If you're paid biweekly through your employer, you're likely already aware that two months every year you receive three paychecks instead of two.
That's because getting paid every two weeks equates to 26 pay periods in a year (52 weeks divided by 2), leaving two of the 12 months as "three-paycheck months" (since 12 months x 2 paychecks only equals 24 paychecks total).
Since you're likely used to (and probably budgeting for) getting two paychecks per month, that extra third can feel like a nice bonus. Below, CNBC Select offers some advice on how you can put this money to good use.
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Save, save, save
High interest rates may be bad news for first-time homebuyers and anyone looking to finance a car, but they should put a smile on the face of savers. Take advantage of the high APYs offered by banks and put that extra paycheck in a high-yield savings account or a CD.
The Western Alliance Bank High-Yield Savings Account tops our list of the best high-yield savings for earning a high APY and with no cap. Plus, the account requires just a $1 minimum deposit to open an account and charges no monthly fees.
Western Alliance Bank High-Yield Savings Account
Annual Percentage Yield (APY)
3.80% APY
Minimum balance
$1 minimum deposit
Monthly fee
None
Maximum transactions
Up to 6 transactions each month
Excessive transactions fee
The bank may charge fees for non-sufficient funds
Overdraft fee
No overdraft fee
Offer checking account?
No
Offer ATM card?
No
Terms apply.
CDs right now are offering rates competitive with the best high-yield savings accounts, and they can be a smart option if you're able to leave your funds untouched until the CD term length is up. And, unlike a high-yield savings account's rate, the APY you lock in when you invest in a CD usually doesn't fluctuate, meaning you can enjoy today's high APYs even if rates fall in the future.
Bread Savings™ (formerly Comenity Direct) is currently offering one of the highest CD APYs on its one-year CD. A one-year CD makes for an ideal place to save for a near-term financial goal like a down payment on a home or a wedding.
Bread Savings™ (formerly Comenity Direct) CDs
Annual Percentage Yield (APY)
From 3.90% to 4.50% APY
Terms
3 months to 5 years
Minimum balance
$1,500 minimum deposit
Monthly fee
None
Early withdrawal penalty fee
Early withdrawal penalty applies. For terms shorter than 1 year, the penalty is 90 days simple interest. For terms 12 months to 3 years, the penalty is 180 days simple interest. For terms 4 years and up, the penalty is 365 days simple interest.
Terms apply.
Pay off debt charging you a high interest rate
High interest rates make servicing debt with variable rates — like credit card debt — an even bigger burden on your bank account. Most credit card issuers compound interest daily, which means that if you carry a balance on your account, you owe more in interest with each passing day. One way to stop interest payments from increasing is to shift that debt to a balance transfer credit card.
The way balance transfer cards work is that once you transfer your balance from another credit card, you are then given a 0% APR introductory period of up to 21 months on that balance (intro periods differ between cards). During that time, you can focus on paying down your debt without facing the financial headwinds of accruing interest. To make the most from a balance transfer, you'll want a plan of how you'll pay off the balance completely before the intro period is up and interest then gets charged again.
These credit cards below currently offer cardholders up to 21 months — nearly two years — to pay off their debt interest-free:
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.74%, 24.24%, or 28.49% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
The Citi® Diamond Preferred® Card is one of the best balance transfer credit cards and also has a generous intro APR offer.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- 0% Intro APR on balance transfers for 21 months and on purchases for 12 months from date of account opening. After that the variable APR will be 16.74% - 27.49%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
- No Annual Fee - our low intro rates and all the benefits don't come with a yearly charge.
- Buy now and pay later. Split your payment for eligible purchases of $75 or more into a fixed payment with Citi® Flex Pay.
- Get free access to your FICO® Score online.
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Foreign transaction fee
3%
Treat yourself
You should be able to accurately predict which two months of the year you'll receive a third paycheck. Here's your cheat sheet:
- If your first paycheck of 2023 was Friday, Jan. 6: Your three-paycheck months are March and September
- If your first paycheck of 2023 was Friday, Jan. 13: Your three-paycheck months are June and December
- If your first paycheck of 2024 is Friday, Jan. 5: Your three-paycheck months are March and August
- If your first paycheck of 2024 is Friday, Jan. 12: Your three-paycheck months are May and November
Knowing when you'll get some extra cash can help you also plan ahead for something to look forward to. For example, if you know you get three paychecks in June, maybe that third can be used for summer travel. Three paychecks in September can help with paying for back-to-school for the kids (or yourself), and getting some extra income around the holidays is always a welcome relief.
Bottom line
Now that you know when you'll have a three-paycheck month and how much that third paycheck will be, it's time to start planning what you'll do with it: save, pay off debt or treat yourself. Like with any additional income, make sure you use this cash in a way that stays true to your goals — even (or especially) when that means indulging in the occasional splurge.
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