I received some good news in an email from Bank of America on the investment/banking front this week that's a few decades in the making. I'm now a BoA Preferred Rewards gold member.
How I Got There
BoA has what I believe to be the best option out there for those looking for a free stock option that will enhance the benefits of the credit cards that it boosts while also having the 3rd most branches around the country, which assists with the Preferred Rewards other benefits like free cashiers checks. With the 2nd biggest bank not having any local branches near me, Chase, I don't have a bank account with them even though I have 10 credit cards with them at the time of this writing. I also have a bank account with Wells Fargo, #1 in branches by a slim margin nationwide over Chase, but I'll share more about that account in the "Where I'm at & Where I'd Like to Be in Other Similar Programs" section below.
While I keep a relatively low amount in the practically no interest Bank of America bank account I have, I have chosen BoA to hold most of my stocks whether in raw stock accounts or my Roth IRA, excluding my Roth 401k where the majority of my stock is. BoA offers free accounts to hold your stock or investment account (not including gov. fees for trades) and provide special perks for those who have holdings at various tiers ($20k, $50k, and $100k). Because of the Preferred Rewards program, if you hold stock, you should know about the BoA Preferred Rewards program. I've held stock for over 20 years, since I was a kid, even though nothing I bought 20 years ago wasn't already sold by now (though I've reinvested in some cases in the same stocks) & used to buy other stock that's helped me to reach this tier.
I've got a Roth 401k as well which has been my primary focus on stock-based investments and it's only in the past few years where I've invested in a Roth IRA. Some of the Roth IRA was from stock holdings from when I was a kid and sold at a 15% long term capital gains tax bracket. Getting into the program isn't automatic either. You need to activate it, which is a short and simple process.
What I Get Now
Even at the $20k tier, where I'm at, I now get free BoA Cashier's checks, standard check orders, and most importantly, a 25% rewards bonus on certain BoA credit cards that include my Customized Cash Rewards card which gets 3% cashback on online shopping. A 25% boost means that shifts to 3.75% cashback on those purchases.
Where I'd Like to Be in the BoA Preferred Rewards Program
I hope to continue to grow in tiers and hope that the Preferred Rewards program doesn't change much. I would be a bit surprised if they didn't have a devaluation though since when the Preferred Rewards program was originally created, these accounts weren't free. I feel like the current offer available is difficult to sustain as a business model. I would love to have >$100k in stock/Roth IRA/College 529 investments, hopefully with BoA not changing much by then (which is doubtful, but possible). At the >$100k level, you get a 75% bonus on cashback/other earnings from certain cards, which opens up $.02625/$ in cashback on their current $.015/$ card (the Unlimited Cash Rewards card) on general spending and $.0525/$ spent on online shopping on the Customized Cash Rewards card if things don't change.
In addition to the personal version of the BoA Preferred Rewards program, there's a business version as well. Sadly the business and personal versions don't stack, and the personal status only counts for personal cards, and business for business. I don't see myself chasing that status, but for some, that's a good option, with strong cards to maximize if doing so for cashback.
If the Roth IRA cap was raised, and if the income limit for putting $ into the Roth IRA was raised, that would be ideal. While my current income is below the cap, I'm in a business where there's no pay ceiling as a real estate agent and it wouldn't be far fetched for me to become ineligible at some point in the next 5 years. An IRA doesn't have as heavy of restrictions as a Roth IRA in terms of contribution limits and income, but one can hope. If long term capital gains get pushed higher, it also changes the equation of what's best. A 15% tax on earnings from stock holdings over a year old is really nice for now but that could change.
My other investments are a factor as well, since my heaviest investing is in real estate, where the majority of my holdings are found wrapped up in a single incredible purchase at the moment that's a cashflow rental property worth about 70% more than what I paid for it after only about 4 years, over 20% of which was instant equity because I got such a good deal on the home and renovations. I want to continue investing into real estate because the capital I can gain from that, as an agent especially, is more than what I can gain from stocks. I wouldn't consider myself a stock expert by any means. That said, I feel that Roth IRA's, for those eligible, are a solid part of a well diversified portfolio. My annual gains in stock and Roth IRA have done a lot better than my Roth 401k because of the limited options available with the Roth 401k even though I select some of the best options available based on historic growth.
Where I'm at & Where I'd Like to Be in Other Similar Programs
I also bank with Wells Fargo, which has the most branches in the US at the time of this writing, which hasn't historically offered the best credit cards, in my opinion, nor a program as good as the BoA Preferred Rewards one for the cards it has. Supposedly Wells Fargo is getting better in the near future, but I still don't have a single card with Wells Fargo, despite having a few dozen credit cards and banking with them (or Wachovia before Wells bought them) for decades. I think that they offer some decent cards, but some of their best options came after I was already in the late game of credit cards where their best options wouldn't be as good as they would have a decade ago. With my Wells Fargo account, I already had free cashier's checks with no balance requirement (just a $1k/mo direct deposit requirement I believe - it's an account that's no longer available in my area), but having free cashiers checks from the 1st and 3rd biggest banks in terms of number of branches is better than just having it in one.
The free incoming wire transfers doesn't mean much to me, especially when, if the Synchrony Bank rewards program doesn't change before then, I'm planning on being a top tier Synchrony Bank Reward member. That program has a time based option for the rewards. Even with only 1 account holding $100, if you've had an account with them for 5 years, you get their version of top tier rewards. It's been over 4 years for me so far. It's not as good as the BoA Preferred Rewards program, but unlike even the top tier version of BoA Preferred Rewards, it offers a few free domestic outgoing wire transfers per statement cycle.
After getting to the $100k tier with BoA, if it's still around, you might consider the $50k tier with Citi linked retirement/investment accounts to get the Citi Priority Package.
Once you've got that, consider the Citi Gold package. Then again, some people could do all these now if they haven't already because of their retirement account holdings and otherwise.
I hope that's helpful for anyone considering using existing or future investments to get extra perks for free.
For more details on the Bank of America Preferred Rewards program, Bankrate has a solid article.
Disclosure: I am not a financial advisor, CPA, and do not represent any bank or credit union. The opinions expressed here are the author's alone. The offers available may change at any time after publication & may not be up to date. While typically national, the Citi offers are based on your area and may be different. Consult the banks for each of their offers that might be available to you for the most accurate information.