August 10, 2020Posted By: growth-rapidly Tag: Banking
Bank of America, like most banks, offer several bonuses, either from their credit cards, checking or savings accounts. These deals can be either cash rewards, bonus points, etc. For example, open this credit card then you get a $200 cash rewards bonus. In the past, if you refer a friend, Bank of America would pay you $50 referral bonus. But Bank of America has discontinued the referral bonus when you refer a friend.
CIT Savings Builder – Earn 0.85% APY. Here’s how it works: Make at least a $100 minimum deposit every month. Or Maintain a minimum balance of $25k. Member FDIC. Click Here to Learn More.
Bank of America “refer a friend & cash rewards” bonus program
While Bank of America does not have a cash reward bonus when you refer a friend, there are cash rewards when you yourself get approved for a particular credit card.
Cash Rewards Credit Card:
Receive $200 cash rewards bonus after you make $1,000 in purchases in the first 90 days. Also, you get to choose how to collect your rewards.
Plus, earn 3% cash back when you shop for: gas, online shopping, drug stores, home improvements, dining or travel.
Get 2% cash back at grocery stores and wholesale clubs.
Earn unlimited 1% cash back on all other purchases.
No annual fee. Go to Bank of America’s homepage to take advantage of this credit card referral bonus.
Travel Rewards Credit Card
Earn 25,000 online bonus points when you make at least $1,000 in purchases in the first 90 days. You can redeem it for a $250 credit toward your travel purchases.
Earn unlimited 1.5 bonus points for every $1 spent on all purchases.
Bank of America Premium Rewards Credit Card.
Again Bank of America offers no referral bonus when you refer a friend, but this credit card has great deals and promotions.
50,000 bonus points after you make at least $3,000 in purchases in the first 90 days of account opening.
Earn 2 points for every 1$ spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
Get $200 in travel statement credit.
Make sure you take a look at other Bank of America Promotions.
In conclusion, if you’re looking for a cash reward deal when you refer a friend to Bank of America, you will not find any at this time. But there are several credit cards with great cash rewards. For more cash back deals, rewards or future referral bonus programs and promotions, check Bank of America’s deals here. The site guarantees no coupons or promo codes. You just activate your deals and go.
Here are other popular Bank promotions deals!
Speak with the Right Financial Advisor
If you have questions about your finances, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
A certificate of deposit, more commonly known as a CD, is a special type of savings account. You deposit your money into the account and agree not to make any withdrawals for a certain period of time. At the end of that time, you get your money plus whatever was earned in interest back.
Want to know more? We’ve got you covered. We’ll dig into traditional CDs, including what they are, how they work and whether they’re right for you.
Just How Do CDs Work?
A traditional CD is essentially a time-bound deposit. In exchange for earning interest, you enter into an agreement that lets the bank use your money for a fixed time. The bank rewards you by paying you a higher interest rate than it does for a regular savings account or money market account. This works for the bank because they can use your money to earn more money—such as by extending other customer’s long-term loans.
When opening a CD, you choose how long you want to give your money to the bank. This is known as the term length. Common term lengths for traditional CDs include 6, 12, 18, 24 and 30 months and 3, 4, 5 and 6 years. Some banks and credit unions also offer a custom term length.
What Is a Traditional CD?
A traditional CD can also be called time deposits, fixed deposits or term deposits. Unlike a traditional savings account that lets you withdraw money anytime, a CD has a fixed term and:
Requires a minimum deposit amount that is higher than a savings account
Allows you to withdraw money at the end of the term—earlier withdrawals can be made only by paying a penalty
Don’t let you add money after your initial deposit
By opening the CD, you agree to leave your one-time deposit in the account for a fixed amount of time. In an emergency, you can withdraw funds early, but you’ll have to pay an early withdrawal penalty. In exchange for agreeing to a set term length, you get a fixed interest rate, typically one that is higher than a traditional savings account. Generally, the longer the term length, the higher the interest rate.
Like traditional savings accounts and money market accounts, traditional CDs opened at a bank or credit union are protected by the Federal Deposit Insurance Corporation (FDIC)or National Credit Union Administration (NCUA) for up to $250,000 per person. Many analysts consider CDs to be one of the safest forms of investment offers. They also pay higher interest rates than money market accounts and savings accounts, making a CD a more lucrative low-risk option for investors.
Considerations Before You Open a CD
You might think that opening a CD with the longest term is a good idea. But having a very long term may not be the best thing to do. For example, you may need your money before the time period is up. If you choose to remove your money before that happens, you can be penalized by the bank or credit union. Here are some other things to consider before opening a CD:
Do CDs pay interest monthly? The interest rate on a CD is the annual percentage yield (APY). This is how much interest you will earn after a year. However, many banks compound interest on CDs monthly. Some CDs allow you to choose to take the monthly interest earned out. Others let you cash out the CD only at the end of the term length.
Can you lose money in a CD? No, you can’t lose money on a CD as long as it insured, which is one reason they can be attractive investments. FDIC and NCUA coverage is limited to $250,000 per person, per bank, per account category. So, if you have multiple CDs at the same bank or credit union, the total of all CDs is only insured up to $250,000. As long as you’re under that, you’re guaranteed to get your money back if your bank or credit union goes under for any reason.
How much interest will I earn on a CD? The amount of interest you earn on a CD varies depending on how long the term is, the amount you deposit and the APY. In general, longer terms, higher interest rates and larger deposits will net you more interest gains.
So, are CDs worth it? The bottom line is that, before you invest in a CD, you need to make sure you’re confident that you won’t need the money before the maturity date or that you’re comfortable paying a penalty if you need the money earlier. If you’re not sure, consider choosing a high-yield savings account or money market instead.
When Your CD Matures
When your CD reaches the end of its term, it matures. Toward the end of your term, your bank will inform you about its impending maturity and present you with options, including taking your money and walking away or renewing for another term length. Sometimes, if you don’t withdraw your money, the bank will automatically reinvest your balance into another CD with the same term length as the first.
How to Open a CD
Opening a CD is relatively easy. You can apply online or go in person to your bank or credit union. When researching online options or talking to your bank, ask questions, know your investment rationale and find out about withdrawal penalties and possible alternative products.
Longer CD term lengths can be more attractive than shorter term lengths. If you purchase a CD when interest rates are low though, you end up with a lower APY for the rest of your term. A shorter term length may actually let you renew for a higher APY.
A CD ladder—or CD laddering—is a common CD tactic used to help maximize returns on CDs. Laddering is using multiple longer-term CDs opened at different times and/or for different term lengths. This disbursement strategy gives you access to money at various times and rates. You avoid being locked into any single term, interest rate or maturation date. And you can reap the benefits of a CD without needing to risk paying penalties if you need money early.
CDs and Your Credit
A CD won’t impact your credit one way or another, but a bank or credit union may make a hard pull or a soft pull of your credit when you apply for a CD. Most only do a soft pull, but it won’t hurt to ask before you apply if a hard pull is a concern.
CDs won’t help you build your credit history. However, some banks offer a CD secured loan if you open a CD. This is a loan that uses your CD deposit as collateral. If you default on your loan payments, your CD will be taken to pay the loan. Making timely payments on the loan can help you build your credit as long as your bank or credit union reports your payments to all three credit bureaus.
To learn more about investment options or find the details on popular savings accounts, check out Credit.com’s personal finance resources.
CIT Bank CD rates are competitive compared to other Banks’ CDs.
For instance, a 6-month CIT Bank CD has a rate of 0.50%, which is way higher than the national average rate of 0.25%.
How much you will earn depends on the length of the term.
But one thing for sure is that the longer the term of the CD (certificate of deposit), the more money you will make.
CIT Bank offers CD terms ranging from 6 months to 5 years. The 5-year term CD has an applicable yield of 1.05%.
The minimum investment requirement is $1,000. But their jumbo CD’s deposit requirement is way much higher, $100,000.
CIT bank also offers a no-penalty 11-month CD (more on this later).
Click here to open a CD with CIT Bank.
See below a table of CIT Bank CD Rates that are available to you:
CIT Bank Term CD
All CIT bank CDs are FDIC insured up to $250,000.
CIT Bank CD Rates: an overview
CIT Bank CD rates are very impressive out there.
When compared to other CDs, such as Vanguard CDs, they compete at a similar or even better level.
CIT bank CDs, as all certificate of deposits, produce a higher rate than savings accounts, money market funds, etc.
But not as much as a short-term bond.
The minimum deposit for CIT Bank’s standard CDs is very reasonable, $1,000.
The bank’s Jumbo CDs, while produce a higher rate than a standard CD, has a much higher minimum of $1,000 (more on this below).
What is a certificate of deposit (CD)?
CDs are certificates that banks or credit unions sell to you.
Banks issue them to you for a specific dollar amount for a specific length of time.
The time period could be anywhere from 1, 6, 12 or 24 months to several years.
The bank pays you some interest. You get your full principal back plus interest you earn once the CD matures or “comes due.”
If you want your money back before it matures, you can withdraw it.
But you will get hit with a penalty for early withdrawal. But some banks like CIT Bank, that offer CDs with no penalty.
CDs are very safe, because they are FDIC insured for up to $250,000.
See: Grow Your Money: Mutual Funds, Index Funds & CDs
Are CIT Bank CDs the right choice for you?
CDs is one of the best short-term investments you can have. Given that their rates are very impressive, CIT Bank CDs may be right for you.
Therefore, you should consider investing in them:
You don’t tend to tap into your money at any moment.
You’re saving money for a down payment to buy a house in the near future.
You want an investment that provides a higher yield than a regular savings account, money market fund.
You’re looking for a safe and low-risk place for your hard-earned money.
What are the CIT Bank CD rates?
CIT Bank provides CDs ranging from 6 months to 5 years. The longer the term of the CD, the higher the interest rate.
For instance, CIT Bank’s 5-year term CD currently has a rate/APY of 1.05%.
CIT Bank 5-Year CD Rates
The applicable rate for a 5-Year CIT Bank CD is currently 1.05%. And it requires a minimum deposit of $1,000.
This is the longest CIT Bank CD term out there. And its interest rate exceeds most CD rates you’d get from banks.
Learn more about this product and apply on CIT Bank’s secure website
CIT Bank 4-Year CD Rates
This 4-year CIT Bank CD also requires a minimum deposit of $1,000.
This CD’s yield is the same as the CIT Bank 5-year CD. It is also higher than most bank CDs. The yield is currently is 1.05%.
CIT Bank 3-Year CD Rates
The applicable yield for a 3-Year CIT Bank CD is still very competitive. It’s 1.00% and requires a $1,000 deposit.
CIT Bank 2-Year CD Rates
The rate for a 2-Year CIT Bank CD is 1.00% and a minimum deposit of $1,000 is required.
CIT Bank 18-Month CD Rates
For an 18-Month CIT Bank CD, the yield is 0.75%. The minimum deposit is $1,000.
CIT Bank 13-Month CD Rates
For an 13-Month CIT Bank CD, the yield is 0.75%. The minimum deposit is $1,000.
CIT Bank 1-Year CD Rates
The yield for a 1-Year CIT bank CD is 0.75% and a minimum deposit of $1,000 is required.
CIT Bank 11-Month CD Rates
For an 11-Month CIT Bank CD, the yield is 0.75%. The minimum deposit is $1,000.
However, the CIT Bank 11-month CD is a no-penalty CD. That means CIT Bank will let you withdraw your money at any time without incurring a penalty.
This is good for those faced with an emergency situation and need quick and easy access to their money.
CIT Bank 6-Month CD Rates
Lastly, for a 6-Month CIT Bank CD, the yield is 0.50%. The minimum deposit is $1,000.
See: 6-Month CD Rates: Earn More Money
CIT Bank’s Jumbo CDs.
CIT Bank also offers Jumbo CDs. They offer a much better interest than CIT Bank’s standard CDs.
However, they require a much bigger minimum deposit. For example, you will need a minimum deposit of $100,000 to start with.
Here is a table of CIT Bank’s Jumbo CD rates:
CIT Bank Jumbo CD
How to open a CIT Bank account.
To get access to the best CIT Bank CD rates, you must be eligible to open an account.
To be eligible, you must be a US citizen or resident alien. You must be 18 years old or older, have a a US address, a social security number, a driver’s license or state issued ID.
You also need to have a bank checking account to transfer money to your CIT Bank account.
CIT Bank CDs Alternatives
If CIT Bank CDs do not do it for you, or you’re looking to get more interest on your money, then try to invest in the best Vanguard mutual funds out there.
That way your money is still safe and you get more return on your money.
Mutual funds are some of the best ways to invest your money.
One thing you should know, however, is that mutual funds invest in stocks and bonds.
These securities tend to be riskier. Therefore, you might lose some or most of your investment if the market goes down.
So, beginner investors wishing to invest in these mutual funds should also consider learning how the stock market works.
CIT bank CDs might be appropriate for you if you are not going to use the money for a certain period of time.
They can be a great choice if you are saving your money for a down payment to purchase a house in the next few years or so.
Indeed, CIT Bank CDs provides a better yield than bank savings accounts and money market funds. But the money is only available after the CD becomes due.
So, if access to your money at anytime is a priority, you’re better off save your money in a high yield savings account or the best Vanguard Mutual Funds.
Tips for Maximizing Your Savings
Open a Chase checking account. You will get a $200 bonus when you open a new Chase Total Checking account and set up a direct deposit. And it’s easy to find a Chase ATM just about anywhere. Get started Now.
If you have questions beyond CIT Bank CD rates, you can talk to a financial advisor who can review your finances and help you reach your goals. Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
online savings accounts currently offer an average of just 0.05% APY, according to the Federal Deposit Insurance Corporation (FDIC). Although your money might be safe in a basic savings account, you’re definitely not going to build wealth.
With that in mind, it’s smart to keep an eye out for ways to earn a steady return on savings without giving up flexibility and liquidity.
I’ve owned cryptocurrencies since 2014, but just recently found cryptocurrency interest accounts which claim to let you earn up to 8.6% on your crypto deposits. These accounts are the next evolution in Decentralized Finance’s (DeFi) fight with traditional centralized banking, but do they deliver on their promise of higher returns?
BlockFi is an industry leading crypto exchange. This company allows users to deposit stable cryptocurrency (pegged to the US dollar) in an account and earn up to 8.6%. That definitely sounds good, but we wanted to dig deeper to find out how these accounts work as well as who they might be the right fit for. If you’re eager to earn a higher rate of return on your assets, keep reading to learn more.
About the Company
Founded in 2017, BlockFi seeks to “bridge the worlds of traditional finance and blockchain technology to bring financial empowerment to clients on a global scale.”
The company allows customers to buy, sell and hold certain crypto assets, like Bitcoin.
When you hold an asset in your Blockfi Interest Account, you can earn interest paid to you in the same cryptocurrency.
BlockFi also lets customers borrow against their cryptocurrency at lower rates than they might get with a personal loan.
To help you keep your account safe, BlockFi offers security features like two-factor authentication, allowlisting, and internal PII verification.
This company is currently best known for their dynamic and innovative savings product, which lets you deposit cryptocurrency and receive a high rate of return.
BlockFi Products and Services
BlockFi builds alternative banking products for crypto investors, and they even have new offerings in the works. Here are the main ways you can use BlockFi to help you reach your financial goals.
BlockFi Interest Account (BIA)
This non-traditional “savings account” lets you deposit cryptocurrency you already hold and earn up to 8.6% APY in the process. Note that interest accrues daily on your account balance, yet it is paid out monthly. This account is also free of hidden fees and minimum balance requirements.
If you already have cryptocurrency as part of your portfolio and you’re a long-term investor, you might as well deposit it at BlockFi and earn interest on your account. Just keep in mind that how much you’ll earn depends on the type of cryptocurrency you hold. For example, as of writing, Bitcoin (Tier 1) currently earns 6%, whereas Ethereum earns 5.25% and PAX earns 8.6%.
BlockFi Trading Account
BlockFi also offers a platform for buying, selling, and trading cryptocurrency. You can conduct all your crypto moves using the innovative mobile app, and trades are instant. Currently, you can buy, sell, or trade BTC, ETH, LTC, and PAXG, as well as USD-based stablecoins like USDC, USDT, GUSD, and PAX.
Since trades and purchases are instant, you can begin earning interest on your crypto right away. You can also use the app to set up recurring trades.
BlockFi Crypto-Backed Loans
If you keep cryptocurrency on deposit with BlockFi, you can use the funds in your account to secure a low-interest loan. Currently, loan rates can be as competitive as 4.5%. Since you use your crypto balance as collateral for your loan, you can qualify without a hard pull or a soft pull on your credit. This makes crypto-backed loans easy to qualify for regardless of your credit score.
Crypto-backed loans from BlockFi also move along at a rapid pace. Once you apply, you can get your loan funds as soon as the same business day.
Coming Soon: BlockFi Bitcoin Rewards Credit Card
BlockFi is also launching a rewards credit card that lets you earn rewards in cryptocurrency (I’m on the waitlist!). You can currently join the waitlist for this product, which will eventually offer 1.5% back in Bitcoin on everything you buy.
There are scarce additional details available on the Bitcoin Rewards Credit Card for now, but we should find out more when this card is released later in 2021.
Note: You have to be a BlockFi client with an account to join the waitlist.
Cryptocurrency Savings Accounts: What to Watch Out For
When it comes to investing with cryptocurrency or using it to earn a higher return than a savings account, you should first know that some cryptocurrency is incredibly volatile. We’ve watched as the price of Bitcoin rose to $20,000, dropped below $4,000, then increased in value to over $30,000 over the last several years. That’s a fun ride to be on if you wind up winning in the end, but it’s safe to say that — for the time being — cryptocurrency isn’t stable.
Aside from the general volatility of crypto accounts, BlockFi Interest Account (BIA) doesn’t come with the same protections as a traditional savings account that comes with FDIC insurance. BlockFi accounts also come without SIPC insurance, which is a type of insurance that protects against the loss of cash and securities.
With FDIC insurance on the best savings accounts, the standard insurance amount is $250,000 per depositor, per insured bank, and for each account ownership category. This insurance can kick in to replace your funds if your traditional bank goes out of business and leaves you in the lurch.
With SIPC insurance, most investors are covered for $500,000, which includes a $250,000 limit for cash. BlockFi claims its BIA funds are “insured”, but it’s not easy to find how that insurance works or how reliable it is.
Who BlockFi is Best For
Current long-term bitcoin holders
If you already have bitcoin or ethereum and its sitting in Coinbase or other exchange, it seems to be a no-brainer to bring it over to Blockfi to earn interest. Fees and liquidity can vary, so if you are actively trading these coins, this might not be the best move.
If you have cryptocurrency already, then you might as well open a BIA and begin earning interest on your deposits.
You want to use your crypto to take out a loan
Because BlockFi lets crypto investors use their cryptocurrency to earn interest or as collateral for a loan, this company is best for seasoned cryptocurrency experts who already buy, sell, and trade cryptocurrency as part of their portfolio but need to take out a loan against their balance.
If you’re interested in crypto, but don’t want to take too much risk, the BIA is a great place to start. You can earn so much more than a traditional savings account. Although you do have more risk than an FDIC-insured bank, I view it as an acceptable risk with a portion (not all) of your cash.
Earn a little extra while you learn more about the world of crypto investing and then decide to make the leap later. Just keep in mind that your account funds are not protected by the same type of insurance as traditional bank accounts and brokerage accounts are.
Jeff’s Take on BlockFi
Watch Jeff’s key considerations about the crypto platform, and what to know before opening a BlockFi account.
BlockFi vs. Other Industry Competitors with Crypto Savings Accounts
Earn up to 8.6% APY
Earn up to 8% interest on crypto and up to 12% on stablecoins, paid out daily.
Earn up to 10.3% interest on crypto
Minimum account balance required
No hidden fees
No hidden fees
No hidden fees
What to Know About Crypto Savings Accounts
We’ve tried to drive the point home that crypto savings accounts are not the same as traditional bank accounts. There’s a considerable amount of risk when you’re dealing in cryptocurrency for starters, and cryptocurrency savings accounts can’t offer the same federal protections as regular banks.
Since cryptocurrency hasn’t been around as long, you’re putting your assets on the line if you use one of these accounts to secure a higher return. That doesn’t necessarily mean crypto savings accounts are a bad idea. However, you should know the risks and understand what’s at stake.
Here are some other details you should know and understand before you open this type of account:
Withdrawal restrictions. Where traditional savings accounts let you withdraw funds up to six times per month without any fees, crypto savings accounts may have more restrictive withdrawal limits.
Lack of compound interest. Because of the way crypto savings accounts work, you won’t necessarily earn compound interest like you would with a traditional savings account.
Ownership issues. With crypto savings accounts, you will likely be asked to give up the “keys” to your account since this allows the administrator to lend your crypto out. Many investors are not comfortable with this arrangement, and some would say for good reason.
Security risks. While crypto savings accounts tend to have a high level of security, you should know that cryptocurrency is a target for hackers and thieves. According to Coindesk, hackers and scammers have managed to steal $7.6 billion in cryptocurrency since 2011.
The Bottom Line
Earning up to 8.6% APY on your crypto assets sounds pretty good, but don’t forget to read the fine print. These accounts do offer big returns, but you won’t have the same protections as you would with a traditional savings account.
Your best bet is taking time to read all you can about cryptocurrency and crypto savings accounts, as well as the steps you can take to protect yourself.
A cryptocurrency savings account may help you “beat the bank,” but you’ll have to accept more risk along the way.
BlockFi Frequently Asked Questions (FAQ)
Before you get started with a BlockFi product, you should strive to learn as much as you can about this company and all they offer. These FAQs can help.
You have all kinds of financial goals you want to achieve, but where should you begin? There are so many different aspects of money management that it can be difficult to find a starting point when trying to achieve financial success. If you’re feeling lost and overwhelmed, take a deep breath. Progress can be made in tiny, manageable steps. Here’s are 16 small things you can do right now to improve your overall financial health. (See also: These 13 Numbers Are Crucial to Understanding Your Finances)
1. Create a household budget
The biggest step toward effective money management is making a household budget. You first need to figure out exactly how much money comes in each month. Once you have that number, organize your budget in order of financial priorities: essential living expenses, contributions to retirement savings, repaying debt, and any entertainment or lifestyle costs. Having a clear picture of exactly how much is coming in and going out every month is key to reaching your financial goals.
2. Calculate your net worth
Simply put, your net worth is the total of your assets minus your debts and liabilities. You’re left with a positive or negative number. If the number is positive, you’re on the up and up. If the number is negative — which is especially common for young people just starting out — you’ll need to keep chipping away at debt.
Remember that certain assets, like your home, count on both sides of the ledger. While you may have mortgage debt, it is secured by the resale value of your home. (See also: 10 Ways to Increase Your Net Worth This Year)
3. Review your credit reports
Your credit history determines your creditworthiness, including the interest rates you pay on loans and credit cards. It can also affect your employment opportunities and living options. Every 12 months, you can check your credit report from each of the three major credit bureaus (Experian, TransUnion, and Equifax) for free at annualcreditreport.com. It may also be a good idea to request one report from one bureau every four months, so you can keep an eye on your credit throughout the year without paying for it.
Regularly checking your credit report will help you stay on top of every account in your name and can alert you to fraudulent activity.
4. Check your credit score
Your FICO score can range from 300-850. The higher the score, the better. Keep in mind that two of the most important factors that go into making up your credit score are your payment history, specifically negative information, and how much debt you’re carrying: the type of debts, and how much available credit you have at any given time. (See also: How to Boost Your Credit Score in Just 30 Days)
5. Set a monthly savings amount
Transferring a set amount of money to a savings account at the same time you pay your other monthly bills helps ensure that you’re regularly and intentionally saving money for the future. Waiting to see if you have any money left over after paying for all your other discretionary lifestyle expenses can lead to uneven amounts or no savings at all.
6. Make minimum payments on all debts
The first step to maintaining a good credit standing is to avoid making late payments. Build your minimum debt reduction payments into your budget. Then, look for any extra money you can put toward paying down debt principal. (See also: The Fastest Way to Pay Off $10,000 in Credit Card Debt)
7. Increase your retirement saving rate by 1 percent
Your retirement savings and saving rate are the most important determinants of your overall financial success. Strive to save 15 percent of your income for most of your career for retirement, and that includes any employer match you may receive. If you’re not saving that amount yet, plan ahead for ways you can reach that goal. For example, increase your saving rate every time you get a bonus or raise.
8. Open an IRA
An IRA is an easy and accessible retirement savings vehicle that anyone with earned income can access (although you can’t contribute to a traditional IRA past age 70½). Unlike an employer-sponsored account, like a 401(k), an IRA gives you access to unlimited investment choices and is not attached to any particular employer. (See also: Stop Believing These 5 Myths About IRAs)
9. Update your account beneficiaries
Certain assets, like retirement accounts and insurance policies, have their own beneficiary designations and will be distributed based on who you have listed on those documents — not necessarily according to your estate planning documents. Review these every year and whenever you have a major life event, like a marriage.
10. Review your employer benefits
The monetary value of your employment includes your salary in addition to any other employer-provided benefits. Consider these extras part of your wealth-building tools and review them on a yearly basis. For example, a Flexible Spending Arrangement (FSA) can help pay for current health care expenses through your employer and a Health Savings Account (HSA) can help you pay for medical expenses now and in retirement. (See also: 8 Myths About Health Savings Accounts — Debunked!)
11. Review your W-4
The W-4 form you filled out when you first started your job dictates how much your employer withholds for taxes — and you can make changes to it. If you get a refund at tax time, adjusting your tax withholdings can be an easy way to increase your take-home pay. Also, remember to review this form when you have a major life event, like a marriage or after the birth of a child. (See also: Are You Withholding the Right Amount of Taxes from Your Paycheck?)
12. Ponder your need for life insurance
In general, if someone is dependent upon your income, then you may need a life insurance policy. When determining how much insurance you need, consider protecting assets and paying off all outstanding debts, as well as retirement and college costs. (See also: 15 Surprising Insurance Policies You Might Need)
13. Check your FDIC insurance coverage
First, make sure that the banking institutions you use are FDIC insured. For credit unions, you’ll want to confirm it’s a National Credit Union Administration (NCUA) federally-covered institution. Federal deposit insurance protects up to $250,000 of your deposits for each type of bank account you have. To determine your account coverage at a single bank or various banks, visit FDIC.gov.
14. Check your Social Security statements
Set up an online account at SSA.gov to confirm your work and income history and to get an idea of what types of benefits, if any, you’re entitled to — including retirement and disability.
15. Set one financial goal to achieve it by the end of the year
An important part of financial success is recognizing where you need to focus your energy in terms of certain financial goals, like having a fully funded emergency account, for example.
If you’re overwhelmed by trying to simultaneously work on reaching all of your goals, pick one that you can focus on and achieve it by the end of the year. Examples include paying off a credit card, contributing to an IRA, or saving $500.
16. Take a one-month spending break
Unfortunately, you can never take a break from paying your bills, but you do have complete control over how you spend your discretionary income. And that may be the only way to make some progress toward some of your savings goals. Try trimming some of your lifestyle expenses for just one month to cushion your checking or savings account. You could start by bringing your own lunch to work every day or meal-planning for the week to keep your grocery bill lower and forgo eating out. (See also: How a Simple “Do Not Buy” List Keeps Money in Your Pocket)
Choosing a new checking account can be an important step toward financial independence. Here’s how to do it right.
You’ve probably had a checking account for most of your life and never gave it much thought. It’s just there to store your everyday cash, right? Not necessarily.
If you’re considering questions about checking accounts as you take a closer look at your current setup and explore opening a new one, it’s important to note that checking accounts are designed with different and unique features. Some may even be more beneficial to you than you realize.
For starters, most checking accounts offer a host of conveniences, providing customers the ability to set up automatic payments for routine bills, schedule electronic transfers and make all deposits and transfers via a smartphone app. Some accounts even allow you to earn cash back on your debit card purchases.
“A checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out,” says Jeff Kreisler, money expert and author of the personal finance book “Dollars and Sense.”
At this point, you might be thinking, “What questions should I ask before opening a checking account?” To help you decide which account is right for you, here are four key questions to ask yourself:
1. What types of checking accounts should I consider?
Before you open a new checking account, do a little homework to learn about the different types of checking accounts offered by banks, Kreisler says. There’s the standard personal checking account that allows you to write checks and make payments with your debit card or electronically. But when thinking about questions to ask when opening a checking account, go beyond the basic features to find an account that best fits your lifestyle and financial goals. Here are some examples:
Online checking account: Ready to bypass the teller lines with the benefits of an online bank? Then this is the checking account for you. Doing your banking from any computer or mobile device is sweet—and since online banks don’t have brick-and-mortar locations, they can often pass their savings from overhead down to you. Just verify that the online bank or credit union supplying the checking account is backed by the FDIC or the National Credit Union Administration.
Rewards checking account: One question to ask before choosing a checking account is if you can earn rewards or incentives for certain activity. Discover Cashback Debit, for example, lets you earn 1% cash back on up to $3,000 in debit card purchases each month.1 That means your monthly cashback earnings could yield $360 in total rewards each year (finally, dinner and drinks at that new French bistro in town!). Some banks may also offer a checking account bonus just for opening a new account, while others have a variety of reward options based on certain qualifying purchases. A rewards checking account works for almost anyone looking to maximize their debit spend or a balance they regularly hold in their checking account.
Say hello to cash back on debit card purchases.
No monthly fees. No balance requirements. No, really.
Discover Bank, Member FDIC
Joint checking account: Most checking accounts can be opened as a joint checking account, which is an account held by two or more people. This can be a convenient solution for couples, minors and their parents and even seniors and their caregivers who are trying to manage a household budget. It does require good record keeping and communication, so make sure you understand the ins and outs of joint accounts before choosing this option.
The above checking accounts are the most standard and usually have appealing benefits. But if you have more questions about checking accounts, there are options that can cater to more specific needs. However, they often have less flexibility. For instance:
Interest-bearing checking accounts are available for those who want to earn some money while their cash is parked in the account. The rate of return is usually low and minimum balance requirements high.
Student checking accounts are often low-cost, but they could come with limitations. Whether or not a student account is available may be a good question to ask before choosing a checking account if you’re looking for a starter account for yourself or your child.
Second-chance checking accounts could be a fit for those who may not be able to get a standard checking account due to their banking or credit history; however, they often have higher fees.
“A checking account can have a long-term impact on your financial well-being, so it’s worth taking the time to figure everything out.”
2. Are there fees associated with the checking account?
This is one of the most commonly asked questions about checking accounts. Before choosing a checking account, be sure to research its fees, says Marc Bernstein, financial planner and strategist for MWealth Advisors. Types of fees and fee amounts can vary greatly from bank to bank, and even among accounts at the same bank.
A question to ask when opening a checking account is if the account charges fees for ATM use, automatic bill pay, monthly maintenance, ordering checks, replacing a debit card or ordering official bank checks. Banks may charge any combination of these fees—or none. Discover Cashback Debit comes with no fees. Period.2 That means you won’t be charged a fee for any of these services.
Along with including the fee topic on your list of questions to ask before choosing a checking account, you should also consider obtaining “a document outlining the fees you’ll be paying, in case you have any questions, and check the fine print,” Bernstein says. You can also typically find a list of fees (if any) on the bank’s website or in the account agreement.
3. Is there a minimum balance requirement?
According to Bernstein, among the questions to ask when opening a checking account is if it requires an initial minimum balance to open. You’ll also want to know if a minimum balance needs to be maintained to avoid a fee.
Bernstein suggests looking for an account with no minimum balance requirement if you tend to keep less than $1,000 in your account or like to have flexibility when making large withdrawals.
If you’ve asked this question about checking accounts and are still comparing accounts that have a minimum balance requirement, realistically determine how much you can keep in your account per month and what you will be charged if you can’t keep that balance.
Even if your account falls below a minimum requirement, there could be a way to save on fees. If you have multiple accounts at one bank, the bank may allow you to combine the balances to waive checking fees.
The total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.
4. What ATM fees could I incur?
If you frequent the ATM to take out cash, a good question to ask before choosing a checking account is: Where are the bank’s ATMs located in relation to your home and work?
Availability of ATMs is an important question to ask when opening a checking account that can really affect your wallet. For instance, if you decide to withdraw money from an ATM that’s not in your bank’s network, you can get hit with two separate charges: a surcharge from the ATM owner (since you’re not a customer) and a fee from your own bank.
And those fees can really add up. According to Bankrate’s 2018 checking account and ATM fee study, the total average cost of withdrawing cash from an out-of-network ATM is $4.68. That’s 36 percent higher than it was 10 years prior, with no signs of decreasing.
One way to get cash without paying an ATM fee is to use your own bank’s ATMs. The more ATM locations that your bank offers that are conveniently located, the less likely you are to use one that’s out-of-network and rack up unnecessary charges. If you can’t always use your own bank’s ATM, one of the questions to ask when opening a checking account is whether your bank allows you to use a broader ATM network for no-fee transactions.
Find the best checking account for you
Opening a new checking account is an important step toward establishing, or rebuilding, your financial foundation.
Now that you can ask the right questions about checking accounts, you’re one step closer to choosing an account that fits your individual needs. And that feels like money in the bank.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, which also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
2 Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.
A fiduciary deposit account is an account thatâs owned by one or more persons but managed by another. The owner is known as the principal, while the manager is known as the fiduciary. These accounts are sometimes used to handle estate or trust assets, among other purposes. Their legal status and their insurance coverage are determined by the Federal Deposit Insurance Corporation (FDIC). Hereâs what you need to know about this type of account.
Fiduciary Deposit Account, Defined
A fiduciary deposit account, also known as a principal account, is a deposit account that a person or other entity, acting as a fiduciary, establishes to benefit one or more persons who own the assets in the account, according to FDIC rules. The individual who opens the account doesnât have ownership of it nor any ownership interest.
Some examples of fiduciaries of these accounts are trustees, agents, nominees, custodians and guardians. Fiduciary accounts are used in various ways:
Uniform Transfers to Minors Act (UTMA) accounts
Uniform Gifts to Minors Act (UGMA) accounts
Decedent estate accounts
Real estate and other escrow accounts
Accounts with a power of attorney
When FDIC Pass-Through Insurance Coverage Applies
All deposits managed by a fiduciary on behalf of the accountâs owner or owners are insured by the FDIC for the full $250,000 on a pass-through basis. This means that all the deposits are considered to be deposits made directly from the principal as long as three requirements are met:
The owner of the funds must be the principal and not the fiduciary who set up the account. The FDIC may review the fiduciary and ownerâs agreement on the account as well as state laws to confirm this.
The record of the insured depository institution (IDI) account must indicate the agency nature of the account. For example, the ownership of the account may read ABC Company as custodian, ABC for the benefit of (FBO) or Sally Rowe UTMA John Rowe, Jr.
The IDI, fiduciary and third-party records must show the ownersâ identities and the ownership interest(s) in the deposit account.
For example, letâs say XYZ Brokerage firm establishes an account for Sally Rowe at ABC Bank. In this example, Sally Rowe is the owner, or the principal, of the money in the account. This account would then be added with any other single accounts she owns at ABC Bank, which would be insured as a single account for up to $250,000.
If we assume Sally has more single ownership accounts at ABC Bank, she will not receive additional coverage because XYZ Brokerage firm opened the account for her. With a fiduciary account, coverage is provided as though the actual owner opened the account at the IDI, assuming all responsibilities are met.
Pass-through coverage is also possible if a guardian retains part of the interest paid by the IDI as a guardian fee.
When FDIC Pass-Through Insurance Coverage Doesnât Apply
If requirements of a fiduciary account are not met, the account will be insured under the fiduciary, not the intended principal. In this case, the fiduciary will own the deposits and the account will be categorized as a single account or corporate account. These deposits will then be combined with other deposits the fiduciary holds in the same ownership at the IDI where funds are held. The total sum will be insured up to $250,000.
For example, letâs say a customer of a deposit broker is assured by the guardian (fiduciary) that he or she will earn 5% on a deposit when the IDI is paying only 3%. The guardian would not be a guardian then; he or she would be a borrower with an independent responsibility to pay 5%. In this case, the deposits are no longer eligible for pass-through coverage for the principal. Instead, the deposits are now considered corporate deposits belonging to the guardian.
A fiduciary deposit account is an account set up by someone for another person, who actually owns the money. The one who sets up the account and manages it is known as the fiduciary, while the owner of the money is known as a principal. This kind of arrangement is used to handle assets in trusts, escrow accounts, brokerage accounts and decedent estates, among other uses. Itâs important that these arrangements carefully follow all the FDICâs legal requirements, as well as applicable state regulations, to qualify as a fiduciary deposit account.
Estate Planning Tips
Consider talking to a financial advisor about your estate plans. Finding a financial advisor doesnât have to be hard. SmartAssetâs free financial advisor matching service can connect you with several in your area in minutes. If youâre ready, get started now.
If you have an agent, they may make decisions about your 401(k) account. Find out how much money youâll have in your account by the time you retire with our free 401(k) calculator.