Posted by Chuck on December 23, 2015
Checking Accounts

Published on December 23rd, 2015 | by Chuck

113

Netspend to Require Real Direct Deposit for Initial Trigger of 5%

Netspend offers a savings account along with their prepaid product and it offers 5% interest on balances up to $5,000. To be eligible for the savings account, you need to upgrade to a Premier account, which is done by receiving a $500 direct deposit within one calendar month. This direct deposit requirement is a one-time thing, no need to have a monthly direct deposit.

Previously, any ACH transfer worked to get an upgrade to Premier. As of January 22, 2016, only paychecks or government benefits payments will qualify. The change does not apply for those who were already upgraded.

Previously, we did not require specific types of direct deposits to meet the $500 direct deposit requirement to qualify for the NetSpend Premier FeeAdvantage Plan. Now, we will require a total of $500 in direct deposits of paychecks and/or government benefits payments within one (1) calendar month to qualify for the NetSpend Premier FeeAdvantage Plan.

If you previously qualified for the NetSpend Premier FeeAdvantage Plan, you will be allowed to remain on that fee plan, regardless of the type of direct deposits that qualified you for this fee plan.

Here is the link to the PDF with a whole bunch of changes. None of the other changes mentioned there seem to make much of a difference for us.

[Most of us are not on the Fee Advantage Plan, rather on the Pay-As-You-Go, but I think the change affects the upgrade and thus will apply even for those who choose not to go with the Fee Advantage Plan.]

This change will affect all Netspend products, including Western Union, Brinks, and the rest. Note, that the change should not affect the $20 referral bonus requirement of adding $40 to the card; that requirement is just to get the funds onto the card, no need for direct deposit, and ACH transfer would work fine for that.

If getting a real direct deposit is challenging for you, it may be worth opening an account now and doing an ACH transfer to upgrade yourself before the change goes into effect. (Grab a referral from here.) Note that even after the changes you only need a single direct deposit to get an upgrade; if you’re getting a $500 tax refund, for example, that will work.

See an update on this in the post: Netspend Allows Savings Account without Direct-Deposit/Upgrade.

HT: milespoints on Reddit



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JB
JB

Did you get my Tweet this time? I told you about that this morning 😉

Any guess if that will apply to the other NS clone accounts? I already have NS, Brinks for me and my wife but I’m wondering if I should set up the remaining two (WU, ACE) now in order to lock them in just to make sure…

Octavio
Octavio

I received the letter (email) for my WU card, so I’ll say that it at least applies to that one as well.

JB
JB

thanks for that info. I’ll go ahead and get another 4 cards to secure another $20,000 in 5% APY now 😉

Octavio
Octavio

NP, I just checked and also got it for Brinks – haven’t gotten it for Ace…yet 🙂

JB
JB

interesting as I didn’t get anything for neither of our 2 Brinks cards yet…

JB
JB

That’s what I always do Chuck and you never seem to get the tweets… I have to admit I’m not a Twitter genius but when I punch in “@Chucksth did you see the new Netspend prepaid account rules going into effect 1/22/16? New direct deposit requirements and restructured fee” that should do the trick, no?

asar

Hope it does not come to Mango too

credit
credit

I have placed a fraud alert on my credit reports. An extra step for the banks to verify with me. When I apply for credit cards it’s no problem. Banks verify that I applied. When it comes to banking accounts, no ball. Banks want me to come in person in the branch. PNC did that. Wtf?

milespoints
milespoints

I am the OP of the reddit article. Note that in this other thread – https://www.reddit.com/r/churning/comments/3xzw2u/do_we_still_need_to_upgrade_premier_account_to/ – there is an encouraging datapoint that one no longer needs to do the upgrade to the Premier in order to gain access to the savings account

josh
josh

So if we open an account and transfer $500 before January 22, will we get the increased interest rate or will I nevertheless have to have a government direct deposit?

P
P

Good riddance, I say. I’m ticked off at them for flagging my account/application as fraudulent when I tried to activate their card and they wanted me to prove my identity!

Chris
Chris

I understand identity confirmation procedures, but these yahoos expected me to email them a copy of my SS card, driver’s license and utility bill via email. There was no option to fax, mail or secure email any of the requested documents. I’m not sending anyone that stuff in unencrypted email, and certainly not to netspend for this product.

IOException
IOException

On what planet do you think fax or US Mail is more secure than a major email provider (which by the way, you do connect to via a secure socket)?

007
007

Thank you for your helpful blog! I am still very cautious about these accounts but am going to get at least one. Two questions:

1) How do the companies involved make money? This is what makes me most cautious. For example, even if you don’t ACH anything in or out for a whole year, it seems that the fee is $5.95 per month from:

https://www.netspend.com/how_it_works/what_it_costs.shtml
“Account Maintenance Fee
$5.95 per month (fee applies if Card Account has not had any activity, that is, no purchases; no cash withdrawals; no load transactions; or no balance inquiry fee for 90 days). This fee is not applicable to residents of Connecticut and New Jersey.”

It seems that even with this fee totaling $71.40 per year, you would earn $178.6 on a $5000 balance which means a ~3.5% APY, which is almost 2.5% higher than most online savings accounts. Maybe NetSpend makes money off people using the card for all sorts of transactions, but how does the backend bank (MetaBank, etc.) make any money off such a deal?

2) My initial plan was to get one card (NetSpend), try it for a while, and then if I don’t have too many problems get two more. However, it seems that there is now a hard deadline due to the change on 1/22 to get all three and to “upgrade” them. Once I ACH $500 to each card, does it stay linked to a savings account forever? In other words, once I ACH $500 to my 2nd and 3rd cards (e.g., Brinks and Ace), can I just withdraw all the $500 and just do ACHs to avoid inactivity fees? I understand that I would be missing out on the interest from the 2nd and 3rd cards, but I’d really like to take this slowly.

Thank you!

ct
ct

Has anyone ever had success using paycheck direct deposit to a spouse’s bank account or netspend card? My company (large “Megacorp”) allows me to split my paycheck direct deposit but I’ve only ever done it to accounts that have my name on them. It doesn’t ask for my name just for the account number, but I’m not sure if it would work to send to a Netspend in my spouse’s name only.

Octavio
Octavio

Never tried it with Netspend, but both Chime and Serve returned the attempted deposit back to my employer and I had to wait 2 weeks for my job to redeposit the amount to an account under my name.

I only tried a small amount ($25) in case it failed (which it did). I was only able to successfully deposit part of my paycheck to my wife’s Mango account and never had any problems (I’ve switched to using Paypal though). When my wife called both companies (Chime and Serve) to find out why the deposits had not posted, she was told they weren’t under her name – so I’m guessing they were able to see that.

Calvin
Calvin

Can anyone confirm if the January 22nd rule applies to other Netspend affiliated prepaid cards (such as AceElite) as well?

Octavio
Octavio

The body of the post states: “This change will affect all Netspend products, including Western Union, Brinks, and the rest.”

I can tell you that I received the email alerting me of the changes on my Western Union and Brinks, but not for Ace (which does not necessarily mean it will not be affected as well) Ace, however, did not require me to upgrade to preferred before allowing me to open the savings account.

JB
JB

I’m having a bit of an issue ordering a WU card for my wife. The site tells me something along the lines of “it seems like you’ve ordered a card, you should have it in the mail in 7-10 days”. Of course the address I used for her is the same as mine so the only difference is her given name and the email I created specifically for that purpose. Annoying…

Oh and btw: happy new year everyone!

JB
JB

Think I figured it out. My card was in the mail today and as soon as I had activated it, I was able to order one for my wife with the exact same information. Maybe some kind of busted cookie in my Chrome’s bowels…

Chris
Chris

I’m having the same problem. I tried clearing all cookies and going incognito and it didn’t do anything. I’ll try after 24-hr and after I activate.

Mike
Mike

QUESTION!

why do we need to upgrade to premier? doesn’t the standard netspend already allows for the 5% savings account?

also does the real direct deposit requirement to upgrade to premier applies to other 5% savings accounts like Brinks, Ace , HEB, western u?

thank you

007
007

In case it is helpful, I just received and activated a Western Union netSpend card. I was able to enroll in the Savings Account without transferring ANY money to the account at all.

007
007

In case it is helpful, I just received and activated a Western Union netSpend card. I was able to enroll in the Savings Account without transferring ANY money to the card at all (i.e., no ACH or anything else – just activate and then enroll in Savings Account).

mike
mike

me too i was able to enroll in the savings account without any deposit for netspend but not brinks

Eric
Eric

Has Western Union always been like that? That’s great to know as I might wait to signup until I am eligible for another referral bonus. Did you receive a referral bonus on it?

007
007

I don’t know if it has always been like that. I am going from 0 to 5 cards in less than a month trying to lock in the 5% rate before 1/22 (three cards activated, two on the way), so I’m not getting a referral bonus.

Eric
Eric

Don’t you just need to signup by 1/22? Or do you need to activate by then?

007
007

I don’t know. Just FYI, maybe better NOT to use the strategy of enrolling in the savings account before transferring at least $500. My WU netspend now says “Your NetSpend Savings Account has been closed. You will be eligible to re-enroll on 04/06/2016.”

007
007

Just FYI, the account may also have closed because I called the privacy opt-out phone line AFTER I enrolled in the savings account rather than BEFORE as I did with my other 2 cards. Apparently others have had problems with their savings accounts being closed if they call the Opt Out line AFTER they enrolled in the savings account.

Phoebe
Phoebe

What is the privacy opt-out phone line? Do I need to opt out of anything before opening a savings account? Thanks!

trackback

[…] that DoC reports that in order to open Netspend Premier account (which was the original requirement) you will need to have an actual direct deposit as of January 22nd. So, perhaps, this window of opportunity will close soon. Obviously, I’m not saying: Limited […]

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