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Airbnb could run out of cash in one year, even with the $1 billion it just raised, because of how devastating the coronavirus is on its business

Mon, 04/06/2020 - 9:03pm

  • The $1 billion in cash Airbnb announced Monday that it has raised likely won't last the company very long.
  • Even before the coronavirus epidemic hit, the travel startup was losing money; thanks to the crisis, its losses and cash burn have likely exploded.
  • In a worst-case scenario, it might not have enough cash to last a year, despite the new funding.
  • More likely, thanks in part to some cost cuts, it can extend its life beyond that, but not by much, particularly if the crisis and associated economic downturn linger.
  • Click here for more BI Prime stories.

The $1 billion financing that Airbnb said it secured Monday gives it a vital resource as the coronavirus squeezes its business. But even with the 10-figure cash infusion, the company's long-term survival remains in question so long as the pandemic and the associated economic downturn persist.

Indeed, Airbnb could still run out of cash in as little as a year, depending on how hard its revenue is being hit and how much it's able to control its expenses, according to Business Insider's interpretation of some of the company's financial figures which news organizations have previously reported.

The question of just how much cash Airbnb has and how long that stockpile will last the company has become an urgent one because of the coronavirus pandemic. The outbreak has disrupted the travel industry as a whole, as governments around the world have urged or required citizens to stay home to try to limit the spread of the disease. Those steps have halted economic activity throughout the US and in large parts of the world.

It's unclear how long the epidemic will last or when the US or global economy will recover. Worryingly, in the US, there have been massive numbers of layoffs over the last two weeks and a growing number of business closures, both of which could portend an extended economic downturn. So, companies of all kinds and sizes are having to assess whether they have enough cash on hand to see them through the crisis.

Airbnb has experienced a sharp reversal of fortune

That Airbnb should be in a position where its survival is in question represents a sharp change of fortunes for the company. As recently as a few months ago, the company was widely considered one of the standouts among the group of jumbo-sized venture-backed startups. With a proven business model and a past history of profits, Airbnb was gearing up for a widely anticipated initial public offering.

Those plans having almost certainly been shelved, Airbnb turned to private investors for new funding. As part of the deal announced Monday, Airbnb will raise $1 billion from Silver Lake and Sixth Street Partners through a combination of debt and equity financing. The company didn't say exactly how it would use the funds, but said $5 million of it would go into a fund it created to offer grants to its superhosts — property managers who offer popular and highly rated accommodations through its service — to help them pay their mortgages, rent, and utilities.

The San Francisco startup is almost certainly reserving the bulk of the funds to pay its ongoing operating costs. To understand why — and why the company's still in danger of running out of cash — it's helpful to look at Airbnb's finances, to the extent that they are known. As a still-private company, Airbnb does not publicly release its financial statements, and a company representative declined to answer questions about its finances and cash stockpile.

But before the latest funding, Airbnb likely had somewhere between $1 billion and $3 billion in cash on hand. In February, in a story about the company's third-quarter results, The Wall Street Journal reported that Airbnb had $3 billion in cash. Last month, in an article about Airbnb's fourth-quarter results, Bloomberg reported the company had more than $2 billion. However, neither story made clear when Airbnb had the amount of reported cash, whether that amount was current as of the end of the third or fourth quarter, respectively, or as of the date of the articles.

With Monday's cash infusion, Airbnb, at worst, now has less than $3 billion on hand. At best, it likely has somewhere around $4 billion.

No one is travelling, but Airbnb still has lots of expenses

That's a lot of money, but it doesn't amount to even a year's worth of revenue for Airbnb. Last year, the company posted about $4.8 billion in sales, according to figures compiled from The Information, The Journal, and Bloomberg. 

That comparison is important, because the company's business — like those of other travel companies — has been pummeled by the pandemic. Some 90% of reservations made through its service with check-dates of between March 18 and April 7 have been cancelled, according to data from AirDNA, an industry research firm. And few new bookings are being made, AirDNA's data indicates. 

"They've probably got close to 0 revenues or very, very low revenues," Siegel said.

While Airbnb's revenue has been slashed, it still has ongoing expenses. Among other things, it has thousands of employees, office space in San Francisco, and the costs involved in keeping its online service up and running. Last year, those costs exceeded the company's revenue. All told, the company appears to have had $5.1 billion in expenses for all of 2019, at least on an EBIDTA — earnings before interest, depreciation, taxes, amortization — basis, based Business Insider's back-of-the-envelop analysis of the select financial figures reported in The Information, The Journal, and Bloomberg. That would amount to expenses of about $1.3 billion a quarter.

There's little information available about Airbnb's recent cash burn rate. But EBIDTA is supposed to be a proxy for that, because it excludes certain non-cash charges. 

So, if you assume that Airbnb has no revenue right now and it continued to spend at the same rate it did last year, its cash outflow would equal its EBIDTA expenses of $1.3 billion a quarter. At that rate, it would blow through the $1 billion in new funding it just got in less than 90 days. If you figure it has less than $3 billion in the bank even after that new funding, its coffers would be empty within three quarters at that spending rate.

But Airbnb's revenue probably hasn't completely disappeared... 

To be sure, that's a worst-case scenario. Airbnb is almost certainly in better shape and will likely will last longer than that scenario suggests, even if it doesn't raise any more money and even if the pandemic lingers on.

While cancellations have soared and new bookings have fallen off a cliff, Airbnb is still seeing some activity on its site. Some consumers, particularly city dwellers hoping to get out of hard-hit urban areas, have used its service to book accommodations in more rural areas for 30, 60, or even 90 day stays, according to AirDNA CEO Scott Shatford. Those kinds of long-term reservations now make up nearly half of all bookings on Airbnb's service, he said. So, it does have some revenue — potentially a significant amount — coming in.

Meanwhile, the company is reportedly cutting its expenses. It's stopped all of its marketing spending, largely frozen new hiring, and is delaying paying out bonuses, according to a report last month in The Information. Cutting the marketing budget alone will save the company $800 million this year, according to the report.

Those two factors — some amount of revenue coming in and less cash going out than before — should allow Airbnb to extend its life well beyond the worst-case scenario. But that doesn't mean it's out of danger.

It's still likely burning lots of cash

Let's generously say Airnb's sales are now one-third of what they were a year ago. That would mean that it's pulling in about $300 million in revenue quarterly. Let's also say that thanks to cost-cutting measures it's managed to slash its expenses by about $300 million a quarter — $900 million over the last three quarters of this year. That would mean that its quarterly expenses would be about $1 billion. So, its cash burn rate would now be around $700 million a quarter.

At that rate, it will gobble up its new $1 billion in funding within two quarters. And if you generously assume it has $4 billion total cash, it would eat that up within six quarters. If it has less than $3 billion, that stockpile would last it little more than a year.

It's quite possible the economy will rebound or Airbnb will be able to attract more funding if its current cash starts to run low. And many analysts think it's likely, if it gets through this crisis, that the company will bounce back stronger than ever.

Still, a month or two ago, few would have thought that Airbnb — of all startups — would be in position where its survival was even theoretically on the line.

Got a tip about Airbnb? Contact Troy Wolverton via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Airbnb hosts are furious that the company is sticking them with the cost of letting guests cancel due to the coronavirus crisis

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Jamie Dimon tells shareholders he expects the coronavirus to cause a 'bad recession' and 'financial stress similar to the global financial crisis,' at a minimum (JPM)

Mon, 04/06/2020 - 7:52pm

In his annual letter to JPMorgan shareholders, published Monday, CEO Jamie Dimon said that while the bank is strong, it won't be untouched by the fallout from the coronavirus pandemic.

The pandemic will be damaging to the US economy, Dimon said. "At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008," he said.

"Our bank cannot be immune to the effects of this kind of stress," he added.

The US is grappling with the economic consequences of the pandemic, which has roiled global markets and shut down much of the country in an attempt to curb the spread of the disease.

Most firms agree that the US is either already in a recession or will soon be in one, marked by massive slowdowns in output and an elevated unemployment rate — in the past two weeks alone, 10 million Americans have filed for unemployment benefits as coronavirus layoffs persist.

Read more: 14 Wall Street experts told us the single metric they're each watching to assess coronavirus market fallout — and give their portfolios a leg up

In response to the crisis, JPMorgan has stopped buying back its own stock, Dimon said, adding that halting buybacks "was simply a very prudent action." Dimon also said the board would consider suspending the bank's dividend only in "an extremely adverse scenario" that would include a 35% contraction of gross domestic product in the second quarter and an unemployment rate of 14%.

"If the Board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring," Dimon wrote.

Still, Dimon said that the bank's capital resources and liquidity remained strong and that JPMorgan is lending or plans to lend an additional $150 billion for client needs.

Read more: GOLDMAN SACHS: These 13 cheap stocks are poised for years of better-than-expected profits — and they're must-haves as the coronavirus wipes out earnings in 2020

JPMorgan is "working closely with all levels of government during this crisis" but has not asked for any regulatory relief, Dimon said. But he said that the financial system needed an overhaul when the crisis subsides.

Next, there needs to be a solid plan to "carefully" return Americans to work, with precautions that include testing, Dimon said.

"The country was not adequately prepared for this pandemic — however, we can and should be more prepared for what comes next," he wrote. "Done right, a disciplined transition would maximize the health of Americans and minimize the time, extent and suffering caused by the economic downturn."

Dimon briefly thanked people who wished him well after his emergency heart surgery in March, but he didn't give any further updates on his health.

Read more: 'Still too high': Goldman's global equity chief lays out 4 reasons why the stock market will melt down further before it fully captures the coronavirus crisis

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Buybacks have long been the stock market's biggest source of buying power — but they're quickly fading and won't come back for years, a new report says

Mon, 04/06/2020 - 7:51pm

  • Corporate stock buybacks — the biggest driver of equity demand — are fading and may not return for several years, analysts at Sanford Bernstein said on Monday.
  • The repurchase programs face threats from weakened revenue streams, restrictions tied to government loans, and cash protection amid the coronavirus outbreak's economic turmoil.
  • A debate about whether buybacks are "socially unacceptable" could place a more permanent drag on the programs, the team wrote.
  • Buybacks were a key source of fuel for the 11-year bull market, as such programs reduce the number of shares outstanding and boost each individual unit's value.
  • Visit Business Insider's homepage for more stories.

Corporate buybacks will lag for years and leave a multibillion-dollar hole in stock demand, Sanford Bernstein said Monday.

Analysts are already projecting what financial markets will look like after the coronavirus outbreak, and Bernstein sees a collection of factors wiping out repurchase activity. The market's biggest driver of demand will be "severely curtailed" for several years, leaving stocks "unlikely to return to their pre-crisis valuation multiples," the firm wrote in a note to clients.

Buybacks played a key role in keeping the 11-year bull market afloat when other positive drivers for stock prices dried up. When firms buy their own stock, it reduces the number of shares outstanding and lifts the value of each remaining unit. Last year saw roughly $730 billion spent on buybacks, according to S&P Dow Jones Indices.

The revenue slowdown firms are experiencing during the pandemic will directly hit their ability to buy back stock, the team led by Inigo Fraser-Jenkins said. Other firms had relied on debt issuance to buy back shares, but that path "now seems impossible" as firms bolster cash holdings for the likely recession ahead, the team added.

Read more: A stock chief at $7.4 trillion BlackRock shared with us his coronavirus-investing playbook: How to keep money safe, what he's avoiding, and some surprising contrarian bets

Even if they had the means to, several companies would be legally blocked from stock buybacks for years to come. The government's $2 trillion stimulus plan set aside hundreds of billions of dollars for corporate loans, but firms tapping the relief pool won't be able to buy shares or pay dividends until one year after they pay off the borrowed sum. The widespread damage caused by the virus outbreak will leave firms across all industries taking out loans and further stifling buyback activity, Bernstein said.

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Possibly the most "intriguing" factor fueling buybacks' demise is the social stigma against them, according to the firm. Such programs could become "socially unacceptable" alongside dividend payments as the public calls for focus to shift from the shareholder to the stakeholder. The debate is already picking up steam in Europe, and a shift in how companies deploy cash could bring a permanent change to buyback frequency, Bernstein said.

"Over the last week this has moved from being a purely economic question to an ethical question," the analysts said.

Despite the new headwinds, some repurchase programs will continue, Bernstein said. Companies flush with capital without government-loan constraints are poised to resume buybacks. Firms facing temporary blockages may also defer buybacks years down the road, the team wrote, but investors should still anticipate a broad decline in activity throughout the market.

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A stock chief at $7.4 trillion BlackRock shared with us his coronavirus investing playbook: How to keep money safe, what he's avoiding, and some surprising contrarian bets

Mon, 04/06/2020 - 7:51pm

  • Tony DeSpirito of BlackRock told Business Insider about the blend of safety and risk he's targeting after an unprecedented bout of volatility and economic uncertainty.
  • With the economy possibly frozen in place for months, and amid the threat that similar measures will be imposed again, he's looking for companies that can outlast their peers.
  • DeSpirito is the chief of BlackRock's fundamental-active-equity business and the manager of a $35 billion fund.
  • Visit Business Insider's homepage for more stories.

In an unprecedented crisis, Tony DeSpirito of BlackRock is working on a road map.

DeSpirito is the chief investment officer of fundamental active equity for the largest asset manager, which oversees $4.7 trillion. He also manages its $35 billion equity dividend fund.

In an exclusive interview, he told Business Insider how he's thinking about the meltdown spurred by the coronavirus pandemic.

The core of DeSpirito's approach is finding companies that are highly profitable, which means they steadily earn more than their cost of capital. After the February and March sell-off, he's applying that focus to companies that have abruptly become undervalued.

"Stocks that have done the worst, which are the value stocks, will do the best," he said. "The only times when we've been at spreads this wide (between the most expensive and least expensive stocks) ... over the last hundred years that are similar are the global financial crisis and the Great Depression."

Also at a historic level is the yield gap between dividend-paying stocks and Treasury bonds, which hasn't been this wide in 65 years.

"I think you're going to see demand for dividend-paying stocks grow" as investors continue to seek yields, he said.

One group of stocks fitting that description is the Vanguard Dividend Appreciation Index Fund ETF.

That hunt for value comes with the realization that a company's financial strength is more important than ever and shocks to the system can be even more severe than he had expected.

"In the short run, we're spending a lot of time stress testing balance sheets," he said. "We're now doing a case where we say, 'What if the capital markets are closed?' All you have is your cash and your revolver, and your sales go to essentially zero. How long can you last?"

Because the expansion ended so abruptly, DeSpirito said he was applying that focus on quality to the cyclical stocks that will benefit the most as the US economy gets up off the mat and starts growing again in the next cycle.

"We want high-quality businesses that grow over time," he said of his approach. "Finding the quality cyclicals that have good balance sheets over the next three years is going to prove tremendously valuable."

Those elements are telling him to steer clear of companies with too much leverage, and DeSpirito said companies would make different choices now that they know a pandemic could bring the global economy to a halt.

"Coming out of this, I think corporate America is going to rethink what's an inappropriate level of debt, and so that means probably means less M&A," he said. "It may mean less buybacks."

However, he said the few companies that have a ton of cash on their balance sheets would have a rare opportunity to snap up their competitors at low prices.

DeSpirito also identified two areas he sees as safe, steady investments and two areas where the balance of risks and rewards has become much more appealing than it was. The first of those stable areas is tech, which he said was "the new staple."

"Everyone has to build out their home office, and to the extent you didn't have a good home office, you now need one, and so you're spending on equipment there," he said. "Companies spend more on security because all the people working from home. They spend more on the networking telecommunications side."

Interested investors could implement those ideas through funds like the SPDR S&P Technology Hardware ETFFirst Trust Nasdaq Cybersecurity ETF, and iShares North American Tech-Multimedia Networking ETF.

Meanwhile, he said drugmakers weren't suffering from a big drop in demand like the more consumer-focused businesses, and their stocks are holding up relatively well because of it. One way to invest in that sector is the Invesco Dynamic Pharmaceuticals ETF.

For investors comfortable with more risk, DeSpirito said bank stocks looked appealing despite record-low interest rates. 

"Dodd-Frank was built for the environment we're going through. So I think you're going to see banks come on the other side of this relatively unscathed," he said. "The financial system is in so much better shape today."

There are also risks worth taking in energy stocks, provided they meet his other criteria. The key, he said, is to find the companies that can endure oil prices of $20 a barrel or less for a time.

"Within oil, there's a range of quality," he said. "I would say a high-quality company has diverse supply of oil plus, low cost of production. And then you want to look at the quality of the balance sheet."

SEE ALSO: GOLDMAN SACHS: These 13 cheap stocks are poised for years of better-than-expected profits — and they're must-haves as the coronavirus wipes out earnings in 2020

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14 Wall Street experts told us the single metric they're each watching to assess coronavirus market fallout — and give their portfolios a leg up

Mon, 04/06/2020 - 7:51pm

  • Business Insider asked 14 investment strategists and analysts to share one crucial metric, index, or signal they're closely tracking as the novel coronavirus throws markets and economies into disarray.
  • Their answers illustrate where experts are looking to gauge when the worst may be over for investors.
  • "What matters for the market right now is the cresting of virus cases — not PMI data, not earnings revisions, and certainly not GDP estimates," one chief investment strategist said.
  • Visit BI Prime for more investing stories.

The novel coronavirus, with the devastation it's inflicted on economies around the world, has created a chaotic environment for investors that's virtually unparalleled.

In the US, the longest bull market in history ended, but then the Dow Jones Industrial Average reentered one within weeks. Amid those price swings, a widely used measure of expected market volatility jumped to its highest level on record.

The Federal Reserve attempted to stabilize the market with two emergency interest-rate cuts in March. That lowered borrowing costs and was designed to stimulate economic activity at a time when officials mandated quarantines, businesses shuttered, and experts forecast a skyrocketing unemployment rate.

Now, as markets whip around into early April, and the investment community expects further deterioration of economic growth, investors are on edge in a highly uncertain environment. After all, there is no real COVID-19 playbook to consult.

For a window into how strategists are judging the unprecedented macroeconomic environment, Business Insider asked 14 investment strategists and analysts to share one crucial metric, index, or signal they're closely tracking as they assess the ultimate damage the coronavirus will inflict.

For the sake of drawing from a wide variety of economic and market gauges, we asked experts to provide a response other than the widely cited US jobless claims, which hit 6.6 million last week for a two-week total of almost 10 million.

Their answers illustrate how they're gauging when the worst may be over for investors. Several told us the number of new coronavirus cases is the most important figure to watch — even more so than any core measure of the US economy.

"The current environment has us paying less attention to economic data and laser-focused on the virus data," Ed Campbell, a portfolio manager and managing director at QMA, told Business Insider.

Their responses come just ahead of corporate earnings season, which will give investors early evidence of how the virus has negatively affected a wide variety of public companies. First-quarter earnings for S&P 500 companies are expected to decline 7.3%, the largest year-over-year drop since falling 15.7% in the third quarter of 2009, according to FactSet. 

Here are the singular measures 14 experts told us they're watching:

Lisa Emsbo-Mattingly, Fidelity: the Commodity Research Bureau's raw-industrials spot-price index

Lisa Emsbo-Mattingly, the director of research for global asset allocation at Fidelity Investments, is keeping a close watch on commodities of all kinds. 

She's carefully monitoring the Commodity Research Bureau's raw-industrials price index, which tracks the direction of widely used commodities such as copper scrap, lead scrap, steel scrap, cotton, burlap, and rubber, according to Yardeni Research.

The index, which was constructed in the 1950s, takes a look at the price of commodities harnessed in overall industrial activities. On Friday, the measure was near a four-year low.

Emsbo-Mattingly considers the measure reliable because it's a real-time indicator of global economic activity and the strength of the US dollar.

"When we see the CRB raw industrials begin to move consistently up, we will feel more confident on the outlook for US and global growth," she told Business Insider.

 



David Aurelio, Refinitiv: semiconductor equipment

Digital dependency has exploded in recent years, but the pace has picked up through the pandemic. Consumers are relying heavily on technology for connection as they spread away from peers and their workplaces. 

"At the heart of this expansion are semiconductors," David Aurelio, the senior equity-markets-research manager at Refinitiv, said, referring to the components and circuits found in many of our devices and computers. 

"If semiconductor-equipment companies are expected to grow, then expect to see economic expansion to follow," he said.

The S&P 500 semiconductor-equipment subindustry is expected to report a rise in earnings this year of 16.8%, and nearly 24% next year, outpacing the broader market's earnings expectations, Aurelio said.

With analysts' expected growth of 5G capabilities, too, the overall health of the semiconductor sector indicates "there is reason to be optimistic about economic expansion," Aurelio told Business Insider. 

The VanEck Vectors Semiconductor ETF has fallen about 22% this year, about in-line with the S&P 500's decline. 

He's also keeping a close watch on analysts' earnings revisions for companies' first-quarter earnings results.



Solita Marcelli, UBS Wealth Management: areas of the market that may be oversold

The old saying "throwing the baby out with the bathwater" refers to getting rid of something valuable in an unavoidable — yet mistaken — fashion while trying to reject something more broadly unfavorable.

There's been a lot of that during the severe market sell-off, said Solita Marcelli, the deputy chief investment officer for the Americas at UBS Global Wealth Management.

She pegged that dynamic — companies of all fundamentals being bought and sold indiscriminately, regardless of underlying strength — as one major theme she is closely monitoring to gauge the sell-off's condition. 

"Many stocks that have strong balance sheets and long-term cash-generation power have been hit just as much as those that are much weaker," she wrote in a recent note to clients. "This has created an enormous opportunity to own high-quality names that will differentiate themselves once dust settles."

Just consider the median return for names with varying S&P quality rankings from the market's high on February 19 through March 20. They show a brutal sell-off that hasn't spared many.

For instance, stocks with A+, A, and A- rankings have returned about -32 to -36% during that time — a showing not much better than names with the far weaker B- and C rankings, which have returned -44 and -31% during the same time, according to a UBS and FactSet analysis. 



Sam Stovall, CFRA Research: the S&P 500's rolling 15-day average intraday percentage price change

One popular way to measure stock-price swings is the Cboe Volatility Index, known as the VIX — and even better known as the market's "fear gauge." 

The forward-looking index takes the S&P options' implied moves and conveys the level of expected volatility over the next 30 days, rather than "realized," or actual, volatility. 

As the markets have gone haywire, the VIX spiked just above 80 last month in its highest reading on record and fell in recent weeks to about 50 on Friday.

Still, these figures are elevated; the index stayed below 20 for most of 2019. For a more granular look, the VIX is hardly the only way to look at how wildly stock prices are moving. 

Sam Stovall, the chief investment strategist at CFRA Research, told us he was looking to another measure of equity-market swings to gauge "when the worst may be behind us." He watches the rolling 15-day average intraday percentage price change on the S&P 500. 

We checked in with Stovall on March 30, when US stocks rose on the back of the Trump administration's expanded social-distancing measures.

During that Monday session, his measure was "still on the ascent," so he didn't think the worst was over "just yet." The index's average intraday change on a percentage basis stood at 6%, the largest such mark since the 2007-09 financial crisis. 

On April 3, we checked in for an update. 

"My volatility measure has been on the descent" since March 27, "implying that the worst may be behind us," Stovall said. 



Frank Cappelleri, Instinet: the NYSE Tick index

As a technical analyst, Frank Cappelleri spends a lot of time examining the minutiae of markets.

Cappelleri, Instinet's chief market technician, regularly sends clients market snapshots throughout the trading session, detailing key levels to watch on the S&P 500 and providing historical context around the market's moves.

He told Business Insider that lately he's paying attention to one investors might be missing out on: the NYSE Tick index, which measures the difference between stocks listed on the New York Stock Exchange moving higher and those moving lower at any point in time.

During periods of relative market calm, the index is generally between minus 1,000 and plus 1,000, he said. For instance, the average tick range between October and February 19 — the S&P 500's closing high — was 1,700.

Since then, the average has been 2,700, marking a rise of nearly 60%, he said. As long as that range remains wide, investors can expect conditions to remain stressed. 

By design, the index can highlight a situation that the widely used VIX may not fully be able to show. 

While investors know volatility as measured by the VIX has "exploded," Cappelleri said, it spikes only during severe market sell-offs, while the NYSE Tick index "reveals acute intraday activity in both directions by displaying outsized movement in both buying and selling surges."



Emily Roland, John Hancock Investment Management: the US dollar's direction

Through the market's recent chaos, Emily Roland — the co-chief investment strategist of John Hancock Investment Management — told us she was closely watching the US dollar's direction. 

"It will provide important clues to cross-asset class performance," Roland said.

The US dollar index measures the greenback's value against a basket of other currencies, most heavily against the euro. In March, it shot up to the highest point in more than three years as "investors frantically raised cash," Roland said. It has risen by about 4% this year. 

The strategist believes the US will emerge from the coronavirus crisis in a more resilient fashion than other economies and expects the dollar to maintain strength as volatility subsides across currency markets.



Amanda Agati, PNC Financial: sub-investment-grade bonds

Last month, alongside two emergency interest-rate cuts, the Federal Reserve announced a laundry list of new measures to aid the economy through the economic damage the coronavirus crisis is causing.

Among other programs, the US central bank created credit facilities to support credit going to large employers. One was formed to purchase corporate bonds issued by investment-grade US companies, as well as US-listed exchange-traded funds whose purpose is to provide "broad exposure to the market for US investment grade corporate bonds."

But "none of the Fed's tools directly support the below-investment-grade fixed-income market," Amanda Agati, the chief investment strategist at PNC Financial, told Business Insider.

That's why she's keeping a close watch on how bonds with sub-investment-grade ratings, an area which includes the high-yield segment, are faring without that extra injection of support. 

For instance, more than 10% of the Bloomberg Barclays High Yield index is made up of names in the energy sector, Agati said.

The $2 trillion fiscal stimulus package that passed in the US last week did not include language around relief for shale-oil producers — a particularly challenged industry with plunging oil prices and slowing global economic growth, she said.

Agati is also closely watching the Cboe Volatility Index and new cases of COVID-19. Her team believes that number must slow in countries like Italy and the US before the market finds a bottom.

"In other words, what matters for the market right now is the cresting of virus cases — not PMI data, not earnings revisions, and certainly not GDP estimates," she said.



Liz Ann Sonders, Charles Schwab: the case curve of COVID-19

The most important metric for investors to pay attention to is COVID-19's case curve, Liz Ann Sonders, the chief investment strategist at Charles Schwab, said.

That's "for every reason, including the health of Americans, the health of our economy, and the health of the stock market," she told Business Insider.

"Until we start seeing a bending of the curve, it's hard to envision a light at the end of the tunnel for either the economy or stocks," she said.

The US has the largest reported virus outbreak, representing more than one-fifth of cases worldwide, Business Insider has reported

 



Deepak Puri, Deutsche Bank Wealth Management: broad US financial-market conditions

A selection of readings reflecting broad US financial-market conditions — funding-market stress, financial-market liquidity, and US corporate-credit spreads — are top of mind for Deepak Puri, the chief investment officer for the Americas at Deutsche Bank Wealth Management. 

As spreads across the investment-grade- and high-yield-credit markets have widened to levels not seen since the global financial crisis of 2007-09, "fixed-income investors have shown a very little appetite for credit risk," Puri told Business Insider. 

"So far, we are encouraged that the 'do whatever it takes' approach by monetary policymakers has helped restore confidence in the credit markets, along with the added liquidity," he added.

 



Tony Roth, Wilmington Trust: declines in gross domestic product

Tony Roth, the chief investment officer of Wilmington Trust, the investment-advisory arm of M&T Bank, is closely watching for declines in US gross domestic product.

Roth estimated that the precautions states are taking across the US to mitigate COVID-19's spread could lead to a 34.4% annualized rate of decline for the second quarter if the current conditions persisted for three months from early April. 

"That would be by far the worst rate witnessed in US history of GDP data, going back to 1949," he told Business Insider, adding a slow resumption in economic activity during the second half of 2020 would lead to a decline of 2.6% for the year.

If the entire US were to operate under stay-at-home orders for the next three months, that could lead to a more severe scenario with businesses remaining closed and consumers continuing to curb spending, Roth said.

That would lead to a 61% annualized rate of decline for the second quarter and a drop of 8.5% for the year, according to his projections. Roth sees markets higher nine months to a year from now.

"Currently, our recommendation to clients is to rebalance, avoid selling if you don't need immediate liquidity, and if you have new cash, average this into the market on a slightly accelerated time frame," he said.



Katie Stockton, Fairlead Strategies: a key technical range on the S&P 500

Katie Stockton, the founder and managing partner of Fairlead Strategies, an independent-research provider with a focus on technical analysis, is laser-focused on key levels for the benchmark S&P 500.

"As a technical analyst, support and resistance levels are incredibly important as a gauge of risk/reward," she told Business Insider.

Stockton sees the index's risk framed by long-term support of about 2,300 to 2,350.

She arrived there after considering a 38.2% Fibonacci retracement level (a term in technical analysis referring to areas of support or resistance), the S&P 500's low in December 2018, and another technical metric called the monthly cloud model.

"This level is key toward the preservation of the uptrend that began in 2009, in my opinion," she said. 

The dip below that area in March was not a technical breakdown, she said. For that kind of damage, she requires consecutive weekly closes below support, "especially in emotionally charged environments, which are prone to shakeouts," or "false breakdowns," Stockton said.



Ed Campbell, QMA: COVID-19 data

"The current environment has us paying less attention to economic data and laser-focused on the virus data," said Ed Campbell, a portfolio manager and managing director at QMA, the quantitative-equities and asset-allocation business at PGIM, Prudential's investment-management arm. 

With the lockdown measures in place during the coronavirus outbreak, economic data will "cease to have value for markets," so he's watching for the trajectory of new infections to indicate when quarantines will end and economic activity will pick back up.

He believes the path of cases in the US is closely tracking cases in Italy — which has the highest reported death count — with a two-week lag.

"Should Italy's decline in new cases continue and point in the direction of containment, it may lead to the expectation that an apex and containment for other Western countries are not far behind," Campbell said. "This could be an important inflection point for markets."



John Stoltzfus, Oppenheimer: how the spread of COVID-19 is being contained

John Stoltzfus, Oppenheimer's chief investment strategist, told Business Insider that the most important indicator for a sustainable stock market rally is the progress made in stemming COVID-19's spread.

"At the end of the day, it's a health-risk story with economies on lockdown," he said.

The coronavirus has spread to nearly all of the world's countries and territories, according to data from Johns Hopkins University.



Ryan Detrick, LPL Financial: a peak in US coronavirus cases

Ryan Detrick, the senior market strategist at LPL Financial, said the biggest factor he's been watching is a peak in the number of coronavirus cases in the US. 

"While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States," Detrick said.

The US has recorded the highest number of cases, with just over 337,000 confirmed, according to Johns Hopkins University's database. More than 1.2 million people around the world have been sickened by the coronavirus. 

"Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching," he said. 



One research firm thinks the coronavirus-roiled stock market could fall another 20% this year

Mon, 04/06/2020 - 7:50pm

  • The research provider TS Lombard predicted on Monday that the S&P 500 would fall below 2,000 in 2020.
  • That would mark a 20% drop from where the index closed on Friday, and a drop of about 40% from its all-time high reached in February.
  • The firm said it sees more market declines during the coronavirus pandemic because it doesn't believe a V-shaped recovery is possible.
  • TS Lombard also thinks there will be further economic pain in the third quarter after a brutal second quarter.
  • Read more on Business Insider.

The stock market has a lot further to fall as the coronavirus pandemic continues, according to analysts at TS Lombard.

The research firm on Monday predicted that the S&P 500 would fall below 2,000 in 2020, marking a 20% drop from where the index closed on Friday. Such a decline would bring the index more than 40% below its all-time high of 3,386.15, reached on February 19.

TS Lombard lowered its outlook for stocks because it doesn't believe that a "V-shaped" recovery — indicating a swift rebound and strong snap-back momentum — is possible for the US, even after the coronavirus pandemic subsides.

"The idea that Americans are simply going to snap back as if what's going on had not happened suggests Wall-Street has 'herd immunity' to common sense," analysts led by Charles Dumas wrote in the note.

An early sign of pain to come was in last week's jobs numbers, according to Dumas. On Friday, the March nonfarm-payrolls report showed that the US had lost 701,000 jobs during the month. That the losses were so much deeper than the 100,000-job contraction forecast by economists suggests that damage is more widespread than originally thought, he said.

Read more: A stock chief at $7.4 trillion BlackRock shared with us his coronavirus-investing playbook: How to keep money safe, what he's avoiding, and some surprising contrarian bets

"There is worse to come, hard though that may be to imagine," Dumas wrote, adding that labor income could fall through the second quarter and then the third. This conflicts with the V-shaped recovery that many economists have predicted.

"The world will not just snap back to normal," he wrote. "Leaving aside the 'how' and the 'when' of any return to normal from the current lock-down, people are said going to be the same."

Further, Dumas said, at the end of 2019, US households had more assets in the stock market than their own houses — but those assets have since been cut by a third.

Small businesses — the "mom and pop" shops that are the backbone of the economy — are also likely to struggle to stay afloat during the coronavirus-induced recession, Dumas said.

Read more: 'I was a single mother with 2 small kids:' Here's how Ashley Hamilton flipped a $20,000 waitressing salary into real-estate-investing success and a 10-unit portfolio

"A little bit of government help may tide them over, of course — but who would bet that cutbacks in capex do not get triggered sooner than with the usual lag of six months or more?" Dumas wrote, adding that the Philadelphia Federal Reserve's survey of capital expenditure intentions was slumping before the COVID-19 outbreak hit the economy hard.

Aside from potential spending cuts, "the first call on any revival of business cash flow will be to pay back whoever has tided them over — not much will be left for dividends even, let alone capex," Dumas said.

Overall, Dumas said, the situation is a "stock market in denial, very far from any sign of capitulation."

He concluded: "The second leg down of this bear looks as if it will be worse than the first ... and always, the last leg down hurts most."

Read more: 14 Wall Street experts told us the single metric they're each watching to assess coronavirus market fallout — and give their portfolios a leg up

Join the conversation about this story »

NOW WATCH: We tested a machine that brews beer at the push of a button

The best no-fee checking accounts right now

Mon, 04/06/2020 - 5:30pm

A good checking account is a necessity. It's a temporary home for the money you earn and soon spend on your needs, wants, and future goals — and it shouldn't cost you anything.

These days, most (if not all) banks offer conditional no-fee checking accounts. That is to say, your monthly service fee can be waived if you meet minimum balance or recurring deposit requirements.

In this list, we want to highlight the checking accounts that charge zero monthly maintenance fees, no matter where your balance lies. You might notice this list is similar to our list of best checking accounts — that's because we value no-fee products and have mentioned many of the best already.

Below you'll find our picks for the best no-fee checking accounts available right now. Each of these accounts comes with a debit card, FDIC insurance, and mobile app access. 

Capital One 360: Best no-fee checking account overall

Why it stands out: Access to over 39,000 Capital One and AllPoint ATMs; no monthly service, overdraft, or foreign transaction fees; mobile check deposit available; connects to Zelle for digital money transfers; multiple overdraft protection options; and all balances earn 0.20% APY. Plus, Capital One ranks No. 4 on J.D. Power's US National Banking Satisfaction Study.

What to look out for: Minimal branch locations. Though Capital One Cafés are popping up in big cities around the US, the bank only operates about 470 branches in nine states.

Discover CashBack Debit: Best no-fee checking account for rewards

Why it stands out: Access to over 60,000 ATMs; no monthly service or overdraft fees; mobile check deposit available; connects to Zelle for digital money transfers; and earns 1% cash back on up to $3,000 in debit card purchases every month.

What to look out for: Location restrictions. You can only use your Discover debit card in the US, Canada, Mexico, and the Caribbean.

US Bank Student Checking: Best no-fee checking account for students

Why it stands out: Access to 4,700 US Bank ATMs, 28,000 ATMs in the MoneyPass Network, and 3,000 US Bank branch locations; no monthly service fees for students; no overdraft transfer fees when linked to a deposit account; fee reimbursement for up to four non-US Bank ATM transactions per statement cycle; connects to Zelle for digital money transfers; and mobile check deposit available.

What to look out for: Minimum opening deposit of $25. Also, although US Bank ranked above Wells Fargo, Bank of America, and CitiBank on J.D. Power's US National Banking Satisfaction Study, it's categorized as "about average."

HMBradley: Best checking account/savings account hybrid

Why it stands out: When you deposit money into your HMBradley account, the platform tracks how much you spend vs. how much you save over the course of the quarter. HMBradley has a tiered APY based on the percentage of deposits you save. The tiers are as follows:

  • Tier 1: Earn 3.00% APY when you save at least 20% of your deposits
  • Tier 2: Earn 2.00% APY when you save 15% to 19.99% of your deposits
  • Tier 3: Earn 1.00% APY when you save 10% to 14.99% of your deposits
  • Tier 4: Earn 0.50% APY when you save 5% to 9.99% of your deposits

You have to set up direct deposits to earn interest with HMBradley, but there's no required initial deposit or minimum account balance. 

Monthly fee: $0

What to look out for: Percentage of deposits saved. You have the potential to earn more than you would with other checking accounts or even high-yield savings accounts, but if you don't save at least 5% of your deposits, you won't earn any interest the following quarter.

Simple Online Checking: Best online-only checking account

Why it stands out: Access to 40,000 AllPoint ATMs; mobile check deposit available; built-in budgeting feature that automatically portions out fixed expenses after each paycheck is deposited and leaves you with a "safe to spend" amount; and the ability to open and easily transfer excess funds into a high-yield companion account that earns 1.75% APY.

What to look out for: Limited overdraft options. If you attempt to make a purchase with your debit card that requires more funds than are available in your account, Simple will decline the transaction. At this time, there are no other options for overdraft protection.

Other no-fee checking accounts we considered and why they didn't make the cut:
  • Charles Schwab High-Yield Investor Checking Account: This no-fee checking account earns just 0.03% on all balances, and you have to open a brokerage account at the same time.
  • Ally Interest Checking Account: This no-fee account is comparable to Simple's online checking account, although Simple has a budgeting feature and offers a higher-earning savings account than Ally. However, Ally does have more overdraft options and earns 0.10% APY on balances under $15,000, if that's important to you.
  • CIT Bank eChecking: The minimum opening deposit for this account is $100 and it only offers up to $15 of fee-free ATM visits a month, otherwise it's a fine account earning 0.10% APY on balances below $25,000.
  • Betterment Everyday: This is still in beta, but it has the makings of a solid checking account: ATM fees reimbursed worldwide, no monthly service fees or overdraft fees, and a boosted rate on your savings account.
  • TD Bank Student Checking: While TD Bank ranked No. 1 on J.D. Power's US National Banking Satisfaction Study, its only ATM and branch locations are on the East Coast, and there's a $3 fee each time you use a non-TD ATM.
  • Axos Essential Checking: A solid online-only checking account with unlimited ATM fee reimbursement, but nothing extra special.
  • Axos Cash Back Checking: This account offers up to 1% cash back on purchases (up to $2,000 per month), but doesn't count transactions from grocery stores and requires an average daily balance of $1,500 to earn the cash back. If your balance falls below that limit, you get 0.50% cash back.
  • Axos Rewards Checking: This account touts up to 1.25% APY, but to get the full rate you need to have monthly direct deposits totaling $1,000 or more and a total of 15 transactions per month (min $3 per transaction) on your debit card. You also need $50 to open the account.
  • Chime: A solid online-only, no-fee checking account with overdraft protection options, quick direct deposit, and access to over 38,000 ATMs, but additional features are not as good as Simple.
  • TIAA Yield Pledge Checking: No monthly service fees and all balances earn 0.50% APY for the first year; after that, the rate drops to between 0.20% to 0.35%. To enjoy unlimited ATM reimbursement you need to keep an average daily balance of at least $5,000. You also need at least $100 to open the account.
  • SoFi Money: This hybrid checking account/savings account offers 20% cash back on Lyft rides and unlimited ATM reimbursements worldwide, but its 0.20% APY is less than what you could earn with HMBradley.
Frequently asked questions: Why trust our recommendations?

At Personal Finance Insider, we strive to help smart people make the best decisions with their money. We spent hours comparing and contrasting the features and fine print of nearly three dozen checking accounts available at over 20 national and online-only banks so you don't have to.

We understand that "best" is often subjective, however, so in addition to highlighting the clear benefits of a checking account — no fees, for example — we outline the limitations, too.

How did we choose the best no-fee checking accounts?

To find the best no-fee checking accounts, we consulted our list of the best checking accounts, many of which are completely free for all accountholders, regardless of their balance. To compile that list, we considered offerings at over 20 financial institutions, as well as reviews at popular comparison sites like Bankrate and Nerdwallet, to determine the strongest options.

We also polled Business Insider employees for their favorite picks and considered J.D. Power's US National Banking Satisfaction Study for 2019, which measures customer satisfaction at America's largest retail banks.

While big retail banks in the US have the most widespread ATM and branch location access, they typically do not offer completely free checking accounts, so we didn't name a winner for ATM and branch access.

Unlike a savings account, a checking account doesn't need to have a high interest rate to be good. In fact, the annual percentage yield (APY) shouldn't matter much if you're using your checking account to pay your monthly bills and cover expenses in short order. If your money is constantly flowing in and out of your checking account, it won't get a chance to earn much interest anyway.

What banks offer free checking accounts?

You can find completely free checking accounts at Ally, Betterment, CIT Bank, US Bank, TD Bank, Capital One, Charles Schwab, Discover, Axos, and SoFi Money, to name a few.

Which banks have the best checking accounts?

Through our extensive research, we've concluded that the best checking accounts available right now are at Chase, Capital One, Discover, Simple, and SoFi Money. Some of these may offer to waive service fees if certain requirements are met, but most charge none at all.

Which banks have free checking with no minimum balance?

Several banks offer free checking accounts with no minimum balance or opening deposit requirement, including Ally, Charles Schwab, Betterment, and Capital One.

Tanza Loudenback has been writing about money every day for more than three years. She is an expert on strategies for building wealth and financial products that help people make the most of their money. She is in the process of becoming a licensed CERTIFIED FINANCIAL PLANNER™ (CFP).

Join the conversation about this story »

NOW WATCH: Pathologists debunk 13 coronavirus myths

Everything we know about the coronavirus stimulus checks that will pay many Americans up to $1,200 each

Mon, 04/06/2020 - 5:25pm

  • Part of the $2 trillion stimulus package from the US government is one-time cash payments of up to $1,200 to Americans who qualify.
  • Those payments — coronavirus stimulus checks, let's call them — will be paid automatically to Americans with Social Security numbers.
  • If you filed taxes in 2018 or 2019, or you don't file taxes but do get Social Security payments, you don't have to do anything to get a payment.
  • If you don't file taxes or get Social Security, the IRS has mentioned it will set up a "simple web portal" to submit your information, though details on that are still coming. In the meantime, TurboTax has launched its own free web portal to submit direct-deposit information to the IRS.
  • Americans who have set up direct deposits should get their payments by mid-April. Americans who are receiving paper checks may have to wait considerably longer.
  • Read more personal finance coverage.

When President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, into law, he initiated a $2 trillion stimulus package, the largest emergency relief bill in American history.

Part of that package is one-time cash payments of up to $1,200 to Americans who qualify.

An extra $1,200 is always welcome. But with the announcement of the cash came the questions: What is it? Who gets it? How much will I get? Is it taxable? What do I have to do to get it?

Below, we've answered those questions and more. Read on for everything you need to know about your coronavirus stimulus check.

What is a coronavirus stimulus check?

The payment — which the IRS is calling an "economic impact payment," the government has named a "recovery rebate," and many people are calling a "stimulus check" — is technically an advance tax credit meant to offset your 2020 federal income taxes.

Am I going to get a check?

You will get a check if you:

  • Have a Social Security number.
  • Have filed taxes in 2018 or 2019, or don't earn enough to file but receive Social Security payments.
  • Earned less than $99,000 for single filers, $136,500 for heads of household, or $198,000 for married filers according to the most recent tax return filed.
  • Are not claimed by someone else as a dependent.
If I get a check, will it affect my tax refund?

No. Even though the stimulus payment may feel and look like a tax refund, it's not. You'll still get your full tax refund next year (and this year too, for that matter), as long as you file a tax return.

The stimulus check is a tax credit, which reduces your tax bill on a dollar-for-dollar basis. It's like having store credit at your favorite clothing shop — when you apply it to your total bill, it reduces what you owe. 

You usually can't claim a tax credit until you file your taxes since you don't know what you owe until the year is over. Because of the severity of this national crisis, the government is giving qualifying taxpayers their credit early in the form of a cash payment. It will not affect your refund this year or next.

How much will I get?

The IRS bases the amount of your payment on the adjusted gross income (AGI) listed on your most recent tax return: 2018 or 2019.

The maximum payment is $1,200 for single filers with an AGI below $75,000 or single parents (heads of household) with an AGI below $112,500. Married couples who file jointly and have an AGI below $150,000 will get a total of $2,400.

Payments will begin to phase out at a rate of $5 for each $100 over the AGI threshold before ceasing at an AGI of $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers. There's also an additional $500 allotted to parents who have an AGI within the phaseout range for each child younger than 17.

You can use an online calculator to figure out how much your check will be if you're unsure.

Do I need to do anything to get a stimulus check?

You do not have to sign up to receive a stimulus check. The process is automatic for most Americans who qualify.

To get a check, you must have a Social Security number (nonresident aliens, people without a Social Security number, and adult dependents are not eligible). If you filed taxes in 2018 or 2019, that tax return must reflect an adjusted gross income below $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers.

Note that if you've moved, and you haven't provided the IRS with direct-deposit information, you should make sure the agency has the correct address on file to receive a paper check in the mail.

If you don't file taxes but do get Social Security payments, the government will use that information for your payment. If you don't file taxes or get Social Security payments, the IRS has announced it will set up a "simple web portal" for you to submit your information on (more to come on the details of that). On Saturday, TurboTax launched a free web portal for people who don't file taxes to submit direct-deposit information to the IRS, although a PR representative for TurboTax confirmed to Business Insider that its stimulus registration webpage is not the web portal to which the Treasury had previously alluded.

Who won't get a stimulus check?

Dependents older than 16, people without a Social Security number, and those with incomes above $99,000 (or $136,500 if you file as a head of household) won't get a stimulus check.

How will I get the money?

Most people will get the money deposited directly into their bank accounts.

People who do not set up direct deposits with the federal government will be mailed a paper check.

People who don't file taxes but do get Social Security payments will get a payment the same way they get their Social Security payments.

People who don't file taxes or get Social Security payments will need to send the IRS their information through a "simple web portal" (more details to come). They may also use TurboTax's free web portal to submit direct-deposit information to the IRS.

When will I get my stimulus check?

"If we if have your information, you'll get it within two weeks," Treasury Secretary Steven Mnuchin said in a White House press briefing, according to The Washington Post. "Social Security, you'll get it very quickly after that. If we don't have your information, you'll have a simple web portal. We'll upload it. If we don't have that, we'll send you checks in the mail."

For taxpayers who can use direct deposit, the payment should be deposited mid-April.

However, NBC News reported that for Americans who haven't set up direct deposits with the federal government, it could take much longer: up to five months for about 60 million Americans to receive a paper check.

Business Insider's Bryan Pietsch wrote: "In early May, the IRS will send out paper checks to those without direct deposit, and it could take around 20 weeks to issue all of the checks, the report said. Those with lower incomes will reportedly be prioritized, and those on Social Security will receive their payments as they would their Social Security checks."

Read more: Where is my stimulus check? Here's when your payment should arrive

How does the IRS know where to send the money?

In most cases, the IRS will take direct-deposit information or a mailing address from your most recent tax filing. For people who receive Social Security payments but don't have enough income to file taxes, the IRS will use the information from the Social Security payments.

If neither of the above situations applies to you, but you qualify for a payment, the IRS has said it will set up a "simple tax return" in an online portal, through which you'll be able to give the IRS your contact details. More information is coming on this feature. Those who want to submit direct-deposit information to the IRS may also use TurboTax's free web portal.

Is the money from the check taxable?

No, the money is not taxable.

What if my 2018 income qualifies, but my 2019 income doesn't?

The IRS bases the amount of your payment on the AGI listed in your most recent tax return: 2018 or 2019. In some cases, when your income changed between 2018 and 2019, your 2018 income might qualify for a larger payment than your 2019 payment, or perhaps it might qualify for any payment while your 2019 does not.

In that case, because the IRS has extended the federal tax filing and payment deadline to July 15 (all states that tax income have also their deadlines, in most cases until July 15), you could hold off filing your 2019 income taxes until after the IRS has issued your payment, forcing the organization to use your 2018 income for your payment.

Waiting to file has a few downsides, like waiting longer to get your refund and giving identity thieves more time to try to prey on your taxes. But Riley Adams, a public accountant, previously told Business Insider if you'd qualify for a stimulus check under your 2018 income but not at all under 2019, it might be worth holding off filing for a few weeks (assuming you haven't already).

What if I owe back taxes right now?

You'll still get a check if you qualify.

These payments are treated differently than your tax refund. Typically, you can have your refund seized if you owe back taxes, but that's not the case here. Even people with tax debt should be getting a stimulus payment if they're under the income thresholds. The only people who could get their check reduced because of debt are parents with outstanding child support.

I got a phone call, email, or Facebook message about my check. Should I answer?

No. The US government isn't calling, emailing, Facebook-messaging, or otherwise contacting you about your stimulus check — and if someone does, it's probably a scam.

The IRS generally gets in contact with taxpayers through snail mail, and in the case of stimulus checks, it doesn't need to contact you for any type of additional information. The process is automatic for any American who qualifies. If someone is calling or emailing you to confirm personal details or asking for bank information or money, it's a scam.

Unfortunately, scammers are taking advantage of this opportunity to steal people's identities, money, or both. These scams include fake stimulus checks that arrive immediately with an unusual denomination and ask you to verify the receipt online, as well as someone claiming that paying a "processing fee" will get your money to you sooner.

What if I get my check and it's too big?

You don't need to do anything.

Technically, this payment is a tax credit. A tax credit reduces your tax bill on a dollar-for-dollar basis. It is one of the last steps in calculating your annual tax liability and can be claimed regardless of whether you itemize your deductions. Some tax credits, like the coronavirus recovery rebate, are refundable. That means you'll still get the money even if you don't have enough tax liability to offset it.

There aren't any clawback provisions outlined in the law, so you wouldn't be expected to repay any of the money if you wind up getting too much.

What if I get my check and it's too small?

While it won't help you today, experts say the IRS will allow taxpayers to reconcile underpayment on next year's tax return.

"If you should have gotten a check and didn't, or if you should have gotten more than you did because the IRS didn't know something important (like you have a kid), you should get more money" next tax season, Kelly Phillips Erb, a tax lawyer, wrote for Forbes.

Correction: This article has been updated to correct the age for which an additional $500 is allotted to parents: That payment is for those who have an AGI within the phaseout range for each child younger than 17, not 16.

Join the conversation about this story »

NOW WATCH: Why electric planes haven't taken off yet

The best checking accounts

Mon, 04/06/2020 - 5:21pm

A checking account is like ground zero for managing your money.

In the words of financial expert Ramit Sethi, a checking account is best used like an "email inbox" for your income — once the cash is deposited, you can filter appropriate sums out to your other accounts to pay bills, save, and invest.

At the very least, your checking account should be easy to access, whether online or in person, and incredibly cheap to maintain, if not free. With so much competition among financial institutions, legacy banks, and fintechs, it's easier than ever to find a checking account that fits your needs.

Still, sifting through the fine print can be tedious, so we've done the legwork for you. Below you'll find our picks for the best checking accounts right now. Bearing in mind that "best" is often subjective — some people may prefer the convenience of a physical bank branch to the absence of fees, for example — we reviewed nearly three dozen checking accounts available at over 20 national and online-only banks to identify the strongest options.

Each of these accounts comes with a debit card, FDIC insurance, and mobile app access. Most are free of monthly maintenance fees too, or could be after meeting certain deposit or balance requirements.

Capital One 360: Best checking account overall

Why it stands out: Access to over 39,000 Capital One and AllPoint ATMs; no monthly service, overdraft, or foreign transaction fees; mobile check deposit available; connects to Zelle for digital money transfers; multiple overdraft protection options; and all balances earn 0.20% APY. Plus, Capital One ranks No. 4 on J.D. Power's US National Banking Satisfaction Study.

Monthly fee: $0

What to look out for: Minimal branch locations. Though Capital One Cafés are popping up in big cities around the US, the bank only operates about 470 branches in nine states.

Discover CashBack Debit: Best checking account for rewards

Why it stands out: Access to over 60,000 ATMs; no monthly service or overdraft fees; mobile check deposit available; connects to Zelle for digital money transfers; and earns 1% cash back on up to $3,000 in debit card purchases every month.

Monthly fee: $0

What to look out for: Location restrictions. You can only use your Discover debit card in the US, Canada, Mexico, and the Caribbean.

Chase Total Checking: Best checking account for branch and ATM access

Why it stands out: Access to 16,000 ATMs and nearly 4,900 branches; mobile check deposit available; connects to Zelle for digital money transfers; and cash bonus offer for new Chase customers who open an account and set up direct deposit within 90 days. Plus, Chase ranks No. 2 on J.D. Power's US National Banking Satisfaction Study.

Monthly fee: $12 — waived if you set up direct deposit of at least $500 a month; or have a $1,500 daily balance; or have $5,000 in combined balances across Chase accounts.

What to look out for: Overdraft/insufficient funds fee and non-Chase ATM fee. You may be charged an insufficient funds fee if you're not signed up for overdraft protection. You'll be charged a $2.50 fee for using any non-Chase ATM.

Chase College Checking: Best checking account for students

Why it stands out: Access to 16,000 ATMs and nearly 4,900 branches; mobile check deposit available; connects to Zelle for digital money transfers; and $100 cash bonus offer for new Chase customers who open an account and make qualifying purchases. Plus, Chase ranks No. 2 on J.D. Power's US National Banking Satisfaction Study.

Monthly fee: $6 — waived if you're between the ages of 17 and 24 and enrolled in college; or set up monthly direct deposit in any amount; or have an average daily balance of $5,000 in this account.

What to look out for: Overdraft/insufficient funds fee and non-Chase ATM fee. You may be charged an insufficient funds fee if you're not signed up for overdraft protection. You'll be charged a $2.50 fee for using any non-Chase ATM.

HMBradley: Best checking account/savings account hybrid

Why it stands out: When you deposit money into your HMBradley account, the platform tracks how much you spend vs. how much you save over the course of the quarter. HMBradley has a tiered APY based on the percentage of deposits you save. The tiers are as follows:

  • Tier 1: Earn 3.00% APY when you save at least 20% of your deposits
  • Tier 2: Earn 2.00% APY when you save 15% to 19.99% of your deposits
  • Tier 3: Earn 1.00% APY when you save 10% to 14.99% of your deposits
  • Tier 4: Earn 0.50% APY when you save 5% to 9.99% of your deposits

You have to set up direct deposits to earn interest with HMBradley, but there's no required initial deposit or minimum account balance. 

Monthly fee: $0

What to look out for: Percentage of deposits saved. You have the potential to earn more than you would with other checking accounts or even high-yield savings accounts, but if you don't save at least 5% of your deposits, you won't earn any interest the following quarter.

Simple Online Checking: Best online-only checking account

Why it stands out: Access to 40,000 AllPoint ATMs; mobile check deposit available; built-in budgeting feature that automatically portions out fixed expenses after each paycheck is deposited and leaves you with a "safe to spend" amount; and the ability to open and easily transfer excess funds into a high-yield companion account that earns 1.75% APY.

Monthly fee: $0.

What to look out for: Limited overdraft options. If you attempt to make a purchase with your debit card that requires more funds than are available in your account, Simple will decline the transaction. At this time, there are no other options for overdraft protection.

Other checking accounts we considered and why they didn't make the cut:
  • Charles Schwab High-Yield Investor Checking Account: This no-fee checking account earns just 0.03% on all balances, and you have to open a brokerage account at the same time.
  • Ally Interest Checking Account: This no-fee account is comparable to Simple's online checking account, although Simple has a budgeting feature and offers a higher-earning savings account than Ally. However, Ally does have more overdraft options and earns 0.10% APY on balances under $15,000, if that's important to you.
  • Chase Premier Checking: The only way to waive the $25 monthly fee on this account is to have a $15,000 daily balance or link it to a mortgage account with automatic payments.
  • CitiBank Simple Checking: A fine checking account with options to waive the $12 monthly fee, but customer satisfaction is below average, according to J.D. Power's US National Banking Satisfaction Study.
  • US Bank Easy Checking: A standard checking account with options to waive the $6.95 monthly fee, but customer satisfaction is about average, according to J.D. Power's US National Banking Satisfaction Study.
  • CIT Bank eChecking: The minimum opening deposit for this account is $100 and it only offers up to $15 of fee-free ATM visits a month, otherwise it's a fine account earning 0.10% APY on balances below $25,000.
  • Betterment Everyday: This is still in beta, but it has the makings of a solid checking account: ATM fees reimbursed worldwide, no monthly service fees or overdraft fees, and a boosted rate on your savings account.
  • TD Bank Convenience Checking: While TD Bank ranked No. 1 on J.D. Power's US National Banking Satisfaction Study, its only ATM and branch locations are on the East Coast, and there's a $3 fee each time you use a non-TD ATM.
  • TD Bank Beyond Checking: While TD Bank ranked No. 1 on J.D. Power's US National Banking Satisfaction Study, this account is favorable for people with high balances. Non-TD ATM fees are reimbursed, but only with a $2,500 minimum daily balance.
  • PNC Performance Select Checking: PNC ranked "better than most" on J.D. Power's US National Banking Satisfaction Study, but in order to waive the $25 monthly fee, you need $5,000 or more in monthly direct deposits, or a $5,000 average balance, or $25,000 in all PNC accounts (including investments). You also need $25 to open the account and branch access is limited to the Eastern US.
  • PNC Performance Checking: PNC ranked "better than most" on J.D. Power's US National Banking Satisfaction Study, but in order to waive the $15 monthly fee, you need $2,000 or more in monthly direct deposits, or a $2,000 average balance, or $10,000 in all PNC deposit accounts. You also need $25 to open the account and branch access is limited to the Eastern US.
  • HSBC: HSBC offers a good variety of checking accounts, although only those with high minimum balance or deposit requirements get ATM fees reimbursed.
  • Axos Essential Checking: A solid online-only checking account with unlimited ATM fee reimbursement, but nothing extra special.
  • Axos Cash Back Checking: This account offers up to 1% cash back on purchases (up to $2,000 per month), but doesn't count transactions from grocery stores and requires an average daily balance of $1,500 to earn the cash back. If your balance falls below that limit, you get 0.50% cash back.
  • Axos Rewards Checking: This account touts up to 1.25% APY, but to get the full rate you need to have monthly direct deposits totaling $1,000 or more and a total of 15 transactions per month (min $3 per transaction) on your debit card. You also need $50 to open the account.
  • Chime: A solid online-only checking account with overdraft protection options, quick direct deposit, and access to over 38,000 ATMs, but additional features are not as good as Simple. 
  • TIAA Basic Checking: A solid account that waives the already low $5 fee with a daily average balance of $25. To enjoy unlimited ATM reimbursement, however, you need to keep an average daily balance of at least $5,000.
  • TIAA Yield Pledge Checking: No monthly service fees and all balances earn 1.01% APY for the first year; after that, the rate drops to between 0.25% to 0.55%. To enjoy unlimited ATM reimbursement you need to keep an average daily balance of at least $5,000. You also need at least $100 to open the account.
  • Wells Fargo Everyday Checking: Wells Fargo's account is comparable to Chase's Total Checking Account, but Wells Fargo ranked below Chase on J.D. Power's US National Banking Satisfaction Study and has about 3,000 fewer ATMs.
  • SoFi Money: This hybrid checking account/savings account offers 20% cash back on Lyft rides and unlimited ATM reimbursements worldwide, but its 0.20% APY is less than what you could earn with HMBradley.
Frequently asked questions: Why trust our recommendations?

At Personal Finance Insider, we strive to help smart people make the best decisions with their money. We spent hours comparing and contrasting the features and fine print of nearly three dozen checking accounts available at over 20 national and online-only banks so you don't have to.

We understand that "best" is often subjective, however, so in addition to highlighting the clear benefits of a checking account — no fees, for example — we outline the limitations, too.

How did we choose the best checking accounts?

We considered offerings at over 20 financial institutions, as well as reviews at popular comparison sites like Bankrate and Nerdwallet, to determine the strongest options for online banking, college students, branch access, low fees, and rewards. We gave precedence to the accounts with no monthly fees or the option to waive monthly fees with qualifying activities; overdraft protection options; widespread ATM access and/or reimbursement for ATM fees; and mobile banking capabilities.

We also polled Business Insider employees for their favorite picks and considered J.D. Power's US National Banking Satisfaction Study for 2019, which measures customer satisfaction at America's largest retail banks.

Unlike a savings account, a checking account doesn't need to have a high interest rate to be good. In fact, the annual percentage yield (APY) shouldn't matter much if you're using your checking account to pay your monthly bills and cover expenses in short order. If your money is constantly flowing in and out of your checking account, it won't get a chance to earn much interest anyway.

What banks offer free checking accounts?

You can find no-fee checking accounts at a few big retail banks and nearly every online-only bank, including Ally, Capital One, Charles Schwab, Discover, Axos, and SoFi Money.

What's the best bank for a checking account?

We believe Capital One offers the best checking account available right now, in large part thanks to $0 in monthly fees, multiple overdraft options, access to 39,000 Capital One ATMs and AllPoint ATMs, and mobile check deposit. As an added bonus, it also earns 0.20% APY on all balances. 

Can I open a second checking account at the same bank?

Many banks allow you to open more than one checking account, but it's usually unnecessary unless you need an individual account and a joint account.

Is it bad to have multiple checking accounts?

It's not bad to have multiple checking accounts, but it's usually not necessary. A checking account should hold cash that you are using to cover your expenses each month and no more than that. Any excess cash is best stored in a high-yield savings account, where it can earn up to 200 times more interest than a checking account, or in an investment account.

Tanza Loudenback has been writing about money every day for more than three years. She is an expert on strategies for building wealth and financial products that help people make the most of their money. She is a candidate for the CFP® certification.

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Tiger Global, Maverick, and Coatue all lost double-digits in a tough month for Tiger Cubs

Mon, 04/06/2020 - 5:10pm

  • Tiger Global, Maverick Capital, and Coatue all fell double-digits in March. Viking lost money as well.
  • The Tiger Cubs, all founded by former members of Julian Robertson's Tiger Management's staff, focus on public equities; which were hit hard by the novel coronavirus pandemic.
  • The average hedge fund fell nearly 6% in March, according to Hedge Fund Research's global index of hedge-fund strategies.
  • Visit Business Insider's homepage for more stories.

Some of the biggest names in the hedge-fund game were not spared from the coronavirus selloff that tanked global markets. 

Coatue, Tiger Global, and Maverick all lost double-digits in March, sources told Business Insider, while Viking fell 5% for the month. Bloomberg first reported the Coatue and Viking losses. 

The funds, all run by billionaires, are considered Tiger Cubs, which is the first generation of funds to come from Tiger Management, the legendary hedge fund founded by Julian Roberson. 

Maverick's losses were the worst of the funds, with Lee Ainslie's fund down 11.7% for March and 13.6% for the year. The firm declined to comment.

In a note sent to investors right as the coronavirus was beginning to spread to the US, Ainslie had said his plan was to take advantage of the volatility in the markets and buy up stocks of companies he liked at a discount. 

Tiger Global, the fund founded by Chase Coleman that invests heavily in both public and private markets, fell 10.8% in March and is down 5.8% for the year. The firm declined to comment.

Bloomberg reported that Philippe Laffont's Coatue dropped 10% in March and is down 6% for the year. Viking's losses are at 2% for the year, after the 5% drop in March, according to Bloomberg. 

The average hedge fund fell nearly 6% in March, according to Hedge Fund Research's global index of strategies, and is down 6.85% for the year.

Stephen Mandel Jr.'s Lone Pine meanwhile lost tens of millions on an investment into Luckin Coffee, filings showed, after the China-based company's stock dropped 80% on the news that its COO falsified about $310 million of sales. Lone Pine declined to comment on Luckin and declined to provide a performance update.

SEE ALSO: Julian Robertson's Tiger Management is at the center of a quarter-trillion-dollar web linking billionaires, the Pharma Bro, and a 'Big Short' main character

SEE ALSO: Macro hedge funds are soaring while quants and stock-pickers tank. Here are the biggest winners and losers.

SEE ALSO: How a brain-zapping device can calm hedge-fund traders' nerves when markets are chaotic, according to a veteran performance coach

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Goldman Sachs is going through a huge transformation under CEO David Solomon. Here's everything you need to know.

Mon, 04/06/2020 - 4:32pm

  • The storied investment bank is seeing leadership shakeups under CEO David Solomon and a slew of partner departures. 
  • Goldman has been moving away from high-risk businesses like trading and is making pushes into more stable areas like consumer lending, wealth management, and transaction banking. 
  • There have been big cultural changes, too. Solomon is looking to create a more transparent workplace, while new tech execs are taking cues from Silicon Valley heavy-hitters. 
  • At Business Insider, we are closely tracking the latest developments at Goldman. You can read all of our Goldman coverage on BI Prime.

Storied Wall Street bank Goldman Sachs is going through some massive shifts under CEO David Solomon.

It's taken big steps involving transparency and inclusion to change up its culture. It has seen a slew of partner departures — many in the securities division. And it's making big pushes into businesses like wealth management and transaction banking.  

Here's everything we know about what's been going on inside Goldman. 

Coronavirus response Investor day 2020 Culture and talent Consumer push, transaction banking, wealth management Technology Trading Alternatives Deals Careers 

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Read the full memo Goldman Sachs just sent to staff announcing its new head of regulatory affairs. The former White House counsel will be tasked with helping clean up the bank's 1MDB drama.

Mon, 04/06/2020 - 4:19pm

  • Goldman Sachs has named Kathryn Ruemmler as its new global head of regulatory affairs, according to an internal memo reviewed by Business Insider.
  • Ruemmler joins as a partner and becomes the 34th member of CEO David Solomon's management committee, Goldman's most powerful decision-making group. 
  • Goldman Sachs is engaged in discussions with global authorities, including the Justice Department, over its role in selling debt for the Malaysian sovereign wealth fund.
  • Click here for more BI Prime stories.

Goldman Sachs has named a new head of regulatory affairs, bringing in a woman with considerable government experience and political connections as a partner and member of the management committee. 

The bank said Kathryn Ruemmler will start later this month and become the 34th member of the company's management committee. Ruemmler joins as a partner from elite law firm Latham & Watkins LLP, where she chaired the firm's white collar defense and investigations practice. 

Prior to joining Latham in 2014, Ruemmler served in the Obama administration, in roles at the Department of Justice and in the office of the president. She will work with John Rogers, the firm's chief of staff and a longtime player in Washington circles, on the firm's regulatory agenda, according to the memo.  

Ruemmler will oversee Michael Richman, an almost three-decade veteran who gets a promotion to chief compliance officer. Richman had been helping to set strategy and oversee operations in the compliance function. 

Goldman Sachs is engaged in discussions with global authorities, including the Justice Department, over its role in selling debt for the Malaysian sovereign wealth fund known as 1MDB. The Wall Street Journal reported in December that the firm was in talks to pay a settlement of less than $2 billion and admit guilt. Nothing has been announced since. 

Goldman CEO David Solomon has been filling out his management committee since taking the top job in October 2018. In the time since, he's added roughly a dozen new people to the firm's most powerful governing body. 

Here's the full text of the memo: 

We are pleased to announce that Kathryn H. Ruemmler will join the firm this month as global head of Regulatory Affairs and a member of the Management Committee.  In this capacity, Kathy will oversee the management of the firm's regulatory infrastructure, including Goldman Sachs' interactions with banking regulators, securities regulators and supervisory authorities globally. Kathy will also be responsible for overseeing the firm's compliance policies and procedures.

Kathy will join John Rogers as co-chair of the Regulatory Reform Steering Group, and will work closely with him on the firm's regulatory agenda.  She will also join Gwen Libstag as co-vice chair of the Firmwide Reputational Risk Committee.

Michael Richman will become chief compliance officer and report to Kathy in that capacity.  Michael has been with the firm for nearly three decades, and brings deep knowledge and invaluable expertise in risk management to his expanded role.  Most recently, he has helped set the strategy and manage the day-to-day operations of Global Compliance. 

About Kathy

Kathy brings to the firm significant experience in policy development, regulatory and agency enforcement matters, and corporate governance.  She joins Goldman Sachs from Latham & Watkins, LLP, where she served as global chair of the White Collar Defense & Investigations Practice and a partner in the Litigation & Trial Department. 

Kathy rejoined Latham & Watkins in 2014 after serving for almost six years in the Administration of US President Barack Obama, first in the Department of Justice and later as counsel to the President.  In that role, she provided counsel on all legal matters related to domestic and foreign policy and national security, and advised on all significant litigation matters, including key cases heard by the United States Supreme Court. Kathy also managed the administration's response to congressional and other investigations, and was responsible for the selection and nomination processes of federal judges.

Prior to serving in the White House, Kathy was principal associate deputy attorney general at the Department of Justice, joining on the first day of the Obama Administration as its highest-ranking political appointee.  In that role, she was the deputy attorney general's primary advisor on a range of criminal policy, law enforcement, national security and civil litigation matters. She worked closely with the attorney general and the deputy attorney general in the overall management and supervision of the Department of Justice, including the United States Attorney's Offices.

Kathy is a fellow in the American College of Trial Lawyers. She worked for six years as a federal prosecutor, including as an assistant United States attorney in Washington, DC and as deputy director of the Enron Task Force.  Earlier in her career, Kathy served as associate counsel to President Bill Clinton, defending the White House and the Office of the President in independent counsel and congressional investigations.

Kathy began her career as a law clerk to Judge Timothy K. Lewis of the United States Court of Appeals for the Third Circuit.

About Michael

Previously, Michael held several leadership roles, including most recently as deputy head of Global Compliance, global head of Investment Management Division Compliance and global head of Private Wealth Management (PWM) Compliance. 

Prior to that, Michael served as co-legal director for the PWM Group in the US, senior counsel to GS.com and general counsel for Goldman Sachs Asset Management's US Mutual Funds Group.

Michael joined Goldman Sachs in 1992 in the Legal Department.  He was named managing director in 2000 and partner in 2008.

Michael serves as co-chair of the Firmwide Suitability Committee and the Firmwide Volcker Oversight Committee.  He is a member of several additional committees, including the Firmwide New Activity Committee, the Firmwide Client and Business Standards Committee and the Firmwide Enterprise Risk Committee.

Please join me in welcoming Kathy to the firm, and in congratulating Michael on his expanded role.  I wish them both continued success.

SEE ALSO: Read the full memo Goldman Sachs' top brass just sent to staff announcing 2 heads of the bank's private-investing arm are out as it's gearing up to raise billions

SEE ALSO: Goldman Sachs CEO David Solomon just sent a firm-wide voicemail about the coronavirus crisis. Here's what he told employees.

SEE ALSO: Goldman Sachs just announced its first partnership for transaction banking as it looks to build a new $1 billion business moving money around the world

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Wayfair skyrockets 41% after saying revenue doubled in March as coronavirus drove online furniture shopping (W)

Mon, 04/06/2020 - 4:14pm

Shares of Wayfair surged 41% Monday after the company said that business is going well amid the coronavirus pandemic.

Wayfair's gross revenue growth was about 20% at the beginning of March, similar to January and February, according to a statement. But by the end of March, the rate had more than doubled, the company said. Wayfair said the trend has continued in April.

"We are encouraged by our increasing sales momentum, yet remain highly focused on our plan to rapidly reach profitability and positive free cash flow," said Niraj Shah, Wayfair CEO. "The additional capital we are raising, though not strictly necessary, should only enhance our ability to successfully navigate through any market backdrop."

Now, the company expects to meet or exceed its previous guidance of 15% to 17% revenue growth in the fiscal first quarter of 2020. The company added that it's "making solid early progress" against initiatives to lead it to profitability. It reports earnings on May 5. 

The company also addressed its actions to curb the spread of COVID-19 and keep employees and customers safe. 

Read more: 14 Wall Street experts told us the single metric they're each watching to assess coronavirus market fallout — and give their portfolios a leg up

"We are closely monitoring the current market as we all respond to the threat of COVID-19. Wayfair's e-commerce model is uniquely suited to serving customers' very real needs at this challenging time," Shah said. 

Wayfair's employee base is working from home while "fulfilment, logistics and transportation facilities are fully operational," according to the statement. The company has implemented no-contact delivery, encourages drivers to wash hands, and has instituted temperature checks at several locations, it said. It also rolled out emergency paid time off for workers who are not feeling well, it said. 

The company also announced today $535 million in convertible notes as a step to "further strengthen its balance sheet and optimize its liquidity position to allow it to continue to serve customers from a position of operational and financial strength."

Even with today's gains, Wayfair is down roughly 21% year-to-date.

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Dow surges 1,627 points on growing signs the coronavirus death rate is slowing around the world

Mon, 04/06/2020 - 4:04pm

  • All three major US indexes skyrocketed on Monday after countries reported declines in new coronavirus deaths over the weekend, offering investors new hope for near-term containment.
  • The Dow Jones industrial average rallied in the final hour of trading and closed near intraday highs. All 30 stocks in the index climbed on the day.
  • Spain and Italy announced the fewest deaths in more than two weeks, while New York posted its first single-day decline in new virus deaths on Saturday.
  • Oil pared overnight losses after Russia's sovereign wealth fund's chief signaled that the country was nearing a deal with Saudi Arabia to cut production and cushion the sliding commodity market.
  • Watch major indexes update live here.

US stocks soared on Monday after countries reported declines in new coronavirus deaths over the weekend.

European markets led the charge, gaining after Spain and Italy announced the fewest deaths in more than two weeks. France and Germany reported their fewest deaths in days, signaling that the outbreak may be reaching its peak overseas.

New York posted its first single-day decline in new coronavirus deaths on Saturday, offering new hope for the virus outbreak's US epicenter after weeks of social-distancing measures and business closures. The White House also offered a slightly more hopeful tone during a Saturday press conference, highlighting signs of slowed contagion in highly affected areas.

Here's where major US indexes stood at the 4 p.m. ET market close on Monday:

Read more: A stock chief at $7.4 trillion BlackRock shared with us his coronavirus-investing playbook: How to keep money safe, what he's avoiding, and some surprising contrarian bets

Monday's stock-market rebound followed a negative week to kick off April. Major indexes slipped roughly 2% during the period as labor-market data trounced even the most bearish forecasts. Thursday's jobless-claims report notched a record and brought the two-week total of Americans filing for unemployment to 10 million.

Data released by the Labor Department on Friday revealed that the US had lost 701,000 jobs in the month ended March 14. Economists had anticipated a decline of roughly 100,000, as the report didn't include jobs lost after the strictest containment measures went into effect.

The end-of-week reports offered investors some of the first details about how hard the outbreak slammed the US and how deep the economy would slide into an all-but-certain recession.

Read more: 'I was a single mother with 2 small kids': How Ashley Hamilton flipped a $20,000 waitressing salary into real-estate-investing success and a 10-unit portfolio

Elsewhere on Monday, the much-beleaguered oil market slid 7% after declining as much as 11% overnight on news that a meeting between Saudi Arabia and Russia had been postponed. The resource pared losses after Russia's sovereign wealth fund's chief said the two nations were nearing a deal to cut production.

The commodity soared last week after President Donald Trump said he expected both nations to deescalate their efforts to flood the market with cheap oil.

Despite the market leap, several major market players warned of harsh economic troubles to come. Janet Yellen, the former Federal Reserve chief, said in an interview with CNBC that US gross domestic product could slip 30% this quarter, adding that the unemployment rate is likely near 13% already. A V-shaped rebound is still possible, she said, but a worse outcome worries her.

JPMorgan CEO Jamie Dimon chimed in with a similarly bleak forecast. The chief executive said in an annual letter to the bank's shareholders on Monday that he expected "a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008." The firm's board may even consider suspending JPMorgan's dividend, Dimon said, but only in an "extremely adverse scenario."

"If the Board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring," Dimon wrote in the letter.

Now read more markets coverage from Markets Insider and Business Insider:

Billionaire Bill Ackman says he's 'beginning to get optimistic' about a coronavirus recovery, weeks after saying 'hell is coming'

Economists think coronavirus could push unemployment above Great Depression levels. Here's why the pain won't be as prolonged this time.

The new CEO of IBM just sent a welcome letter to employees, calling for a 'maniacal focus' on AI and hybrid cloud and a pragmatic approach: 'This is about aiming for speed over elegance'

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The Fed will start buying debt backed by emergency small-business loans — giving banks more leeway to offer critical aid

Mon, 04/06/2020 - 4:02pm

  • The Federal Reserve announced Monday it will begin buying debt backed by the Small Business Administration's Payroll Protection Program.
  • The facility will create a new market for the SBA loans and allow lenders to shore up cash for additional aid.
  • PPP loans are meant to cover roughly two months' worth of payroll and business expenses, and accounted for roughly $350 billion of the government's $2 trillion stimulus package.
  • Additional details on the facility will be announced later in the week, the Fed said in a statement.
  • Visit the Business Insider homepage for more stories.

The Federal Reserve announced Monday it will begin purchasing debt backed by the government's emergency small-business loans.

The purchase program creates a new market for the debt and allows banks to shore up more cash for additional relief lending. The Small Business Administration's Payroll Protection Program loans accounted for roughly $350 billion of the government's $2 trillion relief measure.

PPP loans are meant to cover roughly two months of payroll and business expenses amid the coronavirus pandemic and related economic shutdown. The loans can be forgiven if participating firms maintain their current workforce.

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The program will "facilitate lending to small businesses" beyond the current level seen since applications for PPP loans opened on Friday, the bank said. 

The Wall Street Journal first reported the new Fed program. Additional details on the facility will be announced later in the week, the Fed said.

Banks have pressured the White House to create such a program to ease lending conditions and form a new buyer for the debt, The Journal reported. The Fed will work alongside the Treasury Department to create the program.

Now read more markets coverage from Markets Insider and Business Insider:

Buybacks have long been the stock market's biggest source of buying power — but they're quickly fading and won't come back for years, a new report says

Economists think coronavirus could push unemployment above Great Depression levels. Here's why the pain won't be as prolonged this time.

Peter Thiel-backed insurance startup Jetty lays off 40% of staff days after pausing the sale of all new policies

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Here are the best savings accounts right now

Mon, 04/06/2020 - 3:50pm

The best savings accounts right now:

Picking the best savings account to store your money is nearly as important as how much you save. Fees can eat into your cash, but a good interest rate can help grow it.

Many of us are guilty of settling for the savings account at the bank that holds our checking account. While there can be advantages to this — speedy cash transfers, most of all — it can be limiting. 

Below you'll find our picks for the best savings accounts right now, which includes high-yield savings accounts and certificates of deposit (CDs) — two types of savings products that can help you earn up to 20 times more in interest than a traditional savings account. Each of these accounts has no fees, FDIC insurance up to $250,000, and online or mobile app access.

The most common way to access cash in a savings account is through electronic transfers to an internal or external checking account. With some accounts, an ATM card is provided or checks can be requested.

Keep in mind that most savings accounts limit the number of transfers and withdrawals to and from a checking or other savings account to six per statement cycle. With a CD, you cannot add additional money to the account or withdraw any money between the end of the initial funding period (usually between 10 and 14 days) and the maturity date without forfeiting your interest earnings.

Ally: Best savings account overall var bannersnack_embed = {"hash":"bu86covw5","width":640,"height":120,"t":1584990059,"userId":40236296,"responsive":true,"type":"html5"};

Why it stands out: Ally has been a power player in the high-yield savings space for a few years now, and it consistently nabs top awards for online banking. It's a particular favorite among millennials, who tout its accessibility and ease of use. You can deposit checks through the mobile app and open multiple accounts in minutes with $0 down. Ally's suite of products also includes a checking account, home and auto loans, and investing accounts.

Rate: 1.50%

What to look out for: An excessive transfer charge. Each transfer over the federal limit of six per statement cycle will incur a fee of $10.

Vio Bank: Best savings account for high APY

Why it stands out: Vio offers the top APY for high-yield savings accounts right now, and it doesn't charge a monthly management fee.

Rate: 1.75%

What to look out for: Minimum deposit. You need at least $100 to open an account. You'll also receive limited customer support. Unlike many online banks, Vio doesn't offer live chat with representatives. Also, bear in mind that interest rates fluctuate with the federal funds rate, which means you aren't necessarily guaranteed to earn the highest rate with this account forever. There are still good reasons to open a high-yield savings account when interest rates are low, but be aware they can change.

Capital One: Best savings account for kids/teens

Why it stands out: Kids under 18 can use Capital One's Kids Savings Account to deposit and store money with a little oversight from Mom and Dad. There are no fees and all balance tiers earn the 0.50% APY — much higher than kids' savings accounts at competing banks.

The mobile app allows kids to deposit checks and play with savings interest calculators to see how their money could grow. When the child turns 18, the account automatically becomes a Capital One 360 online savings account earning 1.50% APY.

Rate: 0.50% APY

What to look out for: Parental controls. Kids have their own online login to the account, but money can't be transferred without parental approval. 

Synchrony Bank: Best savings account for college students

Why it stands out: Synchrony Bank's high-yield savings account comes with an ATM card and doesn't limit the number of transactions or withdrawals that can be made via ATM, so it acts like a checking account. The bank will reimburse up to $5 a month in ATM fees charged by other financial institutions. But even better: All balance tiers earn 1.50% APY.

Rate: 1.50% APY

What to look out for: Non-ATM transfer limits. If you're making transfers to other accounts electronically, you're limited to six per statement cycle. Also, you cannot swipe the ATM card at retailers like a debit card.

American Express CD: Best savings account for long-term goals

Why it stands out: If you have a savings fund that you won't need until a future date (and not before then), a CD is a good option for earning more. CDs lock away your money for a set amount of time, and you can secure a fixed interest rate that won't fluctuate along with the federal funds rate. American Express offers some of the highest rates on long-term CDs paired with no minimum deposit requirement. For CD terms of 1 to 5 years, you'll be hard pressed to find a higher rate right now.

Rate: The rates for American Express CDs are as follows:

  • 6 months: 0.40%
  • 12 months: 1.85%
  • 18 or 24 months: 1.90%
  • 36 or 48 months: 1.95%
  • 60 months: 2.00%

What to look out for: High early withdrawal penalties. You'll pay 90 days interest if your term is less than 12 months, 270 days interest for 12 to 48 months, 365 days interest for 48 to 60 months, and 540 days interest for a term of 60 months or more. In contrast, Ally charges a max of 150 days interest for early withdrawals from a CD.

Other savings accounts we considered and why they didn't make the cut:
  • Wealthfront: This account allows unlimited transfers and an initial deposit of just $1, but its rate has dropped significantly to 0.26%.
  • Betterment: This robo-adviser's high-yield cash account, which requires a $10 initial deposit but doesn't limit transfers, is generally a good deal. While Betterment plans to launch a checking account, it currently does not offer other financial products, like loans.
  • Discover Bank: While it offers the same 1.50% APY, Discover's high-yield savings account isn't as beloved by customers as Ally's.
  • Marcus by Goldman Sachs: While this high-yield savings account is a contender for fan favorite, the new mobile app doesn't support check deposit.
  • BrioDirect: This high-yield savings account offers a respectable rate of 1.65%, but you'll need an initial deposit of $25.
  • Wells Fargo Way2Save: While this account comes with ATM access, it offers a dismal 0.01% APY and charges a $5 monthly fee unless certain balance or auto-transfer requirements are met.
  • Chase Savings: Despite access to thousands of physical branches and ATMs, Chase offers just 0.01% APY on its savings account and charges a $5 monthly fee unless certain balance or auto-transfer requirements are met.
  • Bank of America: Despite access to thousands of physical branches and ATMs, Bank of America's savings account earns just 0.03% APY and charges an $8 monthly fee unless you keep a $500 daily balance.
  • HSBC Direct: The 1.70% APY makes this high-yield savings account a good choice for high earning potential, but it's not the best no-fee, low minimum balance option out there.
  • CIBC Bank: To earn the 1.45% APY on CIBC's high-yield savings account, you only need to maintain a balance of $0.01, but you have to put down $1,000 to open the account in the first place.
  • Citizens Access: Despite offering a respectable 1.70% APY, the minimum deposit to open a high-yield savings account here is $5,000. Citizens Access offers high APYs on its CDs, ranging from 1.50% to 1.65%, but all terms require a minimum deposit of $5,000.
  • Sallie Mae: Sallie Mae's CDs offer between 1.30% and 1.40% APY, but the minimum deposit to open an account is $2,500 and there isn't a no-penalty CD available. Sallie Mae does offer a fine high-yield savings account earning 1.40% APY, however.
  • MySavingsDirect: This high-yield savings account earns 1.00%, and there are others with better user experience and similar features that earn more.
  • Barclays: Barclays offers a 1.85% APR on all CDs with at least a 12-month term, but you won't find higher rates with longer terms as you would with American Express. You can also open a Barclays high-yield savings account with a 1.60% APR.
  • PurePoint Financial: PurePoint's rates are on par with the best CDs and high-yield savings accounts on our list, but its $10,000 minimum deposit could be a major drawback for more modest savers.
  • SFGI Direct: Although SFGI Direct's high-yield savings account earns a 1.71% APY, it requires $500 to open an account.
  • Credit Karma: This high-yield savings account earns just 0.56%, and as a credit and loan company, Credit Karma's expertise is not in traditional banking.
  • Personal Capital: This is technically a cash account, which makes it easy to sweep some money into investments, but it only offers a 0.05% APY on your savings.
  • CIT Bank Savings Builder: This account requires a $100 monthly deposit or a $25,000 daily balance to earn the top APY. It's a great account to create savings momentum, but not the best overall.
  • HMBradley: This hybrid checking and savings account offers high rates, but you have to save at least 20% of your deposits to earn the maximum APY of 3%.
Frequently asked questions: Why trust our recommendations?

At Personal Finance Insider, we strive to help smart people make the best decisions with their money. We spent hours comparing and contrasting the features and fine print of these savings accounts so you don't have to.

We understand that "best" is often subjective, however, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. 

How did we chose the best savings accounts?

We reviewed over two dozen banks and financial institutions and found that the best offerings are at online banks, in large part because they offer much higher interest rates and fewer fees. We ultimately narrowed our focus to banks offering at least 1% APY on their savings products (high-yield savings accounts and CDs included), with the exception of kids' savings accounts.

For this list, we did not consider credit unions — though they tend to offer high interest rates on savings accounts and CDs, many limit membership to people who work in a specific industry or live in a designated area. 

What bank offers the best savings account?

Because of its ease of use, high customer satisfaction, and good interest rate, Ally Bank has one of the best savings accounts overall. However, the "best" savings account for you will depend on your goals and priorities. Some people prefer to have a savings account at a bank that offers other financial products, like loans or checking or investment accounts, so we took this into consideration as well.

What is the best savings account to have?

The best savings account to have is one that does not charge excessive (or any) fees, is easy to access, and earns an interest rate above the national average of 0.09%. Interest rates on traditional and high-yield savings accounts are variable, however, so it's important to consider other features of an account before opening it for a high APY.

If you don't need immediate access to your cash, you may want to consider a CD to potentially lock in a higher interest rate. Otherwise, for cash that you will need to access on a regular basis — whether you're adding or withdrawing money from the account — a high-yield savings account is the best option.

Are online savings accounts safe?

Just like a savings account opened through a brick-and-mortar bank, most online savings accounts are FDIC insured up to $250,000. The account is set up through a bank's website using the same information required at a physical branch — name, date of birth, Social Security number, driver's license or passport number, and address — but you will also need to create a username and password for online access.

Are high-yield savings accounts worth it?

A high-yield savings account keeps your money safe from market risk, is insured by the FDIC (usually up to $250,000, but up to $1 million in some cases), and gives you a shot at beating inflation with annual percentage yields over 1.50%.

The only potential downsides of a high-yield savings account would be maintenance fees that eat into your interest payments (though most accounts are fee-free) or restrictions on the monthly transfer limit or time it takes for your money to get to your checking account.

Tanza Loudenback has been writing about money every day for more than three years. She is an expert on strategies for building wealth and financial products that help people make the most of their money. She is a candidate for the CFP® certification.

Join the conversation about this story »

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How $6 billion Balyasny trounced most hedge funds in the first quarter — and where it's focusing next after losing a top macro investor

Mon, 04/06/2020 - 3:49pm

  • Dmitry Balyasny's $6 billion firm posted returns of nearly 5% in its flagship fund in the first quarter, much higher than the average hedge fund and overall market.
  • One of the firm's macro investing heads, Tim Wilkinson, is set to leave the firm soon, and Balyasny has shut down trading in his portfolios. 
  • Going forward, Balyasny is focusing on more liquid markets in its macro strategy, "increasing our trading oriented macro strategies across rates, FX, and equities." 
  • Click here for more BI Prime stories.

Balyasny put up returns besting the average hedge fund and the overall market in the first quarter, but will soon have to grapple with the intense volatility caused by the coronavirus pandemic without one of its macro investing heads.

In the firm's first-quarter letter to investors, Balyasny wrote that Tim Wilkinson, the firm's cohead of macro investing in London, is retiring from the industry in early summer. He'll remain an advisor to the firm through 2020.

The $6 billion manager's flagship fund put up returns of 3.6% for March and 4.75% for the year so far, the letter states, as global stock markets have tanked. Hedge Fund Research's global index of hedge fund strategies is down 5.88% in March and 6.85% for the year.

"The portfolios under Tim have been closed from active trading," the letter states. It's unclear from the letter how many portfolios Wilkinson led. He joined Balyasny from rival multi-strategy fund Citadel in 2019, along with other former Citadel executives including Jeff Runnfeldt and Alex Lurye.

Peter McConnon, who joined the firm this year from Canada's main pension fund, will become the sole head of macro in London while Mayank Chamadia is still the head of macro in the US, based in New York. 

The firm's first-quarter results were driven by its equity book, a departure from some of the trends the industry has experienced during the coronavirus pandemic. Macro investors and commodity speculators have generally been outperforming stock-pickers, but at multi-strategy Balyasny, the firm's equity investors — specifically in healthcare and consumer stocks — reigned supreme, the letter states.

"Our equity teams performed well by quickly updating their bottom-up, fundamental views for the new environment. Teams identified the companies likely to outperform and underperform in a deteriorating economy without clinging to previously held ideas," the letter reads. The letter also points out that the firm held "a record number of group PM calls in March," which the firm believes helped performance. 

In the macro book, which made up just under 30% of the firm's book as of the end of March, performance was flat, and two portfolios were even closed for poor performance in the quarter. 

"We will continue to refine our strategy sets to capture the opportunities created by sustained low rates globally. Portfolios reliant on less liquid otc markets have been reduced or closed. As we expect a continuation of volatility, we are increasing our trading oriented macro strategies across rates, FX, and equities," the letter reads. 

The note to investors also touches on the response the firm has had to the pandemic, praising its IT team for allowing the firm to continue to invest from home, and detailing a donation of more than $1 million to help fight the coronavirus that included contributions from every office. 

"We believe the opportunity set across our market-neutral strategies continues to be very fruitful. Volatility will likely remain high, allowing those operating from a position of strength to take advantage of dislocations and generate consistent alpha."

SEE ALSO: A liquidity crunch for the hedge-fund industry's biggest backers could force redemptions on even top-performing funds

SEE ALSO: 'We are in an unprecedented moment of global distress': Read the full memo billionaire Ken Griffin sent to Citadel employees on the coronavirus crisis

SEE ALSO: Macro hedge funds are soaring while quants and stock-pickers tank. Here are the biggest winners and losers.

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Here are the best high-yield savings accounts right now

Mon, 04/06/2020 - 3:45pm

 The best high-yield savings accounts right now:
  • Ally Bank: Best high-yield savings account overall
  • Vio Bank: Best high-yield savings account APY 
  • Marcus by Goldman Sachs: Best high-yield savings account for ease of use
  • CIT Bank Savings Builder: Best high-yield savings account for automatic savings
  • Synchrony Bank: Best high-yield savings account for ATM access

You really can't go wrong with a high-yield savings account. If you've decided to store your money in a high-yield account, where it's growing but still accessible, you're already doing better than the 75% of Americans who are leaving money on the table.

As more banks and financial companies crowd into the high-yield savings space, it has become an all-out battle to offer the best account features coupled with the highest interest rates — and that's great news for savers. 

It's important to note that, unlike certificates of deposit (CDs), you do not lock in a fixed interest rate when you open a high-yield savings account. The annual percentage yield (APY) is variable since it's based on what the Federal Reserve does. So while it's smart to look at interest rates when comparing high-yield savings accounts, it's not the be-all and end-all.

Note also that high-yield savings accounts' rates have been decreasing along with the federal funds rate in the first quarter of 2020. But considering these accounts still offer higher rates than your average brick-and-mortar bank, it's still a good idea to use them to save money.

Below you'll find our picks for the best high-yield savings accounts right now. Each of these accounts is free of monthly maintenance fees, insured by the FDIC, and appropriate for modest and super savers alike. Users can access each of these accounts online or through an app.

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Ally Bank: Best high-yield savings account overall

Why it stands out: Ally has been a power player in the high-yield savings space for a few years now, and it consistently nabs top awards for online banking. It's a particular favorite among millennials, who tout its accessibility and ease of use. You can deposit checks through the mobile app and open multiple accounts in minutes. 

Accounts are FDIC insured up to $250,000 per user. If you're married with a joint account, you're insured up to $500,000.

Ally makes it easy to save for specific goals. Assign each account a nickname, like "Emergency Fund" or "Travel Account" to track your progress and stay motivated. You may decide to open a separate account for each goal, but Ally has a bucket feature that allows you save for multiple goals in one account.

Rate: 1.50%

Minimum opening deposit: $0

What to look out for: An excessive transfer charge. Like most banks, Ally limits the number of transfers in and out of its high-yield savings account to six times per statement cycle. Each transfer over the limit will incur a fee of $10.

Vio Bank: Best savings account for high APY

Why it stands out: Vio offers the top APY for high-yield savings accounts right now, and it doesn't charge a monthly management fee.

Rate: 1.75%

Minimum opening deposit: $100

What to look out for: Limited customer support. Unlike many online banks, Vio doesn't offer live chat with representatives. Also, bear in mind that interest rates fluctuate with the federal funds rate, which means you aren't necessarily guaranteed to earn the highest rate with this account forever. There are still good reasons to open a high-yield savings account when interest rates are low, but be aware they can change.

Marcus by Goldman Sachs: Best high-yield savings account for ease of use

Why it stands out: This account is a contender for fan favorite. The company launched an easy-to-use mobile app in early 2020, making transfers and tracking simpler for users. Marcus doesn't require you to maintain a minimum balance, although you'll need to deposit at least $1 to start earning interest.

Rate: 1.70%

Minimum opening deposit: $0

What to look out for: No mobile check deposit. If you want to deposit a paper check, you'll have to put the money in an external bank account and transfer the funds to your Marcus account. 

CIT Bank Savings Builder: Best high-yield savings account for automatic savings

Why it stands out: This account rewards automatic savings with a high APY. After you make an initial deposit of $100 to open an account, you'll earn the top APY for a brief introductory period. After that, you'll need to set up automatic transfers or direct deposit of at least $100 a month (or keep a balance of $25,000) to keep earning 1.75%. If you're serious about making saving a habit, this is a great tool to get started.

Rate: 1.15% to 1.75%

Minimum opening deposit: $100

What to look out for: Minimum balance requirements. If you don't set up automatic transfers of $100 a month and you have less than $25,000 in the account, you'll earn 1.15%. 

Synchrony Bank: Best high-yield savings account for ATM access

Why it stands out: High-yield savings accounts usually don't allow you to pull out cash easily. Synchrony Bank gives account holders a debit card to use at ATMs and doesn't limit the number of transactions.

Rate: 1.50% APY

Minimum opening deposit: $0

What to look out for: ATM fees. While Synchrony won't charge you for ATM withdrawals on its end, other banks or operators may. Synchrony will only reimburse up to $5 in ATM fees per statement cycle.

Other high-yield savings accounts we considered and why they didn't make the cut:

  • Capital One 360: This is a solid high-yield savings account, but its 1.50% APY is slightly lower than other accounts with similar features.
  • Betterment: This robo-adviser's high-yield cash account doesn't limit transfers. However, Betterment requires a $10 initial deposit and its APY is just 0.30%.
  • Wealthfront: This account offers unlimited transfers in a statement cycle, but its APY is lower than competitors' at 0.26%.
  • Discover Bank: While it offers the same 1.50% APY, Discover's high-yield savings account isn't as beloved by customers as Ally's.
  • Barclays: A fine high-yield savings account with a 1.60% APY, it lacks distinguishing factors.
  • American Express: With a solid 1.60% APY, this account is a good option if you don't mind not having mobile access.
  • HSBC Direct: The 1.70% APY makes this high-yield savings account a good choice for high earning potential, but it's not the best no-fee, low minimum balance option out there.
  • CIBC Bank: To earn the 1.45% APY on CIBC's high-yield savings account, you only need to maintain a balance of $0.01, but you have to put down $1,000 to open the account in the first place.
  • Fitness Bank: This unique high-yield savings account determines your APY by the number of steps you take on an average day. While there's potential to earn up to 1.90% on your money, it's conditional on your level of commitment.
  • Citizens Access: Despite offering a respectable 1.70% APY, the minimum deposit to open a high-yield savings account here is $5,000.
  • MySavingsDirect: This high-yield savings account earns 1%, but there are others with better user experience and similar features that earn more.
  • BrioDirect: The 1.65% APY makes this account a decent choice for savers, but some customers have complained that their initial funds transfer took longer than expected.
  • SFGI Direct: Although SFGI Direct's high-yield savings account earns a 1.71% APY, it requires $500 to open an account.
  • Credit Karma: This high-yield savings account only earns 0.56%, and as a credit and loan company, Credit Karma's expertise is not in traditional banking. 
  • Personal Capital: This is technically a cash account, which makes it easy to sweep some money into investments, but it only offers a 0.05% APY on your savings.
  • HMBradley: This hybrid checking and savings account offers high rates, but you have to save at least 20% of your deposits to earn the maximum APY of 3%.
Frequently asked questions: Why trust our recommendations?

Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.

How did we choose the best high-yield savings accounts?

There are a lot of high-yield savings accounts out there. Through our research, we've found that the best high-yield savings accounts are offered by banks with a strong online presence, robo-advisers, and other internet-only financial companies. 

In addition to polling Business Insider employees for their favorite picks, we reviewed high-yield savings accounts at nearly two dozen institutions to identify the strongest options. We also cross-referenced our list against popular comparison sites like Bankrate and Nerdwallet to make sure we didn't miss a thing. 

While interest rates are an important aspect of any high-yield savings account, several offer the same annual percentage yield (APY). To differentiate between them, we also considered minimum deposit and balance requirements, transfer limitations, and any other standout features. Importantly, we didn't consider any high-yield savings accounts that impose monthly maintenance fees.

Are high-yield savings accounts worth it?

Yes — a high-yield savings account has very few downsides, if any. There's no risk that you'll lose money, your account is insured by the FDIC (usually up to $250,000, but up to $1 million in some cases), and it gives you a shot at beating inflation.

The only time a high-yield savings account may not be worth it is if you're paying excessive maintenance fees that eat into your interest payments or you find yourself restricted by the monthly transfer limit or time it takes for your money to get to your checking account.

Which banks have the best savings interest rates?

Generally you'll find the best savings interest rates at online banks. Nationally, the average traditional savings account earns just 0.09% APY. The best high-yield savings accounts offer an APY of at least 1%.

If you're more comfortable banking with a brick-and-mortar, a traditional savings account may be a better option for you. Just know that you may not be getting the best possible interest rate.

How often do high-yield savings rates change? 

Interest rates on high-yield savings accounts closely follow the federal funds rate. That is to say, rates are variable and can change multiple times per year at the whim of the Federal Reserve. 

The Fed meets eight times a year and decides whether to increase, decrease, or leave interest rates untouched. If the Fed cuts rates, the APY on your savings account can drop within days. When rates are lower, you won't earn as much interest on your savings. But that doesn't mean you shouldn't save at all. When interest rates inevitably go back up, you'll see a greater return on your money than if you started from scratch. 

Because the Fed spent several years raising rates since the Great Recession, it cut interest rates three times toward the end of 2019 in an effort to regulate the economy and side step another recession, and it's already slashed rates twice in 2020. It's nearly impossible to predict with certainty which way rates will go, but you can bet they're going to change one way or another.

Is there a 5% interest savings account?

There is no savings account that offers a 5% interest rate. Today, most high-yield savings accounts top out around 1.85% APY. If you want a higher return and you don't need immediate access to your money, you may consider putting it in a certificate of deposit (CD) or investing in the market. 

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Tanza Loudenback has been writing about money every day for more than three years. She is an expert on strategies for building wealth and financial products that help people make the most of their money. She is a candidate for the CFP® certification.

Join the conversation about this story »

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How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify

Mon, 04/06/2020 - 3:22pm

President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, into law on March 27.

The $2 trillion stimulus package, the largest emergency relief bill in American history, will direct one-time payments, or "recovery rebates," of up to $1,200 to many Americans.

You do not have to sign up to receive a stimulus check. The process is automatic for most Americans who qualify. 

Here's how to get a stimulus check:  1. Have a Social Security number

To get a stimulus check, you need to have a Social Security number. Nonresident aliens, people without a Social Security number, and adult dependents are not eligible.

2. File a tax return for 2018 or 2019

The size of your stimulus check is based on the adjusted gross income listed on the latest tax return you filed, either this year's tax return or 2018's.

Americans whose adjusted gross income was less than $75,000 will receive the maximum amount: $1,200. Reduced payments are sent to single filers who earned between $75,000 and $99,000, or married filers who earned between $150,000 and $198,000. There's also a $500 payment per child under age 17 for parents in the payment.

Business Insider's Andy Kiersz created the following chart showing how much taxpayers will receive from the stimulus package based on filing status and income.

The IRS will be sending automatic payments of $1,200 each to Social Security recipients and railroad retirees using the payment method for their regular benefits, whether direct deposit or a home address.

The agency previously said that some seniors and low-income Americans who don't normally file tax returns would need to submit a simple tax return to provide filing status, number of dependents, and bank information to receive payments. This is no longer the case for those who receive tax forms SSA-1099 and RRB-1099.

"Social Security recipients who are not typically required to file a tax return do not need to take an action, and will receive their payment directly to their bank account," Treasury Secretary Steven Mnuchin said in an April 1 news release

3. Check your direct deposit information

The IRS will disburse the funds according to the direct-deposit information provided on the last tax return you filed or most recent Social Security or railroad retirement benefits statement.

It's unclear which date the Treasury will use as a cutoff for processing these payments, but if you haven't filed your 2019 tax return yet and want to ensure the IRS uses your latest income figure and that your stimulus check gets deposited in the right account, file as soon as possible.

Nicole Kaeding, the vice president of policy promotion and an economist at the National Taxpayers Union Foundation, tweeted shortly after the relief bill passed in the Senate that about 60% of tax filers provided direct-deposit information on their returns last year.

4. Provide updated bank information to the IRS 

If you didn't provide bank information on your last tax return, you'll have the opportunity to do so online soon.

"In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail," the IRS says.

In the meantime, Americans who generally aren't required to file tax returns because they don't earn enough money can use TurboTax's free online portal to submit their direct-deposit or mailing information to the IRS.

5. Wait for direct deposit or a paper check

While the IRS is attempting to get payments to people as soon as possible via direct deposit, it's still going to have to issue paper checks to millions of people who don't provide bank details.

"If we have your information, you'll get it within two weeks. Social Security, you'll get it very quickly after that. If we don't have your information, you'll have a simple web portal. We'll upload it. If we don't have that, we'll send you checks in the mail," Secretary Mnuchin said in a White House press briefing on April 2.

Read here to find out when your stimulus payment is coming. 

This post was updated on April 6, 2020 to include new information from the IRS.

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Jefferies says now is the time to buy Tesla, which it says could surge another 35% this year (TSLA)

Mon, 04/06/2020 - 3:19pm

  • Jefferies upgraded shares of Tesla to "buy" from "hold" Monday while lowering its price target to $650 from $800 still implying a 35% upside from where shares traded at Friday's market close. 
  • Shares gained as much as 8% Monday. 
  • Tesla is the only auto original equipment manufacturer that is legacy free, engaged in a positive electric-vehicle sum-game, nearly doubling its market coverage with the Model Y, and leading the industry's technological transformation, wrote analyst Philippe Houchois. 
  • Watch Tesla trade live on Markets Insider.
  • Read more on Business Insider.

Tesla is looking like a good deal to Jefferies. 

The firm on Monday upgraded shares of the automaker to "buy" from "hold" while lowering its price target to $650 from $800. That implies a 35% upside from where shares closed at $480 per share on Friday. 

Jefferies views Tesla as the only automotive original equipment manufacturer that is legacy free, engaged in a positive electric-vehicle sum-game, doubling its market coverage with the Model Y, and leading the industry's technological transformation, analyst Philippe Houchois wrote in a note. 

Shares of Tesla gained as much as 8% Monday. 

The upgrade comes after Tesla's record rally at the beginning of the year was snapped by the coronavirus pandemic. While shares of the automaker are still up about 15% year-to-date through Friday's close, they have slipped more than 48% from their all-time high close of $917 per share in February. 

Read more: A stock chief at $7.4 trillion BlackRock shared with us his coronavirus-investing playbook: How to keep money safe, what he's avoiding, and some surprising contrarian bets

Tesla hasn't been untouched by the coronavirus pandemic. It had to close its new Shanghai Gigafactory for two weeks at the beginning of the year. Its factories in Fremont, California, and Nevada are also currently closed as employees have tested positive for COVID-19, the illness caused by the virus. 

Still, the company released better-than-expected first-quarter vehicle delivery numbers amid the crisis and despite "unfavorable seasonality" according to Jefferies. That should factor into a solid first quarter financial report — Jefferies expects revenue of $6.1 billion, an auto gross margin of 17%, and that the company will break even on an earnings-before-interest-and-taxes basis. 

Although Jefferies cut its full-year 2020 estimates for Tesla because of the coronavirus outbreak, it expects that the company will grow 27%.

"Early feedback on the Model Y is strong," Houchois wrote. In addition, Tesla could benefit after the coronavirus outbreak subsides, according to the note. 

"Post-crisis we would assume higher consumer support to energy efficient transport," wrote Houchois. "US gas prices drifting below $2 and the US loosening vehicle emissions rules create some headwinds to near term demand for EVs in the US, but a situation worse for peers." 

There is much riding on Tesla's upcoming battery day, which was slated to take place in April. "Tesla has demonstrated a durable edge over competitors in energy density, management, and connectivity, with incumbents facing new challenges in catching up," according to the report. Houchois thinks Tesla could grow into a supplier for other OEMs, a market that could be worth $235 billion by 2030. 

Jefferies reduced its price target to $650 because of revised estimates and "macro uncertainty," according to the note. 

"Looking further out, we see Tesla's ability to attract capital as a strong positive as pressure on the industry's transformation accelerates," said Houchois.

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