If you’re a millennial with $1 million in the bank and don’t want to worry about your retirement savings, you can use the Federal Reserve’s free deposit account bonus.
The account is only open for up to three years and will pay you as much as you earn over the next three years.
The Federal Open Market Committee (FOMC) can set any number of interest rates it wants, but it’s the annual bonus that’s worth watching.
For $1,000, you’ll receive an annual bonus of $25,000.
That’s not too bad for a $10,000 deposit.
That means you’ll earn $1.25 million in six years, which works out to $2,250 per year.
It also gives you the ability to earn another $2.50 million if you stay open longer.
This is great for those who like to take risks, but not for everyone.
For example, if you’re making less than $75,000 per year and earn less than 10% in interest, you might want to wait a year before opening the account.
That could make the account less attractive for someone like me.
That said, if I’m making less and I have a few years left to get into this, I’m not complaining.
I’ll make up the difference.
That also means you’re likely to be a little more generous with your money over time.
And remember, the Federal Open Bank offers no cashback on the deposit.
So if you can find a bank that’s willing to give you a better rate than $2 million, the bonus could actually be worth it.