Part 1 - Getting a 4.94% APR return on my savings! - The Basics
It June 6th and I have $8,300 in my bank account just sitting in a 2.1% savings account waiting for the federal government to take my money. Why you ask? Well, I made quite a bit of “independent contractor income and I have another job that didn’t quite withhold enough from my income over the Spring Semester. This means I have to save for taxes that I might owe when I do my 2019 tax returns in 2020…I’ll owe, I promise.
Obviously leaving $8,300 in a 2.1% savings account is boring. It doesn’t pay well, I hate seeing it know that the government will take it and I’d really like to purchase a home and use it as a down payment, but that’s another story for another day.
While I was sitting on this money, I was wondering how can I make more money on those funds, but at the same time keeping the money uber safe, like so safe that I don’t want to lose it because I don’t want the feds coming after me because I evaded taxes kind of safe.
As you might have saw in my April side hustle, I stumbled upon opportunities to open new accounts and get “bonuses” from banks. Well, you can also do this for savings accounts when you deposit and hold XXXXX amount of dollars for X amount of time. Well, I stumbled on this one:
As you might see, if I deposit $15,000 and do 2 qualifying direct deposits, I can earn $500.00. That’s awesome, I can do that. Well, except I had $8,300 not $15,000.
Well, I actually do have $15,000 sitting in savings accounts right now. I have $8,300 in estimated tax savings and I pulled together the $6,700 from other savings accounts (NDNC Funds and Emergency Savings).
So with $15,000 in my hands, I opened an account:
Now I really didn’t have $15,000 in my hand, I needed to do bank to bank transfers, a couple of them. So I still need to work all of that out, but at the end of June 6th, I had two accounts at Citi Bank and I was working on getting all of my funds transferred into these accounts to have $15,000 on deposit at Citi.
I also need to make two direct deposits into these accounts for the first two months. That is going to be hard because I literally only get paid once a month from my job, so within two months I would only have one payroll cycle. I will probably have to have one of my side hustle direct deposit my earnings into this account and then immediately transfer it back to my normal accounts. That will be a pain, but no pain, no gain.
This is a Four Part Series Blog as I chronicle my decision to get a 4.94% APR return on my money ($15,000 to be more specific). The four parts include:
Part 1 - The Basics
Part 2 - The Tax and Calculations
Part 3 - The $500 Bonus Deposit (Expected Between September - November 2019)
Part 4 - The Tax Form Received and Final Results (Expected February 2020)
Parts 3 and 4 are based on future results. Technically speaking, after 150 days, I should receive $500 from Citi if I do everything correct. On Day 150, I should my $500 bonus and Part 3 would be completed. Part 4 would include the actual tax forms I receive from Citi for this bonus. Tax forms for this bonus will not be received until February 2020. I will add links to this blog post after those blogs are posted to this site. So stay tuned.