Posted by Chuck on August 1, 2016
Checking Accounts

Published on August 1st, 2016 | by Chuck

194

Major Negative Changes to Mango 6% APY Prepaid Account

Mango Changes

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

Direct Link

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.

Neutering Multiples

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.

Final Thoughts

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 



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Frank
Frank

Don’t quite understand why you need to do a $2400 MO. Will an ACH pull work for this case? Depositing a $2400 MO is both risky and quite a hassle.

Jusmin
Jusmin

Would this work to trigger the 6% and minimize MS methods.
1. You transfer in $800 in September, leave it until October, then ACH it out
2. ACH $800 middle of October and leave it until November
3. Rinse and repeat each month

In my head this makes sense as each month you are pulling $800 out and leaving it in at same time! Let me know what you guys think

Lrdx
Lrdx

I think they count the DD minus ACH each month, regardless of balance. With your approach, you’re still depositing 800 and pulling 800 each month, 800-800 = 0, so no high rate.

Jusmin
Jusmin

I see, then how about bringing in $1600 and removing $800 each month which would mean you just have to be able to float $800 in your account monthly for life.

Jusmin
Jusmin

Well just realized then you will still get +$800 each month that needs to be removed, I guess the only way to do it is to buy money orders once in a while to cash out if you want all 12 months to be at 6%

Sid
Sid

So say I want a full 5000$ in my account earns 6% for the entire year. you would have to add 800$ each month and take it out at the year end which means 7200$ more. Effectively you earn 6% on 5000$ + 0% on 7200 i.e. much less < 6% on the effective balance. Right?

Tomtoo
Tomtoo

You don’t have to deposit a bunch of money and leave it in all year. Here’s one way to do it without tying up a bunch of money (from an earlier post):

“Walmart is cheapest [for money orders] around me at .70, max $1000. If you are going the money order route, you can save yourself some extra hassle and do the $800 DD toward the end of one month, then another right at the beginning of following month, then get 2 $800 MO’s on your next trip out [to Walmart or wherever you can get them for $800]. That way you only have to go get MO’s every 2 months.”

If you do it as described above, you only tie up $1600 for about 5 days, and only 6 times a year.

Vidyasagar
Vidyasagar

Seems good idea. Let me try it.

anthonyjh21
anthonyjh21

Wonder if Google Wallet will work. I see in the Reddit thread people are already looking for ways to maximize under the new rules.

TxAg
TxAg

Google Wallet changed their rules as of June 1st to not allow debit card transactions anymore

Wyle
Wyle

In your example, why ACH $800 into the account in November? You’re foregoing the 6% interest, so just ACH out the $1600 from Sept and Oct. Or collect the interest for Nov and ACH out the $2400 in Dec.
Am I missing something?

Rebecca
Rebecca

If you don’t want to ACH money in every month, you’d either have to stop and restart automatic payments, or not be making automatic payments at all. You could do it the way you said, but you’d have to do more manually.

Harry
Harry

Use Square Cash to unload?

me
me

Has someone tried this? Wouldn’t square cash be seen as a debit card transaction?

IOException
IOException

I fail to see how using the debit card would be useless…

Wouldn’t the returns still far exceed a typical 2% general category rewards card?

General Revil
General Revil

Three solutions are:

Unload every fourth month (max APY without MS):
Sep: 800 in 6%
Oct: 800 in 6%
Nov: 800 in 6%
Dec: 2400 out 2%

Unload once a year (max interest without MS, but at greater opportunity cost):

Unload $1000 – cost of MO four out of every five months (Max interest, requires effort).
Sep: 800 in 5800 balance
Oct: 800 in 1000 MO out 5600 balance
Nov: 800 in 1000 MO out 5400 balance
Dec: 800 in 1000 MO out 5200 balance
Jan: 800 in 1000 MO out 5000 balance
Feb: 800 in 5800 balance.
Repeat.

tbradnc
tbradnc

If it were just Mango I’d be willing to do a few contortions to keep the 6% but the prepaid space in aggregate has been changing for the worse. Now with both Mango and Netspend having negative changes I feel like I’m squatting mosquitoes buzzing around my head. I’m moving on – which is what they want.

Tomtoo
Tomtoo

Don’t forget, there’s still Insight. I have managed to open 2 accounts with them before they stopped me (wife also…4 accounts total between us).

JILL
JILL

What do you mean by saying “before they stopped me”?
Do you still have 4 accounts total between yourself and your wife, in which you earn 5% APY in the Insight Savings Accounts?

Tomtoo
Tomtoo

So sorry for not responding sooner. Thought I was subscribed for notifications to this thread, but haven’t gotten them.
Wife and I still have 4 accounts between us. The way they “stopped” us was when applying a third time and hitting “submit”, I got a notice stating something along the lines of being unable to open a new account.
We are still earning 5% on all 4 accounts.

Ben
Ben

@Tomtoo, how did you do 2 accounts? Use anything different? i.e. Tom and Thomas; different addresses; etc? Thanks!

Tomtoo
Tomtoo

So sorry for not responding sooner. Thought I was subscribed for notifications to this thread, but haven’t gotten them.
I gave the exact same information for both accounts. Hope you have been able to do the same!

Don L

I think that I’m going to drop out of the Mango game too at least temporarily. Remove all funds from the savings account and card balance.

Does anyone know if there are any negative effects if I drop my card balance to zero? Does the card then just sit with no fees?

Matthew
Matthew

I have been ACH $500 into my mango account and going to a place that allows large withdrawals with purchases. IE I go to walmart ring in 1 banana and get $100.00 cash back with my purchase. Times by 5 and I have ACH in/out effectively

dbaseballfan
dbaseballfan

But you need to ACH 800 to get 5% right? does this method work to keep the 5%? Seems like a simple solution if debit cashback works

Eric
Eric

He wrote this comment in August before Mango changed their rules. Also, the rate is 6%, not 5%.

dbaseballfan
dbaseballfan

Ok thanks, but that doesn’t answer the main question of whether debit cashback at the grocery should allow to keep the 6%.

Eric
Eric

I would have answered you but unfortunately I don’t know the answer as I’ve never tried it.

I wouldn’t count on dbaseballfan responding back as it’s a rarity for people to reply back on DoC and since that comment was from almost a year ago it’s even more unlikely.

Why not try it yourself and see what happens?

Eric
Eric

I should have written “Matthew” rather than “dbaseballfan”.

Kathy
Kathy

You fail to mention the $3 monthly fee on the Mango card. This eats up some of the interest received.

Prand
Prand

serve or bluebird still allows for debit card loading?

kt
kt

will it cost a chexsystem pull to open a Mango saving account?

Don L

Don’t believe so. I believe the ChexSystem queries are reserved for regular checking accounts.

Steph
Steph

Do you still earn 6% if you have $5000 in the savings and $1+ in the checking?

Peter
Peter

Why are you suggesting to pull the money back every 3 months? Why not every 7 or 8 months? I understand one has to keep pushing 800 every month and won’t be earning interest on that money that’s being pushed (assuming one has hit the 5k already).

Erik
Erik

I would like to keep $5K in the Savings for max interest. However, I do not want to leave money in the card account as I can get at least 2.25% on it elsewhere (e.g. Main Street Bank).

Thus, why not just go to your local bank and get a cash withdrawal from your card. I believe that this is free (ATM cost $2.00). The only issue is that you need to do this twice/month as the max daily withdrawal is $600 (e.g. $600 day 1 and $200 day 2)

Alternatively, go once a month the first two month and twice in the third month (leaving $200 month 1 and $400 in month two; cost in lost interest is a bit more than $0.375 in month 1 and $0.75 in month 2., depending when in month 3 you do the 2 withdrawals) .

p.s. Don’t forget to withdraw $800 from the Savings at the end of August so that you can deposit it again in September w/o having to worry about a Sept withdrawal; only the $800 ACH deposit)

Jacky
Jacky

The benefit of doing so is not that huge, unless you can find a good interest rate for that $600 withdraw.
For example, if you deposit that $600 to a bank with a interest rate of 1%, it takes 4 months to earn that $2 back. So comparing to ACH withdraw of $3200 every 4 months, the difference is very little TMO (maybe about $10~$20).
Please correct me if I am wrong

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