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The Best Ways to Send Money Online

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Sending money online is no longer exotic. It’s actually a simple and hassle-free way to send dollars to that friend who bought you lunch yesterday, pay a freelance artist for designing your small business logo or purchase that robot-themed necklace on Etsy. And today, consumers have more options when they want to send money online, from well-known services, such as a PayPal and Google Pay Send, to newer options, such as Venmo and Zelle.

These services let you send money to friends, family members, businesses, contractors and freelancers — basically anyone who’s waiting for a payment from you. By sending money online, you eliminate the need to provide recipients with your credit card information, you don’t have to worry about writing checks and you won’t have to scramble to find an ATM to withdraw cash.

The big question: Which service should you use to send money online?

Not surprisingly, the answer varies depending on whom you are paying and what you are buying. Here’s a quick look at some of the more popular ways to send money online and the pros of each service.

Best to send money online to friends and family

Venmo

Send money online via Venmo
Image source: iTunes

You can use Venmo on your mobile device to pay for items on your own, or split up payments among your friends and family members. You can also use Venmo to deposit money in your bank account, make purchases through several apps and pay for items in physical stores.

To use the service, you’ll need to create an account with Venmo first, either through the Venmo’s app or on its website. You can then link your Venmo account with your bank account, and debit or credit cards. This way, you won’t have to add any money to your Venmo account to make purchases.

Features: Venmo’s biggest advantage is its flexibility. You can send money to people through Venmo by using the recipient’s email address or phone number. If these people already have Venmo accounts, the money will be transferred automatically. If a recipient does not have an account, they’ll first need to create a Venmo account to accept your payment.

Downside: It’s usually free to send money through Venmo. But if you use your credit card to send money to a recipient, you will pay a fee equal to 3% of the amount you send.

There are limits to how much money you can send through the service, too. Before Venmo verifies your identity, you can spend and send as much as $299.99 per week. Once Venmo verifies your identity, you can send a maximum of $2,999.99 each week in payments to recipients.

Zelle

Image source: iTunes

Zelle works much like Venmo, allowing you to send money to anyone whose email or phone number you know. However, you don’t have to download a separate app to use Zelle. Instead, many of the biggest banks across the country embed Zelle within their online banking platforms as a service to their consumers.

Some of the banks that already use Zelle include Associated Bank, Chase, Citi, Fifth Third Bank, Bank of America and SunTrust. If you bank with Chase, for example, then you simply send money through your Chase app. But if your bank does not offer Zelle, you still can use the service by downloading the Zelle app.

Features: If your bank or credit union offers Zelle, you can use the service to send money to anyone who has a bank account in the United States. If your bank does not offer Zelle, and you are using the Zelle app on your own, then the people you send money to must have Zelle through their bank or credit union.

Fees are a positive feature. Zelle does not charge consumers anything to send money. Zelle, though, does recommend that users check with their personal bank or credit union to make sure that these institutions don’t charge any fees.

Zelle is fast, too. If you send money to someone who already has access to Zelle, the money should show up in that person’s bank account in minutes. If you send money to someone who is not yet enrolled in Zelle, it will take from one to three business days for the money to show up.

Downside: You might be limited with Zelle according to your bank’s policies. As Zelle says, to determine how much money you can send each week through the service, you’ll need to check with your bank or credit union. If your financial institution doesn’t offer Zelle, you can send a maximum of just $500 a week with the service.

Zelle also doesn’t let you use a credit card to send money. You will need to connect the service with a bank account or debit card.

Google Pay Send

Image source: Google App Store

 

Like its competitors, Google Pay lets you send money to people by using their name, email address or phone number. You might remember this service as Google Pay. Last year, though, Google added the “Send” part of the name to signify that the service now combines the features of Google Wallet and Android Pay.

To send money online, you’ll need to link Google Pay Send to your bank account or debit card. Then, when you make a payment, the money is taken from these linked accounts. To get started with the service, you can sign in to pay.google.com on your computer or you can download the mobile app.

Features: Google Pay Send is completely free to use. The service is fast, too. Google says that linking Google Pay to a debit card results in the fastest transactions, usually within minutes. However, linking to a bank account can result in slower transactions. Google says it can take as long as five business days for the funds to be withdrawn from your account.

Downside: You are somewhat limited in how you can send money with Google Pay Send. You can use your debit card and bank account to send money through the service. You cannot, however, use credit cards or PayPal to send money through Google Pay Send.

There are limits, too, on how much you can send with Google Pay Send. You can send a maximum of only $10,000 in a single transaction, and as much as $10,000 altogether in a seven-day period. In addition, if you want to send someone more than $2,500 in a single transaction, then the recipient must add a bank account in order to receive the funds.

Cash App

Image source: iTunes

The Cash App is offered through Square. To use it, download the app onto your phone. To send money through the service, you’ll have to link it to either a debit card, credit card or the funds already available in your Cash App.

When you send the money, you’ll enter the recipient’s name or mobile phone number. The recipients receive an email or text telling them that they’ve received cash.

Features: It’s easy to send money through this app at no charge. You just can’t use a credit card. Sending money with your debit card or Cash App balance is always free. Sending money through a credit card, though, costs 3% of the amount of money you are sending.

Downside: There are limits to how much you can send through Cash App. If you send more than $250 in one week, Cash App will ask you to verify your name, date of birth and Social Security number. If you provide this information, you can then send as much as $2,500 in a week.

Best for business transactions or purchasing items online

PayPal

Image source: iTunes

PayPal might be the best known of all the platforms to send money online. And it’s easy to use via your computer or phone. You create a free account and then link it to your bank account, credit card or debit card. To send money online, you enter your recipient’s email address or mobile phone number.

PayPal then notifies recipients that they have received money. This money is directly deposited into their own PayPal accounts. If recipients don’t have an account, they are prompted to open one.

Features: You won’t have to pay to send money with PayPal as long the money is coming from your PayPal balance or bank account. However, you will be charged if your payment is funded by a credit card or debit card. PayPal has a particularly far reach, too. You can use PayPal to send money to recipients across the globe.

Downside: The biggest downside to using PayPal to send money online? It comes down to fees. If you fund your payment with a debit card or credit card, you’ll be charged a fee equal to 2.9% of the amount you are sending. You might also be charged a separate fixed fee depending on the currency of the transaction. If you are sending U.S. dollars, you’ll be charged an additional fee of $0.30.

The recipients of your funds also might need to pay fees. But, recipients won’t pay any fees when you send them money through PayPal’s friends or family option. However, if you send someone money for goods or services provided — which PayPal considers a commercial transaction — then that person must pay 3.4% plus $0.30 if you are making a domestic payment with PayPal’s standard rates. If you are sending an international payment, recipients from most countries must pay 3.9% plus $0.30 to receive the funds if you are sending in U.S. dollars.

Best for sending money abroad

TransferWise

TransferWise allows you to send international payments online, after you set up an account. To do this, you must first set up an actual payment through your account. When you do this, you enter how much you want to send and the recipient’s bank details. When it’s time to send your payment, you have the option of specifying how you want to pay.

Features: TransferWise allows you to pay in several ways. You can pay directly from your bank account, with a debit card or a credit card, or through an Automated Clearing House (ACH) service. Sending money internationally can get complicated when it comes to fees and exchange rates. But TransferWise will tell you the fees upfront when you set up your payment.

When it comes to exchange rates, TransferWise always charges the mid-market rate. It will also tell you the exchange rate it is charging when you set up your payment.

Downside: It’s not especially cheap to send money through TransferWise. TransferWise charges a fee of 0.6% of the amount you send plus $1.

Western Union

Western Union allows you to send money to more than 200 countries and territories. You can send this money online or by visiting a physical Western Union location. You can send money to recipients’ bank accounts directly online by using your credit card or debit card. You can also do this by transferring money from your bank account.

How long it takes for your money to arrive will vary according to your destination. Western Union says that you’ll be able to see these various arrival times as you enter your payment details.

Features: Western Union does make it easy to pay. You may download the Western Union app to start the payment process, or visit the company online to send payments. However, if you would like an agent to handle the transaction for you, then you can send money from more than 500,000 Western Union locations across the globe, and 43,000 in the U.S. alone.

Downside: You will have to pay to send money through Western Union. For instance, Western Union says it costs $5 to send a maximum of $500. You will, though, have to check what the fees might be for sending specific amounts to specific locations.

There are also limits on how much you can send through Western Union. When sending online, you can send a maximum of $2,999 per money transfer. If you are sending a transfer through Western Union’s mobile app, you can send as much as $500 per transfer.

MoneyGram

MoneyGram is another big player in the transfer business. This service also allows you to send money to overseas recipients either online or by visiting a MoneyGram location. With MoneyGram, you can send money directly to a recipient’s bank account or mobile wallet.

To send money online, you may pay with a credit card, debit card or directly from your bank account. You will need to tell MoneyGram to whom you are sending money and how this person wants to receive the funds.

Features: The biggest plus of MoneyGram is its flexibility. You can find in-person locations if you prefer to speak with a representative by visiting this page. MoneyGram offers you as many options to send money internationally as it does domestically.

Downside: You will have to pay fees to send funds through MoneyGram. How much depends on the amount you send and where you are sending it. For instance, if you want to send $1,000 to a recipient in Australia, it will cost you $32. If you want to send $500 directly to the bank account of someone in Great Britain, it will cost you $7.

You can estimate your fees before you send money here.

As with some of the other services, there are limits as to how much you can send online. MoneyGram says that you can send a maximum of $6,000 in most countries for every single online transfer. You can also send a maximum of $6,000 in most countries every 30 days.

How to send money online safely

Sending money online is convenient. But you do have to be careful. There are opportunities for scammers. The most common scams are when criminals try to trick you into sending them money online. Be sure to carefully read the fraud protection programs offered by these services. They do vary by provider.

MoneyGram provides a useful list of some of the most common scams criminals use to trick people into sending them money online. For example, scammers might call you, saying that they are from the Internal Revenue Service, and asking that you send them money to pay taxes that you owe. Others might say that they are from the Federal Trade Commission and they need you to send a payment so that they can refund you money from a legal settlement.

The bottom line? Don’t ever send money online to someone who calls you. And never send money online to someone you don’t know or trust adequately.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dan Rafter
Dan Rafter |

Dan Rafter is a writer at MagnifyMoney. You can email Dan here

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Banking

What Is a Patriot Bond and What Can You Do With It?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Savings bonds are intrinsically tied to American ideals, serving as a way for American citizens to grow and save their money while supporting the country.

They were originally conceived by President Franklin D. Roosevelt to help finance World War II. The Patriot Bond was created after the devastating attacks of Sept. 11, 2001.

What is a Patriot Bond?

A Patriot Bond is a special paper Series EE savings bond created in direct response to the terrorist attacks of September 11. Sold from December 2001 through December 2011, the bond provided a tangible way for Americans to support the country’s reaction to the attacks, as proceeds from the bonds went to an anti-terrorism government fund. A Patriot Bond can be identified by the words “Patriot Bond” printed at the top, in between the owner’s Social Security number and the date the bond was issued.

While the bond may have a unique name, it functions like a standard EE paper savings bond. The bond could be purchased for between $25 and $10,000. It was government-backed, making it a low-risk option for Americans to grow their money.

Each bond was assigned a fixed interest rate that guaranteed the bond would grow in value over time. And just like Series EE savings bonds today, Patriot Bonds could be purchased for a variety of uses, such as saving for retirement, growing a college fund or simply to give as a gift. The Patriot Bond was discontinued in 2012 when the Treasury switched to electronic bonds.

Can I redeem a Patriot Bond if I have one today?

The short answer is yes. While EE bonds typically cannot be redeemed until after 12 months has passed from the date of purchase, the last Patriot Bond was printed well beyond that time frame, making it eligible for redemption. But there are some things to consider before heading to your bank to redeem it.

Ken Tumin, founder of DepositAccounts — which, like MagnifyMoney, is owned by LendingTree — said there are a few conditions you need be aware of before redeeming. Patriot Bonds mature in the same fashion as an EE savings bond, which means they earn interest every year for 30 years. So the longer you have the bond, the more it will be worth. Once the bond hits the 30-year mark, the bond stops accruing interest and reaches maturity, making it the perfect time to redeem.

Tumin said Patriot Bonds, as well as all Series EE bonds, are guaranteed to double in value after 20 years, but you might not need to wait so long. “If someone got a Patriot Bond in 2002, interest rates were much higher back then, so [the bond] could have doubled already,” he said.

If your bond has not yet fully matured, it may be in your best interest to convert it to an electronic bond, which will be helpful if you lose or damage a paper one. TreasuryDirect.gov — part of the  U.S. Department of the Treasury Bureau of the Fiscal Service — has a feature called SmartExchange that can convert your paper bonds into electronic bonds. Electronic bonds are much more efficient when compared to paper bonds. They can be redeemed anytime through the Treasury’s website, as well as transferred easily to another owner.

How do I redeem my bond, and can I take it all?

If you are interested in redeeming your Patriot Bond, you can head to almost any bank to exchange it for cash. In general, paper bonds come with no limitations on how much of the bond’s value you can redeem at once, but some banks may have their own restrictions.

A Patriot Bond can also be redeemed through the Treasury Retail Securities Services. To redeem this way, you must have a certifying officer from a local bank certify your signature on the back of the bond. Once certified, you must then mail the bonds, your Social Security number and the Treasury’s direct deposit form to Treasury Retail Securities Services.

I have a Series I savings bond. Do I cash this in differently?

While Patriot Bonds were printed as Series EE savings bonds, you may be in the possession of a Series I bond. The value of a Series I bond is determined differently since part of the bond’s interest rate is based on inflation (thus the “I” in the name).

Tumin said the bond is first assigned a fixed interest rate that stays with the bond over its lifetime. Then, the bond is given an inflation rate. The inflation rate changes every six months in accordance with the inflation rate, which the Treasury announces on the first business day every May and November. The fixed rate and inflation rates are combined when determining the overall value of the bond.

Just like the EE bonds, an I bond can be cashed 12 months after the date of purchase. The bond also reaches full value maturity after 30 years.

How can I find out how much my Patriot Bond is worth?

Determining the worth of your Patriot Bond is pretty easy.

TreasuryDirect has a simple calculator you can use to find out the value of the bond. You can also use the calendar to see the expected value of the bond in the years to come, which will help determine when you would like to redeem the bond.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Ben Moore
Ben Moore |

Ben Moore is a writer at MagnifyMoney. You can email Ben here

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How Important Is It to Have a Rainy Day Fund?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

rainy day fund
Be prepared for the unexpected with a rainy day fund.

Life is unpredictable, which is why a rainy day fund is one of the most important components of a sound financial foundation. Even the most prepared, organized people can be caught off guard and put into a difficult financial situation when the unexpected arises. Because of this, it’s essential to have money tucked away in an emergency fund and a rainy day fund. While most people would agree that having easy-to-access cash is important, 29% of households have less than $1,000 in savings, according to a recent MagnifyMoney study.

In this post, we’ll explain exactly what a rainy day fund is, how much you should save and how to start one today.

What is a rainy day fund?

Rainy day fundEmergency fund
Money set aside for predictable expenses, like a roof repair or trip to the mechanic. Money set aside for unpredictable, and unplanned for expenses such as job loss, divorce or a sudden change in income.

Often, the terms rainy day fund and emergency fund are used interchangeably. While they are both savings accounts that can be used to pay for the unexpected, they differ in a few key areas. It’s important to learn the difference between the two types of savings accounts and contribute to both.

A rainy day fund is a designated amount of money that has been set aside for one-off expenses that you can typically predict the need to pay for at some point. Rainy day funds should be easily accessible and used to cover expenses that fall outside of your normal budget. This fund can be used to pay for things like car or house repairs, broken appliances, additional taxes, children’s field-trip fees, or last-minute travel expenses. While these expenses are usually not part of your monthly budget, you could likely anticipate the need to pay for them once or twice a year. So, a rainy day fund comes in handy.

“The number one reason to have a rainy day fund is peace of mind,” said Corbin T. Green a financial advisor in Salt Lake City. “People are able to go to bed knowing that if something were to happen, there are funds available to take care of that.”

This fund allows you to pay for smaller, one-off expenses without going into debt or pulling from your checking account and throwing off your well-planned budget that is used to pay for predictable monthly bills and expenses.

An emergency fund is exactly what it sounds like—a reserve of money or savings account that you can quickly access in case of an unexpected and unplanned life emergency. Typically, emergency funds are used to pay for unexpected, longer-term events such as medical bills, job loss or divorce.

“If something were to happen where you got laid off, left a job or got injured, having an emergency fund protects you and buys some time,” Green said.

Experts suggest having three to six months’ worth of money in this account that you could easily access and use to run your household and pay your monthly bills in the case of an emergency.

How to save for your rainy day fund

rainy day fund side gig
Consider taking on a side gig to bring in extra cash for your rainy day fund.

It can seem daunting to put extra money away each month, but saving money is a key part of smart financial planning. We know it’s important to save for your rainy day fund, but how do you get started? Here are some easy ways to save more money each month:

  • Create multiple savings accounts: Instead of lumping all your money into one savings account, create multiple savings accounts to help you distinguish between the emergency fund and the rainy day fund. If you ever need to access either of these accounts, you’ll know which one to pull from.
  • Automate your savings: It’s easy to say you’ll put extra money into your savings account at the end of each month once bills are paid. But, if you don’t pay yourself first, at the end of the month, you likely won’t have saved what you originally intended. By automating your savings, you’ll automatically have money set aside each month and won’t have to worry about it. Treat your savings as a bill and pay it automatically, on time, each month.
  • Reduce your spending: Money saved is money earned. If you’re looking to save for a rainy day fund, try trimming your spending and adding a little more each week or month to your fund. Cut back on eating out or your daily coffee run and put that money towards your fund.
  • Take on a side hustle: Many millennials are taking on additional work or side hustles as a way to earn more money. If your full-time salary isn’t cutting it, consider taking on a side hustle as a way to quickly boost up your rainy day fund.

Where to keep your rainy day fund

rainy day fund
The best place to stash your rainy day fund is in a savings account, where you can easily access the money in a time of need.

Now that you’ve built up some money for your rainy day fund, where should you keep that money? You want to find a safe place to store your money that gives you easy access to the funds in a pinch but can also allow you to earn interest on your funds.

The best options

Saving accounts: A savings account is a no-brainer when you’re looking for a place to stash your rainy day fund. Savings accounts are FDIC insured and offer better interest rates than checking accounts. Check out the best savings accounts here.

Money markets: Money markets are a type of account that usually offer higher interest rates than checking or savings accounts. You can access more money relatively easy, but money market accounts may limit the number of withdrawals each month. Also, most money market accounts require a minimum balance to be met.

Avoid these options

Checking accounts. Checking accounts probably aren’t the best option for your rainy day fund. They give you quick, easy access to your money, but often offer low, if any, interest. You may also be more tempted to spend the cash if it’s readily accessible in your checking account and you’ve got a linked debit card you can use.

CDs. CDs often charge early withdrawal penalties when you try to cash them out before your term is up. Since emergencies are unpredictable, avoid locking your rainy day fund up in a CD. Stick to accounts that offer easy access like a savings account.

What to spend your rainy day fund on

rainy day fund
A home repair or unexpected medical bill are two examples of a good time to dip into your rainy day fund.

Rainy day funds are usually not used to cover ongoing, long-term, emergency events. “If it’s a true emergency, it’s usually not a materialistic expense,” said Green.

Rainy day funds can be spent on things like car repairs, new tires, and emissions and inspections. Or perhaps you need a new washing machine, fridge, roof or floor? Rainy day funds are meant for such expenses. Most people wouldn’t budget for a new roof because it’s a one-off expense. However, it’s somewhat predictable that you’ll have to repair your car or home at some point, so this type of fund is the perfect financial resource for occasions like this.

However, if you lose your job, become sick or are unable to work for a sustained period of time, you would not use your rainy day fund, but instead, pull from your emergency fund.

“Use your emergency fund when something impacts your ability to earn a paycheck or you lose your income and need to use it [emergency fund] to pay your bills and live off of it,” Green said.

Why a rainy day fund is important

rainy day fund

Change is the only predictable thing in life. It’s almost inevitable that something unplanned will occur requiring additional money to pay for it. Knowing this, it’s smart to plan ahead and prepare for the unexpected. Having a rainy day fund is important because it gives you peace of mind and financial protection in case something happens. This type of fund is extra padding in your budget that can keep you out of debt and on track financially, no matter what unexpected life event unfolds.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sage Evans
Sage Evans |

Sage Evans is a writer at MagnifyMoney. You can email Sage here

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