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Posts Tagged ‘deposit accounts’

High Yielding Savings Accounts, Online Mostly

November 19th, 2008 by Matthew C. Keegan | 2 Comments | Filed in Consumer Financing, Consumer Tips

Earning 3.35% on your savings account may seem like chump change, but if you recently opened your 401(k) statement and learned that your portfolio plunged by 20% or more, then any sort of savings plan looks like a comparable goldmine.

Most brick ‘n mortar banks are downright cheap when it comes to savings accounts, even worse with interest paying checking accounts. Some banks act as if they are Liberty Head Dollar
doing you a favor by paying 0.25% on your balances, while few will pay more than 1.5% on every day savings.

Fortunately, internet banking has changed the way that banks do business, at least for those whose deposits are chiefly transacted online. With fewer employees and virtually no real estate to speak of, online banks keep their overhead low and pass on their savings to you.

I’m not about to endorse any bank these days, simply because so many of the larger ones are going through extraordinary times, requiring a federal government bail out or risk facing insolvency. When dealing with any institution, you’ll want to verify that they are FDIC insured, otherwise your funds could be at risk.

The following are some of the more noteworthy banks conducting business online, financial institutions to consider as a places to make your hard earned funds work for you:

ShoreBank – Some banks help you earn money while others do that and take up a cause. ShoreBank’s modus operandi is to give you a good return on your money while using some of their profits to support the environment. ShoreBank has funded solid alternative energy businesses, environmental protection groups, green collar jobs, sustainable business practices, nursery schools, educational institutions, churches, temples, homeless shelters, NPOs, and much more.

ING Direct – Disclaimer: I am a loyal customer of ING, having banked with them for many years. A global institution based in the Netherlands, the American arm of this bank offers various savings accounts, mortgages, equity loans, and more. The bank now offers business services too. So, am I recommending them? Well….

Dollar Savings Direct – Operating as a division of Emigrant Bank, Dollar Savings currently is offering 4.0% interest on a sixteen-month, one thousand dollar deposit. Founded in 1850, Emigrant is one of the oldest, continually operating banks in the U.S. If longevity is a factor in who you bank with, then there are few banks that have been around as long and are paying high rates for deposits.

GMAC Bank – If it weren’t FDIC insured, I probably wouldn’t include GMAC Bank on this list. Parent GMAC Corporation is owned by Cerberus Capital Management, L.P. (of Chrysler automobile fame) and General Motors, two companies who aren’t exactly doing well right now. But, with some of the highest earning rates in the nation, you may not want to pass this bank by. Just don’t expect a break on your car loan rate if your credit isn’t good!

E*Trade Financial – You may already use E*Trade to buy and sell stocks, so why not use them for your government backed savings account? Currently, E*Trade is paying 3.30% on every day savings, which means you only need to deposit $1 to get such a high rate of return.

EverBank – Based in Jacksonville, FL fast-growing EverBank offers a good rate on short term money market accounts as well as on checking accounts. Although you need to put $1500 down to open a high yielding checking account, there is no minimum balance requirement to earn interest.

With the financial markets in a tizzy, many consumers are looking for safe places to stash their cash. It looks like certain online financial institutions have what it takes to give you a high return on your investment and some peace of mind too!


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What You Need To Know About The FDIC And Your Money

October 9th, 2008 by Matthew C. Keegan | 2 Comments | Filed in Consumer Tips

The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to provide deposit insurance for America’s banking system. Reporting directly to the federal government, the FDIC was put into place as response to the Great Depression-era bank runs. During that time, a simple panic would spark a run on a bank, quickly draining the institution of all of its Liberty Head Dollardeposits and making it insolvent. Millions of people lost all or part of their money, necessitating the creation of the FDIC to guarantee deposits.

Over the past month, the FDIC has been in the news quite a bit as the number of bank failures has increased, including some high profile failures involving Washington Mutual and Wachovia. In most cases the FDIC and other federal agencies have been able to resolve the crisis quickly, but not every customer has escaped unscathed.

Are You Covered Or Not?

There are limitations to the amount of money that the FDIC will ensure, meaning some customers risk losing a portion of their monies if they aren’t aware of the FDIC’s limitations. To clarify matters, we’re sharing with you current guidelines to help you determine whether your deposits are safe or not:

Up To $250,000 – Deposits are ensured up to $250,000, for all funds at one bank. This means that if you (as a single depositor) have $90,000 in a CD, $85,000 in a checking account, and $75,000 in a savings account, your funds are insured. Up until recently that level was $100,000, but has been raised temporarily through December 31, 2009.

Multiple Accounts At Multiple Banks – If you keep you money at several banks, your money is ensured provided your deposits at each institution stays below $250,000. This means that if you have $2,000,000 evenly divided in accounts at eight banks, your money is covered.

Joint Accounts – If you have a joint account at a bank, those funds are ensured up to $500,000. Even at that amount, you can still have accounts in your own name which will be insured for up to $250,000.

Retirement Accounts – Your Individual Retirement Account is covered by FDIC insurance under certain conditions. These include: regular IRAs, SEP IRAs, and ROTH IRAs. FDIC insurance will cover up to $250,000 of your retirement money at any one bank.

If you have over $250,000 at any one financial institution, you are putting those funds at risk. However, the FDIC says that you’ll likely recover a portion of those funds, perhaps 80-90% of the excess amount, but that process could take weeks to resolve.

Credit Unions Are Covered In A Separate Fund

If you have funds at a credit union, including regular deposits and retirement funds, those monies are insured too, but not by the FDIC. Instead, credit unions are covered by a separate agency – the NCUSIF or National Credit Union Share Insurance Fund – which recently received Congressional approval to cover individual deposits up to $250,000, just like the FDIC.

Of course, having your funds in any financial institution means keeping track of the performance of that bank or credit union by reviewing monthly statements and following the news. Even if your bank gets into trouble, the federal government is quickly jumping in and handling everything, bringing about super mergers virtually overnight.

(Source: FDIC)

Adv. — If you’re looking for additional consumer advice, please visit our sister site at SayLowerBills.com to find information about managing your income, handling debt, and other money saving tips.


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