The idea of the Savebetter platform sounds interesting to me. With just one account, one can shop for the best savings and CDs from participating banks and credit unions from their marketplace, and without needing to go through the hassle of opening new and closing unused accounts. At tax time, there would only be one 1099 to deal.
Does anyone here use them? Could you share your experience, particularly with respect to the following
Funds transfer speed (do they do next-day transfers?)
Does Savebetter steal some of your interest during a transfer, e.g. by crediting your account only a few days after they had debited your account?
Are there any ACH transfer amount limits?
Suppose you want to switch from one bank to another on their platform, how do you do it? Do you have to move the money out to the external bank first?
The 1099s are one of the big reasons why I don’t rate chase as much as I should. It is such a pain in the behind to track them down and deal with them. Especially so with the fintechs who often issue them after 1/31, correct them if they “forgot” to include a SUB, etc. I’ve had to file two amended returns in the last three years because I inevitably get a late or corrected 1099. I can’t even get Fidelity to issue one on time, much less the random fintechs.
I wish the IRS would just centralize this and spit out a number on your online account that you can fill in on your 1040. They get copies of them anyway.
I keep track of every transaction in spreadsheets. For interest (and SUBs) I login to every bank account at the beginning of the month, save the monthly statement, and record the most recent interest payment in a spreadsheet. Each bank has its own column in the spreadsheet (rows are months, columns are for individual banks and totals). At tax time I know the exact numbers, which are added up in a single cell in my taxes spreadsheet with a note indicating bank name, total, and whether I received the 1099. All that’s left by that point is to keep track of the 1099s.
This may sound like a lot of effort, but I also keep most of the money in the bank that pays the most, so I really only need to login to two or three for the interest payments. For TreasuryDirect I don’t even need to login, because I have another spreadsheet tracking each security and adding up all the interest.
But all you really have to do is keep a list of the bank accounts that were open during the year. You just need to login once to each one on January 1 and add up any interest payments. If you close an account during the year, then add it all up before closing for banks that take away online access to statements/documents once an account is closed (like Citi, unlike Barclays). I suspect this is less effort than having to amend your tax return .
That sounds like more effort than I am willing to expend!
In this environment, I’m sort of at the point that I’m gonna take my liquid cash and shove it into Fidelity’s money market (FZDXX) or into t-bills. The drawback there is missing out on sign-up bonuses, I suppose.
For longer term stuff (4+ years), the stock market is almost always going to beat a CD and so that money tends to get invested.
You should review your accounts periodically regardless. So, if doing this monthly, it takes about 5 extra minutes each month to record your interest earned from you accounts. Then, on Jan 1 you already know what every 1099 is going to list. It takes very little effort, the most intensive part is setting up your tabulation system (using quicken, a spreadsheet, or whatever).
Like many here, I have dozens of active accounts. But the only things stopping me from being able to file my tax return on January 2 is a MLP that doesnt distribute it’s K-1 until early March, and a REIT that pays dividends all year then reclassifies a portion as a capital distribution instead.
Normally after I zeroed out / abandoned an account, I would download the last statement. That statement would have the interest paid YTD. That is how I track the interest in case I misplace or did not get the 1099 for old or closed accounts.
Separately, I keep track of the accounts which I opened or closed in a year. This alerts me of the interest that I need to report.