If you are a T-Mobile customer, you may be interested in the new T-Mobile Money account that earns you 4% interest on your first $3,000; and 1% interest on everything else! This is a huge benefit, considering the leading high-yield savings account (HYSA) offers 0.55% as of April 2021.
The Catch
To earn that 4% back on your first $3,000, you must complete ten qualifying transactions from this checking account each month. If you spend from your checking account directly with your debit card anyway, this is not likely to be a concern for you. But if you put all of your expenses on your credit card and pay it off with one transaction at the end of the month, this requirement could pose a challenge. Ultimately, you have two options: Intentionally use your debit card ten times per month to stay qualified for the 4% back on the first $3,000, or just stick with the 1% back.
1% Back – No Strings Attached
Regardless of whether you have more than $3,000 in your T-Mobile Money account, or you qualify for the 4% back with ten transactions, you are still earning 1% on your account balance! No strings attached. This represents nearly twice what you could earn in the best HYSA today.
Uncle Sam
As is the case with any interest revenue, don’t forget about the taxman! Any interest you accrue with T-Mobile Money is subject to the same interest income taxes you would expect from your other accounts, so plan accordingly!
My Take
T-Mobile Money is an intriguing service and ultimately takes its place as the best spot to park your emergency savings of three to six months’ worth of expenses, even if you don’t feel like chasing that 4%. Because this is a checking account, not only is your money secure and federally insured up to $250,000, it is easy to transact from it in the case of an emergency using provided checks or your debit card. If you’re already a T-Mobile customer, I’d recommend opening the account for this reason alone.
