New M1 High-Yield Savings Account Offers 5.00% APY
Finance app M1 has launched the M1 High-Yield Savings Account with 5.00% APY. M1’s new account immediately becomes one of the highest-yielding savings accounts available, but it also comes with a fee. You must be an M1 Plus member in order to get this rate.
With the launch of the M1 High-Yield Savings Account, M1 is also offering three free months of M1 Plus for all users. Current M1 Plus members will see three free months added to the end of their subscription.
When it’s time to renew, membership pricing will resume at the regular rate of $10/month or $95 per year. You need to pay these fees to earn 5.00%. If you are not a M1 Plus member, then you will earn an interest rate of 1.50% APY.
The M1 High-Yield Savings Account is insured up to $5 million, providing a materially higher level of protection than most competing financial institutions that only meet the standard level of FDIC insurance of $250,000. The savings account has no minimum deposit requirement and no cap on a user’s interest-generating account balance.
This could a good option if you want to check out M1 Plus for three months for free. But you can already get 5.00% or even slightly more with other bank accounts. Check out this list of the best interest rates available this month, and earn up to 5.07% APY with savings accounts and 5.65% APY with CDs.
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Interactive Brokers offers 4.58% on cash balances. So, we’re talking 0.42% difference. Now, apply that difference to the amount of idle cash that the average reader holds. My sense is it’s not going to be $5 million . . . or even $250k. But, if it were say $100k, we’re talking $400 per year in additional interest. It’s hard for me to imagine someone incurring the inconvenience of having a separate cash account at a separate institution to capture $400 per year in additional interest. It doesn’t seem worth the inconvenience.
Frank, to answer your question, it’s the same way that Schwab offers unlimited insurance on certain accounts. Schwab (and other institutions) obtains an excess coverage policy from Lloyds of London or similar provider. I was in the business and am familiar with their set-up.
Thank you for your reply. It’s important for people to know that…cause some people may be comfortable with that scenario, some may not. Personally, I’d spread money over several institutions at a 4% level and get the FDIC comfort. I was in the meltdown and bad things do happen. But others might feel different. Thanks again!
It says ,”The M1 High-Yield Savings Account is insured up to $5 million, providing a materially higher level of protection than most competing financial institutions that only meet the standard level of FDIC insurance of $250,000. ”
So then, who is insuring it? It doesn’t say.