Get Your Bank to Pay For Your Netflix
It’s hard to think of a time before the subscription era. It started with Netflix, the shiny new toy everyone wanted to play with. The catch? You had to convince your parents to shell out $8 a month. The first time I asked my parents, they said they couldn’t afford it, which confused me when I was young. I didn’t consider the cost of cable and the many other bills my parents paid. After several days of begging, I finally got what I wanted. Yet, the greed didn’t end there. Shortly after Netflix blew up, other companies realized the market opportunity in subscriptions. Soon, I was bombarded with ads for Hulu, Apple Music, Spotify, and even Six Flags!
Because of the subscription junkie that I am, I convinced my family to get all of these subscriptions. This may seem like a lot, but what if I told you that one day, my family won’t have to pay a DIME for any of these subscriptions.
This is the part where people start to suspect I’m on drugs. Nothing in life is free, right?
Although it is possible for Netflix to be virtually free for you and me, Netflix WILL be getting paid, just not by us. Instead, high-yield savings banks would be paying for our subscriptions. Many don’t know this, but one of the founding principles of saving money in a savings account is that you are owed money. Yes, that’s right! Your bank is supposed to pay YOU for saving your money with them. You are, in effect, loaning your money to the bank. We tend to forget how much power we have as consumers, so remember that these companies would be nothing without us.
This is how banks make most of their money. They take that $100 you loaned them and loan it to someone else at a higher interest rate. What many popular banks have done is pay us next to nothing when we loan them our money. Chase, for example, has a savings interest rate of 0.01%. That means for every $100 you save with them, Chase pays you a penny of interest. People come to banks to get loans for a mortgage or a business. Generally, the banks charge them interest rates as high as 7.75%-10%. By paying consumers a low interest rate, they can collect a higher difference in interest and fatten their pockets.
However, saving your money at a high-yield savings bank will get you better compensation. I save my money with Ally bank which pays 2.1% interest, one of the best rates out there. With this rate, Ally can pay me enough interest to cover the cost of Netflix or other subscription payments. Whenever the Netflix payment comes up, I can transfer the interest I’ve accrued to my checking account.
With a 2.1% APY savings rate, this is the amount you need in your savings account to cover some of the most popular subscriptions:
Netflix Basic Plan ($9/month)
- Amount needed in savings: $5,144
- $108/yr, paid $9/month
Hulu Basic Plan ($6/month)
- Amount needed in savings: $3,430
- $72/yr, paid $6/month
Apple Music/Spotify/Tidal ($10/month)
- Amount needed in savings: $5,715
- $120/yr, paid $10/month
Apple Music/Spotify Family Plan ($15/month)
- Amount needed in savings: $8,572
- $180/yr, paid $15/month
I know these numbers may seem high, but with discipline and hard work, you can get there! One great motivation to save is that once you reach these amounts, you’ll be consistently paid by the bank for just letting your money sit there. If I had $5,715 in my savings account right now, I would never have to worry about paying for Apple Music again. Every month, I would simply be able to transfer the $10 Ally paid me that month from my savings account to my checking account.
Think about this like a game. To be the winner of a Netflix subscription, you have to save better than most. The average American hardly has anything in their savings, so by working toward this goal, you’ll already be doing better than average. Know that I’m in this with you too. On my family’s journey to financial stability, we are hoping to eventually have enough in our savings to cover all subscription costs. Currently, we get paid around $4/month of interest with the amount we have in savings.
Proper saving habits are not only the first step to financial stability, but also, the first step to never paying for your subscriptions again. I hope this article helped you realize how your money can work for you. Let’s get these banks to pay for our binge-watching habits!
Resources
Equation for Calculating Interest — To calculate how much money a bank will pay you, simply multiply the bank APY savings interest rate by the amount you have in savings and divide by 12. For example $1000 in an Ally savings account with 2.1% APY yields $21 a year which would pay you $1.75 every month.
High Yield Savings Accounts
