HMBradley users: help me understand optimal deposit/withdrawal

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cat_guy
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HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

Various other threads have convinced me that HMBradley is legit and FDIC insured, and the high interest rates are explained by them betting that most customers won't qualify for that and their other products will make up for it, similar to credit unions and various startups and banks over the years.

So I'm ready to take the plunge but want to understand what it takes to maintain maximum benefit. I've read in threads that people qualify for the 3% by only depositing $100/month, and then move over a lot more money. How much money can be taken out of the account each month? They say you have to "save at least 20%". Does this mean if $100 is deposited, then a max of $80 can be withdrawn each month?

The max amount that can get 3% is 100k. By my calculation, here's how to get maximum benefit:

3% of $100,000 = $3,000
$3,000/12 = $250/month I want to remove from the account each month

$250/4*5=$312.50 (i.e. $250 is 80% of $312.50).

So...

If I have $100,000 in the account, deposit $312.50 each month, withdraw $250 each month, then my account will maintain 3% interest and be at max size. The only compromise, which is barely worth mentioning, is the amount above $100k will grow by $62.50 ($250/4) each month, $750/year, earning 0% [updated, I previously thought it was 0.5%, but I was confusing with something else].

Is that math correct?


I initially forgot to include the interest in the amount over 100k that would grow. BUT, it turns out interest also counts toward incoming money, so the net math is the same as my previous erroneous math. Deposit $312.50 each month, withdraw $250, inefficiency of $62.50/month.
Last edited by cat_guy on Fri Dec 17, 2021 9:09 am, edited 4 times in total.
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

The piece I'm less than 100% sure on is whether you lose the 3% on the entire balance if your balance goes over $100k. I don't think you do, but I'm not certain. So I'm instead just putting about $95k or so in there and calling it a profitable day.
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

dublin wrote: Sun Feb 21, 2021 11:48 am The piece I'm less than 100% sure on is whether you lose the 3% on the entire balance if your balance goes over $100k.
Hah, now that would be evil. Hopefully an email to support would clear that up. I just wrote to them, I will report back.

https://faq.hmbradley.com/hc/en-us/arti ... ngs-Tiers-
dublin wrote: Sun Feb 21, 2021 11:48 am So I'm instead just putting about $95k or so in there and calling it a profitable day.
How much do you deposit and withdraw each month?
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

Depositing a small amount via direct deposit, not withdrawing anything.
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

Heard back from customer support on two questions I asked:
We do not pay interest on the amount over $100,000. Your first $100,000 would still earn interest.
So, that confirms they aren't evil and turn off your interest if you get past 100k 😄
The 20% counts for total deposits including direct deposits and any other deposits.

If you save 20% of your total deposits per quarter and have at least one direct deposit each month, you will qualify for Tier 1 (3% APY) in the next quarter.

We calculate your Savings Tier with this formula (which determines your Tier for the *next* quarter):

{Total Money in this Quarter} - {Total Money Out This Quarter} / {Total Money in This Quarter}

So if you were to deposit $1,000 a month and withdraw no more than $800 you will maintain the 20% savings rate. When you transfer in additional funds, you would need to maintain the 20% savings rate to continue to qualify for Tier 1 (3% APY).

The APY is earned on the entire balance of up to $100,000. That is, the first $100,000 will continue to earn interest, while any amount beyond $100,000 will not earn interest.
This makes sense and it's confidence-inspiring to see them laying out the formula in a simple way.

One interesting side effect of this is for the first quarter that I am making 3%, during which time I will transfer in 100k, I can feel free to transfer out 100% of everything over 100k because the total in / total out formula will include that incoming 100k.
Last edited by cat_guy on Sun Feb 21, 2021 12:31 pm, edited 1 time in total.
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

cat_guy wrote: Sun Feb 21, 2021 12:27 pm Heard back from customer support on two questions I asked:
We do not pay interest on the amount over $100,000. Your first $100,000 would still earn interest.
The 20% counts for total deposits including direct deposits and any other deposits.

If you save 20% of your total deposits per quarter and have at least one direct deposit each month, you will qualify for Tier 1 (3% APY) in the next quarter.

We calculate your Savings Tier with this formula (which determines your Tier for the *next* quarter):

{Total Money in this Quarter} - {Total Money Out This Quarter} / {Total Money in This Quarter}

So if you were to deposit $1,000 a month and withdraw no more than $800 you will maintain the 20% savings rate. When you transfer in additional funds, you would need to maintain the 20% savings rate to continue to qualify for Tier 1 (3% APY).

The APY is earned on the entire balance of up to $100,000. That is, the first $100,000 will continue to earn interest, while any amount beyond $100,000 will not earn interest.
Impressive response speed, on a Sunday no less!

Good to hear that it sounds like you'll still earn the 3% on that first $100k. And yes, the 20% is calculated as total in-quarter withdrawals/total in-quarter deposits. So it works as long as you plan to have a net-positive balance. If you withdraw more at some point, you'd bounce to a lower tier (or none at all) in the next quarter.
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cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

I saw in another thread that there is a max of $2500 inbound to HMBradley - @dublin do you know if this is true? (I'm too lazy to dig through their documents at the moment) viewtopic.php?t=328986#:~:text=They%20d ... 0per%20day.
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

cat_guy wrote: Sun Feb 21, 2021 12:34 pm I saw in another thread that there is a max of $2500 inbound to HMBradley - @dublin do you know if this is true? (I'm too lazy to dig through their documents at the moment) viewtopic.php?t=328986#:~:text=They%20d ... 0per%20day.
That's true if you're pulling from the HMB side, but you can push from another account into HMB with no problem, based on the other account's ACH push limit.

They've also said remote check deposit will be released soon.
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

dublin wrote: Sun Feb 21, 2021 12:50 pm That's true if you're pulling from the HMB side, but you can push from another account into HMB with no problem, based on the other account's ACH push limit.
great news!
dstac
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dstac »

Looks like an extra 0.5% if you put a little spend on their card too.

https://www.hmbradley.com/credit-card-terms

Really interesting model.
aristotelian
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by aristotelian »

I think you have it correct. I am just contributing $100/month through DD and planning not to withdraw unless there is an emergency. If I am running low on cash I would make a lump sum withdrawal so at most I only miss one quarter of top tier.
Escapevelocity
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Escapevelocity »

One cool thing you can do is earn "rate rewinds". You earn these by referring new accounts (up to 4). With a rate rewind, if you need to make a large withdrawal one quarter that would normally bump down your rate for the next quarter, you can apply these "get out of jail free cards" to maintain your rate at the higher level. By using these strategically, you should never need to lose the highest rate tier nor go above the $100k level on your balance. Please PM me for a referral code.
bob1234
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by bob1234 »

It also looks like the interest itself counts towards the deposit amount for the purposes of determining the tier qualification, based on the calculation that it does for you. Perhaps someone can confirm this.
jco
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by jco »

This feels a lot like a 3-month CD. No withdrawal penalty, but you don't get interest for that quarter. Could be a nice guaranteed alternative to bonds, is anyone holds those on taxable.
BlackcatCA
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by BlackcatCA »

bob1234 wrote: Mon Feb 22, 2021 8:22 pm It also looks like the interest itself counts towards the deposit amount for the purposes of determining the tier qualification, based on the calculation that it does for you. Perhaps someone can confirm this.
I can confirm. But with 100k it is only 250/month, so not a big difference in the grand scheme. It should be viewed as a restricted savings account, not a working checking account (like Ally or Chase).
MrJedi
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by MrJedi »

BlackcatCA wrote: Mon Feb 22, 2021 9:17 pm
bob1234 wrote: Mon Feb 22, 2021 8:22 pm It also looks like the interest itself counts towards the deposit amount for the purposes of determining the tier qualification, based on the calculation that it does for you. Perhaps someone can confirm this.
I can confirm. But with 100k it is only 250/month, so not a big difference in the grand scheme. It should be viewed as a restricted savings account, not a working checking account (like Ally or Chase).
I treat it like a rather favorable and generous CD actually. The penalty for withdrawing is future interest.
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

bob1234 wrote: Mon Feb 22, 2021 8:22 pm It also looks like the interest itself counts towards the deposit amount for the purposes of determining the tier qualification, based on the calculation that it does for you. Perhaps someone can confirm this.
Thanks for pointing this out! I wrote to support and they responded:
Interest earned counts as a deposit towards calculating your savings percentage, but we do not consider it a direct deposit.
So the optimal deposit/withdrawal math is now, with 100k in the account, each month...
(deposit $62.50) + (earn interest of $250) = $312.50
withdraw $250
Inefficient buildup of $62.50/month
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

cat_guy wrote: Tue Feb 23, 2021 5:21 am
bob1234 wrote: Mon Feb 22, 2021 8:22 pm It also looks like the interest itself counts towards the deposit amount for the purposes of determining the tier qualification, based on the calculation that it does for you. Perhaps someone can confirm this.
Thanks for pointing this out! I wrote to support and they responded:
Interest earned counts as a deposit towards calculating your savings percentage, but we do not consider it a direct deposit.
So the optimal deposit/withdrawal math is now, with 100k in the account, each month...
(deposit $62.50) + (earn interest of $250) = $312.50
withdraw $250
Inefficient buildup of $62.50/month
Why not deposit less than $62.50 (ie as little as your DD allows)? Then just withdraw down to $100k, even if that's less than 80%. Though now we're really playing at the margins haha
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

dublin wrote: Tue Feb 23, 2021 6:26 am Why not deposit less than $62.50 (ie as little as your DD allows)? Then just withdraw down to $100k, even if that's less than 80%. Though now we're really playing at the margins haha
You're right! I hadn't thought about the obvious fact that the optimal deposit/withdrawal involves the lowest possible deposit:

in account: 100k
deposit: $10
interest: $250
withdraw: .8*260 = 208

260-208 = $52 inefficiency/month

Yeah, definitely spent more time thinking about this than the value of that margin 😄 But worth it for the gainz.
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

cat_guy wrote: Tue Feb 23, 2021 6:50 am
dublin wrote: Tue Feb 23, 2021 6:26 am Why not deposit less than $62.50 (ie as little as your DD allows)? Then just withdraw down to $100k, even if that's less than 80%. Though now we're really playing at the margins haha
You're right! I hadn't thought about the obvious fact that the optimal deposit/withdrawal involves the lowest possible deposit:

in account: 100k
deposit: $10
interest: $250
withdraw: .8*260 = 208

260-208 = $52 inefficiency/month

Yeah, definitely spent more time thinking about this than the value of that margin 😄 But worth it for the gainz.
Hey, I mean you take that extra $10.50 per month and put it in a high yield savings account yielding 0.5% and you're looking at a good $0.60 a year or so in alpha. Stick that in VTSAX and 30 years from now log in again - you might want to be sitting down!
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

dublin wrote: Tue Feb 23, 2021 7:07 am Hey, I mean you take that extra $10.50 per month and put it in a high yield savings account yielding 0.5% and you're looking at a good $0.60 a year or so in alpha. Stick that in VTSAX and 30 years from now log in again - you might want to be sitting down!
Okay, I couldn't resist.

$10/month contributed to cash (at no interest) vs total stock market for 30 years.

https://www.portfoliovisualizer.com/bac ... ion2_2=100

perfect illustration of the intellectual and emotional rollercoaster that investing can be:

1. $4.2k v $16.5k nominal!
2. for the first ~17 years, cash sometimes beat the total stock market!
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

cat_guy wrote: Tue Feb 23, 2021 7:25 am
dublin wrote: Tue Feb 23, 2021 7:07 am Hey, I mean you take that extra $10.50 per month and put it in a high yield savings account yielding 0.5% and you're looking at a good $0.60 a year or so in alpha. Stick that in VTSAX and 30 years from now log in again - you might want to be sitting down!
Okay, I couldn't resist.

$10/month contributed to cash (at no interest) vs total stock market for 30 years.

https://www.portfoliovisualizer.com/bac ... ion2_2=100

perfect illustration of the intellectual and emotional rollercoaster that investing can be:

1. $4.2k v $16.5k nominal!
2. for the first ~17 years, cash sometimes beat the total stock market!
And now I think we've reached peak Bogleheads
Topic Author
cat_guy
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by cat_guy »

I wrote to support asking if there a minimum DD required to activate savings tiers:
We do not currently require a minimum direct deposit to qualify for Savings Tiers, but we do require at least one direct deposit per statement cycle (month). This is subject to change, but our goal is to not segment customers by how much money they have, but instead by their saving habits.

For that reason, we do not enforce minimum Direct Deposits or minimum balances. However, it's worth noting that we do use the incoming Direct Deposits for income estimation which can affect which customers get credit offers when they have opted into One Click Credit (https://secure.hmbradley.com/account/one-click-credit).

Since our model is to push fully pre-underwritten offers to our customers when they have opted in, if someone has only put in a small portion of their pay, we're likely to estimate their income lower than it is and may be unable to offer credit products to them.
vbdoug
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by vbdoug »

I currently have @ 90k with HMBradley and direct deposit @ $1,400 a month. On chat I just sent this:

It is possible that I might need to withdraw money from my HMBradley account not now, but in the next quarter. I want to stay in Tier 1 both this quarter and the next quarter. To facilitate this I was planning on withdrawing 60k on March 26th and re-depositing 50k on on April 2. I realize I would lose the higher interest rate for a few days, but are there any other negatives to this plan? Or would I lose the higher interest rate for more than a few days?

And they responded: There are no negatives to your plan. If you are saving at least 20% of your total deposits, you will not drop down and your interest rate will not be impacted.

Sounds good so far!
dublin
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dublin »

vbdoug wrote: Tue Mar 23, 2021 4:01 pm I currently have @ 90k with HMBradley and direct deposit @ $1,400 a month. On chat I just sent this:

It is possible that I might need to withdraw money from my HMBradley account not now, but in the next quarter. I want to stay in Tier 1 both this quarter and the next quarter. To facilitate this I was planning on withdrawing 60k on March 26th and re-depositing 50k on on April 2. I realize I would lose the higher interest rate for a few days, but are there any other negatives to this plan? Or would I lose the higher interest rate for more than a few days?

And they responded: There are no negatives to your plan. If you are saving at least 20% of your total deposits, you will not drop down and your interest rate will not be impacted.

Sounds good so far!
Interesting strategy - you're saying you could effectively pull money out at the end of each quarter, leaving, just enough to be 20% saved in that quarter. Then at the start of the next quarter, deposit however much you don't want to withdraw back in. Right?
vbdoug
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by vbdoug »

"Interesting strategy - you're saying you could effectively pull money out at the end of each quarter, leaving, just enough to be 20% saved in that quarter. Then at the start of the next quarter, deposit however much you don't want to withdraw back in. Right?"

That is pretty much it. My direct deposits will remain unchanged at $1400 a month. I want to stay at about 90k invested. I will take out less in the second quarter based on my 50k deposit in early April and my aforementioned $1400 a month. Just riding the 3% wave.
Juno2222
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Juno2222 »

Here's a suggestion.
Rather than trying to figure out how much you need to withdraw monthly, just calculate all of your deposits for the quarter, and about 4 days before the end of the quarter, PULL 79.5% of your quarterly deposits (direct deposits, any regular deposits, and projected interest for that quarter) from a bank like Ally. Once it hits Ally, schedule another transfer back to HMBradley via ach push for the same or similar amount to hit HMBradley on the 2nd day of the 2nd quarter so you can potentially withdraw up to 80% of the new quarter's deposits any time during the second quarter (just in case you need it). Doing it this way keeps your 3% tier.
For example $100 DD on Jan 1, Feb 1, Mar 1, regular deposit $98k, interest
(Roughly $245 per month, doesn't take into account compounding, just keeping it simple here for explanation purposes). Total deposits = $99035. So w/draw $78733 on march 29, and redeposit 98k on apr 2. I avoid depositing the full $100k just so i dont have to worry about going over $100k since they only pay 3% on the first 100k.
The reason I don't withdraw on the last day of the quarter is that I want to be sure it the money is gone by the end of the quarter.....has to do with WHEN the withdrawal posts by HMBradley.....my pension registers on HMBradley system one day before my employer says it will be paid and I need to chat with them every quarter so they can manually review my DD.
Just fyi, HMBradley now allows joint accounts, too. You do need two direct deposits, one to your solo acct and one to the joint acct. Interest for the joint acct is paid to the first name on the joint acct
Escapevelocity
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Escapevelocity »

You don't need to jump through these hoops for occasional large withdrawals. You can earn "rate rewinds" which allow you to get out of jail free. These can be earned through referrals.
Craig2020
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Craig2020 »

I have been happy with HM Bradley so far. Is anyone using their credit card? From what I read, it gives an extra 0.5% on the savings account for a total of 3.5%. Plus, it give rewards of 3% for the top category. I am currently using fidelity 2% card for everything, so this could help me.
vbdoug
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by vbdoug »

"I have been happy with HM Bradley so far. Is anyone using their credit card? From what I read, it gives an extra 0.5% on the savings account for a total of 3.5%. Plus, it give rewards of 3% for the top category. I am currently using fidelity 2% card for everything, so this could help me".

I was waiting for an invitation for a credit card from HMBradley that never came. I posted this in another thread:
"Some time ago I was on a chat with HMBradley and this is what I learned:
"Must have estimated gross annual income from direct deposits of at least $35,000 to qualify for a credit card".

That information is not in their FAQs. I was not pleased.
Escapevelocity
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Escapevelocity »

vbdoug wrote: Wed Mar 24, 2021 12:14 am "I have been happy with HM Bradley so far. Is anyone using their credit card? From what I read, it gives an extra 0.5% on the savings account for a total of 3.5%. Plus, it give rewards of 3% for the top category. I am currently using fidelity 2% card for everything, so this could help me".

I was waiting for an invitation for a credit card from HMBradley that never came. I posted this in another thread:
"Some time ago I was on a chat with HMBradley and this is what I learned:
"Must have estimated gross annual income from direct deposits of at least $35,000 to qualify for a credit card".

That information is not in their FAQs. I was not pleased.
I got the credit card invite shortly after bumping my direct deposits to 2.5k per month. I think it was about 6 weeks later. Now that I have the card, I’m dialing the direct deposits back down in order to stay under $100k on deposit. I assume they won’t close my credit card as long as I pay on time.
vbdoug
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by vbdoug »

"I got the credit card invite shortly after bumping my direct deposits to 2.5k per month. I think it was about 6 weeks later. Now that I have the card, I’m dialing the direct deposits back down in order to stay under $100k on deposit. I assume they won’t close my credit card as long as I pay on time".

I would say you got lucky. Congratulations! $2500x12 is 30k. I was hoping their policy had changed. The following is a copy of my chat just now.

"Hi There, Just one quick question. What is the minimum amount of direct deposit required to qualify for the HMBradley credit card?

$35,000 is the minimum amount of direct deposit in order to qualify for the credit card. Keep in mind, though, that it is an estimation".
Escapevelocity
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Escapevelocity »

vbdoug wrote: Wed Mar 24, 2021 3:08 pm "I got the credit card invite shortly after bumping my direct deposits to 2.5k per month. I think it was about 6 weeks later. Now that I have the card, I’m dialing the direct deposits back down in order to stay under $100k on deposit. I assume they won’t close my credit card as long as I pay on time".

I would say you got lucky. Congratulations! $2500x12 is 30k. I was hoping their policy had changed. The following is a copy of my chat just now.

"Hi There, Just one quick question. What is the minimum amount of direct deposit required to qualify for the HMBradley credit card?

$35,000 is the minimum amount of direct deposit in order to qualify for the credit card. Keep in mind, though, that it is an estimation".
The $35k is pre-tax criteria which they infer based on your after tax direct deposits. They wouldn’t tell me exactly how they translate this but I tried 2.5 per month and that did the trick no luck involved just a good guess.
livelovelaugh00
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by livelovelaugh00 »

I treat it as a CD. I have tiny DD every month to the account once it hits 100k.
dudeman135
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by dudeman135 »

I'm curious. Does anyone know if a husband and wife could each have a separate account to get 3% up to 100k max each for a total of 6k vs 3k in interest if you meet the requirements?
Juno2222
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Juno2222 »

Husband and wife can have separate individual accounts, and now they offer joint accounts, too. I'm pretty sure that means 4 total accounts possible (1. husband individual, 2. wife individual, 3. joint w/ husband primary, 4. joint w/ wife primary. You DO need to have a separate DD into each of the accounts, however.

Edit: I was mistaken about husband & wife being able to have two joint accounts. Via chat yesterday, HM Bradley said husband + wife can have 1 joint account between them, plus each can have an individual account. They also confirmed that a parent, for example, could have multiple joint accounts with multiple children. But each joint account needs a separate direct deposit. And, the children don't have to "join" HM Bradley or have their own account (I mention this because I'm trying to set up a joint account at a credit union with a child, and this CU won't allow a child to be a joint account holder without the child actually joining the CU membership and having their own account).
Last edited by Juno2222 on Wed Sep 01, 2021 6:09 pm, edited 1 time in total.
meeotch
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Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by meeotch »

Old thread, I know - but I just opened my HMB account, and have been googling up ways to maintain a $100k balance while still staying in Tier 1. Seems to me it's simpler than it appears:

0) deposit the full $100k
1) direct deposit at $1/month
2) interest at ~$250/month
3) withdraw $250 * 0.8 = $200/month
4) total savings in excess of $100k = $50/month

After a year, you'll have accumulated ~$600 above the $100k limit. Assuming your other bank accounts are paying 0.5%, you'll have "lost" $15 in interest on that $600. (Or more like $7.50, when you consider the incremental buildup of that $600.)

At that point, you have options:

A) Just leave it there, and accept the fact that your effective rate will be declining by something like 2 basis points per year. So ~5 years before it even falls to 2.9%
B) Pull the $600, and use a "rate rewind" (referral code) the following quarter to get back to 3%
C) Get the HMB credit card, run up $600, and pay your bill from the HMB account. (HMB credit card payments don't count as withdrawals.)
D) The rates / rules will likely have changed by then anyway, so you'll need a new plan.

Of course, this only works if you can do a $1 direct deposit. Otherwise, DD the lowest you can, and pull 80% of it out. Adjust the $100k overage calculation accordingly.

Personally, I'm going to go with option A, and wait for option D to throw a wrench into the plan.
SnowBog
Posts: 4700
Joined: Fri Dec 21, 2018 10:21 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by SnowBog »

For those with (or interested in) the credit card, it now requires a DD of at least $2500/month to get the 0.5% boost. That threw a wrinkle in my plan (which was similar to yours).

But the credit card might make things even easier, as if you pay the credit card balance with your Hmbradley account - it does not count as a withdrawal. So if your credit card charges are high enough, you could actually decrease your monthly balance even if you save 100% of deposits.

For our cash, we tend to build up reserves during the year which are the front loaded into Roth, HSA, I/EE Bonds, etc. in January. So we don't actually keep (or currently plan to keep) $100k in the account all year. What I've done is to withdraw up to just under 80% of any deposits right at the end of the quarter, and then deposit them back in the following quarter (so I can withdraw 80% of them plus new withdrawals and still stay in top savings tier). I might tire of this at some point, but so far it's keeping liquidity with my cash without risking losing the 3.5% interest rate.
engaged73016
Posts: 46
Joined: Fri Nov 26, 2021 8:08 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by engaged73016 »

Based on the updated rates and requirements ($2,500 DD monthly minimum + credit card) to get the 3% rate, do people have thoughts on a new optimal strategy to stay clear of the $100,000 balance beyond which no interest is paid?
MrJedi
Posts: 3540
Joined: Wed May 06, 2020 11:42 am

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by MrJedi »

engaged73016 wrote: Fri Dec 17, 2021 5:36 am Based on the updated rates and requirements ($2,500 DD monthly minimum + credit card) to get the 3% rate, do people have thoughts on a new optimal strategy to stay clear of the $100,000 balance beyond which no interest is paid?
The cleanest method is to use the credit card. Payments to the credit card do not count as withdrawal. You can effectively displace money out that way without hurting saving rate.
engaged73016
Posts: 46
Joined: Fri Nov 26, 2021 8:08 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by engaged73016 »

MrJedi wrote: Fri Dec 17, 2021 6:56 am
engaged73016 wrote: Fri Dec 17, 2021 5:36 am Based on the updated rates and requirements ($2,500 DD monthly minimum + credit card) to get the 3% rate, do people have thoughts on a new optimal strategy to stay clear of the $100,000 balance beyond which no interest is paid?
The cleanest method is to use the credit card. Payments to the credit card do not count as withdrawal. You can effectively displace money out that way without hurting saving rate.
That's what I am thinking as well.
Back of the envelope, say you're near $100k, per month:
$2,500 DD
$250 interest
$550 can-withdraw (20% of $2,750=$2,500+$250)
$2,200 credit card payment
Net of zero on the month

So basically, if you have $2,200 worth of credit card bill on this card that doesn't take away from other credit card rewards (opportunity cost), you're in good shape.
MrJedi
Posts: 3540
Joined: Wed May 06, 2020 11:42 am

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by MrJedi »

engaged73016 wrote: Fri Dec 17, 2021 7:17 am
MrJedi wrote: Fri Dec 17, 2021 6:56 am
engaged73016 wrote: Fri Dec 17, 2021 5:36 am Based on the updated rates and requirements ($2,500 DD monthly minimum + credit card) to get the 3% rate, do people have thoughts on a new optimal strategy to stay clear of the $100,000 balance beyond which no interest is paid?
The cleanest method is to use the credit card. Payments to the credit card do not count as withdrawal. You can effectively displace money out that way without hurting saving rate.
That's what I am thinking as well.
Back of the envelope, say you're near $100k, per month:
$2,500 DD
$250 interest
$550 can-withdraw (20% of $2,750=$2,500+$250)
$2,200 credit card payment
Net of zero on the month

So basically, if you have $2,200 worth of credit card bill on this card that doesn't take away from other credit card rewards (opportunity cost), you're in good shape.
Actually you have the withdrawal and CC payment backwards.

You only need to save 20% and can withdraw 80%.

So you can use CC payment to displace out the 20% savings (~$500) to try and get net zero.
engaged73016
Posts: 46
Joined: Fri Nov 26, 2021 8:08 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by engaged73016 »

MrJedi wrote: Fri Dec 17, 2021 7:21 am
engaged73016 wrote: Fri Dec 17, 2021 7:17 am
MrJedi wrote: Fri Dec 17, 2021 6:56 am
engaged73016 wrote: Fri Dec 17, 2021 5:36 am Based on the updated rates and requirements ($2,500 DD monthly minimum + credit card) to get the 3% rate, do people have thoughts on a new optimal strategy to stay clear of the $100,000 balance beyond which no interest is paid?
The cleanest method is to use the credit card. Payments to the credit card do not count as withdrawal. You can effectively displace money out that way without hurting saving rate.
That's what I am thinking as well.
Back of the envelope, say you're near $100k, per month:
$2,500 DD
$250 interest
$550 can-withdraw (20% of $2,750=$2,500+$250)
$2,200 credit card payment
Net of zero on the month

So basically, if you have $2,200 worth of credit card bill on this card that doesn't take away from other credit card rewards (opportunity cost), you're in good shape.
Actually you have the withdrawal and CC payment backwards.

You only need to save 20% and can withdraw 80%.

So you can use CC payment to displace out the 20% savings (~$500) to try and get net zero.
Thanks for catching that!
For clarity, corrected "strategy":
$2,500 DD
$250 interest
$2,200 can-withdraw (80% of $2,750=$2,500+$250)
$550 credit card payment
Net of zero on the month
=> Need to charge $550 on the card
meeotch
Posts: 33
Joined: Sun Sep 15, 2013 12:59 am

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by meeotch »

Well, that didn't last long. Just noticed this on the hmbradley site today:
Savings Tier APYs effective now through 1/31/2022:
Tier 1: 3.00% APY
Tier 2: 2.00% APY
Tier 3: 1.00% APY
Tier 4: 0.50% APY

Savings Tier APYs effective 2/1/2022:
Tier 1: 1.00% APY
Tier 2: 0.50% APY
Tier 3: 0.25% APY
Tier 4: 0.125% APY
Sounds like next quarter, those of us without the credit card will only get one month of 3%. As noted by other posters above, you can still earn 3% with the card + $2500DD + $100 card spend: https://www.hmbradley.com/blog/the-hmbradley-ecosystem

You also have to get the card by 12/31 in order to get 3% in Feb.
engaged73016
Posts: 46
Joined: Fri Nov 26, 2021 8:08 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by engaged73016 »

Juno2222 wrote: Wed Apr 14, 2021 1:23 pm Husband and wife can have separate individual accounts, and now they offer joint accounts, too. I'm pretty sure that means 4 total accounts possible (1. husband individual, 2. wife individual, 3. joint w/ husband primary, 4. joint w/ wife primary. You DO need to have a separate DD into each of the accounts, however.

Edit: I was mistaken about husband & wife being able to have two joint accounts. Via chat yesterday, HM Bradley said husband + wife can have 1 joint account between them, plus each can have an individual account. They also confirmed that a parent, for example, could have multiple joint accounts with multiple children. But each joint account needs a separate direct deposit. And, the children don't have to "join" HM Bradley or have their own account (I mention this because I'm trying to set up a joint account at a credit union with a child, and this CU won't allow a child to be a joint account holder without the child actually joining the CU membership and having their own account).
Hi,
Just curious which of their functions you used to open the joint accounts: "Open a new joint account" or "Add someone to your account"? And if you noticed any advantage doing one versus the other?
(I worry that if I convert, which is my preference for timing reasons, I may not be able to (re)open an individual one later on)
Thanks.
Juno2222
Posts: 20
Joined: Wed Mar 27, 2019 6:50 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Juno2222 »

Good news! Update to HMBradley's Direct deposit requirement. Effective Jan 19, HMB modified their requirement to get their highest tier.
Sounds like they will only require $1500 per month DD to each of your HMB accounts, rather than what they originally required ($2500 DD/ mo).

Still need to spend > $100 on their credit card each month, and still have to maintain your savings deposit percentages, but lowering the DD requirement is welcome news. Glad to see HMB is listening to their customers.

https://www.hmbradley.com/blog/savings- ... ost-update
meeotch
Posts: 33
Joined: Sun Sep 15, 2013 12:59 am

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by meeotch »

They're also waiving the requirements altogether for the quarter when you first receive your CC. I applied for and got my HMB CC in Jan (still waiting for it to arrive). When I log into my account and click on the link to view tier progress, I see that the $1500 DD requirement is waived for Jan/Feb/Mar (in order to get the boost in Q2).

However, the $100 CC spend is offset by a month: it's waived for Dec 2-Jan 1, Jan 2-Feb 1, and Feb 2-Mar 1. So CC spending in Mar actually counts toward the April $100? I'm assuming this is due to a mismatch between the CC and checking statement periods, but it's still more confusing than it needs to be, imho.

Also, I haven't yet been able to get a straight answer out of them about what happens to the "partial quarter" when the tier rates change on Feb 1. When I first applied for my CC, I was told that because I got the card after 12/31, I would *not* be exempt and would have to meet the $2500/$100 for Jan/Feb/Mar in order to keep 3% in Q1 Feb/Mar. It looks like they've updated the rules so that the cutoff to apply for the card is now Mar 31:

https://www.hmbradley.com/blog/the-hmbradley-ecosystem (all the way at the bottom)

But it only specifies the bonus in "the next quarter", nothing about Q1 2022 Feb/Mar. Been trying to call them, but typically it's just wait on hold for half an hour, then leave a message, then they call back at 8am on a Sunday when you're sleeping, rinse / repeat. Given that the new rules are supposed to drive people to get the CC, hopefully they're doing the simple thing, and giving new cardholders a freebie for Q1 as well as Q2.
Juno2222
Posts: 20
Joined: Wed Mar 27, 2019 6:50 pm

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by Juno2222 »

You could try HMB chat to get your questions answered. If they are not online at the moment, they will respond to you by email. This way, you would also have in writing answers to your specific questions. I would hate to lose an upcoming tier/tier boost based on not quite understanding their new requirements. It's VERY confusing at the moment, to say the least. I know someone who received their credit card in late December, and found their first CC statement cycle ended on Jan 1 2022, just a few days after they activated it!
meeotch
Posts: 33
Joined: Sun Sep 15, 2013 12:59 am

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by meeotch »

Good idea. I was assuming the chat system was as backlogged as the phone system, but that doesn't seem to be the case. I got the following from a chat agent just now. (Though the first thing she told me was that she was "in training". Which is not a confidence-inspiring disclaimer.) She claims:

1. New cardholders get the bonus automatically in Q1 (Feb/Mar) *and* the next quarter.
2. The CC cycle is different than the bonus cycle, so Mar 2 - Apr 1 spending counts toward the Apr requirement. So check your progress online to confirm your dates.

Not sure if this is an unadvertised effect of today's rule change, or if the person I spoke with a week ago was just wrong.

So if the above is correct, and I maintain 20% savings (and current $1 DD), I'll get 3% until June for free. I have to start the $1500 DD in April, and the $100 CC spend in March, to get 3% in Q3.
meeotch
Posts: 33
Joined: Sun Sep 15, 2013 12:59 am

Re: HMBradley users: help me understand optimal deposit/withdrawal

Post by meeotch »

Well, customer service turned out to be wrong. Disappointed, but not surprised. Rate dropped to 1% in Feb, and the promised Q1 automatic boost didn't materialize. Showed them the chat transcript, and CS basically said, "You were given incorrect info. Oh, well."

1% is still a decent rate, but a $300+ "oopsie" with no fix is still pretty offputting.
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