The foundation for Max dates back to the financial crisis, when I was looking for a way to keep my own cash safe and liquid amidst broader turmoil in the market. In the process, I discovered the higher yields available through online banks, and began managing cash actively to keep it fully FDIC-insured while earning the highest yield possible. This became particularly important as banks were cutting their rates during a rapidly declining interest rate environment.
We’ve made a tremendous amount of progress since then, creating what we believe to be the fastest and simplest account opening process in the industry, arranging preferential rates and terms available exclusively to our members, growing assets optimized through the platform dramatically, and attracting the attention of some of the most influential people in asset management.
We’ve also kept our ear to the ground, listening carefully to every one of our members to understand how they use Max to help them earn more on their cash. We listened even more closely to those who didn’t enroll in Max, to try to understand why, since most people tell us Max is a ‘no brainer.’
Over the years, we heard six main requests from clients — ways in which they’d like to be able to use Max. Today, we’re launching an addition to the Max platform that addresses all six.
Introducing: Max Checking!
Our goal in launching Max Checking is not to get people to switch banks or open a new checking account. Many people are perfectly happy with their existing bank and are unlikely to switch. However, at Max, we’re constantly striving to do better for our members, and so we’ve worked hard to create a compelling offering that delivers better rates and terms than pretty much every bank in the country. And so we do expect that, over time, many of our members will start to use Max Checking for more of their banking needs. But that’s not why we’re launching Max Checking.
Max Checking was designed to deliver on the promise of helping everyone in America earn higher returns on their cash. Here are the client requests we’ve heard, and why Max Checking is the answer:
1. Please Support my Bank
When Max launched in 2014, to use Max you had to have an account at one of the four largest banks in the country: JPMorgan/Chase, Bank of America, Wells Fargo, or Citibank. This was a logical place to start, since these four banks represent 37% of the nation’s deposits. Over the years we added support for more banks, and now can support customers with checking accounts at 20 of the largest banks and brokerage firms in the country. But with more than 6,000 banks in the country, not to mention credit unions and brokerage firms, we knew we could do better. With Max Checking, you can now benefit from some of the highest yields in the country regardless of where you bank or invest. Simply open Max Checking in 60 seconds and you can then link all of your existing bank and brokerage accounts to Max Checking so you can earn more no matter where you bank or invest.
2. I Want to Link Max to my Savings Account, not my Checking Account
Max’s core architecture originally required that you link your existing checking account to Max. But many of our members wanted to link Max to their savings accounts instead. Now, you can link your savings, brokerage, or checking account to Max Checking and start earning more.
3. I Want to Link Max to Multiple Accounts
Many of our members have multiple banking relationships. Max’s existing architecture required that you pick one bank to link to Max as your ‘core’ checking account, but we saw many of our members using Max to move funds from one bank to another. With the launch of Max Checking, you can now link multiple checking, savings, and brokerage accounts at multiple financial institutions, so Max can help you earn more on all of your cash, regardless of where it currently sits.
4. I Want to Earn More but Don’t Want Max Sweeping Funds in/out of my Main Checking Account
Max was originally designed for households who saw no distinction between checking and savings. Over the years, we’ve come to know many people who are saving for a specific purpose, and who prefer to allocate a discrete amount of cash into savings to earn more, without touching their checking account. With the launch of Max Checking, you can now earn more on savings without Max sweeping funds in/out of your existing checking account, so you’ll have even more control over your funds. Simply make a deliberate allocation of cash to your new Max Checking account and from there, Max will automatically move excess cash to your even-higher-yielding online savings accounts.
5. I Like the Idea of Max but Don’t Want to Share my Credentials
Early on, many prospective Max members were concerned about sharing their login credentials with Max. That’s understandable. With Max Checking, it is now possible to enroll for Max, open up a new checking account and four high-yield savings accounts with preferential rates without ever typing in a bank login or password. You can even fund your account by wire if you choose, but even if you fund by ACH, Max will never be privy to your bank login credentials.
With the Max Common Application, we’ve made account opening simple, so you can open multiple bank accounts using a single form without logins, passwords, or the trial deposits that many people have come to associate with online banking. Faster, simpler account opening. More FDIC insurance coverage. Higher rates. That’s the power of Max!
6. I Want to use Max but Don’t Want to Pay Any Fees
From Day 1, we’ve been committed to our members’ privacy and security. As part of that commitment, we’ve sought to avoid any conflicts of interest. So unlike many websites that offer their products for ‘free,’ only to monetize your data in the background, we don’t sell your data, we don’t accept advertising or referral fees from banks, and we don’t cross-sell other products.
To cover its costs, Max charges a nominal membership fee to its members. Membership costs just 8 basis points per year, or $80 per $100,000 of cash, which is half of what a typical money market fund charges, yet Max delivers greater liquidity and higher yield. The higher yield available exclusively through Max often far outweighs our membership fee. Max also includes many additional features such as easier account opening, automatic monthly optimization, one-click funds transfers, and consolidated tax reporting.
Still, we wanted to find a way to do even better for our members. So, if you choose to keep larger amounts of cash in your new high-yielding Max Checking account, our banking partner, Radius Bank, will reimburse your Max membership fee, up to $200 per year. For many of our members, this means that Max will be free!
I’m proud of our team, who has worked creatively and tirelessly to bring these new innovations to market. And I’m even more proud that as an organization, we’ve managed to stay true to our core mission: your best interest.
To learn more or get started earning more, visit MaxMyInterest.com/MaxChecking.
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- Maximizing Yield in a Near-Zero Rate Environment - March 12, 2020