The Mango 6% APY prepaid card has announced two important changes in their terms:
- New requirements to become eligible for the 6% APY rate
- Each person can have only one Mango account going forward
The new terms will go into effect on September 1, 2016.
6% Gets Tougher
There are two changes in the requirements to become eligible for the 6% interest rate:
- You need to direct deposit/ACH $800 into the account. Previously, only $500 was necessary.
So far, nothing terrible; just an extra $300 to cycle through.
- Any money pulled out of the account via ACH does not count toward the $800 direct deposit requirement. ACH includes bill payments, ACH pulls, or any other form of ACH transaction.
Mango wants us to spend down the money in the account using the linked debit card, not ACHing it out. Starting September, in order to be eligible for the 6% rate, we’ll have to leave the money in the account or spend it down using the debit card.
You can still ACH money out of your Mango account, but if you do, it won’t count toward the $800 requirement, and you won’t earn 6% APY. For example, if you ACH/DD $800 into the account, then ACH $100 out of the account, you won’t earn 6% APY.
On the surface, it would seem the card is completely useless since we all use reward credit cards for daily spending. But as we know, there are many places we can run up spend on a debit card, including PIN-based transactions (money orders, load prepaids), among other debit-only transactions.
Going forward, the only way it would be worthwhile for someone to keep the 6% account is if you have an easy way of racking up $800 in spend each month.
Keep it for the 2%
It’s also worth remembering that Mango does offer a very competitive 2% APY rate on up to $5,000, even if you don’t meet the direct deposit requirement. Consider keeping the account for the 2% rate even if you can’t meet the new direct deposit requirement.
Complicate Things & Win
It’s been noted that if you complicate life a bit, you can still get the 6% rate most of the time.
If you don’t fancy buying money orders, consider ACHing $800 in each month and only pulling out the money once each quarter.
For example, ACH $800 into the account in September, then $800 in October, then $800 in November. After the November deposit clears, pull out the full $2400 via ACH in one shot.
You’ll end up getting the 6% rate for September and October, and the 2% rate for November. Using this approach, you can get 6% APY eight months of the year and 2% the other four months.
Another option is to buy $2400 of money orders quarterly, the idea being to limit the number of times you need to visit a money order vendor. Using this approach, you’ll get the 6% rate the entire year.
The other change soon to take place is that each person is limited to having just one Mango Savings account; previously, it was possible to have multiple accounts. You can continue have more than one Mango prepaid card account, but only one Savings account.
The account which had the highest daily balance during June 2016, will remain open, and the others will be closed down with the balance transferred over to the connected prepaid account.
In the end, some people will find it easy to manufacture $800 in debit card spend, and others will find it hard. That will be the deciding factor for most as to whether they keep Mango or let it go. Some might opt to retain it for the 2% rate or to do the every-other-month approach.
First Netspend died, now Mango is much less lucrative. Sigh. Not many easy options remain. See the post “Which High-Interest Savings Account Should I Get?” for a roundup of other high-yield options.
Hat tip to reader Don and to this Reddit thread