Rob Berger

7 Best Short-Term Investments to Save Money (2022)

August 1, 2022 by Rob Berger

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There are a lot of good reasons to hold cash. An emergency fund is a must. Then there’s saving for a home or vacation. Whatever the reason, the big question is where are the best short-term investments to park your money.

We’re in an historically low interest rate environment. In a Consumer Reports article from just two years ago, June 2019, it shows interest rates ranging from 2% at Sallie Mae to 2.75% at First Internet Bank.

Unfortunately, those days are behind us. They’re probably ahead of us too. I’m going to make a prediction that eventually we’ll get back to those rates. But right now, most big banks are paying about one basis point (0.01%).

You can do better. Here are 7 of the top short-term investments for your money.

Best Short-Term Investments for Saving Cash

1. No-Penalty CD

This has been my choice lately. As the name suggests, a no-penalty CD doesn’t charge a penalty for early withdrawal. You get the higher yields of CDs with the flexibility to pull your money out at any time.

Typically you pay for this no-penalty feature with a slightly lower APY. Right now, however, Sallie Mae is offering a 14-month no-penalty CD that pays 2.50% APY. This offer is only available through a service called SaveBetter. It’s the best deal I’ve been able to find, and I’m moving my cash to this account now.

Featured Offer: Sallie Mae 14-Month No Penalty CD

Open an Account

14-Month No-Penalty CD
APY: ~~2.50%~~ 2.70%
Min. Deposit: $1
No early withdrawal penalty
FDIC Insured

2. U.S. Government Treasury Bills

Treasury bills are U.S. government bonds that mature in one year or less. The government issues them in terms of 4, 8, 13, 26, and 52 weeks. They are zero coupon bonds. You buy them for less than face value, and receive the face value when the bond matures. The difference represents your interest.

You can buy Treasury bills via Treasury Direct, but I wouldn’t recommend it. The website is a mess. A better approach is to buy them through your broker of choice. Fidelity, Schwab and Vanguard are all reasonable options.

Current yields range from about 2.25% to just under 3%. These yields change daily, so be sure to check out current yields here.

3. High-Yield Savings Account

For those who want a straight up savings account, there are several today that pay north of 2.00% APY. The highest APY I can find on a savings account available nationwide without savings caps is My Banking Direct (2.20% APY). Let me know if you find a better offer.

4. High-Yield Money Market Account

When it comes to saving cash, there really is no difference between an FDIC-insured savings account and an FDIC-insured money market account. Sometimes, however, you’ll find that one or the other pays a slightly better rate.

The best MMA rate I can find comes from the Merchants Bank of Indiana (2.28%).

5. High-Yield Checking Account

If you want to keep your money in a checking account, there are some high-yield options. One of the best rates out there is from SoFi (1.80% APY). The rate applies to both the SoFi checking and savings account, but does require direct deposit to qualify.

6. Business Checking

For small business owners and freelancers that have a business, Bluevine is an excellent choice. Bluevine is very similar other neobanks except it’s for small businesses. It pays 1.50% on balances up to $100,000. There is no interest earned on balances over 100,000.

7. Fitness Bank

The last one on our list is called Fitness Bank. They tie the interest rate you can earn by how many steps you walk each day. Seriously. They pay up to 2.30% APY. You have to average 12,500 steps a day to earn this rate and have both a checking and savings account (2.20% with just a savings account). If you get at least 10,000, you can earn up to 1.25%. Even if you sit in a barcalounger all day you’ll earn 0.50% APR

If you’re a senior citizen at least 65 years of age they cut you a break. You get the top rate at 10,000 steps. You do have to download their app and wear an approved fitness tracker, which include Garmin, Fitbit, Google Fit and Apple Health.

Bonus Tip

If you can wait at least 12 months before accessing the money, I Bonds are the best risk-adjusted return you can get today.

Best Round-Up Apps for Saving and Investing

June 9, 2022 by Rob Berger

Saving and investing money is a lot like eating broccoli. We know we should do it, but it’s not so easy. One easy way to save money is with an automatic savings app. To help you get started, here are the best round-up apps for both savings and investing.

Best Round-Up Apps Table of Contents

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Best Overall Round-Up App for Savings–Chime

For those focused on building an emergency fund or other savings, Chime is my top pick for round-up apps. Why? Unlike most round-up apps, Chime pays interest on your savings.

Chime comes with a long list of features:

Get paid up to 2 days early with direct deposit*
Fee-free overdraft protection of up to $200 if you qualify
More than 60,000 free ATMs
Savings earn interest (currently 0.50% APR)

It’s key feature for our purposes is automated savings. Chime automates savings in several ways.

First, it does have a round-up feature. Called “Save When You Spend,” Chime will round up to the nearest dollar purchases made with its free Visa debit card. Chime then transfers the round up from your Spending Account to your Savings Account.**

Second, Chime enables customers to setup automatic savings. After each paycheck, you can have an amount of your choice automatically moved from your Spending Account to your Savings Account.

There are other things I like about Chime. It has arguably one of the best secured credit cards to help customers build their credit. It’s called the Chime Credit Builder Secured Visa® Credit Card, charges no annual fee and has no required minimum security deposit.

Open a Chime Account

Best Overall Round-Up App for Investing–Acorns

Acorns is my pick for the best overall round-up app for investing. Acorns is one of the first round-up apps with over 9 million clients. It offers both low cost investing, free checking and a free debit card. As such, it works for savings, investing or both.

After creating an account, you link the credit and debit cards you use for spending. Acorns tracks your round-ups and transfers them from your linked checking account once they reach $5.

You choose how you want Acorns to invest your round-ups. Users can select from several pre-configured portfolios, ranging from conservative (100% bonds) to aggressive (100% stocks). You can also chose among socially responsible portfolios. Acorns does the rest, making the investments for you in low cost, diversified ETFs (Exchange Traded Funds).

For savers, Acorns offers a checking account and debit card. The FDIC-insured account offers direct deposit, mobile check deposit and free nationwide ATMs. It does not, however, pay interest on its checking account.

Acorns costs just $3 a month for a personal account. The fee covers investing and checking accounts. For $5 a month, get the family plan that enables kids to start investing early.

Open an Acorns Account

Full List of Round-Up Apps

In addition to Acorns and Chime, here are several other round-up apps worth considering.

Greenlight

Best for kids and teens

Greenlight is perhaps best known for offering a debit card for kids and teens. It also offers an investing platform to teach young people the importance and power of saving and investing. With Greenlight Max, kids can invest in their favorite companies or ETFs. There are no trading fees and parents must approve all trades.

Greenlight offers several ways to encourage savings through what it calls Savings Boosts. One Savings Boost is round-ups. Transactions are rounded up to the nearest dollar and transferred to savings. Other Savings Boosts include earning 1% cash back on all purchases and up to 2% interest on their savings.

In addition to investing, Greenlight can serve as a child’s bank and budgeting app. Monthly costs range from $4.99 to $9.98 a month for up to five children.

Stash

Best for investing in individual stocks

Stash is similar to Acorns. You connect debit and credit cards to a Stash account. Stash monitors transactions and rounds them up to the nearest dollar. Each time round-ups total $5, Stash transfers this amount from your linked checking account to your Stash investment account.

There are several important differences between Stash and Acorns. Where Acorns uses diversified portfolios of ETFs, Stash enables users to invest in fractional shares of individuals stocks. It has over 3,900 companies on its platform, in addition to EFTs and bonds.

For those who prefer a portfolio of ETFs, Stash offers what it calls a Smart Portfolio. Introduced in March 2021, Smart Portfolios use stock and bond ETFs to create a diversified portfolio. These portfolios are automatically rebalanced for hands-off investing.

The cost of Stash ranges from $1 to $9 a month depending on the plan. These fees are in addition to the cost of any underling ETFs.

Qapital

Best for microinvesting

While all round-up apps are a form of microinvesting, Qapital takes it to another level. In addition to round-ups, Qapital offers a number of Rules that will trigger automatic saving and investing:

Payday Divvy: This feature enables you to automate how much of your paycheck goes to spending, savings and investing.
Set and Forget: Set up automatic transfers to savings or investing every week.
Guilty Pleasure: Enjoy your morning coffee at Starbucks, but save some money at the same time. You can designate the merchants and how much you save each time you shop there.
Spend Less Rule: Set a spending limit at the grocery store and automatically save the difference between the set amount and what you typically spend.
Freelancer Rule: For 1099 workers, you can set a percentage of all deposits of $100 or more to be transferred to Qapital’s FDIC-insured account for estimated taxes.
52 Week Rule: Save $1 in week one, $2 in week two, and so on, for a total of $1,378 over the course of a year.
Apple Health: Set automatic transfers to savings each time you walk, bike or run.

Money saved can be invested in one of several portfolios using low-cost ETFs:

Qapital offers three plans ranging from $3 to $12 a month.

Qoins

Best for paying down debt

With Qoins, you create either a debt or savings goal. You can also create what Qoins calls a Bundle, with both a debt payoff and savings goal. With goals set, you pick how you want money transferred toward your goal. There are several options:

Round-ups
Weekly transfers
Payday transfers
Smart Savings

Smart Savings is a feature unique to Qoins. You set how aggressively you wan to save, and Qoins’ algorithm determines how much to put toward your goal. Unlike round-ups, Smart Savings doesn’t require you to link a debit or credit card.

Qoins offers two plans costing $2.99 or $4.99 a month.

Other Round-Up Apps

I continue to evaluate round-up apps and will update this article based on new research. Here are other apps I’m evaluating:

Digit
Empower
MoneyLion
N26
Betterment
Worthy Bonds
Current

It’s worth noting that some banks offer round-up features. Bank of America is one example. The problem is that its interest rates on savings accounts are terrible.

How Round-Ups Work

Round-up apps bring the concept of a change jar into the digital world. When cash was king, it was common to have a change jar in the house. Each day when you got home, you took the change out of your pocket and put it in the jar. It wasn’t a lot of money, so it didn’t crush the budget. And while each deposit into the jar didn’t amount to much, over time it grew into some serious cash.

Round-up apps take the same concept and apply it in the world of electronic payments. You connect your checking account and credit cards to the round-up app. The app then keeps track of your transactions and the round-up amount. For example, if you spend $3.74 at a coffee shop, the app adds $0.26 to your round-up balance.

Once your round-ups reach a threshold (typically $10), the app transfers the amount from your checking account to either a savings or investment account. As such, round-ups are one form of microinvesting.

The Psychology Behind Automatic Savings

There are several psychological “tricks” that make round-up apps so effective. First, they require just one easy decision. Once you turn on the round-up feature, it continues to work without any additional effort on your part. This simple decision makes it easy to overcome the status quo bias. And once overcome, the round-ups become the status quo.

Second, they are automatic. The round-ups don’t require us to make decisions each day, week or month. They happen behind the scenes, even if we forgot all about them.

Finally, round-ups involve relatively small amounts of money. Trying to save hundreds of dollars a month might feel daunting. Saving our spare change every day, on the other hand, is less intimidating even if it adds up over time.

Can Round-Ups Really Make a Difference?

Yes. In fact, one study found that saving even $100 had a profound effect on financial well-being. And with the power of compounding, even small amounts of money saved over time can grow into significant wealth. For example, investing just $50 a month over a working career can grow into more than $400,000 at a 10% return.

Of course, returns aren’t guaranteed and a working career can last 40 or 50 years. At the same time, $50 a month is not exactly a flood of money. It’s a start. Continue to increase your savings and your wealth will continue to compound over time. In the end, compounding will generate for more wealth than the amounts you actually save.

Round-Up FAQs

What is the best round-up app for saving money?

Chime takes the top slot for saving money. It’s combination of an excellent app, fees and interest rate earn it the top spot.

What is the best round-up app for kids?

To help your kids or teens save money, Greenlight is the best option. It’s designed for kids, gives parents control features, and offers automated savings including round-ups.

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*Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

**Round Ups automatically round up debit card purchases to the nearest dollar and transfers the round up from your Chime Spending Account to into your savings account. Save When I Get Paid
automatically transfers 10% of your direct deposits of $500 or more from your Spending Account into your savings account.

12 Best Quicken Alternatives in 2022 (#1 is Free)

May 12, 2022 by Rob Berger

Quicken was once the go-to budgeting tool. I used it when it was first released in the 1980s. Today, it’s been eclipsed by apps that enable you to manage every aspect of your finances, often for free. Here are the best Quicken alternatives to consider in 2022.

Quicken alternatives — Options to replace Quicken

Editor’s Top Picks

Of all the options out there to replace Quicken (and Mint for that matter), three stand out among the rest:

Personal Capital–It’s both free and comes with the a robust set of features unmatched by other alternatives. It easily handles budgeting, net worth, cash flow, retirement investments and taxable investments. It also comes with excellent tools, including a retirement calculator, investment fee analyzer and investment portfolio analyzer. Personal Capital can now even track Bitcoin, Ethereum, Litecoin and thousands of other tokens. It’s the tool I use every day.

Limited Time Offer: From now until August 31, 2022, new Personal Capital dashboard users can enter to win a Tesla Model 3. Get all the details here.
Tiller–If you are a diehard spreadsheet fanatic, Tiller is the answer. It integrates with Google Sheets and can connect your bank accounts and credit cards. It also offers daily email updates to track your spending. You can try it free for 30 days, then it’s $79 a year.
YNAB (You Need a Budget): For those who want to focus exclusively on budgeting (no investments), then YNAB is an ideal choice. It does budgeting as well as any app available today, and its community is second to none.

Quicken Alternatives

Top Quicken Alternatives

1. Personal Capital–Editor’s Choice

Personal Capital is the clear winner when it comes to finding a substitute for Quicken. It’s free and it offers tools to manage every aspect of your finances. With Personal Capital, you can link just about every financial account you have–checking, savings, credit cards, retirement accounts, investments accounts, HSAs, and even your home (via Zillow).

Once linked, Personal Capital’s financial dashboard offers valuable insights into your finances. As an example, the tool enables you to–

Track your spending by category
Estimate when you can retire
Calculate the cost of your investments
Display the asset allocation of your portfolio
Generate a net worth statement
Get alerts when bills are due
Evaluate your investment portfolio
Save for emergencies
New: Track Bitcoin, Ethereum, Litecoin and thousands of other tokens without giving access to your crypto wallet.

I’ve used Personal Capital for years. It’s the only option that in my opinion can handle every aspect of my finances, from budgeting to investing to retirement planning.

Try Personal Capital

I’ve written a detailed review and guide of Personal Capital that you can check out.

2. Tiller Money–Best Spreadsheet Budget

I don’t know how they do it, but Tiller Money has figured out how to turn a Google Sheet into a dynamic budgeting tool. You link your bank accounts and credit cards to Tiller’s Google Sheet tool, and it automatically downloads all of your transactions. From there you can create budgets, categorize spending and generate reports.

I’ve been using Tiller for about one year for both my personal budget and my small business budget. Tiller is ideal for those who love working with spreadsheets. I will caution you that setting up Tiller can be a bit daunting. The good news is that they have videos to walk you through each step. If I can do it, you can do it.

One thing to keep in mind is that you must manually categorize each transaction. For some, this is a show-stopper. They want the convenience of tools like Personal Capital that automate this process. For others, they would prefer to categorize transactions themselves. It forces them to look at each entry, understand how they spent money, and then properly categorize the expense. Tiller does offer an auto-category tool that you can use to automatically categorize transactions based on the description.

There is no right or wrong here. It comes down to preference. You get a 30-day free trial. After that Tiller costs $79 a year.

3. You Need a Budget (YNAB)–Best for Budgeting

YNAB is ideal for those looking just for a budgeting tool. In my view, there is no better app when it comes to creating a budget. YNAB’s interface is similar to a spreadsheet. The tool makes it easy to budget by category based on the money you actually have in the bank.

One of YNAB’s core principles is to give every dollar a job. You do that by deciding how you’ll spend every dollar that enters your checking account. As with other tools, you can connect your bank accounts and credit cards to YNAB. This allows for real-time updates so that you can track your spending throughout the month.

YNAB doesn’t have the rich feature set offered by Personal Capital. That’s particularly clear when it comes to investing. For those who don’t want to track investments, however, YNAB is a good option.

It’s not free, however. You can try it free for 34 days. After that it costs $11.99 a month or $84 a year for the annual plan. The cost is the biggest downside to YNAB.

4. PocketSmith–Best for Calendar Budgeting

PocketSmith started out as a calendar to plan upcoming income and expenses. Today, it’s a full-fledged budgeting app. You can synch your accounts with PocketSmith. Once synced, you can track your budget and you’re net worth. You can also see your income and spending in a handy calendar view.

One stand-out feature is PocketSmith’s auto-budget tool. It can create a budget for you based on past spending. It also has a cash flow feature that maps income and spending by date range.

While there is a free version of PocketSmith, it requires manual data entry. To get automatic bank fees, you’ll need to pay at least $9.95 a month, or $7.50 a month when paid annually.

5. CountAbout–Imports from Quicken or Mint

If you have a lot of data in Quicken (or Mint), CountAbout may be the budgeting tool for you. It has a feature enabling you to import data from Quicken or Mint.

CountAbout enables you to download transactions from your bank and customize both income and expense categories. You can even attach receipt images to expense transactions. You can set up recurring transactions and generate financial reports.

For the features you get, the cost is very reasonable. The basic plan costs just $9.99 a year (not a month). If you want automatic downloading of bank transactions, the cost is $39.99 a year.

6. Moneydance–Traditional Budgeting Software

With so many apps going online, Moneydance takes a different approach. You download Moneydance software rather than use it online. Once downloaded, the software works much like you would expect.

You can download banking transactions into the software and initiate bill pay. The software automatically categorizes expenses based on how you categorize them. In other words, it learns from your use of the program.

It offers a dashboard (shown above) that summarizes your finances all in one place. It can also generate reports and graphs to give you a visual perspective of your money. It comes with a mobile app, can track your finances, and can alert you when bills are due.

It costs $49.99 and is available for both Mac and Windows.

7. EveryDollar (now Ramsey+)–Best for Dave Ramsey Fans

For those Dave Ramsey founds out there, EveryDollar may be a good substitute for Intuit’s Quicken. Now the first thing to point out is that EveryDollar ain’t cheap. After a 14-day trial, you’ll pay $129.99 a year. If you want to try it for just 3 months, it will cost $59.99. For this reason, it’s not high on my list. Still, I know that some folks are passionate about Financial Peace University.

You can sync your bank accounts with the tool, set up budgets, and track spending. The budgeting app works on both computers, smartphones and tablets. It also comes with Dave’s educational materials, enabling you to take online course and join virtual groups.

8. Banktivity–Designed for Macs Only

Banktivity is the budgeting app specifically designed for Macs. It offers features that enable you to organize and track all of your finances. You can group accounts and reports, and organize the dashboard in a way that works best for you.

Banktivity enables you to follow an envelope budget. This can be ideal for those living paycheck-to-paycheck.

You can import transactions from your bank and sync data across all of your Mac devices. Banktivity also tracks investments and offers account-level reporting. You can try Banktivity for free for 30 days. After that they offer three plans ranging in price from $4.16 to $8.33 a month (billed annually).

9. GnuCash–Best for Small Businesses

For those who tracked business income and expenses with Quicken and a reluctant to move up to Quickbooks, GnuCash may be the answer. It uses double-entry accounting, ideal for businesses and accounting nerds, like me. It tracks investments, schedules transactions, and generates reports and graphs.

10. Mint–Best Mobile App

I used Mint when it first came out more than a decade ago. Today, many are looking for Mint alternatives, including several of the apps listed here. Still, Mint is a worth consideration if you are replacing Intuit’s Quicken. It’s free, for starters. It’s easy to link your accounts and track your spending. It includes a budget planner and credit score tracker. Of course, there are great Mint alternatives as well.

11. GoodBudget–Best for Envelope Budgeting

I’m old enough to remember the envelope method of budgeting. My mom used it. When the money in the grocery envelope ran out, we stopped going to the grocery story until payday (seriously). Today, the envelope budget is still a smart way to manage money for those living paycheck-to-paycheck. If you want a digital version of the time-tested budgeting system, give GoodBudget a try.

Goodudget is an app based on the envelope system. You can sync and share your budget, and set goals to save for big purchases. It also has tools that let you track and payoff your debt.

12. Monarch Money–Best for Couples

Monarch Money shares many of the features in the apps listed above. You can connect all your accounts, including investment and loan accounts. Once connected, Monarch syncs your accounts to generate your net worth. The app enables you to see all your transactions in one place, set financial goals, and customize your financial dashboard.

Monarch is ideal for couples because of its collaboration features. Invite someone to your Monarch account with a separate login. They can view your data and connect their own accounts. This feature is particularly useful for couples that keep separate accounts, but want to understand their combined financial picture.

Try Monarch Money for free for 7 days, then as little as $7.50 a month.

Quicken Alternatives FAQs

What is the best free alternative to Quicken?

Personal Capital is the best free Quicken replacement. It comes with nearly every feature Quicken offers, and money additional tools. It’s particularly well suited for those who want to manage all of their money in one place, including investments.

Is Quicken available without a subscription?

Sadly, no. Like so many other software packages and apps, Quicken is now only available as a subscription. As a result, you must pay for Quicken every year.

What is the best option to migrate Quicken data to new app?

If you want to migrate Quicken data to a new budgeting app, CountAbout is a solid option. It has features enabling users to migrate data from Quicken or Mint.

What is the best Quicken replacement for calendar budgeting?

PocketSmith is a good choice as it offers a calendar view of your budget.

Which Quicken alternatives allow you to schedule bill payments?

With both Tiller Money and YNAB, you can plan future bill payments. Tiller offers a Bill Payment Tracker template and YNAB enables you to allocate funds to bills you plan to pay in the future.

Whatever tool you choose, the key is to pick one that works for you. For me, that’s Personal Capital. One or more of the above Quicken alternatives, however, should suit the needs of most looking to better manage their money.

Series I Savings Bond Rates to Rise Near 10% (Updated April 2022)

April 13, 2022 by Rob Berger

Series I Savings Bonds rates are set to rise to historic levels, again. The Labor Department released Consumer Price Index (CPI-U) data this week that showed prices rising by 8.5% for the 12 months ending Marcy 2022 and 4.81% over the past six months. As a result, the Inflation Rate on I Bonds is expected to rise to a whopping 9.62% in May 2022 (the rate is currently 7.12% annualized).That represents the highest Inflation Rate on I Bonds since they were first introduced in 1998.

How I Bond Rates Are Set

Two factors determine the interest rate on an I bond: A Fixed Rate and an Inflation Rate. Combining these two rates gives us what is known as the Composite Rate.

Featured Offer: Sallie Mae 14-Month No Penalty CD

Open an Account

14-Month No-Penalty CD
APY: ~~2.50%~~ 2.70%
Min. Deposit: $1
No early withdrawal penalty
FDIC Insured

Fixed Rate

The Fixed Rate is set based on the date of purchase. Today the Fixed Rate is 0%. The Fixed Rate was above 3% in the late 1990s and early 2000s. It’s been at 0% for much of the past decade.

The Treasury announces the Fixed Rate on I bonds every six months, on the first business day of May and November. The Fixed Rate is an annual rate that compounds every six months. The big question is whether the Treasury will increase the fixed rate in May.

Many predict that the fixed rate will remain at 0%. While I agree with this assessment, it’s a closer call. The real yield on 10-year TIPS (Treasury Inflation Protected Securities) has jumped to from -1.04 to -0.12 in one month.

I suspect the fixed rate won’t rise until real yields on TIPS get about 25 basis points above 0%. This is important for I bond buying strategies (see below). It’s important to understand that the Fixed Rate at the time of purchase applies for the duration of the bond (30 years).

Inflation Rate

Unlike the Fixed Rate, the Inflation Rate changes every six months over the life of an I bond. The rate is set based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy. As with the Fixed Rate, the Inflation Rate is set on the first business day in May and November.

Keep in mind that the date new rates apply to a specific I bond depends on the month in which you bought it. Here’s a table of when new rates will take effect:

Issue month of your bond	New rates take effect
January	January 1 and July 1
February	February 1 and August 1
March	March 1 and September 1
April	April 1 and October 1
May	May 1 and November 1
June	June 1 and December 1
July	July 1 and January 1
August	August 1 and February 1
September	September 1 and March 1
October	October 1 and April 1
November	November 1 and May 1
December	December 1 and June 1

Composite Rate

The Composite Rate is the annualized rate based on adding the Fixed Rate to the Inflation Rate. Through April 2022, Composite Rate is 7.12%. Beginning in May 2022 for the following six months, the Composite Rate will jump to 9.62% thanks to rising inflation.

How I Bonds Work

There are several features of I bonds to keep in mind before investing.

First, you can only buy I bonds directly from the Treasury. They are not bought and sold on the secondary market. This means, among other things, that you won’t find I bonds in an ETF or mutual fund portfolio.

Second, the government imposes a limit on the amount of money that you can invest in I bonds each year. You can invest $10,000 a year per social security number through Treasury Direct. You can also purchase up to $5,000 through your federal tax refund.

Third, you must keep your investment in an I bond for at least one year. You can’t sell the bond back to the government during this time. If you sell before holding the bond for five years, you also lose three months of interest.

Fourth, if you own a business, the business entity can also invest in I bonds. This is something I just learned. My business will be buying $10,000 in I bonds this month.

Finally, you can defer paying income tax on interest until you sell the bond. In addition, you’ll owe no state income tax.

When Should You Buy I Bonds

When you should buy I bonds turns on whether you plan to be a long-term or short-term investor.

Long-Term Investor

For long-term investors, I would buy at the end of April, if you haven’t already purchased I bonds this year. As the chart above shows, you’ll earn the current Inflation Rate from April 2022 through September 2022. Beginning in October 2022, you’ll then earn the new rate of 9.62% for six months.

The key point is that for long-term investors, it’s likely that the Inflation Rate will fall below its current level at some point. As a result, it makes sense to take advantage of the current rate. And while the Fixed Rate will reset in May, it’s unlikely to rise about 0% in my opinion. Of course, there’s no guarantee, but it seems like a reasonable bet in my view.

Short-Term Investor

For investors who plan to sell after one year, I’d follow the same strategy. At the end of last year my recommendation was to wait:

I’d wait until November. I think it’s likely that the Inflation Rate in May 2022 will be higher than the current 3.56%. By waiting until November, investors will receive the 7.12% for six months, followed by the new rate set in May of next year. While it’s certainly possible that the Inflation Rate next year could fall below the current 3.56%, I view that as unlikely given the current trends in the CPI.

Today I’m less certain that the next inflation adjustment will be as attractive. There are already some signs of core inflation moderating. Just keep in mind that accurately predicting inflation and interest rates is impossible. For me today, a “bird in the hand” rules the day.

Keep in mind that if you sell after one year, you’ll lose 3 months of interest. Even so, the return will far exceed what savers can earn on a deposit account.

I Bonds vs CDs

Given the current and upcoming yields on I bonds, they are significantly better than even the best CD rates. That’s true even if one plans to sell the I bond after one year and incur the 3-month interest penalty. The key difference is that with I bonds, you cannot liquidate for the first year. With a CD, you can always withdraw your money, subject to an interest penalty.

I use Personal Capital to track all of my investments. The free tool shows me my asset allocation, total costs, and even retirement projections. Check out my Personal Capital Review and User’s Guide to learn how it can help you, too.

I Bond Resources

Treasury Direct: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm
TIPS Watch: https://tipswatch.com/tracking-inflation-and-i-bonds/
Deposit Accounts: https://www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/

A List of Low Cost Financial Advisors (Say NO to 1% Advisors)

March 29, 2022 by Rob Berger

Investment advisors charging one percent of the investments they manage for you is the industry norm. Many charge more than that.

Not sure how fees may affect your wealth over time, then check out this report.

In an effort keep more of your money in your pocket, I’ve created this list of low cost financial advisors. It includes both flat-fee advisors as well as those who charge 50 basis points (1/2%) or less.

Please understand that I am not recommending these advisors. You’ll need to do your own due diligence to determine whether they are a good fit for your financial needs and goals.

Mark Zoril

Planvision
Fees: $239 the first year, then $8/month (https://planvisionmn.com/faq/)
Services: Financial planning, investment management

Rick Ferri

Website
Fee: $450/hour (https://rickferri.com/faqs/#collapse-1-10941)
Services: Hourly advice for DIY investors

Andy Panko

Tenon Financial (not accepting new clients)
Fee: $9,600/year (couple); $8,400/year (individual)
Services: Financial planning, tax, investment management

Asset Builder

Website
Fee: 0.35% (on average)
Services: Investment management using DFA funds

Vanguard Advisor Services

Website
Fee: 0.30% ($50,000 minumum)
Services: Financial planning, investment management

Andrew Dressel, CFP®, APMA®, CRPC®

Abundo Wealth
Fee: $375-$450 start-up fee, then $89-$139/month
Services: Financial planning

Michael T. Powers, CPA, PFS, CFP®

Manuka Financial
Fee: $950 initial fee + an ongoing flat fee of $1,250 – $6,250 per quarter
Services: Retirement planning, investment management, tax preparation

Jon Luskin, CFP

Website
Fee: For a one-time financial review, you pay a one-time fee: $1,725. Additional in-depth work (many clients don’t need this) and returning clients are billed at $350 an hour.
Services: Hourly advice for DIY investors

Here’s a list of flat-fee planners put together by Cody Garrett, CFP.

Here’s a list of flat-fee and advisors put together by Sara Grillo.

If you know of other advisors who should make this list, please let me know.

4 Best Robo-Advisors in 2022 (Out of 23 Evaluated)

March 22, 2022 by Rob Berger

Robo-Advisors promise to make investing easy at a very low cost. Investors have taken notice. According to one estimate, automated investing platforms will manage nearly $1.5 trillion by 2023. With dozens of options, however, picking the best robo-advisor can be overwhelming.

To help, I examined about two dozen robos and narrowed them down to what I think are the top four choices. Note that I have used all four robo advisors that made this list. I’m continue to test other services and may update this list in the future.

Best Robo-Advisors

Betterment–Best Overall Robo-Advisor

I’ve helped family members and friends set up their first investment account. After explaining the pros and cons of traditional brokers and robo-advisors, they have all chosen Betterment. There are several reasons why Betterment is such a popular choice.

Ease of Use: With Betterment, you select your account type, answer a few questions about your goals, and fund your account (check or bank transfer). From there, Betterment does the rest. It invests your money in a several low cost ETFs that give you a diversified portfolio of stocks and bonds.

In addition to the core portfolios above, it also offers several socially responsible investing portfolios.

Betterment Socially Responsibly Portfolios

Account Types: Betterment offers a wide range of account types, including:

Roth and Traditional IRA
SEP IRA (single participant only)
Inherited IRA
Individual taxable accounts
Joint taxable accounts with rights of survivorship
Trust accounts

Beyond investment accounts, it also offers deposit accounts:

Cash Reserve (a high-yield cash account)
Checking account provided by nbkc bank, Member FDIC.

Features: Apart from its easy of use, Betterment’s long list of features earn it the top spot as the best robo-advisor:

Rebalancing: Automatically rebalances your investment accounts.
Automated Investing: Set up recurring deposits to your account and automatically reinvest dividends and interest.
Tax Tools: Betterment offers several features to reduce your taxes, including tax loss harvesting, tax efficient rebalancing, and asset location.
Planning: Track any number of financial goals, including retirement or saving for a child’s education.
Financial Dashboard: See all of your finances in one place, including assets held at other financial institutions.
Advisor Help: Unlike most robo-advisors, Betterment has Certified Financial Planners available to help you.

Low Fees: Betterment offers three fee levels:

No Fee: You can open a no-fee checking account (comes with a free Visa debit card) or a Cash Reserve account.
0.25%: Digital investing with no minimum balance (comes to about $2.50 a year for every $1,000 invested).
0.40%: Premium investing that includes unlimited calls and emails with Betterment’s team of CFPs (requires a $100,000 minimum balance).

Finally, Betterment is ideal for every stage of an investor’s journey. It’s easy to open up your first account, with no minimum requirements. And betterment offers a wealth of tools for those entering retirement who need to start withdrawing money to live on.

Try Betterment

M1 Finance–Best No-Fee Robo with Ultimate Flexibility

For those that want the automation of a robo-advisor, no fees, and complete control of your investment strategy, M1 Finance is without question the top choice. It blends the benefits of traditional brokers with the automation of robo-advisors.

M1 enables investors to create what they call Pies. Each pie can hold individual stocks, ETFs or both. For each investment you add to a Pie, you also indicate how big each slice is. For example, you could create a Pie with the following investments:

VTI (50%): Vanguard’s Total U.S. Stock Market ETF
VXUS (30%): Vanguard’s Total International Stock Market ETF
BND (20%): Vanguards Total U.S. Bond ETF

The above is what is called the three fund portfolio.

Where M1 really stands out is how easy it makes investing in the Pies of your choice. Using the three fund portfolio above as an example, M1 will automatically allocate your investments based on the percentages you set.

As markets cause your balances in each ETF to vary from your plan, M1 takes any new contributions and investments as necessary to bring your investment Pie back in line with your plan. And if your contributions aren’t sufficient, you can rebalance a pie with the click of a button.

In addition to investing, M1 offers a high-yield checking account and an excellent cash back credit card.

Try M1 Finance

Blooom

Blooom is unique among robo-advisors. It was designed to work with 401(k) plans and other workplace retirement accounts. In fact, it’s the only one on the list that can help investors manage a 401(k). It’s also one of the least expensive robo-advisors (along with M1 Finance).

With Blooom the first step is to connect your accounts. You can connect workplace retirement accounts and IRA accounts. Blooom will analyze your investments and make suggestions based on your goals. The analysis is free, and for those who don’t need help buying and selling within their accounts, this could be all you need.

For those who want more help, Blooom offers several paid plans. With the Personalized Plan, you’ll get personalized fund recommendations based on your specific accounts, financial goals and risk tolerance. The cost is just $120 per year.

With the Advisor Access Plan, you can have Blooom place trades on your behalf. You also get access to financial advisor via chat or email. Keep in mind, however, that you would be responsible for placing your own trades. In this way, it’s not as hands-off as Betterment or Wealthfront. The cost of this plan is $165 per year.

Finally, you can schedule a one-on-one call with a financial advisor for $295 per year.

Try Blooom

Wealthfront

Finally, Wealthfront rounds out my list of the best robo-advisors. Similar to Betterment, it provides a wealth of investing automation for a fee of just 25 basis points. Its list of features is similar to Betterment, with some notable differences.

Before getting those features and differences, however, it’s important to point out that Wealthfront announced in January 2022 that it had agreed to be acquired by UBS. How this will affect Wealthfront is unclear.

Wealthfront offers a Classic, Socially Responsible and Direct Indexing approach to investing. With a Classic portfolio, you get diversification across U.S. stocks, international stocks, and bonds. You can also chose among socially responsible ETFs.

Unlike Betterment, Wealthfront also offers what is called direct indexing for accounts with at least $100,000. With direct indexing, Wealthfront invests in 100 to 600 stocks, rather than a total U.S. stock ETF such as VTI. The idea is to get the returns of an index, but with tax loss harvesting and asset location flexibility.

On the negative side, Wealthfront does not offer the help of a CFP, as Betterment does.

Try Wealthfront

Why Vanguard Digital Advisor Didn’t Make the Cut

At first glance, Vanguard Digital Advisor checks all the boxes. It offers automated investing using Vanguard ETFs. Generally Vanguard uses four ETFs to implement its investment strategy on your behalf:

VTI: Total U.S. Stock Market
VXUS: Total International Stock Market
BND: Total U.S. Bond Market
BNDX: Total International Bond Market

Vanguard automatically rebalances the portfolio periodically to keep the portfolio in line with your investment goals. In addition to investing, Digital Advisor can also help you achieve other goals, such as getting out of debt.

And if all that weren’t enough, the cost is about 0.15%, which includes the cost of the underlying ETFs.

So why doesn’t it make the cut?

Well, it wasn’t until I used the service that I experienced its many shortcomings.

First, there have been a number of technology issues. Do you see the pretty graph in the image above showing the investor’s progress? Here’s what mine looks like:

Vanguard tells me they are working on it.

For a week I couldn’t even enroll in the service. I kept getting this message:

Problems enrolling in Vanguard Digital Advisor

These issues may be temporary, but it gets worse.

Unlike other robo-advisors, you are limited to just five initial asset allocations. Once selected, you are limited in the changes you can make to the asset allocation. And, similar to a target date retirement fund, Vanguard will change your asset allocation as you near your retirement goal.

What’s more, you can’t tell Vanguard to leave your asset allocation alone. It changes whether you like it or not. The result is that Digital Advisor is not well suited for taxable accounts.

And even if you want to use the service in an IRA, you’d be better off with a Vanguard Target Date Fund. These funds use the same funds and cost just 8 basis points. Why pay 15 basis points for effectively the same thing. (A Vanguard rep told me that one can customize the glidepath with Digital Advisor a bit more than with a TDR fund, but the differences seem minimal at best).

In short, Vanguard’s Digital Advisor fails to make the grade.

The True Cost of “Free” Robo Advisors

There are two “free” robo-advisors that did not make my list of the top four–SoFi and Schwab Intelligent Portfolios. In both cases it’s because they have “hidden” fees. Let me explain.

SoFi

SoFi is best known for its student loan business. Several years ago it began to broaden its financial services offerings, including SoFi Automated Investing. While it doesn’t charge a management fee, they get their money another way. Let me explain.

Here’s the portfolio that SoFi suggests for me (I assumed a $1 million contribution, but the amount isn’t important):

When you click in the View details link, here are the specific funds SoFi uses:

Notice that the selected funds include two SoFi ETFs. That’s how SoFi makes its money. And those funds are expensive and not what you might think they are.

For example, the SoFI Select 500 ETF is NOT an S&P 500 index fund. It doesn’t track that index, instead tracking something called the Solactive SoFi US 500 Growth Index. And it costs 19 basis points each year. While not outrageous, solid S&P 500 index funds typically cost less than 5 basis points.

Does this make SoFi a “bad” robo-advisor. I wouldn’t go that far. But its pricing isn’t as transparent as it should be in my opinion, and I have no interest in tracking a SoFi index with my investments. For these reasons, it didn’t make the list of the best robos.

Schwab Intelligent Portfolios

Schwab entered the robo-advisor market with its Intelligent Portfolios. Like SoFi, there are no management fees charged by Schwab. Investors just pay the fees of the underlying ETFs. Unlike SoFi, Schwab doesn’t force you to invest in ETFs that track a proprietary index.

So what’s the problem?

Schwab forces you to keep at least 6% of your portfolio in cash. And that’s how Schwab makes its money. The amount of cash you must keep goes up as your portfolio becomes more conservative.

For example, a Moderate Growth portfolio requires 9% in cash:

I would much prefer for Schwab just to charge a management fee rather than requiring a significant cash position. At least then the costs would be transparent.

Methodology

My first step in creating this list was to identify a complete list of automated investing platforms. In addition to those listed above, I considered the following:

Etrade Core Portfolios: https://us.etrade.com/what-we-offer/our-accounts/core-portfolios
Axos Managed Portfolios: https://www.axos.com/invest
Acorns
Fidelity Go: https://www.fidelity.com/managed-accounts/fidelity-go/overview
Morgan Stanley Access Investing: https://www.morganstanley.com/what-we-do/wealth-management/access-investing/my-goals
Merrill Edge Guided Investing: ttps://www.merrilledge.com/guided-investing
Wells Fargo Intuitive Investor: https://www.wellsfargoadvisors.com/services/intuitive-investor/how-it-works.htm
Zacks Advantage: https://www.zacksadvantage.com/
UBS Advice Advantage: https://adviceadvantage.ubs.com/
FutureAdvisor (Blackrock): https://www.blackrock.com/futureadvisor
Stash: https://www.stash.com/smart-portfolio-investing
Ally Invest Robo Portfolios
SigFig
Ellevest
Interactive Advisors

I then considered the following factors:

Cost
Ease of Use
Account Types
Underlying ETFs used in portfolios
Additional features (particularly as it relates to planning and retirement)

Note that just because a robo-advisor didn’t make the list of the best doesn’t mean the service isn’t worth considering. For example, Acorns is a solid option for those looking for a round-up app.

How to Choose the Best Robo-Advisor for Your Needs

Robo-Advisor	Best for
Betterment	Best overall robo-advisor
M1 Finance	Best free robo-advisor
Blooom	Best for 401(k) and 403(b) accounts
Vanguard Digital Advisors	Best for Vanguard fans
Wealthfront	Best for large taxable accounts

Final Thoughts

Robo-advisors can simplify the process of investing for your future. Not all automated investing services are the same, however. It’s important to understand how a service works, its fees, and its portfolio construction before investing.