Union Plus Prepaid Card: 5% Savings Account FDIC Insured

PA: AFL-CIO 2009 Legislative Conference

If you liked Mango Prepaid card with its 6% savings account (4.6% after taking into account idle cash) but you wished you could put in more than $5,000, here’s another one that does pretty much the same thing.

It’s called Union Plus prepaid debit card. It’s run by the same parent company as Mango, just marketed through a different channel with a slightly different configuration.

Like Mango, you open the savings account after you get the prepaid card. The savings account pays 5.1% APY for balance up to $5,000. Balance over $5,000 earns 0.1%. You must have recurring deposit into the card in order to keep the 5.1% rate on the savings account. I’m not clear how much in recurring deposit is needed but $50/month will probably do, as in Mango.

Although the rate on the savings account is lower than Mango’s (5.1% APY vs 6% APY), the monthly fee is also lower: only $2/month vs $3/month on Mango. It’s also possible to have the $2 monthly fee waived by a direct deposit of $500 or more every month. Unions’ collective bargaining power might have something to do with it? At only $2 a month, you may decide to just keep the monthly transfers at $50 and pay the fee.

Taking into account the initial $5,000, the monthly $50, and the $2 monthly fee, the effective net yield comes out to 3.8% on an average balance of $5,300.

Same as what you do with Mango, if it bothers you that your monthly recurring deposits plus interest earned pile up there earning nothing, you can withdraw them. You don’t have to withdraw more frequently than once a year.

Earning 3.8% sure beats earning less than 1%. If you are married you can get one card for each person and double the amount on which you earn 3.8% to $10k. Although it’s marketed through labor unions, you don’t have to submit any proof of union membership.

Adding up both Mango and Union Plus prepaid cards, a married couple can have $20k  earning 4%+ FDIC insured. They make more than twice as much as I Bonds at this time.

[Photo Credit: Flickr user aflcio]

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Comments

  1. theo says

    I keep getting “some of the info you provided cannot be validated” when attempting to open an account online although I triple checked the info I put in… Same thing happens with Mango…
    Where do they get the info if not through credit check? Chex maybe?

  2. Harry says

    Unions are just a marketing channel for the card issuer. You are not required to submit any proof of membership.

  3. John says

    Harry, after you made the comment in the post “I’m not clear how much in recurring deposit is needed but $50/month will probably do, as in Mango” did you or anyone set this up and confirm that $50/month is sufficient?

  4. Harry says

    I’m putting in more than $50/month so I can’t tell you whether $50/month is sufficient. You can ask customer service what the minimum is. The reps are all US-based and friendly.

  5. autum says

    There was nothing written about the $50 minimum deposit, maybe for Mango but nothing with Union Plus. They denied me the $20 credit for enrolling in direct deposit. I’m only employed part time as an independent contractor so I’m not paid on regular basis, but still they never went into details about the minimum.

  6. Sam says

    Harry, do you still keep using Mango and Union Plus now? I notice this post was from 2 years ago and I still have cash to invest. Thanks.

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