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Investing

CNote Review 2019

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.

In recent years, finding stable, reasonable yield has been difficult for savers. A traditional savings account rarely offers an attractive yield and the bond market has been somewhat anemic in recent years. This is where CNote comes in.

CNote is a company that takes your money and invests it in community development financial institutions (CDFIs). Basically, these lenders issue loans to local governments, nonprofits and businesses owned by minorities and women. CNote invests your money with its partners and offers you a return.

CNote
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The Bottom Line: CNote offers you the chance to earn relatively stable yields that beat traditional savings accounts while allowing you to make a positive social impact in communities across the country.

  • Annual return beats that of most traditional savings accounts.
  • Investments are used for social impact.
  • CNote has no fees, but it does come with liquidity restrictions.

Who should consider CNote

CNote is meant as a savings account or bond market alternative. It’s not designed to offer inflation-beating potential returns like those seen in the stock market. Instead, it’s more likely to be appropriate for savers who are frustrated with their current yields and want a relatively stable way to boost what they’re earning each year.

Additionally, the social impact aspect of CNote could make it attractive to those looking for socially conscious ways to put their money to work. CNote’s CDFI partners invest in small businesses and community development projects, so for those who like the idea of doing good while their money earns interest, this can be an option.

However, CNote comes with limited liquidity. There are only four times a year that CNote allows for withdrawals (with 30 days’ notice), and at those times you’re limited to withdrawals of $20,000 or 10% of your balance, whichever is higher. (CNote does consider special circumstances and may allow larger or unscheduled withdrawals at their discretion.)

Those who need access to their money for goals in the medium term (four to seven years out) could benefit from CNote, but withdrawals require planning. As a result, it likely doesn’t make sense to use CNote as an emergency fund where immediate liquidity is needed.

CNote fees and features

Amount minimum to open account
  • $1
Commission$0
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 inactivity fee
Account types
  • Individual taxable
  • Trust
Customer supportPhone, Email

Strengths of CNote

CNote offers an interesting twist on social investing with the expectation of relatively stable returns.

  • Yield that beats traditional savings accounts: One of the stand-out features is CNote’s advertised return of 2.75% APY (or more). This is much better than most traditional savings accounts. In fact, as of this writing, CNote offers returns higher than the five-year Treasury yield. That means you could see a higher yield for medium-term savings than what’s available with other savings options.
  • No fees: CNote doesn’t charge any fees. Instead, the service makes money on the difference between what they pay you in yield and what they receive from investments made with CDFI partners.
  • Social impact investing: If doing good is important to you, CNote offers a way for you to do that. Your money goes toward helping provide affordable financing to underserved communities for projects like affordable housing, community development and minority-owned businesses.
  • Trust and business accounts: You can open a CNote account as part of a trust or use it for business purposes. Depending on your needs, this can be helpful in your asset management plan.

The service is fairly straightforward and comes with no costs, but it has the potential to help you earn a higher yield on money that might otherwise be sitting in a low-yield savings account.

Drawbacks of CNote

While CNote offers an innovative way to maintain a stable yield, there are some issues that you need to be aware of before you invest.

  • Limited liquidity: This isn’t a deposit account and your money doesn’t remain immediately accessible to you. CNote isn’t simply holding your money; instead, it’s investing your money with its partners. As a result, you need to provide advance notice before withdrawing your money — and you can only withdraw at certain times during the year.
  • Yield is still too low for long-term wealth building: Even though the yield is higher than a traditional savings account, it’s still not high enough for effective long-term wealth-building. If you’re looking for a way to build your nest egg, consider Stocks, Mutual funds and ETFs.
  • No tax-advantaged options: CNote doesn’t offer you the opportunity to invest with tax advantages. There aren’t IRA or 529 options.

If you decide to use CNote, it’s important to understand how you want to use it in your overall portfolio, since there are limitations to when you can access to your money and limited usefulness as a long-term investment vehicle.

Is CNote safe?

It’s important to note that CNote isn’t a depository institution and it isn’t protected by the FDIC. That means if CNote fails, there’s no guarantee you’ll get your money back. However, the loans made by its CDFI partners to community and municipal projects are generally considered low-risk with stable returns, on par with high-quality Bonds. Most of the projects funded by CDFIs are usually vetted heavily and CDFIs impose their own requirements on borrowers.

CNote also uses what it calls Triple Protection to limit potential losses. Because CNote isn’t a holding company, they don’t keep your money; instead, it goes to CNote’s CDFI partners. CNote only contracts with partners that use government-guaranteed programs, which offer a layer of protection. CNote’s partners are also contractually obligated to repay the loans they receive from CNote, even if something goes wrong. Finally, CNote has a loan loss reserve to help cover potential losses.

However, like any investment, there is still a risk, and you could lose capital in addition to missing out on returns.

Final thoughts

If you’re interested in boosting your yield on a chunk of capital that isn’t doing much, CNote could be an interesting place to park your cash. The returns could be fairly stable and may beat what you’ll get at with a savings account. Plus, you get the added bonus of feeling good about making a positive social impact.

However, you do need to be aware of the liquidity limitations and understand that pre-planning is needed before you access the money you invest using CNote.

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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.

Miranda Marquit
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Miranda Marquit is a writer at MagnifyMoney. You can email Miranda here

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Investing

SpeedTrader Review 2019

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.

SpeedTrader is an online broker that caters to active day traders. It offers a choice of platforms and a full selection of research and data tools, making it a competitive option. You also get direct market access with more than 25 routing options, a choice of per-share or per-trade pricing, and the ability to trade Stocks, Options, and Bonds.

However, SpeedTrader has a higher minimum deposit requirement than TradeStation and Lightspeed, which are designed for active traders as well. SpeedTrader doesn’t offer as many options for trading platforms as Lightspeed does, and you won’t have access to multiple free trading platforms with SpeedTrader — unlike with either of its close competitors.

SpeedTrader
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The bottom line: SpeedTrader offers direct market access and advanced trading features, including point-and-click trading, real-time market data and hot keys for faster order entry.

  • SpeedTrader provides a choice of trading platforms, including ActiveWeb, SpeedTrader Pro, and SpeedTrader Mobile.
  • Investors get direct market access — with a choice of more than 25 routing options — to allow for faster execution and better filling of orders.
  • Commissions and fees are affordable, especially for high-volume traders.

Who should consider SpeedTrader

If you’re a day trader who needs real-time market data at your fingertips with the ability to place and execute orders as quickly as possible, then SpeedTrader could be an ideal broker for you. SpeedTrader allows you to save multiple screen layouts, create customized watchlists, stream quotes in real time, manage multiple trading accounts in one platform, and customize 100 different hot key options for the fastest possible order entry.

SpeedTrader also provides support for institutional clients, including hedge funds. Or if you are diving into day trading for the first time, you can request free virtual practice accounts with virtual buying power to make sure you’re ready before you risk any real money.

But if you’re looking for features that cater to hands-off traders, such as commission-free ETFs, no-load Mutual funds, or robo-advising services, SpeedTrader is the wrong tool for you. Online brokers such as Ally Invest, Charles Schwab and E-Trade would be more your speed.

SpeedTrader fees and features

Amount minimum to open account
  • $30,000
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $75 full account transfer fee
  • $75 partial account transfer fee
  • $30 inactivity fee per quarter
Current promotions

When you open a new account with SpeedTrader, you can get up to $100 in free trades or one month of free trading.

Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Coverdell Education Savings Account(ESA)
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
Automatic rebalancing
Tax loss harvesting
Offers fractional shares
Ease of use
Mobile appiOS
Customer supportPhone, Chat, Email

Strengths of SpeedTrader

Some of the key benefits of SpeedTrader include the following:

  • Affordable commissions: With SpeedTrader, you have a choice of how the commissions are structured. You could pay a per-trade fee as low as $2.95 if you make 500 trades or more per month or up to $4.49 per trade if you trade less frequently at under 200 trades in a month — or you could pay a per-share fee instead. Per-share fees start at just $0.0025 if your monthly share volume is at least 500,000 and goes up to $0.0044 if you trade under 250,000 shares. This is comparable to Lightspeed, which charges $0.0045 if you trade under 249,999 shares per month and as low as $0.0010 if you make 15,000,000 or more in trade volume per month. And it’s below TradeStation’s pricing of $5 per trade.
  • Tools to facilitate timely ordering: SpeedTrader is focused on allowing you to place orders as quickly as possible. That’s why you have direct market access with a choice of routing options as well as hot keys to facilitate trades. Most conventional brokers don’t offer direct market access, instead routing customer orders to centralized trading desks, which in turn route to other liquidity providers.
  • Advanced data, charting and research tools: SpeedTrader has multiple platforms, each of which offers customization and advanced tools to help active traders. Investors can create customized watch lists; view streaming quotes as well as time and sales data in real time; and choose from a full array of chart types, including candlestick and price charts.

Drawbacks of SpeedTrader

  • High minimum deposit requirements: SpeedTrader offers only margin and options accounts, and there is a minimum $30,000 deposit for U.S. and foreign clients. There is also a minimum $30,000 deposit if you want to open a day trading account.
  • Costly inactivity fees: There is a $30 inactivity fee per quarter if you execute less than 15 trades.
  • A lack of options for free trading platforms: Lightspeed offers two free trading platforms, while TradeStation doesn’t charge software fees and provides free access to its advanced trading tools. SpeedTrader, on the other hand, charges a minimum of $25 monthly for ActiveWeb unless you generate at least $199 in monthly commissions. And its other platforms are even costlier, with SpeedTrader Pro Level I starting at $49 monthly unless you generate $199 in commissions and SpeedTrader Pro Level II coming in at $104 per month if you have less than $499 in monthly commissions.

Is SpeedTrader safe?

SpeedTrader is committed to account security. It is in full compliance with all regulatory requirements, according to FINRA BrokerCheck. And client assets held with SpeedTrader are insured up to $500,000 since SpeedTrader is a member of the SIPC.

SpeedTrader clients also get additional protection through Lloyd’s of London for up to $24.5 million in assets. That means a combined total of $25 million per client is protected, including up to $1 million in cash.

This insurance does not, however, protect you if the assets you invest in lose value. There are inherent risks to investing, and you could end up losing money if your investments perform poorly.

Final thoughts

SpeedTrader, more than most other online brokers, focuses on facilitating the fastest ordering speeds possible, which is a big benefit for day traders. If speed is of the essence, SpeedTrader is likely the right choice for you. But if you’re looking for a wider choice of trading platforms and are interested in not paying a fee to use them, then you may want to consider Lightspeed or TradeStation instead.

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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.

Christy Rakoczy
Christy Rakoczy |

Christy Rakoczy is a writer at MagnifyMoney. You can email Christy here

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Investing

Wealthsimple Review 2019

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.

Wealthsimple may not be the largest robo-advisor in the U.S. — though it is the largest in Canada and made the leap south of the border in 2017 — but it should be counted among the best. It’s especially valuable for newer investors, even though its fees are higher than some rivals’. For that higher fee, clients receive a portfolio review from an actual human and an all-inclusive package without additional fees, which may cost extra at other robo-advisors. Clients also have access to socially responsible portfolios and at least one other unusual perk. Altogether, Wealthsimple is the complete package for beginners to not-so-beginners.

Wealthsimple
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The bottom line: Though it’s on the expensive side, Wealthsimple delivers an investor-friendly product that’s great for newer investors.

  • Free portfolio review and no extra fees
  • Access to financial planners
  • Higher account management fee

Who should consider Wealthsimple

Wealthsimple is a great choice for investors who are looking for a few more perks from their robo-advisor and who don’t mind paying a bit more for that privilege. It’s also a solid choice for those looking to get into socially engaged investing or halal investing and those who need basic access to financial planners. In these respects, it’s a good choice for beginners who need more guidance. Finally, for those with larger accounts, Wealthsimple provides expanded access to planners as well as special airport lounge access.

Wealthsimple fees and features

Amount minimum to open account
  • $0
Management fees
  • 0.5% (less than $100K deposited)
  • 0.4% ($100K+ deposited)
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 inactivity fee
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • SEP IRA
  • Trust
Portfolio
  • ETFs cover 10 asset classes.
Automatic rebalancing
Tax loss harvesting
Tax loss harvesting detailTax loss harvesting is automatically activated for Wealthsimple Black clients; it is available to all Wealthsimple clients.
Offers fractional shares
Ease of use
Mobile appiOS, Android
Customer supportPhone, Email

Strengths of Wealthsimple

  • Free portfolio review: Wealthsimple offers a free portfolio review as a way to get its foot in the door, much like FutureAdvisor does. With Wealthsimple, you provide your personal details, upload your financial statements and make an appointment with one of the company’s financial planners. The review includes an assessment not only of your investments but also of your debts and how much you’re paying for the funds or investments you currently have. It also includes plans to minimize your taxes and sets up your financial goals — so you know where you’re going. The entire process is led by a Wealthsimple financial planner, who has a fiduciary duty to act in your best interest. Even if you don’t opt for Wealthsimple, it’s a free review of your whole financial life by a professional, so it’s hard to go wrong there.
  • Expanded access to financial planners: While everyone at Wealthsimple has some access to financial planners, those enrolled in Wealthsimple Black (for accounts of more than $100,000) receive more access. This includes a formalized financial plan, which features a strategy for generating retirement income and a goals-based investing plan for retirement or for those big purchases in life. This access is one of the larger perks of the service and should be a draw for those who need this kind of planning and advice.
  • No extra fees and access to some unusual perks: Even if Wealthsimple does charge one of the higher account management fees, it doesn’t nickel-and-dime you on other fees like many other robo-advisors do. A transfer-out fee that might run you $75 at a rival is free here. And tax loss harvesting and portfolio rebalancing are included as a standard part of the management fee.Wealthsimple also allows you to purchase fractional shares, which is a nice bonus for beginning investors who may not have enough money to buy a full share of a fund with a high price tag. That ability allows you to purchase the full range of funds recommended for you and fully diversify even smaller cash deposits immediately — getting you in the game more quickly.Finally, the most unusual perk offered by Wealthsimple has nothing to do with investing. If you have more than $100,000 with the robo-advisor, you’ll become part of Wealthsimple Black, the firm’s upgraded service that offers access to more than 1,000 airline lounges in over 400 cities. If you’re a frequent traveler, that’s a nice perk.
  • Socially engaged investing: Looking to build a portfolio filled with socially responsible companies? Wealthsimple can help you do that, investing in six exchange-traded funds (ETFs) that support major socially engaged themes, such as low carbon, gender diversity and affordable housing. The company builds three types of portfolios using these investments depending on your risk tolerance: conservative, balanced and growth.Wealthsimple also offers Shariah-compliant halal investing, which is in accord with Islamic law. All investments avoid profiting from gambling, tobacco, arms or other industries that violate Islamic law. The diversified portfolio consists of 50 Stocks that have been vetted by a third-party committee of Shariah scholars. Because the portfolio is all Stocks, it’s riskier than more balanced portfolios that include Bonds (which are forbidden under the investment mandate).

Drawbacks of Wealthsimple

  • Account management fee: The account management fee — clocking in at 0.5% (less than $100K deposited) for basic accounts — is probably the biggest drawback at Wealthsimple. Basic accounts at other major rivals are around 0.25%. But it’s not always an apples-to-apples comparison, as Wealthsimple clients have some access to financial planners as well as the other free services above. And Wealthsimple manages the first $5,000 for a year for free, so that helps newer investors get started with their nest egg.Clients who deposit more than $100,000 will automatically join Wealthsimple Black, reducing their management fee to 0.4% and gaining more extensive access to a financial planner. Still, this reduced fee remains above those of rivals offering access to financial planners, including Schwab Intelligent Advisory (at 0.28% and a minimum of just $25,000) and Vanguard Personal Advisor Services (0.30% and a $50,000 minimum). These options beat Wealthsimple on the minimum for the higher tier of service too.
  • Customer support: Wealthsimple provides adequate customer service, and you can call in to have your account or investing questions answered by a professional. But the hours feel somewhat limited: Monday through Thursday from 9 a.m. to 8 p.m. EST and Friday from 9 a.m. to 5:30 p.m. EST. You also can drop Wealthsimple a line via email, but don’t expect an online chat or off-hour responses.

Is Wealthsimple safe?

Wealthsimple manages more than $2 billion in client assets, so it’s a trusted name in the industry. Client assets — which technically are held by the company’s broker, Apex Clearing, and not Wealthsimple itself — are safeguarded by the Securities Investor Protection Corporation (SIPC). This ensures that in the event of a bankruptcy, customers’ assets are insured to at least $500,000 (including $250,000 in cash only). That doesn’t protect you against the market falling or other risks of investing, but it should give you peace of mind about Wealthsimple.

Final thoughts

Wealthsimple should be an attractive candidate for any new investor looking to understand how to build a portfolio. The firm provides access to its financial planners for all investors, though clients in the higher service tier will receive more extensive time with them. The free portfolio review also is a solid service for beginning investors, and those looking to build a socially engaged portfolio should consider Wealthsimple.

Beginning investors who are focused primarily on fees (and need less access to education and advice) might consider shifting to Wealthfront or Betterment. Those who need more advice and can bring more than a little coin to their accounts also might want to consider Vanguard Personal Advisor Services or Schwab Intelligent Advisory. But Wealthsimple will be a solid fit for most.

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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.

James F. Royal, Ph.D.
James F. Royal, Ph.D. |

James F. Royal, Ph.D. is a writer at MagnifyMoney. You can email James here

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