunity in the past.

Titan Invest requires a minimum opening balance of just $500 (with a $100 transfer fee minimum) and calls itself an asset manager for millennials. Is this investment manager right for you? Continue reading our full review below.

What is Titan Invest and How Does it Work?

As with many conventional robo-advisors, Titan Invest constructs and manages your investment portfolio.

Where they differentiate themselves (other than the personalized hedge) is that they actually invest in individual stocks rather than traditional ETFs, which are a basket of different securities.

The individual stocks in which Titan places your money are limited to what Titan believes are the 20 highest quality companies on the market. These companies include household names and members of the S&P 500 such as Microsoft, Alphabet (Google), Apple and more.

After the individual stocks are selected, your portfolio is then provided an automated “personalized hedge.” The size of the hedge will be dependent on your personal risk tolerance which is assessed upon opening the account.

The range will be: conservative, moderate, aggressive. The more conservative you are as an investor (ie the less risk you can tolerate) the larger the hedge against your individual stock investment. This allows protection against severe price swings and overall market volatility. That said, it will not guarantee the protection of your principal investment and your overall portfolio could still lose money.

To get a better idea of how your funds are allocated based on your appetite for risk. Here is the general rule of thumb according to Titan (assuming your portfolio is not in a downturn):

  • Conservative Investor: Titan will allocate roughly 10% of your position to the short.
  • Moderate Investor: Titan will allocate roughly 5% of your position to the short.
  • Aggressive Investor: Titan will allocate closer to 0% of your position to the short.

If your portfolio is experiencing a downturn, the breakdown would look more like this:

  • Conservative Investor: Titan will allocate roughly 20% of your position to the short.
  • Moderate Investor: Titan will allocate roughly 10% of your position to the short.
  • Aggressive Investor: Titan will allocate closer to 5% of your position to the short.

Remember, the Personalized Hedge feature is fully-automated. There is no financial advisor behind the wheel. The way your Personalized Hedge self adjusts will be dependent on your portfolio’s performance relative to the S&P 500. If the performance of your portfolio starts declining against the S&P 500 for a period of time, more of your funds will be allocated to the hedge (and vise versa).

What is a Hedge Fund and How is Titan Invest Different

In a nutshell, hedge funds are pools of money contributed by investors with a fund manager whose mandate is to maximize returns for investors while mitigating risk through “hedging.”

You may not realize it, but you probably make financial “hedges” already in your life. Do you own a home? Did you purchase homeowners insurance on that home to protect against fires and break-ins? If so, then you’re essentially purchasing a hedge.

While hedging with stocks gets a little more complicated than simply purchasing insurance on the stock, the basic principle applies. You invest in an asset (the stock) and then purchase another financial instrument that pays out in the event of said asset losing value.

Hedge funds can invest in pretty much anything – stocks, real estate, land, currencies, etc. and are highly responsive to the market.

Titan Invest is not a hedge fund but provides clients a personalized hedge tool to protect capital in times of market downturns and high volatility. This tool aims to replicate the strategies used by hedge funds to outperform market returns in the long run.

Like hedge funds, Titan Invest accounts are highly responsive to the market. Titan re-adjusts its Flagship stock portfolio each quarter and intervenes when your stocks or overall portfolio enter a downturn.

Another key difference between Titan accounts and hedge fund accounts is liquidity. Whereas hedge funds lock up your funds to allow managers to back out of investments, Titan does not. When you invest with Titan, you can withdraw your funds whenever you want.

Finally, Titan costs its investors much less than the average hedge fund. Many hedge funds charge a very high performance fee, but as you will read about in the next section, this is not the case with Titan Invest.

Titan Invest Fees and Features

Titan charges an annual advisory fee of 1.00% for deposits of $10,000 or greater, and this encompasses all services. If you deposit less than $10,000, you’ll incur just a flat $5/month fee.

The good news is there are no performance fees of any kind unlike hedge funds that have historically charged up to 20% of the investor’s net profit for a calendar year. On top of that, Hedge funds generally charge a 2% asset management fee for their services as well.

This 2% asset management fee plus 20% performance fee has been dubbed two and twenty by those in the financial industry and it has come under fire by investors and politicians alike for a number of reasons.

Titan Invest Fees and Facts

TermDetails
Minimum Investment$100
Annual Fee1.0% of AUM
Performance FeeNone
Lock UpsNone
Investor QualificationsUS only
Custody & ClearingApex Clearing
Legal CounselLowenstein Sandler LP
ComplianceGreyline LLC
SIPC InsuranceUp to $500k

If you’re thinking 1.0% of AUM annually is a little steep, that is because it is. Generally speaking, robo-advisors charge anywhere from 0.25% – 0.50% in annual fees.

Features and Perks

That said, there’s a nice remedy to lowering your annual fee if you can bring a few new customers into the Titan Invest family. Currently, when you refer people to Titan, they will knock 0.25% off your AUM for every person you successfully refer, with the potential of bringing fees to 0% if you can get four people. The best part is that the fee waiver is applied to your account for as long as you have it. You don’t have to refer new people every year.

Other than kickbacks for referring new clients, the Titan Invest platform also offers many additional features to its investors. These include:

  • personal digital vaults or separately managed accounts of your own,
  • fractional share trading,
  • access to a portfolio manager, and
  • the ability to make instant deposits. 

Titan Invest Account Types and Services

Titan offers two investment programs:

  1. Titan Flagship Program (launched in 2018), and
  2. Titan Opportunities (slated to launch in July 2020)

The primary difference between the Titan Flagship and Titan Opportunities (once it launches) is the size of the 20 companies in which Titan spreads your funds between. With Titan Flagship, the 20 companies are going to be made up of large household names. With Titan opportunities, the focus will be on smaller companies that are poised for exceptional growth.

Titan Flagship Program Details:

Number of Stocks20
MandateUS only
Median Market Cap$180 billion
Inception2/20/2018

Titan Opportunities Details:

Number of Stocks20
MandateUS only
Median Market Cap$5 billion
InceptionJuly 2020

Regardless of whether you choose Titan Flagship or Titan Opportunities, you’ll have the option to house these in a retirement account or individual investment account.

Titan invest offers both individual investment accounts and retirement accounts such as traditional IRAs, Roth IRAs and 401ks.

In the early Fall of 2019, Titan Invest began offering Individual Retirement Accounts (IRAs) as part of their suite of retirement products.

This means clients can now take advantage of everything Titan Invest has to offer in the way of low cost hedge-style investing BUT with the added benefits and tax advantages of an IRA. You can also roll over your 401(k) or 403(b) retirement accounts. They have a concierge system in place designated to roll those into your Titan account.

Titan Invest Historical Returns and Performance Review

Because Titan was founded in just 2018, there is limited data to draw upon, but the outlook thus far seems promising.

Per the June 2020 Performance Update, Titan clients were up +8 to +10%. Conversely, the S&P 500 was down -3% and Wealthfront and Betterment (other popular robo-advisors) were down -6% and -10%, respectively.

In the second quarter of 2020, Titan brought a +31% return and the S&P brought +21%. Titan attributes these high returns to three key drivers: idiosyncratic alpha, big tech rebound, and flight to quality. Full hedges remain activated.

Since its founding in 2018, Titan Invest is up +37% total. The S&P 500 has gone up +19.6% since then, Wealthfront +7.6%, and Betterment just +0.5%. 

image credit: titanvest.com/strategy

These numbers speak for themself. Titan Invest, through outstanding research and planning, has proven itself to be a force to be reckoned with. In just over two years, its investors have seen higher returns than they otherwise likely would through another robo-advisor or hedge fund.

Keep in mind that this data is for Titan’s Flagship strategy. Titan Invest is in the process of developing a second strategy, Titan Opportunities, that will focus on identifying smaller U.S.-based companies that are expected to see high growth rather than investing in companies that are already at the top.

Is Titan Invest Safe?

Any reasonable person is going to wonder whether their money is actually going to be safe in an investment account operated by an algorithm.

The answer here is basically yes, or at least as safe as any robo-advisor or digital investment platform can be.

Titan Invest is not any more unsafe than other investment accounts, brick-and-mortar or otherwise. It uses high tech security encryption and is insured by the Securities Investor Protection Corporation.

SIPC covers accounts up to $500,000 and all data flow is encrypted using 256-bit encryption and SSL.

Final Thoughts

Millennial or not, Titan Invest presents many advantages.

You don’t need to be fabulously wealthy to begin and you don’t need to do much of anything to maintain your account.

You’re given tools that have historically only been available to financially privileged clients and the returns thus far have been eye-catching.

On the flip side, the 1.0% annual fee is certainly above average for robo-advisors and the historical returns, while substantial, only go back two years.

That said, Titan Invest does do a good job of providing clients with a way of recouping some (or all) of the annual fee by referring new clients at 0.25% each.