Walk With Money » Banks

Top 8 least evil banks

Robert Wilkinson — Wed, 02 Feb 2011 23:04:12 +0000

Now all this discussion of greed and the inherent corruption of the monetary system gave rise to the notion that all banks are evil. The only difference is the extent of how they practice their evil. And there appears to be a small set of banks who are not so fiendish. CNN Money identifies the top 8.

Ally Bank

No maintenance fee to keep minimum balance
Free use at any ATM
1.05% APY for balance of at least $ 15,000

ING Direct

Free checking account
Free use at any ATM
Online checks for free

USAA

No minimum balance for checking account
No maintenance fees
10 free ATM withdrawals a month

Capital One

Free checking account with no monthly maintenance fees and minimum balance

Alliant Credit Union

High-rate checking
No monthly fees
No minimum balance

PNC

Checking with no monthly maintenance and monimum balance
Refunds for ATM transactions if balance is $ 2,000 monthly

The Incredible Bank

High-yield checking account that pays 1.35% APY
Free e-checking account
No ATM fees

Charles Schwab

Free checking account
High yield checking account with no monthly fee
Free ATM use with free refund from charges from other banks
Free paper checks

CNN Money’s 8 Least-Evil Banks

Robert Wilkinson — Wed, 26 Jan 2011 21:05:10 +0000

Out of the eight “least-evil” banks, as ranked by a staff reporter for CNN Money, I am a customer of two. Everyone who makes financial transactions of a regular basis or handles money in any form should have a checking and savings account at a solid bank that doesn’t attempt to charge its customers exorbitant fees. Although free banking is slowly becoming extinct and there is a good chance that choices for free accounts will become more limited in the next few years, you can still find a good banking institution to work with now, even if that might be a credit union.

Here are CNN Money’s picks, with some of my thoughts.

1. Ally Bank. Last year, Kiplinger’s Personal Finance magazine declared Ally Bank as the the institution offering the best savings account. I’ve had accounts at this bank since May 2009, and I have not yet come across a problem. Ally was originally GMAC Bank, but General Motors undertook a major rebranding campaign that put Ally Bank in the spotlight. Read my review of Ally Bank. Open a High Yield Savings Account at Ally Bank.

2. ING Direct. There is nothing I can say about ING Direct that hasn’t been said. It is the gold standard of online savings banks. I’ve had accounts here for almost a decade, and my accounts include the Orange Savings Account, Electric Orange Checking with free bill-pay, and Business Savings. When I had a paycheck for direct deposit, the Electric Orange Checking served as my gateway to my savings. Now, most of my income is delivered directly to my business savings account at ING Direct.

I have limited experience with the remaining six accounts listed by CNN Money. If you have any thoughts on the level of “evil” of these banks, let us know by writing about them in the comments below. For the rest of CNN Money’s picks, continue reading this article.

3. USAA. CNN likes USAA’s free checking account and notes that the account isn’t just for military families anymore. I’ve heard countless positive reviews from readers about USAA, I will likely join later this year to share a more in-depth review.

4. Capital One. I know Capital One mainly as a credit card issuer, but the parent company merged with North Fork Bank, taking over those branches in New Jersey and New York. Again, CNN Money points out the free checking account makes this bank worthwhile. The article warns that the bank charges a $ 2 fee for using other banks’ ATMs — when the bank that owns that ATM will also likely charge a fee. If you have a convenient branch, however, this might be a good option to consider.

5. Alliant Credit Union. In our upcoming podcast interview with Liz Weston, we discuss credit unions and their advantages over banks. Although this credit union is based in Illinois, anyone can join. There are plenty of fee-free ATMs that communicate with this account throughout the country. If you live in Illinois or are satisfied with the lack of a local branch, CNN recommends this credit union.

6. PNC. PNC has many branches in the area where I live, and many of my friends have accounts here. Like the others listed, PNC offers free checking. If you need to use another bank’s ATM with your PNC account, the bank will reimburse any fees you pay the ATM’s owner, as long as you maintain a minimum balance of $ 2,000 in your account. That might turn some customers away, but I wish this feature of ATM fee reimbursement were more popular.

7. The Incredible Bank. This is the first I’ve heard of this Internet-only bank. It offers a higher interest rate than most other online banks, but I am wary of banks that show up out of nowhere, offering a rate that other banks can’t touch, in order to attract a flood of customers. Every time I’ve seen this happen, the bank has, after a while, dropped its rates to a more reasonable level, and have usually become non-competitive with other, more established banks. Incredible Bank doesn’t really come out of nowhere; it is the online branch of River Valley Bank. It’s been common lately for traditional brick-and-mortar banks to develop online branches whose branding is significantly different than the parent company’s.

8. Charles Schwab Bank. If you open an investing account at Charles Schwab, you will also have access to a free checking account. This is an interest-bearing account linked to your brokerage account to make buying stocks and other investments easy. Like PNC, Schwab will reimburse the fees other banks charge you for using ATMs.

I have my favorite online banks. What are yours? Do you have any experiences with the above?

CNN Money

CNN Money’s 8 Least-Evil Banks is an original article from Consumerism Commentary.

Savings Basics: How to Get Started with Savings Accounts

Robert Wilkinson — Thu, 08 Jul 2010 16:20:03 +0000

One of the keys to financial freedom is developing a habit of saving. It sounds really basic, but many people have trouble with this, and many just don’t know how to start. Here is an overview of how you can get started with savings accounts. The article will cover types of savings accounts, how to open one, and various alternatives that you can choose from.

Photo via Wikimedia Commons

Types of Savings Accounts

There are different kinds of savings accounts. One of the main considerations is the yield you can get on your money. The bank pays you interest — expressed as annual percentage yield (APY) — since the money you deposit is used to fund loans out to others. Rates are influenced by the Fed Funds Rate, and right now, most cash products have low yields, since the Fed rate remains incredibly low. When the Fed begins raising rates, yields on savings accounts should head higher as well. Of course, the bank loans out the money at a significantly higher rate than you are earning, so it makes a profit.

The type of account you choose can influence the returns you get for your money. The main types of savings accounts are as follows:

Traditional Savings Account: For the most part, this is the account you will get when you go to a brick and mortar bank and ask to open a savings account. This type of account generally offers the lowest yields, less than 1% in most cases right now. However, there are rarely minimum account balance requirements, and often no fees are charged.
Money Market Savings: You can usually get a better rate than a traditional account if you consider a money market savings account. Unlike traditional accounts, some money market accounts will allow you to write checks from the account. However, you are likely to have a minimum balance requirement in order to avoid a fee.
Online Savings Accounts: Technology has made it possible for many banks to operate almost entirely online. Many of these banks offer higher yields (around 1.5% to 2% at this time). Additionally, many brick and mortar banks have online accounts that offer better yields than their more traditional offerings. It might be worth it to consider one of these from the standpoint that it might be a little more difficult to access ...

Sallie Mae Bank Review

Robert Wilkinson — Fri, 12 Mar 2010 01:20:44 +0000

Sallie Mae, normally known for their federal and private student loans, is entering the savings account area with a high yield savings account currently offering 1.35% APY with no monthly fees and no minimums. It’s your standard online bank offering with a pretty standard savings account rates. In scanning their list of offerings, the only thing that stands out is their 10% bonus for Upromise earnings, which can be substantial if you’re a big user of Upromise.

Why Sallie Mae?

I’ve been racking my brain to come up with an explanation of why Sallie Mae has started to offer banking services and I was at a loss until I remembered one key insight – most consumers, until recently, were completely unaware of high yield online banks. It wasn’t until Ally Bank made front page news that online banks started to get respect and awareness for your average consumer.

It’s easy for “us,” readers and producers of personal finance blogs, for us to forget that because we get a daily dose of it. If you mentioned “reward checking accounts” to some of your friends, I bet you’d see some puzzled looks. Ultimately, I think Sallie Mae is leveraging their connection with students and parents to bring even greater awareness to the consumer.

Upromise 10% Bonus

If you use Upromise, you can get a 10% annual match on your earnings if you satisfy these conditions:

You ...

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Ally Bank CDs Offer Protection From Rising Interest Rates?

Robert Wilkinson — Tue, 02 Mar 2010 18:20:06 +0000

Ally Bank has been making several customer-friendly tweaks to their product line which are worthy of note. First up are two that give you a way to lock in a higher rate, but with a handy exit plan in case rates start rising due to inflation or other governmental intervention.

60-day Early Withdrawal Penalties
The usual deal for a certificate of deposit (CD) is that you agree to keep your money at a bank for a fixed length of time, and the bank agrees to give you a higher interest rate in return since it allows them to lend more easily. Of course, the purchaser is hoping that rates don’t rise a lot after already being locked in.

If you break that agreement, you get hit with a hefty penalty. It is not uncommon for some banks to take half of all your interest accrued if you “break” the CD. On a 2-year CD you’d lose a year’s worth of interest. On a 4-year CD, 2 years of lost interest. But Ally CDs now have only a 60-day interest penalty for breaking their CDs, from 6 months all the way up to 5 years! (See the Fees tab.)

5-Year CD: APY
Since the early withdrawal penalty is so short, ...

Getting Out of Debt Quickly pt 2

Robert Wilkinson — Tue, 02 Mar 2010 07:20:28 +0000

This is part 2 of a 4 part series on getting out of debt quickly. Make sure that you read all four parts in order to get the most out of this sequence of hints on getting yourself or your family out of the debt trap.

Next you are going to want to try to consolidate all of your debt onto a single credit card with an interest rate that is lower than what your current credit cards are requiring for you to pay. By doing this you are going to be lowering your monthly payments dramatically while paying your credit card debt off much more quickly.

Step #3 - The third step in the process is to find out what your credit score is.

Your credit score is a really important number, because what it represents is essentially how reliable you are going to be when it comes to returning any money that you have borrowed from banks or other lending institutions. When you have a high credit score, it is going to help you qualify for things like low-interest credit card opportunities. Your score is also going to have an impact on how much money you end up paying for auto insurance, home owner's insurance, deposits on utilities, and it may even play a role in whether you can get certain jobs, rent a home or an apartment and a number of other things.

You can easily find out what your credit score is by visiting http://www.myfico.com. You can also visit http://www.creditkarma.com in order to see your TransUnion credit score for free. The number, like an SAT score, is capable of ranging from approximately 300 to approximately 800 depending on the credit reporting agency. If you have a credit score that is higher than 660 then you are more than likely in good shape. Scores over 720 are considered to be excellent. If your score is currently below the 660 point, then you are going to need to spend some time working to improve this number before you are going to be able to obtain a better interest rate on any of your loans or credit cards.

Step #4 - Next, you are going to want to track your spending and make some cuts where necessary.

For a period of thirty days or so, what you are going to want to do first and foremost is to keep a complete record of everyplace that your money goes, leaving nothing out. You can do this using a checkbook register, a notebook or a computer program like Excel or Quicken depending on what your individual needs are. As you go from one day to the next, save all of your receipts for each and every single item that you buy, even the smallest purchases, and then at the end of every day you should sit down and take the time to record as well as categorize every single expense that you make.

…Continued in part 3.

Photo credits: Jonathan Pobre

Originally posted 2009-09-29 03:26:23. Republished by Blog Post Promoter

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Tips for Paying Off Student Loans

Robert Wilkinson — Thu, 04 Feb 2010 07:20:23 +0000

Right now, the student loan industry is going through one of its worst periods in decades. New Federal regulations have forced many banks to stop offering student loans, and students are being forced to either find a direct loan or start paying back what they owe. Enrollment figures are being affected dramatically and right now, many students simply cannot afford to go to school.

This problem is extending to those that are already trying to pay on their student loans. It has become harder than ever to consolidate old student loans and the interest rates are not helping matters either. It is important to pay off your student loans as quickly as possible, especially if you want to save money over the long term. Here are some tips to help you accomplish this.

1. Try asking your family for help.

If your family is in the position to help you financially, this should be your first stop. No one really likes borrowing money from their parents, but if you can pay off all of your loans, it is worth it. You won’t have to worry about crazy interest rates and you’ll have a chance to make bigger payments on the loan. However, you’ll need to make sure that you can set up a payment plan and stick to it to avoid causing any family disputes.

2. Get a second job.

This is a tough one, especially if you are already working full time. However, it can mean the difference between paying on student loans for the next decade, or taking just a year to pay them off. For example, if you owe $98,000 on your student loans, and you get a part time job that pays an extra $1000 a week, you could pay off that loan in less than two years. There are many high paying second jobs, such as bartending, where you can easily work off that student loan in no time at all.

3. Leverage your debt.

If you don’t have the time to get a second job, you may want to consider a technique known as debt leveraging. This involves taking out a loan and making an investment. Whether it is in an interest bearing account, new business idea or stock is up to you. Just make sure that you can count on the returns. This will create a secondary stream of income that can be used to pay down your student loans in a lot less time.

4. Negotiate.

If all else fails, try negotiating with the loan company to get a lower interest rate. If you have been paying on your loan faithfully they will be much more likely to help you out. It never hurts to ask or to apply for a consolidation loan. The worse they can say is no, and you’ll still have a lot of different options out there. The important thing is that you don’t fall behind on your debts. It may take some hard work, but you’ll appreciate it once you’re free of the yoke of your student loans.

Photo Credits: 1

Originally posted 2008-08-17 05:03:58. Republished by Blog Post Promoter

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Checkbooks 101

Robert Wilkinson — Fri, 22 Jan 2010 07:20:21 +0000

Although the premise of balancing a checkbook sounds easy enough, the fact is that the vast majority of Americans really don’t take the time to do it, or they do not know how to do it properly. There is a lot more than simple addition and subtraction when it comes to balancing a checkbook and if you are not careful, you can end up bouncing checks. Here are some tips that everyone needs to know about balancing their checkbooks.

1. Balance means balance –

Those statements that you get every month from the bank are not just for show. They are there to help you balance your checkbook and make sure that there are no errors. The next statement that you get, go line by line and reconcile this with your checkbook. We’ll go more into reconciliation here in a minute, but for now, let’s focus on the balance. The balance in your checkbook needs to match the balance on the bank’s statement.

If it doesn’t, you need to see where the error occurred. Many times, it may be do to a checking account fee that you forgot to deduct, or a simple subtraction or addition error. Look through the entire statement until you find where the error occurred and then make sure to note the correct balance in your checkbook.

2. Reconciliation –

We mentioned this briefly above. Reconciliation refers to the process of making sure that the entries you made in your checkbook register match the entries on the bank statement. It does take a little time, but it is well worth it. Make a checkmark next to each entry as soon as you have verified it in your register. Keep track of any wrong amounts and watch out for fees that you may have forgotten to deduct.

If you have a debit card from your bank, there may be extra fees that will apply each time you use it. If you are not marking down these fees, it is all too easy to end up short in your checkbook. Make note of all of these fees and in the future, write them down in your checkbook whenever you use your debit card.

3. Handling errors –

Sometimes banks do make mistakes, but if you are not balancing your checkbook every month, you may not notice them. You may not also notice an error you’ve made until it is too late. Balancing your checkbook gives you the opportunity to find these errors and correct them before they end up costing you more money in bounced check fees.

You can look at the process of balancing your checkbook like balancing a cash register. Most businesses need to make sure that the receipts match the balance left in the register every day. Your checkbook is just like that, and being more than a few cents off is not a good idea. Schedule in a day every month to go through the process of balancing your checkbook, it will pay off.

Photo Credit: 1

Originally posted 2008-09-24 05:00:44. Republished by Blog Post Promoter

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Savings Accounts vs. CDs: Where to Keep Your Money in 2010?

Robert Wilkinson — Fri, 22 Jan 2010 07:20:07 +0000

If you’re a savvy investor, you most certainly have a fair bit of cash tucked away for general spending and emergencies. The stock market is a long term investment and if 2009 taught us anything, it was to not have money you need to spend in the stock market. So where do you put the money you don’t want in the stock market?

There’s 3 main options to place your cash and get it FDIC insured for up to $250,000.

You can put your money in a checking account where you have fast and easy access to funds.
You can put your money in a savings account where you can take money out and put money in while still earning interest on your funds, or
You can put your money in a certificate of deposit, which typically has higher yields than savings but your money is locked into the account for the agreed upon term.

So where should you put your money? Well all 3 of course.

For money that you plan on spending you should keep in a checking account. It’s the easiest account to get money into and out of so it makes sense to keep spending money in it. You shouldn’t keep more than you need to however because you don’t get a return on your investment in a checking account.

This is where savings accounts and certificates of deposit jump into the picture. Your strategy becomes more complicated now because of the fact that you must lock in a rate when opening a CD.

So what is the best cash strategy for 2010?

If you pay attention to CD rates you know that they’re at the lowest levels since the 80s right now. So it doesn’t make much sense to lock in to a long term CD right now because they’re bound to increase when the unemployment rate drops and the Fed decides to raise interest rates. So there’s 2 main strategies you should consider. The first is to convert any maturing CDs you have into savings accounts.

The yields on savings accounts are not that much lower than what banks are offering on CDs so there isn’t that much incentive to lock in your money. You could keep your extra cash in savings accounts which will leave you ready to jump on a CD when rates start climbing back up. Just make sure you stay under the ...

Leveraged Finance Defined

Robert Wilkinson — Thu, 14 Jan 2010 17:20:20 +0000

Leveraged finance relates to funding a business, a company or another investment using more debt than would be considered normal. More than normal debt is going to imply by nature that the funding is a riskier prospect, and therefore more costly than normal borrowing in general. As a result, leveraged finance options are most commonly employed in order to achieve a specific objective that is often temporary by nature. For example, the specific objective may be to make an acquisition, to effect a particular buy-out, to repurchase some shares, or to fund a dividend. Although different banks offer different options when it comes to leveraged finance, and there are generally two different main products to concern yourself with. These products are leveraged loans and high yield bonds.

Leveraged loans, which are often regarded as credits that are priced 150 basis points or more over the offered rate, are essentially loans that offer a high rate of interest in order to reflect the higher risk that is posed by the borrower to the lender. High yield bonds or junk bonds are those that are rated below what is known as investment grade. One key instrument in much of the world of leveraged finance, especially when it comes to leveraged buyouts, is mezzanine, which is known as "in between" debt. Mezzanine debt has been used for a long time by mid cap companies, especially in the United States and in Europe. These in between forms of debt are used to be a funding alternative to bank debt or high yield bonds. They rank between senior bank debt and equity when it comes to a capital structure within a company, and higher risks may be taken but these higher risks are rewarded much better as well, with returns averaging between 10 and 20 percent or more.

Leveraged finance, just like with other parts of structured finance, generally involves identification, analysis and solving of risks above all else. These risks can be arranged into a number of different groups depending on what they are and how risky they are. Credit risks, for example, are risks that are concerned with the business and its particular market. These are financial risks that lie as a whole within the economy, such as interest rates, tax rates and foreign exchange rates for example. Structural risks on the other hand are risks that were created by actual financial provisions, including settlement risks, documentation risks and legal risks. Finally, liquidity risks are risks that are associated specifically with a leveraged company's inability to refinance itself because of credit conditions that are too tight.

Leveraged finance is a risky business, and therefore it is not for everyone. If you have the necessary capital to invest in high risk and high return investments, then leveraging may be worthwhile as an investment consideration. If you do not have the capital or the willingness to take risks, however, then leveraging may not be the best way to go.

Photo Credits: 1

Originally posted 2009-01-05 05:08:44. Republished by Blog Post Promoter

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