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Paypal Prepaid Mastercard - Access to 5.0% APY Savings Account (FDIC ins)

jonnyd13 652 163 April 11, 2013 at 08:27 AM More PayPal.com Deals
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Last Edited by jonnyd13 April 11, 2013 at 08:33 AM
Paypal Prepaid Mastercard [paypal.com]

I was looking into some other options to pad my CC bonus points/reward miles accounts and stumbled upon this. I have no idea why I haven't seen it posted here (or hot deals) before. Anyone have any experience with this?

The catch is the fees associated with the prepaid card. Basically, it's a $5 month fee to have the card. $1200 average balance per month would earn $5 in interest at the promotional 5% rate. Anything larger than that makes this potentially worthwhile since the actual APY is about 4.4% assuming a $10k balance. (Note: Interest is paid quarterly and my calculations don't consider compounding.)

Balance APY
2000 2.0%
3000 3.0%
4000 3.5%
5000 3.8%
6000 4.0%
7000 4.1%


T&C below:
8. The optional savings account is made available to cardholders through The Bancorp Bank, Member FDIC. TO OPEN A SAVINGS ACCOUNT, YOU MUST ESTABLISH A PAYPAL ACCOUNT, OR LINK THIS PREPAID CARD TO YOUR EXISTING ACCOUNT. If you are subject to Internal Revenue Service backup withholding at the time of your request to open a savings account, the request will be declined. Interest is calculated on the Average Daily Balance of the savings account and is paid quarterly. The Annual Percentage Yield is accurate as of January 1, 2012: this is a promotional rate and may change without notice pursuant to applicable law. No minimum balance necessary to open the account or obtain the yield. Because savings account funds are withdrawn (maximum 6 such transfers per calendar month) through the card account, card transaction fees could reduce the interest earned on the savings account.

Fee info:
FEES RELATED TO THE SERVICE
All fees will be withdrawn from your Card Account and will be assessed as long as there
is a remaining balance on your Card Account, except where prohibited by law. Any time
your remaining Card Account balance is less than the fee amount being assessed, the
balance of your Card Account will be applied to the fee amount.
Card Purchase Fee: None.
Purchase Plan: Monthly
Plan
Plan Fee $4.95 monthly
Signature Purchase Transaction Fee* None. Included in
Plan
PIN Purchase Transaction Fee* None. Included in
Plan
Foreign Transaction Fee
2.5% of the U.S.
Dollar amount of
the Signature or
PIN Purchase
Transaction
*During checkout, select “CREDIT” on the keypad to make a Signature Purchase, or
select “DEBIT” and enter your PIN to make a PIN Purchase.
Withdraw Cash (See tips to avoid ATM fees, below)
Over the Counter Cash Withdrawal at a
financial institution
$2.50 per withdrawal, plus the Foreign Transaction Fee, as
applicable. A fee may be assessed by the financial institution
and may vary from location to location.
Over the Counter Cash Withdrawal at a
NetSpend Reload Network location
Fee may be assessed by reload location and may vary from
location to location. Service not available in all reload
locations.
Domestic ATM Cash Withdrawal $1.95 per withdrawal, plus ATM owner surcharge fee, if any.
International ATM Cash Withdrawal $1.95 per withdrawal, plus the Foreign Transaction Fee, and
the ATM owner surcharge fee, if any.
ATM Transaction Decline Fee $1.00 each
Foreign Transaction Fee 2.5% of the U.S. Dollar amount of the cash withdrawal.
Tips to avoid ATM fees:
1. Select “DEBIT” and enter your PIN to get cash back when making purchases at many retailers,
such as grocery stores.
2. Visit any Allpoint Network ATM in the U.S. This method of cash withdrawal lets you avoid

15 Comments

1 2

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Joined Feb 2008
L10: Grand Master
21,794 Posts
3,419 Reputation
#2
Wait. You think we should put money into Paypal? I, like many people, wouldn't trust the ban hammer with a cent. Wink Although this isn't really Paypal. Paypal is just fronting for a Bancorp Bank. The question is, if PP bans you, what happens to your money?
Reply Helpful Comment? 0 0
Joined Jul 2009
L5: Journeyman
652 Posts
163 Reputation
Original Poster
#3
Yeah very true. I realized after posting this that this "deal" has been around since 2012 sometime. The argument for this would be if you only use Paypal for what they consider legitimate reasons and that since it is FDIC insured, they can't really mess with it.
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#4
Thanks for the tip. Gonna test the waters with this for a bit and see how it goes. Will check back after I receive my card and set up a savings account.
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#5
so if i put 50k into the account i will get near 5%? sure would beat the 1% i get now.
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Oh Lord make me beautiful within
#6
Quote :
EFFECTIVE APRIL 1, 2013, THE SAVINGS ACCOUNT WILL FEATURE A TIERED VARIABLE INTEREST RATE. THIS MEANS THE INTEREST RATE WILL BE 4.91% WITH AN ANNUAL PERCENTAGE YIELD OF 5.00% FOR BALANCES UP TO, BUT NOT EXCEEDING $5,000.00, & FOR THAT PORTION OF THE BALANCE THAT IS $5,000.01, OR MORE, THE INTEREST RATE WILL BE 0.49% WITH AN ANNUAL PERCENTAGE YIELD OF 0.50%. THE INTEREST RATES AND ANNUAL PERCENTAGE YIELDS ARE PROMOTIONAL RATES AND MAY CHANGE
Three seconds of reading.

$5k held by a bank with a non-banking entity controlling the sole means of account access. Negative reps.
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#7
I'll still take a 5% return on 5K and FDIC Insured. Positive Reps
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$4,200 Chasing Bank Promotions YTD
#8
Quote from BreakingTheBank View Post :
I'll still take a 5% return on 5K and FDIC Insured. Positive Reps
If by "5% return" you mean 3.81% return, then yes.
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#9
For the debit card it is nice to have instant access to paypal funds if you do not have the official paypal debit card. There is a nice perk of being able to use vcc numbers. I did this while waiting on my official paypal debit card.
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#10
Quote from sd444 View Post :
If by "5% return" you mean 3.81% return, then yes.
If your referring to the $5 monthly fee loss I have some ideas on avoiding it.
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#11
Quote from BreakingTheBank View Post :
If your referring to the $5 monthly fee loss I have some ideas on avoiding it.
Please share how it can be avoided?
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#12
Based on the verbiage of the savings account I believe you can link the account to your PayPal account. I am going to try and close the prepaid card after opening and funding savings account with the Maximum 5K for 5%. Will let you know if it works once I receive the card.
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#13
Did it work?
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#14
Quote from BreakingTheBank View Post :
I'll still take a 5% return on 5K and FDIC Insured. Positive Reps
In that case why don't you consider LMCU's MAX Checking with 3% upto 15k. You do need a direct deposit transaction though.
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#15
practically the same as mango money savings which offers 6% APY on a max of $5,000. FDIC insured...

my concerns with mango is
1) balance exceeding 5k earns 0.1%
2) accessibility of funds
3) george lopez is their celebrity spokesman
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