Taking off from the Zayed International Airport’s recently opened Terminal A in Abu Dhabi, United Arab Emirates, was a special treat, especially considering I was flying on an Airbus A350-1000 in Etihad Airways’ business class, which offered sliding doors at each seat.
From on demand a la carte dining to a new triple-level lounge in the airport, traveling aboard Etihad, one of the national airlines of the UAE, is a unique way to learn about Emirati culture while also enjoying top-notch service.
Etihad’s many partnerships with other airlines puts award flights more easily within reach for those who want to redeem their points and miles. Here is what to expect when traveling business class with Etihad.
The airport experience
Etihad offers chauffeur service in Abu Dhabi for business class passengers, which was easy to book online. My personal driver arrived right on time to take me from my city-center hotel to the new terminal. The driver dropped me off at the business class check-in area, which was bright and airy.
(Photo by Ramsey Qubein)
There was a short wait, and an agent from the first class check-in area flagged me over to check me in. All in all, check-in took two minutes. In addition, there were comfortable seating areas and even refreshments to enjoy before heading through security.
(Photo by Ramsey Qubein)
Terminal A, which just opened in November 2023, is bright and airy. It showcases enormous windows and an undulating roof sculpture that looks like the shape of the region’s desert sand dunes.
After a little shopping, I made my way to the terminal’s new Etihad business class lounge, which has three floors.
Etihad business lounge in Abu Dhabi
Once I arrived at the Etihad Airways lounge for business class passengers, I asked the friendly check-in agent which floor they recommended and made my way to the suggested top floor. A full-service bar and buffet setup proved an interesting way to pass the time.
My flight was departing at 3:05 a.m., which was a difficult time to stay awake for, but surprisingly, I was hungry and helped myself to the large selection of salads and curries on offer. When it was time to board, there was no extra security check, and I was in my seat in minutes.
The business class seat
The 1-2-1 layout in Etihad’s business class meant the seats have spacious side counters and wireless charging surfaces, which worked brilliantly.
(Photo by Ramsey Qubein)
Several storage compartments allowed me to keep my belongings in order, and the enormous touch-screen monitor in front had a wide range of movies and TV shows. Even with a flight duration of 14 hours and 30 minutes, I had barely enough time to even scratch the surface of entertainment options.
(Photo courtesy of Etihad Airways)
The best part of the seat was the sliding privacy door that was unlocked by the crew after takeoff. This keeps movement in the aisle from disturbing passengers while trying to rest. I kept mine closed most of the flight except when eating.
(Photo by Ramsey Qubein)
Waiting near my seat was a large pillow, padded seat cover, blanket and beige Acqua di Parma amenity kit. It had hand lotion, lip balm, eyeshades and socks. Cushioned noise-reducing headphones were wrapped in a compartment to one side with a bottle of water.
I appreciated how often the crew offered to refill my water bottle, as I prefer to stay hydrated in flight.
Meal service
Etihad offers a dine-on-demand service, and I struggled to decide when I wanted to eat and when I wanted to sleep.
Not wanting to miss out, I decided to try a light snack after takeoff and ordered the Arabic mezze with a glass of Chardonnay plus an acai bowl for dessert.
Just what you want at 4 a.m., right?
(Photo by Ramsey Qubein)
It was quite tasty, and I liked how my flight attendant brought out a bowl of warm nuts before serving my food.
After the light snack, I reclined my seat into bed mode and slept for four hours. My plan was to sleep for eight or nine hours and then have a larger meal before landing, but I could not stay asleep.
So what do you do on an Etihad flight when you can’t sleep? Eat again!
I went to the galley to see if there were snacks available. Sure enough, a display of potato chips, chocolate bars and fruit was laid out. I grabbed a few snacks and informed the flight attendant I also wanted to order something more substantial.
Another glass of wine soon arrived along with a tray of lentil soup and a side salad. It was served at the perfect temperature and with a slice of lemon to squeeze onto it.
After this, my next course arrived, Indian paneer curry. Other options on the menu included a roasted chicken dish and local Emirati grouper fish.
(Photo by Ramsey Qubein)
Etihad has a new partnership with Armani Casa to supply its cutlery, dishes and glassware from the brand. It was very elegant and had the appearance of a fine restaurant.
🤓Nerdy Tip
Interestingly, Etihad uses trays in business class rather than putting the dishes one by one on the table like its peers. Still, this made the service more efficient for the flight attendants and did not detract from the presentation.
For dessert, I ordered the cheese plate, which had cheddar, brie and blue cheeses with fresh fruit. After working a little on my laptop, I reclined my seat again to doze until landing.
(Photo by Ramsey Qubein)
The details
I loved how the crew was from different parts of the world. In addition to the Lebanese flight attendant who took care of me, the purser was from Thailand, another flight attendant in my aisle was from Egypt and the pilot was from Ireland.
Etihad has a very international crew, and its uniforms, in hues of beige and purple, made them look like runway fashion models.
The bathrooms were clean and tidy the entire flight, and they had Armani Casa toiletries, although I was surprised and disappointed there were not more products like shaving or dental kits on display.
Another bummer was the lack of air nozzles at each seat, as the cabin was rather warm.
(Photo courtesy of Etihad Airways)
One unique feature about U.S.-bound flights from Abu Dhabi is that the airport has a preclearance facility. This means passengers complete U.S. customs and immigration formalities before boarding, allowing them to land in the U.S. as a domestic passenger.
Unfortunately, the new airport terminal meant that not all U.S. flights were eligible yet for this service, as the U.S. officers worked only during the morning hours. This added some extra time to my itinerary when arriving at Chicago O’Hare International Airport, but normally, this is an excellent reason to connect on Etihad in Abu Dhabi versus other area airports.
How to book Etihad business class
Redeem points and miles
In addition to paying cash for Etihad’s premium cabin, members of its own Etihad Guest loyalty program can redeem miles for the experience.
The airline uses a distance-based chart, which means the number of miles you need varies by flight. This flight clocks in at more than 7,000 miles, which means a business class seat requires 110,000 miles in each direction.
Transfer travel rewards from airline partners
Another popular way to enjoy business class is by redeeming American Airlines AAdvantage miles, as Etihad is one of the carrier’s partners. A one-way business class flight from the U.S. to Abu Dhabi costs 70,000 miles based on its partner award chart.
Smart cards for Etihad flights
The Platinum Card® from American Express
Citi Premier® Card
Capital One Venture Rewards Credit Card
Annual fee
Earning rates
• 5 points per $1 on flights booked directly with airlines or with American Express Travel, on up to $500,000 spent per year.
• 5 points per $1 on prepaid hotels booked with American Express Travel.
• 1 point per $1 on other eligible purchases.
Terms apply.
• 10 ThankYou® points per $1 spent on hotels, car rentals and attractions booked through the Citi Travel site.
• 3 points per $1 on air travel and other hotel purchases.
• 3 points per $1 on supermarkets.
• 3 points per $1 on gas stations and EV charging stations.
• 3 points per $1 on restaurants.
• 1 point per $1 on all other purchases.
• 5 miles per $1 on hotels and rental cars booked through Capital One Travel.
• 2 miles per $1 on all other purchases.
Learn more
Etihad impresses on ultra-long-haul flights
Etihad offers an impressive business class product on the A350-1000. If you can’t redeem miles to fly on one of the airline’s first class A380 flights (complete with in-flight shower), this is the next best thing.
To view rates and fees of The Platinum Card® from American Express, see this page.
The information related to Citi Premier® Card has been collected by NerdWallet and has not been reviewed or provided by the issuer or provider of this product or service.”
U.S. Bank issues multiple Korean Air Skypass credit cards that offer cardholders the rare opportunity to earn Skypass miles without flying:
The SKYPASS SkyBlue Visa® Card.
The SKYPASS Visa® Signature Credit Card.
The SKYPASS Select Visa Signature® Card.
Korean Air doesn’t partner with any of the major transferable credit card programs, so if you’re looking to earn a slug of Skypass miles, one of these cards may be your best option. But if you’re not a Korean Airlines loyalist, you would probably do better with a general travel card or another airline card.
Here are five things to know about the Korean Air Skypass credit cards.
🤓Nerdy Tip
U.S. Bank previously issued a secured SKYPASS credit card, but that product is no longer available. U.S. Bank also issues the SKYPASS Visa Signature Business Card for small-business owners. This review focuses on the three consumer cards above only.
1. There are several Skypass cards
There are three consumer Korean Air Skypass cards to choose from, including two with an annual fee and one without. As usual, the higher the card’s fee, the more benefits and perks you’ll receive.
How the Skypass cards compare
SKYPASS SkyBlue Visa® Card
SKYPASS Visa® Signature Credit Card
SKYPASS Select Visa Signature® Card
Annual fee
Sign-up bonus
Earn 10,000 Bonus Miles when you spend $1,000 in eligible purchases within 90 days.
Earn 40,000 Bonus Miles when you spend $4,000 in eligible purchases within the first 90 days.
Earn 60,000 Bonus Miles when you spend $5,000 in eligible purchases within the first 90 days.
Rewards earning
Earn 2 SKYPASS miles per $1 spent on streaming and rideshare services.
Earn 1 SKYPASS mile per $1 spent on all other eligible purchases.
Earn 2 SKYPASS miles per $1 spent on purchases with Korean Air tickets, restaurants and hotels.
Earn 1 SKYPASS mile per $1 spent on all other eligible purchases.
Earn 3 SKYPASS miles per $1 spent on Korean Air tickets.
Earn 2 SKYPASS miles per $1 spent on other airline tickets, restaurants, hotels and car rentals.
Additional benefits
No additional benefits.
Earn 2 Korean Airlines lounge coupons annually.
Save 5% on a Korean Airlines ticket for you and a companion annually.
No foreign transaction fees.
Earn 2 Korean Airlines lounge coupons annually.
Save 5% on a Korean Airlines ticket for you and a companion twice annually.
Receive 2 $25 duty-free coupons annually.
Receive a $200 annual travel credit.
Receive a $100 credit for TSA PreCheck or Global Entry.
Trip cancellation, interruption and delay reimbursement.
No foreign transaction fees.
While the ability to earn Skypass miles on a $0-annual-fee card is nice, you’d have to put a lot of spending on the SKYPASS SkyBlue Visa® Card to earn enough miles for an award ticket (see more below). You also won’t receive any additional benefits or perks when you fly.
The $99-annual-fee SKYPASS Visa® Signature Credit Card lets holders earn a big sign-up offer and bonus miles on Korean Air tickets, dining and hotels, in addition to two Korean Air lounge coupons annually. These benefits are similar to other airline credit cards with comparable annual fees.
The SKYPASS Select Visa Signature® Card is built for Korean Air loyalists. The card’s benefits, including an annual $200 travel credit and two $25 duty-free coupons, can help offset the massive $450 annual fee, and the bonus categories are designed to reward frequent travelers.
2. You’ll need good credit to qualify
According to U.S. Bank, you’ll need good to excellent credit to qualify for any of the three Skypass cards (typically, that would mean FICO scores of 690 or higher). If your credit scores fall in that range and you’re a Korean Air loyalist, one of these cards might be worth a look.
3. Skypass miles are tough to acquire …
Korean Air has only one travel transfer partner, Marriott Bonvoy, with Marriott points transferring to Skypass at a 3:1 ratio. And since the airline doesn’t partner with any of the major credit card points programs, Skypass miles are harder to acquire than other airline miles.
That leaves flying on Korean Air or a partner airline and spending on a Skypass credit card as the primary ways to acquire Skypass miles.
4. … But there are plenty of redemption options
Since Korean Air is a member of the SkyTeam Alliance, Korean Air miles can be redeemed on partner airlines like Delta Air Lines and Air France, in addition to nonalliance partners like Alaska Airlines. The Skypass program has multiple award charts you can use to determine the number of miles required for a specific redemption: one for flights on Korean Air, one for flights on SkyTeam partners, one for non-SkyTeam partner redemptions and a round-the-world award chart for multistop itineraries circling the globe.
Partner airline redemptions offer the best value. For example, as of this writing, you can use 25,000 Skypass miles to fly round trip on Delta between mainland North America and Hawaii. Or you can use 30,000 miles to fly round trip on Alaska Airlines between the U.S. and Costa Rica. Redemption values on flights operated by Korean Air vary depending on the time of year.
You can also redeem miles for access to the Korean Air Lounge, as well as for baggage fees, car rentals and hotel stays in partner hotels.
5. You won’t want to carry a balance
The Skypass cards may be good for earning airline miles, but using them to finance a purchase or carry a balance will be expensive. That’s because your interest rate could range almost as high as 30% as of this writing.
If you need time to pay off your card balance, you’d do better with a low-interest card that offers an introductory 0% APR period. You may not earn airline miles with those cards, but the money you save in interest will far outweigh the value of any miles you’d earn on the Skypass cards.
A certificate of deposit (CD) can be a good option to consider as a savings vehicle for a child. With a CD, you can deposit money for a specific term, such as a few months to a few years, and earn a fixed rate of interest.
CDs are relatively safe investments; they are federally insured for up to $250,000, and can offer minimal but steady growth for a period of years.
An adult can open a custodial account for a child who will assume management of the CD account when they reach adulthood. However, there are some pros and cons you should know before opening a CD, including how CDs compare to other investment vehicles for your child.
Understanding Certificate of Deposits
A certificate of deposit is considered a type of savings account. The account holder deposits the funds and agrees not to withdraw the money for a specific period of time, in effect, loaning the money to the bank. The bank pays the CD holder interest based on the total amount deposited and the maturity date of the CD (the term).
You can open a CD at a bank or a credit union; this can be done in person or online. Most CDs are federally insured up to $250,000.
If the account holder decides to withdraw the funds before the end of the term, they are typically charged an early withdrawal penalty, often forfeiting a portion of the interest. For example, if you deposit $1,000 in a two-year CD, and you want to withdraw the funds after one year, you would only be entitled to the amount of interest earned up until that point, minus any fees or penalties.
CDs are generally considered a conservative investment, but the interest earned on a CD tends to be less than some other investments because CDs are lower-risk investments. When opening a CD account for a child, it’s important to consider whether the peace of mind and a lower return is what you’re after, or whether you’d like an investment that potentially offers more growth, but also possibly more risk.
Can a Child Have a Certificate of Deposit?
A CD for kids can be a solid start to an investment plan for your child. It’s also a way to help explain the dynamics of saving to them and what it means to earn interest on a principal deposit.
That said, minors cannot legally open CDs. An adult must acquire a CD for the child and then transfer it to them when the child reaches adulthood.
One thing to keep in mind about a CD for kids is that funds held in CDs and other savings accounts can affect a child’s eligibility for future financial aid. This is an important consideration, which could affect how much a family might pay for college tuition.
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Who Would Own the CD?
A minor cannot apply for a CD, but they do own it. That means that the account cannot be given to anyone else.
An adult, usually a parent or legal guardian, can open a custodial account for a minor under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act, which is an extension of the UGMA. A custodial account allows one person to deposit funds into an account for another. The account can be transferred to the child once they reach adulthood. The age of adulthood is not federally mandated. However, in most states, it is age 18.
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How to Give a Certificate of Deposit to a Minor
Here’s how to set up a CD for a minor child, and transfer the account to them when they reach adulthood.
Select the Bank Where You Want to Purchase the CD
Explore bank account options and decide which bank or credit union you want to hold the CD for your minor child. Compare interest rates based on the amount you intend to deposit and the term for the CD. Also, look at any penalties and fees the bank might charge.
List Yourself as the Custodian and the Child as the Owner
Fill out the form online or in person stating that you will be the custodian and the minor will be the owner of the CD. You will be asked to provide identifying information such as your Social Security number and the child’s Social Security number.
Deposit the Money in the CD
Deposit the desired amount into the CD account, taking into consideration how different amounts and terms might affect the interest rate paid.
Discuss What to Do With the Funds
Opening a CD account for a child presents a “teachable moment,” in that the minor child, who is the owner of the CD, needs to think through what the money can be used for once the CD reaches maturity. When the CD matures, you can cash it out, or renew the CD. If the child is of legal age at that point, the account is transferred to the child. You may have to contact the bank to remove your name from the account.
Recommended: What Are No Penalty CDs?
Are CDs a Good Choice to Help My Child Save?
CDs are among the lower-risk investment options, and a good way to help a child save.
That said, CDs are also low-yield investments. If you are saving for your child’s education, funding a 529 college savings plan might offer more growth potential over time, if that’s your goal.
For longer-term savings, opening a Roth IRA may also be a good choice for parents hoping to provide financial security for their child.
Tax Implications of CDs for Kids
There are tax considerations to opening a CD for kids. Taxes are typically due on earnings when the CD matures, but a child will likely be in a lower tax bracket than an adult, so at least some of the earnings could be taxed at a lower rate.
The IRS taxes kids’ unearned income, such as interest, dividends, and capital gains, in tiers. In 2024, for a child with no earned income, up to $1,300 in unearned income is not taxed. The next $1,300 is taxed at the child’s tax rate. Any amount over $2,600 is taxed at the parent’s rate. So that is something to keep in mind.
The custodian of a CD should also be aware that they can give up to $18,000 in 2024 to a child without owing gift taxes.
Financial Aid Implications of CD Earnings
There are some implications of CD earnings regarding financial aid. If a child is applying to college and has savings in a UGMA, those assets will need to be disclosed on the Free Application for Federal Student Aid (FAFSA). It may be that the student will have to pay more of their college costs than if their money had been put in a 529 college savings account.
Is a CD a good investment for a child? That depends on the length of time between the opening of the CD account, and when the child reaches the age of majority. If the child is a teenager, a CD will provide a guaranteed amount of money, and there is no risk of loss if the market drops.
However, CDs don’t earn a lot of interest, and a growth-oriented investment might earn more and grow faster if the child is younger.
Finally, as noted above, if you are saving for the child’s education, you may want to explore a 529 college savings account, instead of or in addition to a CD for a child.
Where Can I Find a CD for a Child?
Most banks and credit unions offer CDs, and they allow custodians to open accounts for a child. Online banks can also be convenient. Many offer competitive interest rates and lower fees. Be sure to compare the interest rates and APY of each bank and make sure to understand the penalties that will apply if you withdraw the funds early.
The Takeaway
There are many ways to help your child save. Which one is the best depends on the ultimate use of the funds. CDs are lower-risk, they are federally insured up to $250,000, and they may offer higher interest rates than regular savings accounts. However, other options to consider are a 529 college savings account and a Roth IRA.
CDs are easy to open; most banks and credit unions offer these products. They earn interest on the amount invested as long as the funds are not withdrawn before the CD’s term. If the custodian does withdraw funds before the maturity date, the bank will charge a penalty.
Most online banks also offer CDs, and an adult can open a custodial account online for a child. The child is named as the owner of the account, and they will assume management of the account when they reach adulthood according to state laws.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
What is the best way to save money for a child?
The best way to save money for a child depends on your goals. Some options include a savings account or a custodial CD, a 529 college savings account, or a Roth IRA. Explore the options to determine which is best for your situation.
Can you buy a CD as a gift?
Yes. Under the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA) an adult can gift a CD to a child.
Can I open a CD for my child?
Yes. Opening a CD account for a child is easy using a custodial account. The child will be named as the owner and you as the custodian. The owner (the child) will assume full legal ownership of the CD when they reach adulthood. The account cannot be given to anyone else but the named holder.
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SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
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For many Americans, one of the best ways to get closer to their ideal annual income is to learn how to make money online.
According to a 2024 study from Smart Asset, individual Americans need an annual salary of $96,500 to live comfortably in a major city, and families with two children need to make about $235,000.
However, the Bureau of Labor Statistics (BLS) recently reported that the weekly median earnings for Americans was $1,139. This makes the median annual salary a little less than $60,000—far below the annual cost of living in many cities.
Some leverage the thriving “gig economy,” where you find contracted gigs in a virtual marketplace, and others generate passive income. Regardless of your skill set and interests, you’re sure to find something that works for you.
We put together a list of 27 different ways you can make money from home to supplement your income. You’ll also learn what it takes to get started and whether or not it’s right for you.
1. Find miscellaneous freelance jobs
A great place to start when learning how to make money online is by looking at platforms that offer a wide range of work. Before diving into the rest of the list, it’s helpful to know about popular platforms like Upwork and Fiverr. Every day, people and companies post jobs you may be perfect for.
At these sites, you can type in some of your various skills to see if any jobs are available. You can also create a detailed profile marketing your skills so people can find you more easily and offer you work.
Best for: People with a wide range of skills.
What you need to get started: Skills will vary depending on the specific job.
2. Take online surveys
Many companies out there want to get opinions from specific demographics and will pay you to take these surveys. While these don’t pay as much as many of the other options on the list, they also don’t take that long to do, so they are a simple way to make extra money. You can sign up to take these surveys at websites like Survey Junkie or Swagbucks.
Best for: Anyone with access to the internet.
What you need to get started: Access to a web browser.
3. Perform data entry
Data entry is a skill that many people can learn if they don’t already have experience. Doing data entry typically involves inputting data from different sources into a spreadsheet. Sometimes, you can find businesses looking for long-term workers, which can offer a little more stability than finding “gig work.” In addition to sites like Upwork and Fiverr, you can find data entry work at TechSpeed and Oworkers.
Best for: Well-organized individuals.
What you need to get started: Some proficiency with spreadsheet programs like Excel and Google Sheets.
4. Become an online tutor
For teachers looking for online side hustles, becoming an online tutor is a great option. Even if you’re not a teacher, you may be able to find some subjects that you can help students with. The platforms that link tutors with students usually cover school subjects like math, English, foreign languages, writing, and more. You can sign up to tutor on websites like TutorMe, Skooli, and Preply.
Best for: Those who love to teach.
What you need to get started: Experience teaching and expertise in the subject matter.
5. Be a virtual assistant
Many businesses of all sizes need additional help, so they hire virtual assistants. Virtual assistant tasks can vary depending on the gig. Some of these opportunities may be for one day of work, but others may need help for longer stretches of time.
These may pay you per job or per hour, and you can find these gigs on any freelance website. As of 2024, the average hourly rate for virtual assistants is $24 per hour and can be upward of almost $34 per hour.
Best for: People with a wide range of skills.
What you need to get started: Skills will vary depending on the specific job, but some skills can be helpful for many gigs like project management, organization skills, and data entry.
6. Get paid for your perspective
Focus groups are a key aspect of marketing, but it’s no longer just for new products hitting store shelves. In the digital age, companies are looking for people to review the user experience for their websites.
Sites like UserTesting pay you to share your opinions about different products from a variety of different brands. There are also sites like Userbrain that allow you to test different websites, applications, and software.
Best for: Individuals who like sharing their opinions.
What you need to get started: Access to a web browser.
7. Rent out your stuff
Do you have things that you don’t mind renting out? Well, websites like FriendWithA connect you with people who are looking to rent various items. Some of the main items people rent include cameras and film equipment, tools, generators, bikes, and other items people may only need for a day or two.
Best for: People with items they aren’t regularly using.
What you need to get started: Items in good condition to rent.
8. Rent out a room
In addition to apps like Uber, Airbnb is one of the most popular platforms in the new “sharing economy.” Many people use Airbnb as an alternative to hotels while traveling, but some people need a room to rent for longer periods.
Joining a platform like Airbnb allows you to make use of the extra room in your home for both travelers and long-term renters.
Best for: People with an extra room or home.
What you need to get started: A well-maintained room or home.
9. Sell used items
Selling used items is one of the best ways to make money because we all have things we no longer use. You no longer need to have a garage sale to sell your old items because there are platforms that can help you find buyers. There’s a long list of platforms that allow you to sell your used items like:
One of the primary advantages is that you’re no longer limited to your neighborhood and can reach a larger pool of potential buyers. If you have unique novelty items you’re willing to sell, you may want to consider a platform like eBay, where people are regularly looking for hard-to-find items. This is also a great way for kids to make extra money by selling old toys.
Some of these sites are also a great way to make money fast online because they have quick payouts once an item is sold. If the buyer is local, you can get paid the same day.
Best for: Those with old items they no longer need.
What you need to get started: Supplies to ship orders or transportation to deliver locally.
10. Sell graphic design services
There’s no shortage of graphic design jobs, and you can find these jobs through freelance websites or directly with businesses. Many businesses of all sizes need people who can design advertisements, logos, and more. If you’re a graphic designer, it may be a good idea to create a website that hosts a portfolio of your work where people can contact you directly as well.
Although it’s helpful if you have a background in graphic design, you can learn many graphic design skills on your own. There are many helpful tutorials for popular programs like Photoshop on YouTube and other social media sites.
Best for: Graphic designers.
What you need to get started: Graphic design software.
11. Create online courses
Is there something you know quite a bit about that you can teach to others? If so, you can create and sell online courses. From work-related topics to yoga to parenting strategies, offering classes for something you are a subject matter expert in can help you make money while doing something you love! Some of the best websites to sell your courses include Udemy, Skillshare, and Teachable.
You may want to familiarize yourself with online course platforms because they are a great resource to broaden your skills. If you’re willing to invest some time and a little money, there are many courses to teach you new skills that you can turn into more ways to make money online.
Best for: Those who love to teach.
What you need to get started: Expertise in the subject matter you want to teach.
12.Self-publish books
There are many ways for writers to make money online, and writing books is easier than ever. You no longer need to go through a publisher to make money selling books. Today, there are many different websites that allow you to self-publish and sell your books.
The most popular site is Amazon’s Kindle Direct Publishing (KDP), but you can also sell your books on websites like Apple, Google Play books, Kobo, and more. If you have a microphone, you can turn your books into audiobooks as a way to make even more money from your writing.
Best for: Writers.
What you need to get started: Writing software.
13. Start a blog
Blogging became big as a way to make extra money online in the early days of the internet, and it’s still very viable. The great thing about blogging is that you can write about anything you’re interested in and just need to find others who are interested in the same topic.
There are different ways to make money from a blog. You can create your own website and sell Google Ad space or find sponsors. You can also use platforms like Medium, which has a built-in audience, and you can earn revenue as more people read your posts.
Best for: Those who like to write.
What you need to get started: Writing skills and knowledge about a topic.
14. Do freelance writing
Although many news outlets and websites have dedicated journalists, there is also a lot of work out there for freelance writing. Some of the biggest websites out there, from the Washington Post to the New York Times, take submissions from freelance writers.
One of the best ways to find freelance writing work is by following editors on X (formerly known as Twitter). They’ll often post asking for people who can write on a specific topic. Sometimes, these gigs will pay hundreds of dollars for a single article. If you’re a fast writer and can write articles within a couple of hours, you could earn an hourly rate of $100 an hour or more.
If there’s a specific website you’d like to write for, just check and see if they have a page that tells you how to submit pitches for articles. Keep in mind that each publication pays different rates, and sometimes, the work can be inconsistent.
Best for: Writers. What you need to get started: Writing software.
15. Find voice-over work
There are many people looking for voice-over work in advertisements, presentations, or audiobooks. If you can read a script, there may be people out there who will hire you for your voice work. Freelance platforms like Upwork often have miscellaneous voiceover job postings, but you can make more with longer-form content.
ACX is the platform Amazon’s Audible uses for authors to find people to read their audiobooks. The prices vary, but you can sometimes make significantly more there than on the freelance websites.
Best for: Anyone with a great voice.
What you need to get started: A microphone with good quality.
16. Sell arts and crafts
There are many different marketplaces online for those who love making arts and crafts. One of the most popular marketplaces is Etsy, and there’s a market for just about anything you enjoy making. You can make your own prices, and the platform takes a small percentage of the sale.
Best for: Creatives and artists.
What you need to get started: Materials to create items.
17. Sell stock photography and videos
Have you ever wondered where websites get their high-quality photos or videos? Many of them don’t have in-house photographers or videographers. They buy stock photos and stock video footage for a variety of projects.
For those who love photography and videography, there are a variety of websites that will buy your photos and videos. Websites like SmugMug Pro, 500px, Getty Images, and many others will pay you for the rights to your photos and videos.
Best for: Photographers and videographers.
What you need to get started: A camera.
18. Sell royalty-free music
Similar to photography and videography, many websites will pay you for your music. This type of music goes in the background of YouTube videos, advertisements, and anywhere else people may need some background music. Websites like Epidemic Sound and Pond5 are good places to start when it comes to selling your tunes.
Best for: Musicians.
What you need to get started: Instruments and recording equipment. Royalty and licensing information is available on the websites.
19. Create an e-commerce website
There are many websites that allow you to sell your product, but each one takes a percentage of the profits for using their platform. You can keep a larger portion of your profits by creating an e-commerce website.
When you create your own website, you’ll hold onto most of the profits. One of the most popular ways to sell is with Shopify, which easily plugs into your website. Shopify and similar services have fees as well, but it’s less than using a platform like Etsy.
The primary downside is that marketplaces like Etsy have a built-in user base, so you would have to do your own marketing to get the word out about your website.
Best for: People with something to sell who want a larger portion of the profits.
What you need to get started: The ability to create a website.
20. Utilize affiliate links
Affiliate links are a way to make additional money that work in conjunction with many of the other jobs on this list. An affiliate link is a special link that you use for a product or service from a company, and each time someone uses your link, you get a commission. This is how many stay-at-home parents popularized blogging in the 2000s. You can easily make passive income by using affiliate links with any of the following:
Personal blogs and websites
Social media profiles and content
Podcasts
In an interview with Business Insider, creative entrepreneur and YouTuber Roberto Blake explained how he started making $5,000 a month from affiliate marketing. “I fell into affiliate marketing from the Amazon affiliate program, but then I realized a lot of subscriptions and software I was using had programs, too,” said Blake while discussing additional ways to do affiliate marketing.
Best for: Those who also make money from creating a platform like a blog, YouTube channel, or podcast.
What you need to get started: Discussing other products and services that you can link to.
21. Edit audio or video
There are many different job postings on freelance websites for audio and video editing. Many companies find freelancers through sites like Upwork and Fiverr to help them with their marketing content.
In addition to companies hiring audio and video editors, many social media influencers on platforms like YouTube and TikTok outsource their editing. Podcasters often hire audio editors as well.
This is another one of the skills that you can potentially learn if you don’t have experience yet.
Best for: People who enjoy editing audio and video.
What you need to get started: Software to edit audio and video.
22. Edit copy
People are always looking for editors. Whether it’s an author looking for someone to edit their next book or a company that needs an editor for something they’re publishing for the public, people need their words to look excellent. Previously mentioned websites like Upwork and Fiverr regularly have jobs for editors, but you can also find work at Reedsy and Wordvice.
Best for: Those who love language.
What you need to get started: Familiarity with the English language and various types of grammar rules, such as Chicago or AP style.
23. Become a social media influencer
Currently, it’s easier than ever to make money online through social media platforms. Platforms like YouTube and TikTok pay creators directly through their creator programs. Typically, you have to meet certain criteria to be eligible for these programs, but some people make hundreds or even thousands of dollars each month through them.
If you’re an online business owner, a writer, or anyone who sells products or services, social media is a great way to find new buyers. On these platforms, you can provide links to your products, and you can also include affiliate links as a way to earn even more.
Best for: People who don’t mind being on camera.
What you need to get started: Some or all of the following: a camera, smartphone, and editing software.
24. Start a podcast
Podcasting is an easy way to start making content that could potentially make you money. You have a lot of creative freedom with podcasts as well. You can talk about topics that you’re interested in, tell stories, or interview people. Then, you can broadcast it to thousands or even millions of potential listeners on apps like Apple Podcasts and Spotify.
It can take some time to make money from podcasting. Unlike social media platforms like YouTube or TikTok, podcasting platforms don’t have a program to pay creators. Podcasters primarily make their money from advertisements and affiliate links. Once you have a dedicated audience, you can reach out to companies to sell ad space on your podcast.
Best for: People who enjoy talking.
What you need to get started: A microphone and audio-editing software.
25. Create a newsletter
Newsletters were some of the first ways for people to make money online. Services like Mailchimp and others allow you to create an email list and send a newsletter out to your subscribers.
The newsletter can be as frequent as you’d like, you can discuss different topics that interest you, and you can put it behind a paywall on your website. Substack is a newer platform that combines blogging with newsletters, and you can charge readers a monthly or annual subscription. This is a helpful tool for those who don’t want to build their own website.
You can also use a newsletter as a way to promote your online business and alert your customers of new products or discounts.
Anne Janzer is a self-published author and discusses how she uses her newsletter to sell more books. “When I have something new going on, I can go and ask those folks, ‘Hey, can you share the word about this?’ and they’re the first ones to go out and post about my new book,” Janzer said in an interview about how her newsletter leads to more sales.
Best for: Writers and people with an online business. What you need to get started: The ability to write.
26. Walk or board dogs
If you’re a dog lover, this may be the right option for you. There are apps like Wag and Rover that connect dog walkers with people, but you can board dogs as well. For those who rent, you may need your landlord’s approval before boarding dogs, but this is a great option for those who want to make money from home.
Both Wag and Rover offer additional dog services for those with other dog specialties. These include:
Drop-in visits to check on dogs while the owner is away
Dog training
Dog sitting
Best for: People who love dogs.
What you need to get started: Possibly transportation to get to clients and a home that allows pets if you choose to board them.
27. Trade stocks
This path of making money from home is on the riskier side, but it can also come with higher rewards. The difference between investing and day trading stocks is that investments are long term, whereas trading involves buying and selling stocks on a daily basis.
To make money trading stocks, you’ll need to stay updated on all of the latest stock news and learn when to buy and sell properly. There’s a learning curve to trading stocks, but some people make full-time income trading stocks through brokerages like Charles Schwab, Vanguard, or Robinhood.
Best for: People with a high risk tolerance.
What you need to get started: Before trading, you’ll want to learn as much as you can about various stocks and how to read the market to minimize losses. Then, you need a computer to trade, or you can trade on apps like Robinhood.
Making money online can help you pay off your debts
If you have a lot of debt, allocating funds from your paycheck can be difficult. Making money online is a great way to earn extra income that you can put toward your debts and potentially improve your credit. Some people are even able to make more money online than they would in an office job.
Having a good credit score is also a way to get access to credit cards and loans. You can use these to fund your online business or better equipment. This all starts with knowing your credit health and having the right tools.
At Credit.com, you can get your free credit report card to check your credit. Sign up for ExtraCredit for additional tools like credit monitoring and ways to report additional payments to the major credit bureaus.
Saving money can be a challenge, especially for those with a lower household income. To help individuals and families with lower incomes save, some financial institutions offer a type of bank account known as a micro saving account.
A micro savings account works similarly to a traditional savings account, but it’s designed for consumers who can only make small deposits. It can also be helpful for anyone else who finds that stashing away small amounts suits them. Regardless of your income, if micro saving suits your financial style, it can be a win-win.
What Is a Micro Savings Account?
A micro savings account (also sometimes seen written as microsavings account) is a savings account that can help meet the financial needs of consumers with smaller household incomes. It can also suit any saver who likes to tuck away small amounts here and there.
A micro savings account works a bit differently from how a savings account works at most financial institutions. Micro savings accounts typically don’t have a minimum deposit requirement, don’t charge service fees, and are more flexible regarding the possible amount of withdrawals.
Many financial institutions that offer micro savings accounts do so to incentivize consumers to save $1,000 a year by encouraging them to save just $20 a week. They often have educational initiatives in place to help guide micro savings account holders towards meeting this goal.
💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.
Benefits of Micro Savings Accounts
The following benefits are typically associated with micro savings accounts:
• Low-risk savings account that can earn interest
• Little to no upfront costs
• No credit checks required for new account holders
• Additional microfinance services such as microloans may be available for account holders
• Lower or fewer fees or no fees at all
• No minimum account balance requirements
• More flexible withdrawal limits
Disadvantages of Micro Savings Accounts
There aren’t any real disadvantages associated with micro savings accounts. That said, here are a few small downsides worth considering:
• Savings accounts tend to have a smaller return than other forms of investing (such as a CD vs. a savings account)
• Micro savings accounts can be harder to find than normal savings accounts
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
What Are Micro Savings Accounts Used For?
Here’s a closer look at what micro savings accounts are typically used for.
Creating a Regular Savings Habit
Micro savings accounts can help savers boost their liquid assets at an incremental level while giving them the chance to earn interest on their savings. Financial institutions offer micro savings accounts to help encourage good saving habits. These accounts can help remove barriers to saving for those who can’t afford to put away a lot of money. They can also suit those who like to save a little money here and there.
Saving Money Consistently in Smaller Amounts
One of the ideas that drives micro savings accounts is the concept that consistently saving small amounts of money can add up and make an impact. It may not seem that worthwhile at first glance, but setting aside $10 a week can help make a difference. That sum can begin to build a savings fund that can help consumers meet their financial goals or avoid taking on debt when unexpected expenses arise.
Keeping Savings Separate
Storing money in a checking account makes it a lot harder to ignore when spending temptations arise. Keeping money stored in a savings account (where it can grow slowly but surely if not touched) can make it easier to keep it separate from spending money.
Maybe you are saving for a vacation or you need a new washer/dryer. Whatever your goal is, when you are ready to spend money from a savings account, the funds will be there for the taking.
Managing Money Through a Mobile App
Today, lots of people love the convenience of using apps for P2P transfers and other activities. That ease is available with the many micro savings accounts that can be managed through mobile banking accounts. These can make it simpler to monitor spending and saving.
There are also micro savings apps (like Acorns) that have automated savings features that make it easier to save small amounts of money.
Alternatives to Micro Savings Accounts
If you don’t find a micro savings account that meets your needs, there are alternative saving options that can offer similar benefits. Here are two options worth considering.
• Credit unions: Because credit unions are member-owned, unlike not-for-profit financial institutions such as banks, they tend to charge less fees and offer higher interest rates on savings. Applying to a credit union where you can consider opening a checking vs. savings account (or perhaps both) may be able to replace the purpose of a micro savings account.
• High-yield savings accounts: High-yield savings accounts work the same way that normal savings accounts do but they tend to have a much higher interest rate on deposits.
A high-yield savings account is a great way to take advantage of the power of compound interest and help your money grow faster.
These savings accounts can often be found through online banks. Because these institutions don’t have the overhead of brick-and-mortar locations, they may be able to afford to offer higher interest rates.
You don’t have to do anything differently than you would with a normal savings account to earn this extra interest. You can add small deposits as funds become available.
Recommended: A Guide to High-Yield Savings Accounts
The Takeaway
Saving money is hard and requires a lot of discipline. Micro savings accounts are designed to help those with lower incomes or who simply like to save little by little. These accounts typically allow you to make small contributions, charge fewer (or no) fees, and have lower minimum balance requirements. Having the right savings account can make it easier to meet your financial goals.
Another way to save successfully: Open a high-yield bank account.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
How do I create a micro savings account?
Creating a micro savings account works the same as opening any type of savings account. First, you will need to open a bank account or just the savings account by filling out an application and providing the necessary identifying information and documentation. Once you’ve opened the account, you can start making contributions to the micro savings account.
What are the advantages of micro savings?
The main advantages of micro savings accounts are rooted in accessibility: These accounts tend to have no or lower account fees, have smaller or no minimum account balance requirements, and have more flexible withdrawal options. They make it easy to save with small contributions. Many financial institutions that offer micro savings accounts also offer educational initiatives and mobile banking apps that make it easier to learn how to save more money.
Are micro savings apps worth it?
Yes, micro savings apps can be worth downloading, as they can make it a lot easier to achieve savings goals. Alongside making it easier to track spending and saving habits, micro savings apps even have automated savings features that make it easier to stash away small amounts of money.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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A zero-coupon certificate of deposit or zero-coupon CD is a type of CD that’s purchased at a discount and pays out interest at maturity. Zero-coupon CDs can offer higher yields than standard CDs for investors who have the patience to wait until maturity to collect their original deposit and the interest earned.
Zero-coupon certificates of deposit are similar to bonds in that both are considered lower-risk, fixed-income instruments, but they serve different purposes in a portfolio. Understanding how a zero-coupon CD works can make it easier to decide if it’s a good investment for you.
What Is a Zero-Coupon CD?
To understand zero-coupon CDs, it’s important to know how a regular certificate of deposit works. A CD account, also referred to as a time-deposit or term-deposit account, is designed to hold money for a specified period of time. While the money is in the CD, it earns interest at a rate determined by the CD issuer — and the investor cannot add to the account or withdraw from it without penalty.
CDs are FDIC or NCUA insured when held at a member bank or credit union. That means deposits are insured up to $250,000.
CDs are some of the most common interest-bearing accounts banks offer, along with savings accounts and money market accounts (MMAs).
A zero-coupon certificate of deposit does not pay periodic interest. Instead, the interest is paid out at the end of the CD’s maturity term. This can allow the purchaser of the CD to potentially earn a higher rate of return because zero-coupon CDs are sold at a discount to face value, but the investor is paid the full face value at maturity.
By comparison, traditional certificates of deposit pay interest periodically. For example, you might open a CD at your bank with interest that compounds daily. Other CDs can compound monthly. Either way, you’d receive an interest payment in your CD account for each month that you hold it until it matures.
Once the CD matures, you’ll be able to withdraw the initial amount you deposited along with the compound interest. You could also roll the entire amount into a new CD if you’d prefer.
Remember: Withdrawing money from a CD early can trigger an early withdrawal penalty that’s typically equal to some of the interest earned.
How Do Zero-Coupon CDs Work?
Ordinarily when you buy a CD, you’d deposit an amount equal to or greater than the minimum deposit specified by the bank. You’d then earn interest on that amount for the entirety of the CD’s maturity term.
With zero-coupon CD accounts, though, you’re purchasing the CDs for less than their face value. But at the end of the CD’s term, you’d be paid out the full face value of the CD. The discount — and your interest earned — is the difference between what you pay for the CD and what you collect at maturity. So you can easily see at a glance how much you’ll earn from a zero-coupon CD investment.
In a sense, that’s similar to how the coupon rate of a bond works. A bond’s coupon is the annual interest rate that’s paid out, typically on a semiannual basis. The coupon rate is always tied to a bond’s face value. So a $1,000 bond with a 5.00% interest rate has a 5.00% coupon rate, meaning a $50 annual payout until it matures.
Real World Example of a Zero-Coupon CD
Here’s a simple example of how a zero-coupon CD works. Say your bank offers a zero-coupon certificate of deposit with a face value of $10,000. You have the opportunity to purchase the CD for $8,000, a discount of $2,000. The CD has a maturity term of five years.
You wouldn’t receive any interest payments from the CD until maturity. And since the CD has a set term, you wouldn’t be able to withdraw money from the account early. But assuming your CD is held at an FDIC- or NCUA-member institution, the risk of losing money is very low.
At the end of the five years, the bank pays you the full $10,000 face value of the CD. So you’ve essentially received $400 per year in interest income for the duration of the CD’s maturity term — or 5.00% per year. You can then use that money to purchase another zero-coupon CD or invest it any other way you’d like.
💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.
Tips When Investing in a Zero-Coupon CD
If you’re interested in zero-coupon CDs, there are a few things to consider to make sure they’re a good investment for you. Specifically, it’s important to look at:
• What the CD is selling for (in other words, how big of a discount you’re getting to its face value)
• How long you’ll have to hold the CD until it reaches maturity
• The face value amount of the CD (and what the bank will pay you in full, once it matures)
It’s easy to be tempted by a zero-coupon certificate of deposit that offers a steep discount between the face value and the amount paid out at maturity. But consider what kind of trade-off you might be making in terms of how long you have to hold the CD.
If you don’t have the patience to wait out a longer maturity term, or you need the money in the shorter term, then the prospect of higher returns may hold less sway for you. Also, keep in mind what kind of liquidity you’re looking for. If you think you might need to withdraw savings for any reason before maturity, then a standard CD could be a better fit.
Comparing zero-coupon CD offerings at different banks can help you find one that fits your needs and goals. You may also consider other types of cash equivalents, such as money market funds or short-term government bonds if you’re looking for alternatives to zero-coupon CDs.
Recommended: How to Invest in CDs: A Beginner’s Guide
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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
Pros of Zero-Coupon CDs
Zero-coupon CDs have some features that could make them more attractive than other types of CDs. The main advantages of investing in zero coupon certificates of deposit include:
• Higher return potential than regular CDs
• Guaranteed returns, since you’re unable to withdraw money before maturity
• Suited for longer-term goals
• Can be federally insured
Zero-coupon CDs are lower-risk investments, which can make them more appealing than bonds. While bonds are considered lower-risk investments generally, if the bond issuer defaults, then you might walk away from your investment with nothing.
A zero-coupon certificate of deposit, on the other hand, does not carry this same default risk because your money is insured up to $250,000. There is, however, a risk that the CD issuer could “call” the CD before it matures (see more about this in the next section).
Cons of Zero-Coupon CDs
Every investment has features that may be sticking points for investors. If you’re wondering what the downsides of zero-coupon CDs are, here are a few things to consider:
• No periodic interest payments
• No liquidity, since you’re required to keep your money in the CD until maturity
• Some zero-coupon CDs may be callable, which means the issuer can redeem them before maturity, and the investor won’t get the full face value
• Taxes are due on the interest that accrues annually, even though the interest isn’t paid out until maturity
It may be helpful to talk to your financial advisor or a tax professional about the tax implications of zero-coupon CDs. It’s possible that the added “income” from these CDs that you have to report each year could increase your tax liability.
How to Collect Interest on Zero-Coupon CDs
Since zero-coupon CDs only pay out at interest at the end of the maturity term, all you have to do to collect the interest is wait until the CD matures. You can direct the bank that issued the CD to deposit the principal and interest into a savings account or another bank account. Or you can use the interest and principal to purchase new CDs.
It’s important to ask the bank what options you’ll have for collecting the interest when the CD matures to make sure renewal isn’t automatic. With regular CDs, banks may give you a window leading up to maturity in which you can specify what you’d like to do with the money in your account. If you don’t ask for the money to be out to you it may be rolled over to a new CD instead.
How to Value Zero-Coupon CDs
The face value of a zero-coupon CD is the amount that’s paid to you at maturity. Banks should specify what the face value of the CD is before you purchase it so you understand how much you’re going to get back later.
In terms of whether a specific zero-coupon CD is worth the money, it helps to look at how much of a discount you’re getting and what that equates to in terms of average interest earned during each year of maturity.
Purchasing a $10,000 zero-coupon CD for $8,000, for example, means you’re getting it at 20% below face value. Buying a $5,000 zero-coupon CD for $4,500, on the other hand, means you’re only getting a 10% discount.
Of course, you’ll also want to keep the maturity term in perspective when assessing what a zero-coupon CD is worth to you personally. Getting a 10% discount for a CD with a three-year maturity term, for example, may trump a 20% discount for a five-year CD, especially if you don’t want to tie up your money for that long.
The Takeaway
Investing in zero-coupon CDs could be a good fit if you’re looking for a lower-risk way to save money for a long-term financial goal, and you’d like a higher yield than most other cash equivalents.
Zero-coupon CDs are sold at a discount to face value, and while the investor doesn’t accrue interest payments annually, they get the full face value at maturity — which often adds up to a higher yield than many savings vehicles. And because the difference between the discount and the face value is clear, zero-coupon CDs are predictable investments (e.g. you buy a $5,000 CD for $4,000, but you collect $5,000 at maturity).
As with any investment, it’s important for investors to know the terms before they commit any funds. For example, zero-coupon CDs don’t pay periodic interest, but the account holder is expected to pay taxes on the amount of interest earned each year (even though they don’t collect it until they cash out or roll over the CD).
If you’re eager to earn a higher rate on your savings, you’ve got a lot of options to explore — including a high-yield bank account or a regular CD.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
What is a coupon on a CD?
The coupon on a CD is its periodic interest payment. When a CD is zero coupon, that means it doesn’t pay out interest monthly or annually. Instead, the investor gets the full amount of interest earned paid out to them when the CD reaches maturity.
Is a certificate of deposit a zero-coupon bond?
Certificates of deposit and bonds are two different types of savings vehicles. While a CD can be zero-coupon the same way that a bond can, your money is not invested in the same way. CD accounts also don’t carry the same types of default risk that bonds can present.
Are CDs safer than bonds?
CDs can be safer than bonds since CDs don’t carry default risk. A bond is only as good as the entity that issues it. If the issuer defaults, then bond investors can lose money. CDs, on the other hand, are issued by banks and typically covered by FDIC insurance which generally makes them safer investments.
Photo credit: iStock/Joyce Diva
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
4.60% APY SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
We live in a fast-paced world and are accustomed to immediate gratification. Just as we can get groceries delivered in minutes and order a new movie online with a few clicks, so too do we often expect our bank deposits to be available immediately.
But it doesn’t always work that way when it comes to finances. Some things do require a wait, even though it may seem like they should happen instantaneously. When money is put into a bank account, it can take a while for the deposited funds to appear and become available. Here’s a simple breakdown of how long it takes for funds to clear.
What Are Cleared Funds?
Depositing money into a bank account doesn’t always make those funds appear immediately. It can take time for the funds to clear and become available to use. This is because banks and credit unions may place a temporary hold on the deposit. When this happens, the account holder can see their “total balance” on their account and their “available balance.” The latter is the amount of the total balance minus any pending deposits. The available balance is, as the name indicates, what is available for use.
Why Banks Put a Hold on Deposits
One reason why banks don’t immediately declare deposits to be cleared funds is to help avoid issues that can arise when a deposit bounces. Having a brief waiting period helps protect customers from bank fraud and from paying unnecessary fees. If a bank were to allow a customer to spend funds from a check that ends up bouncing, the customer would then need to repay the bank the amount they deposited and probably pay an overdraft fee (even if the customer wasn’t at fault).
Some holds take longer than others. The federal government regulates the max amount of time a banking institution can hold onto the funds before they make them available to the account holder. Banks and credit unions also have their own policies regarding how long it will take for funds to become available after a deposit, which can be shorter than federal regulations. It can be helpful to review your bank’s policies for holding deposits so you can get a better idea of when cleared funds will become available. That way, you won’t accidentally overdraw your account.
How Do Cleared Funds Work?
Cleared funds appear in a bank account, such as a checking account, after the holding period ends. Usually, this holding period lasts until the next business day, but it can take longer. Weekends and holidays can slow this process down. The type of deposit made can also affect the timeline.
Here’s a specific example: If you deposit a check via an ATM that is not part of your bank’s network, you will probably have to wait a while to access the money. It may take up to five days before that check becomes available cash in your account.
Compare that to the case of electronic deposits made via the Automated Clearing House (ACH). The funds can actually clear and become available as soon as the same day. Having a paycheck deposited via direct deposit can help you access your money a lot faster than if you deposited a check at an ATM.
Breakdown of Times of Cleared Funds
All banks and credit unions have their own timeline they follow surrounding cleared funds. In addition, the federal government sets a maximum limit for how long they can make consumers wait to access their deposit.
Here’s a quick breakdown of the federally allowed wait times for different types of transactions, from wiring money to check deposits.
Type of Deposit
Timeline
Direct Deposit
Up to the second business day
Wire Transfer
Up to the second business day
Paper check (less than $200)*
Next Business Day
Cash*
Same day or next business day
U.S. Treasury check*
Next Business Day
U.S. Postal Service money order*
Next business day
State or local government check*
Next business day
Casher’s, certified, or teller’s check*
Next business day
Mobile check deposit
Up to second business day
Federal Reserve and Federal Home Loan checks*
Next business day
Any other checks or non-U.S. Postal Service money orders
Second business day
Deposits made at an ATM owned by the customer’s financial institution
Second business day
Deposits made at an ATM not owned by the customer’s financial institution
Fifth business day
*Deposited in person.
It’s worth noting that these are the maximum hold times allowed; in many cases these deposits happen much quicker. Again, it’s worth reviewing the bank’s funds availability policy. This will be listed in the account agreement given to you, the account holder, when you opened an account. You can also ask the bank for a copy of their holding policies or look online for it.
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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
When Can You Withdrawal Cleared Funds?
Deposits often clear in segments. That is, a portion of the funds will become available in your checking account before the whole amount deposited is ready for use. In most cases, the bank has to allow the customer to access $225 from the deposit at the start of the next business day. You could either withdraw cash or write a check. Usually the rest of the deposit is available on the second business day, unless something occurs to trigger a delay.
Cleared Funds vs Available Funds
The terms “cleared funds” and “available funds” both refer to funds that are available for immediate withdrawal or use. It’s important to keep in mind that simply depositing a check doesn’t mean you can use the money right away.
• Regarding a deposit, the $225 that must be made available by the next business day is known as your cleared or available funds. So on the next day, you can go ahead and use that amount.
• However, the rest of your deposit may not yet be available. If you try to draw against it, you are risking overdraft and charges. The full amount of the deposit may take up to a few more days to become ready for use.
Reasons Why Deposits May Be Delayed Until They Become Cleared Funds
There are a few different reasons why deposits can be delayed on their path to becoming cleared funds. Let’s examine some of these.
Deposits Over $5,000
When it comes to large deposits (excluding cash or electronic payments), the bank is typically required to make the first $5,525 of the deposit available by the second business day and the remainder available on the seventh business day, or later.
Recommended: Where to Cash a Check Without Paying a Fee
Brand New Customer Accounts
Newer customer accounts (less than 30 days old) can experience deposit delays up to nine days. Although with official checks and electronic payments, partial funds can be available the next day. (If you are in this situation and in a rush to make a payment, you can look into other ways to send money to another’s bank account, such as P2P apps. These can draw upon other available funds.)
Post-Dated or Fraudulent Checks
If a bank has reason to suspect a deposit is suspicious (such as if a check appears to be fraudulent), then it may hold the funds for longer than normal. A couple of examples of what might cause this kind of hold:
• A check is post-dated, meaning it’s been filled out to show a date that is in the future.
• A check is more than 60 days old.
The Takeaway
Cleared funds are the funds that become available once a deposit to a bank account clears. That means the money is ready for use. The timeline for funds clearing depends on several factors, such as where, when, and how the deposit was made and how large the amount is. Some funds may clear right away, while others can take a few days. However, federal laws are in place regarding how long a bank can wait to clear funds. By understanding this process, you can likely manage your financial life a little better and avoid situations that involve overdrafts or bounced checks.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
What is the difference between a cleared balance and an available balance?
A cleared balance (or cleared funds) and an available balance are the same thing — it’s the amount of money in your account that is available for immediate withdrawal or use.
How long does it take to get money cleared?
Some deposits clear as soon as the same day, but most generally clear the next business day. In some cases, though, a deposit can take as long as nine days to clear. Check with your bank to know their timelines.
Can you reverse a cleared check?
Once a check has cleared, there is little that can be done to reverse the transaction. If, however, a cleared check is to be found fraudulent, it may be possible for a bank to intervene.
Photo credit: iStock/RgStudio
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
After a makeover, Omni Hotel & Resorts’ Select Guest loyalty program is now a spend-based rewards system, with members earning Omni Credits that can be redeemed for hotel stays.
Program members are rewarded for spending more with the brand; big spenders have access to a faster path to elite status and the chance to earn and redeem awards more quickly.
Technically, you can get all the way to its top-tier elite status level through spend alone. Want to host an event or big dinner? Why not do it when checked into the hotel to earn extra Omni Credits?
These changes make its loyalty program more in line with other major hotel loyalty programs in terms of your ability to spend to earn elite status tiers. Here’s what you can expect with the new version of the program.
How to earn Omni Credits
The new program awards Omni hotel points (known as Omni Credits) for qualifying purchases. Examples include eligible room rates, spending at onsite restaurants, bars and spas, and spend on other activities like hotel-run golf courses.
Members earn points at different rates depending on the type of purchase:
Per eligible room rate: Members earn 5-10 Omni Credits.
Per $100 of eligible purchases beyond the room: Members earn 1 Omni Credit.
The higher your elite status, the more Omni Credits you earn. Tier three and tier four levels, called Champion and Icon, earn 10 Omni Credits per night stay instead of five (like the two lower levels).
🤓Nerdy Tip
If your spending beyond the room rate doesn’t reach the minimum $100 increment, you won’t earn extra on the non-room spend. What’s more, this total does not round up. If you spend $199 on hotel dining, you’d earn only 1 Omni Credit — not 2 — unless you exceed the $200 mark.
Elite status tiers
Omni’s Select Guest loyalty program has four tiers of status: Member, Insider, Champion and Icon. Status is earned by qualifying spending with the brand and can be unlocked at $1,000, $4,000 and $8,000 spend levels, or “Tier Dollars.” Tier Dollars include most charges to the room except taxes, gratuities and fees.
Member
General members receive these benefits:
Free deluxe Wi-Fi.
Free bottled water and a welcome drink upon arrival.
Earn 5 Omni Credits per room night.
Earn 1 Omni Credit per $100 of other hotel purchases.
Insider
Once you spend at least $1,000 in Tier Dollars within the calendar year, you advance to tier 2, the Insider level.
Insider benefits include:
Earn 5 Omni Credits per room night.
Earn 1 Omni Credit per $100 of other hotel purchases.
Free deluxe Wi-Fi and bottled water upon arrival.
Daily beverages comped by the hotel.
Two complimentary clothing items pressed or two shoeshines during the stay.
Champion
After you spend $4,000 in Tier Dollars within the calendar year, you will level up to Champion status.
Champion benefits include:
Earn 10 Omni Credits per eligible room night.
Earn 1 Omni Credit per $100 of purchases.
Free one-room-type upgrade.
Check-in as early as 1 p.m.
Checkout as late as 3 p.m.
Free bottled water each day.
Daily beverage delivered in the morning.
Four complimentary items pressed or four shoeshines.
Local market amenity provided upon arrival.
Guaranteed room availability if checking with the hotel at least 24 hours before arrival.
Icon
This is the top-tier level within the program and is for guests who spend at least $8,000 in Tier Dollars within the calendar year.
Icon benefits include:
Earn 10 Omni Credits per eligible room night.
Earn 2 Omni Credits per $100 of purchases in addition to the room spend.
Free premium Wi-Fi.
Free two-tier room upgrade.
Check-in as early as 9 a.m.
Checkout as late as 6 p.m.
Suite upgrade on redemption stays.
Guaranteed room availability by 4 p.m. on the day of arrival (available for one room per member).
Turndown housekeeping service.
Free bottled water daily.
Daily beverage delivered each morning.
Unlimited complimentary clothes pressing and shoeshines.
Chef-inspired welcome amenity/snack plus the choice of beverage the first night of the stay.
Ability to gift Champion status to another member.
It’s clear that the more business you do with Omni Hotels & Resorts, the more benefits you will receive when achieving different elite status tiers.
How to redeem Omni Credits
Once you earn 100 Omni Credits (or 20 stays at the lower two status levels), you can redeem them for a night’s stay.
There are no complex award charts or dynamic pricing for your award redemptions, and Omni Credits are valid for 36 months from the date of earning.
🤓Nerdy Tip
When the program changed in January 2024, it converted existing Award Credits to Omni Credits at the rate of 1:5.
Omni Select Guest gives more rewards for frequent travelers (and spenders)
The more you spend with Omni, the faster your path to elite status and free night redemptions. These changes to the program make it more rewarding and put it more in line with other hotel loyalty programs. By spending $8,000 with the brand within a calendar year, you will reach the program’s highest elite status tier, Icon. 100 Omni Credits will net you a free award night, which can be redeemed on non-blackout dates at any of the 50+ Omni destinations in the U.S.
Even when flying on a long-haul flight across the Atlantic Ocean, it can be tough to fully disconnect.
British Airways realizes this and offers Wi-Fi on most of its aircraft. However, between two different speed options, three currency options and up to three connection lengths, passengers may be overwhelmed by choice.
Here’s what you need to know about British Airways Wi-Fi, its availability, pricing options and how you might be able to get it for free.
Does British Airways have Wi-Fi?
British Airways was relatively late in installing Wi-Fi on its aircraft, with its first three aircraft only connected in 2018. However, British Airways now offers Wi-Fi on most of its flights — both long-haul and short-haul.
Unfortunately, the London-based airline doesn’t publish which particular aircraft types are connected and doesn’t let passengers check in advance if their flight will have Wi-Fi capabilities.
Instead, the airline advises passengers to wait for an announcement onboard to see if their flight is connected.
Alternatively, travelers can look for a small “hump” on the top of their aircraft or a “.air” sticker near the boarding door.
(Photo by JT Genter)
British Airways Wi-Fi coverage map
British Airways Wi-Fi is available over most of the globe, including most of the key transatlantic routes between the U.S. and British Airways’ hub in London.
However, it’s important to note that you may lose connection mid-flight. Wi-Fi is not available as the aircraft travels to high latitudes, or over India.
British Airways Wi-Fi speeds
British Airways doesn’t publish expected speeds for its two connection tiers, “Browse and stream” (higher speeds) and “Messaging” (slower speeds).
On a recent flight from London to Budapest, I was rather disappointed by the slow speeds for the more-expensive “Browse and stream” package. When I ran a speed test, I found that the connection seemed to be throttled to 1.4Mbps.
That’s a rather low speed for for less than two hours of connection for $11.
British Airways Wi-Fi Cost
The cost of British Airways Wi-Fi depends on several factors, including the length of the flight, the tier of the connection, how long you want to be connected and even the currency in which you pay.
Let’s take a flight from New York-John F. Kennedy to London-Heathrow as an example. When paying in US dollars, the faster “Browse and stream” connection costs:
$6.99 for 1 hour.
$16.49 for 4 hours.
$20.99 for a full-flight pass.
Meanwhile, the BA Wi-Fi cost for the slower “Messaging” connection is:
$4.49 for 1 hour.
$6.99 for a full-flight pass.
Meanwhile, on a shorter flight from London-Heathrow to Budapest, passengers have just three British Airways Wi-Fi connection options:
$4.49 for a full-flight “Messaging” pass.
$6.99 for a 1-hour “Browse and stream” pass.
$10.99 for a full-flight “Browse and stream” pass.
How to get free (or cheap) British Airways Wi-Fi
Use exchange rates to your advantage
Travelers may be able to save on their British Airways Wi-Fi cost by choosing to pay in a foreign currency.
As an example, let’s review the (overwhelming) 15 Wi-Fi pricing options from New York to London and their USD equivalents at current exchange rates:
Connection tier
€3.49 = $3.77.
£2.99 = $3.77.
Flight pass.
€5.99 = $6.47.
£4.99 = $6.29.
Browse and stream
€5.99 = $6.47.
£4.99 = $6.29.
Browse and stream
€13.49 = $14.58.
£11.99 = $15.10.
Browse and stream
Flight pass.
€16.99 = $18.36.
£14.99 = $18.88.
At the time of writing, paying in U.S. dollars is the most expensive option in every case, although the least-expensive currency varies between euros and pounds.
🤓Nerdy Tip
If you want to save a few bucks, it’s worth checking the current exchange rate to see which option is best.
Fly first class
British Airways offers free Wi-Fi connection for passengers flying in first class.
Unlike similar offerings from its competitors, passengers don’t have to book through a particular channel to get this free connection (e.g. Emirates, who offers no free connection if you book using partner miles), and you don’t have to get a paper voucher from the crew and scratch off to reveal a code (e.g. Etihad Airways).
Instead, if you’re flying in British Airways first class, simply connect to the BA Wi-Fi network and open shop.ba.com. There, you should see a banner for “Free Wi-Fi if you are flying in first.” Click “Connect now” and then enter your seat number and last name in the form to activate your connection.
Spend wisely with the right credit card
But if you pay for your Wi-Fi connection using a travel card that includes an airline spending credit that can be applied to in-flight Wi-Fi, you can consider it free.
Cards that cover airline Wi-Fi fees
The Platinum Card® from American Express
Bank of America® Premium Rewards® credit card
on Bank of America’s website
Chase Sapphire Reserve®
on Chase’s website
Annual fee
Airline spending credits
Up to $200 annually with your preferred airline. Enrollment required. Terms apply.
Up to $100 annually.
$300 annual statement credit for travel purchases.
Still not sure?
How to connect to Wi-Fi on British Airways
British Airways activates the Wi-Fi connection when the aircraft is above 10,000 feet. That means you’ll need to wait until around 10 minutes after takeoff to connect, and you’ll be disconnected about 10 minutes before landing. That differentiates it from some U.S.-based airlines which offer a gate-to-gate Wi-Fi connection.
Once above 10,000 feet, turn on your Wi-Fi connection, connect to the BAWi-Fi network, and browse to shop.ba.com — if you aren’t automatically redirected.
Keep in mind that British Airways doesn’t let you switch between devices using the same Wi-Fi pass. So, you’ll want to be intentional about choosing which device you connect.
The bottom line
You have a pretty good chance of getting a Wi-Fi-enabled aircraft on your next British Airways flight. However, you won’t know for sure until you’re at your gate and can see if the aircraft has the tell-tale radome bump.
(Photo courtesy of British Airways)
Depending on the flight, British Airways offers up to five different Wi-Fi packages, each of which can be purchased in one of three currencies. The cheapest option will depend on current exchange rates, so it might be worth having an updated currency converter app on your phone to do some quick math.
To view rates and fees of The Platinum Card® from American Express, see this page.
A banker’s acceptance (or BA) is a financial instrument used to guarantee large future transactions, often in the import/export markets. As a debt instrument, it can function as an investment, commonly traded between large banks and institutional investors on the secondary market. It can trade at a discount to par like U.S. Treasury bills in money markets.
BAs play a key role in facilitating international trade and in broader fixed-income markets. While you may not own an individual banker’s acceptance in your checking account, these instruments help promote sound and liquid markets.
What Is Banker’s Acceptance?
A banker’s acceptance (which you may see written as bankers acceptance) is a short-term form of payment guaranteed by a bank; it is often used for international trade transactions.
Banks often make money on the spread between the buy and sell price on a fixed-income asset or through fees and commissions. BAs commonly have a maturity of between 30 and 180 days and trade at a discount to par. Functioning like a post-dated check, they are seen as a relatively safe method of payment for large transactions. BAs are considered short-term debt instruments.
Here are some more details about banker’s acceptance and how these instruments work.
• The BA is issued and priced based on the creditworthiness of the issuing bank. An investment banker earns a commission for making the transaction.
• Only customers with a strong credit history can access the BA market. These entities are often corporations involved in international trading (import/export) markets.
• A banker’s acceptance can also be highly marketable and liquid, allowing money to transfer from one bank to another.
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How Banker’s Acceptance Works
A banker’s acceptance is considered a time draft. A business can request one from a bank as a way of gaining enhanced security while conducting a deal. The bank essentially promises to pay the firm that is exporting goods a particular amount of money on a certain date. When it does this, it takes funds out of the importer’s bank account.
Typically, the term of a banker’s acceptance is between 30 and 180 days.
Who Issues Banker’s Acceptance?
Not all banks offer BAs. Businesses with a good relationship with a large bank can obtain a banker’s acceptance. It can be an appealing product for an institution entering a large-value transaction. Like signing a check over to someone, the account holder must have enough cash to execute the transaction.
More than a simple checking account transaction, though, obtaining a BA typically requires an amount of credit to be detailed. There are usually fees involved in obtaining a BA, too.
Who Buys Banker’s Acceptances?
Banker’s acceptances are traded by banks and securities dealers on a secondary market, similar to how debt instruments are traded. They are available for a discount on its face value. The exact value may vary with the rating of the bank that has promised payment on the banker’s acceptance.
How Banker’s Acceptance Is Used
Here’s more detail on how banker’s acceptances can be used.
Checks
Think of a banker’s acceptance as a certified check. It’s a relatively safe way to do a transaction. The money owed is guaranteed on a specific date listed on the BA bill. Credit analysis is usually done to verify the creditworthiness of the issuer, so it’s a bit different than how a bank will verify a check before you deposit it.
BAs are frequently used to facilitate the international trading of goods. A buyer of imported products can issue a BA with a payment date after a shipment is scheduled to be delivered. The seller exporting can then take payment before finalizing the shipment. The exporter in this case can hold the BA to maturity or sell it on the secondary market. Unlike a check, the BA is backed by the guarantee of the bank, not an individual.
Investments
Aside from the import/export market, bankers’ acceptances are used commonly in the investment world. Buyers might purchase a BA and hold it to maturity to effectively earn a rate of return on short-term money. Since BAs are seen as very low-risk products, they are used as a cash-like security.
Still, retail consumers usually won’t be able to purchase a BA in an online or traditional retail bank. The purchase is, as noted above, only available to certain financial entities.
Recommended: What Are Some Safe Types of Investments?
Pros and Cons of Banker’s Acceptance
There are a number of positive aspects of bankers’ acceptances to consider.
Pros
First, the upsides of BAs:
Provides Seller Assurances Against Default
Backed by the guarantee of a bank, a banker’s acceptance is regarded as a high-quality fixed-income security that is often liquid and highly marketable. For importers and exporters, financial transactions can be made to facilitate international trading of goods without the risk that one party goes bust.
Buyer Does Not Have to Prepay for Goods
A banker’s acceptance works like a promissory note so the buyer does not have to prepay. Liability can immediately transfer from the issuer of the banker’s acceptance to the bank. The payment is likely debited only on the due date.
Enhances Confidence in the Deal
Part of the process of issuing a banker’s acceptance is usually having a good credit standing and a relationship with a major bank. Since high-risk customers might not be considered, there is strong confidence in BAs traded. There would be no need for the exporting company to worry about default risk; that lies with the banker. While individual investors often do not engage in BA trading, there are important traditional banking alternatives that feature financial solutions to help facilitate transactions.
Cons
While there are many positive aspects of bankers’ acceptances, there are still some risks for those involved in the transaction and trading of BAs. Consider the following:
Bank May Require Buyer to Post Collateral to Hedge Risk
Collateral is sometimes required for a deal to happen. Collateral provides a backstop should the importer be unable to pay. It can reduce risks to the bank and expedite the deal. Think of it like seller concessions to get a deal done, though collateral is generally not used when buying and selling a home.
Buyer May Default
With a banker’s acceptance, the bank accepts default risk, which can be a downside. The issuing bank typically must honor the payment terms even if the account holder, perhaps an importing/exporting corporation, does not have the cash on the payment date. Not all banks choose to be in this market due to the risk that the buyer could default.
Potential Liquidity Risk
Liquidity risk means an individual or financial institution cannot meet its debt obligations in the short term. Investors may not encounter liquidity risk with a banker’s acceptance instrument, but the issuing bank could have liquidity risk from the importer who must pay. This may be a key consideration for a bank issuing a BA. The secondary market for banker’s acceptance products remains highly liquid.
Pros of BAs
Cons of BAs
Provides assurance vs. default
Bank may require collateral
Buyer doesn’t need to prepay for goods
Buyer may default
Enhances confidence that deal will work
Potential liquidity risk
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The Takeaway
A banker’s acceptance is a debt instrument that plays a key role in well-functioning capital markets. BAs help facilitate international trade through bank guarantees. Knowing about this important fixed-income product type can help individuals understand financial markets and institutions.
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FAQ
What is the difference between a letter of credit and a banker’s acceptance?
A letter of credit is a financial instrument that a bank issues for a buyer (the bank client) guaranteeing that a seller will be paid. A banker’s acceptance, on the other hand, guarantees that the bank will pay for a future transaction, rather than the individual account holder.
What is a banker’s acceptance in a real-life example?
An example of a banker’s acceptance would be that, on April 1st, the Acme Bank sends a BA to Back-to-School Supplies, saying it will make funds available on June 1st for a shipment of goods for their client. On June 1st, the school supply company will be able to withdraw those funds.
How safe are banker’s acceptances?
Banker’s acceptances are a relatively safe transaction for all involved, but the exact degree will vary with the creditworthiness of the bank guaranteeing the funds.
Is a banker’s acceptance a short-term investment?
Banker’s acceptances are considered a short-term investment or debt instrument. They are usually traded at a discount, and they are seen as similar to Treasury bills.
Is a banker’s acceptance a loan?
A banker’s acceptance isn’t a loan. It’s a short-term debt instrument, typically with a maturity date of 30 to 180 days.
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