So you’ve finally been able to start putting money away for the next rainy day. You’ve been socking it away into an ordinary savings account where you might be earning ½ % interest or less. Are you wondering what you could be doing with your savings that might make it start to grow? If you’re not, you should be. Here are a few ways you can invest your money and earn up to 5% while protecting your savings.

Preferred Stocks

Preferred stocks are assets that look a lot more like bonds than traditional stocks. The reason is because the dividend, or the money paid to you as the stockholder, is almost always fixed. Preferred stocks are almost always issued by banks, insurers and investment trusts, though other companies can issue them as well. Some preferred stocks pay out monthly and the dividend is usually much higher than those issued by common stocks. The main drawback is that as the interest rate rises, the preferred stock will lose value. Plus, a company can suspend dividends on these stocks if they run into turbulent financial periods.

Blue Chip Stocks

Blue chip stocks are another investment you can make that will keep your risk relatively low while earning you a nice return. These companies have been around and been successful for many years, weathering financial downturns and other crises well. Some of the safest investments are in utilities, energy, and drug companies. These companies generally weather economic downturns well.

REITs

REITs or real estate investment trusts are generally a good bet when it comes to earning a nice return on your investment. These can be a little shakier than others, though, since most are backed by properties. The safest REITs to invest in are the ones that hold healthcare related properties such as hospitals and other medical buildings. This is because the medical field is a growth industry while other sectors of the real estate market are highly susceptible to economic swings.

One kind of hybrid REIT is Annaly (you can read more about this product here). This REIT-like investment does not depend on the real estate market to back it. As a matter of fact, this product doesn’t own one property at all. It buys federally guaranteed mortgage securities. This is a great opportunity to earn a nice return as long as the Federal Reserve holds interest rates steady because Annaly makes tons of cash; and because of its structure, it’s forced to pay out 90% or more of its net income to its shareholders. The current return rate on this investment is around 15%.

Online Savings Accounts

For those of you who shy away from traditional investing, take another look at where you are putting your money. Online savings accounts like EverBank, HSBC Advance and Ally Bank offer much higher interest rates than traditional brick and mortar banks, up to 200% better. Most traditional savings accounts offer under 1% interest, and many don’t offer anything at all. Online savings account products offer anywhere from 1% up to 3% all while keeping your money safe and liquid, meaning that your deposits are insured by the FDIC as long as the institution is a member. Also, you can remove your funds at any time in any amount without penalty.

Savings Bonds

Another idea for the investment-shy individual is savings bonds. Savings bonds are backed by the federal government and are guaranteed to earn a better rate than your savings account, though you’re going to have to wait several years to realize the gain.

This is a post from The Smarter Wallet.

Easy Investment Tips: Where To Invest Your Money

For years after I graduated from college, I made payments to a certain company for my student loans. Lately, I’ve learned that Sallie Mae has several savings products. You can choose to apply for an online savings account or to buy certificates of deposit.

Sallie Mae High Yield Savings Account Review

Sallie Mae’s Online High-Yield Savings account stands out because it currently offers an APY of 1.40%. By contrast, a Bank of America customer in Missouri will be offered a regular savings account with a .10% APY.

There’s no minimum balance to open an account, and there aren’t any monthly fees to drain your funds. And when you register, you can specify either an individual or joint account.

To make deposits, you can link an external account from another bank, then make transfers to your Sallie Mae High-Yield Savings account. You can make transfers or withdrawals via the bank’s website or by calling the bank’s phone number. You can also set up the account for direct deposit or mail checks in as deposits. Interest is compounded daily.

This savings account is insured by the FDIC, so you don’t have to worry about your money disappearing overnight. To open an account online, you’ll need your Social Security Number, a valid form of ID like a driver’s license or military ID, and information about an external checking account that you already have, so you can make deposits to the new savings account.

What about fees? There are a few fees to keep in mind, such as the excessive transactions fee of $10 per withdrawal when you go over the limit of 6 transactions in a statement period. You’ll pay $5 for each deposit that’s returned. And if you want the bank to mail you a copy of your statement, you’ll need to pay $5 per statement. If you’d rather save some money, they advise you to print out your statement via their website instead.

Sallie Mae Certificates of Deposit: Some Details

Sallie Mae also offers certificates of deposit (CDs) with varying terms and rates. A certificate of deposit is a savings vehicle that typically offers higher interest rates if you commit your deposit to a certain length of time. These rates are subject to change (for Sallie Mae’s updated rates, please check this link.)

You can compare these rates with those offered at other banks and institutions: compare online banks here.

These Sallie Mae CDs don’t have monthly fees and like the savings account, they’re insured by the FDIC. When the CDs mature at the end of their terms, they’ll renew automatically. You’ll have 10 days to withdraw the money if you want, though, and the bank will notify you before the CDs mature.

What about early withdrawal penalties? Although there are no monthly fees, you’ll encounter early termination fees if you attempt to withdraw money from the certificates of deposit before they mature. For CDs that mature in 12 months or less, you can expect to lose 3 months’ worth of interest. Otherwise, you’ll lose the equivalent of 6 months’ worth of interest.

Enhance Your College Savings With Upromise!

One great feature that Sallie Mae has over other financial institutions is its acquisition of Upromise, which to me, is one of the best savings programs out there that you can set up for your kids.

If you have students who will head for college sometime in the future, you can open accounts for them in the Upromise college savings program. Upromise allows you to save money when you spend using your credit card (a Upromise card or any other card you register with the program). You can also invite your personal network of family and friends to contribute to your savings efforts through their own spending using their own credit cards; they just need to get set up to contribute to your dependent’s account.

When you make purchases from Upromise’s roster of partners, it’s possible for you to receive discounts and/or earn matching funds for college. I think that anyone with kids should join this program, given that everything about it is free! Through Upromise, you also have the perfect opportunity to open a 529 college savings plan.

After you link your Upromise account to your Sallie Mae High-Yield Savings account, you have the opportunity to earn some great benefits. For instance, through Upromise, you’ll be able to check out coupons and offers from retailers you already know and enjoy. Some of those retail partners include more than 700 stores like Sears.com, Macys.com, and Overstock.com and restaurants such as Denny’s and McDonalds.

Plus, you can purchase more than 20,000 products from local and nationwide grocery stores and drugstores. Chances are that many of these products are already on your shopping list each week or month. With Upromise, you can have those items contribute to your college fund, thanks to the matching funds and/or discounts.

Get An Additional Cash Bonus Into Your Sallie Mae Savings Account

Best of all, Upromise will deposit a 10% annual match into your Sallie Mae High Yield Savings Account if you meet a few stipulations. Within 90 days of opening your savings account, you’ll need to either set up an automatic savings plan of at least $25 per month OR you’ll need to deposit a total of at least $5,000 into the account. You’ll see the 10% match in the February of the year that follows. Other rules might apply, so read the fine print before you sign up.

If you’re looking for a new online savings account or you want to get started with certificates of deposit, then take a look at what Sallie Mae has to offer. What you find just might wipe out the memory of any student loans you’ve had in the past!

This is a post from The Smarter Wallet.

Sallie Mae Savings Account & CD Review

Did you know that when it comes to internet banking, credit unions are winning the race hands down? According to a study published by ForeSee Results, a whopping majority of folks who bank with credit unions are happier with their online experience than with more traditional banks. Plus, the top 5 big banks rate the worst. Here’s why:

Customers of credit unions trust their financial institutions more than any other customer / banking relationship.

Credit Union vs Bank: Why Credit Unions Are A Top Banking Choice

First and foremost, credit unions fly under the radar when it comes to negative publicity. Because most are very small and are community-oriented, they dodge the ball when it comes to scandal. Banks are perceived as untrustworthy when they are represented negatively in the press, and let’s face it, when it comes to brand identification, perception is everything. And the numbers don’t lie. Big banks have experienced a 40% increase in bad publicity this year, which directly relates to a 15% decrease in customer trust compared to a 2% increase in negative publicity for credit unions and a 5% increase in lack of trust.

Plus, because credit unions have a more local presence, the experience of working with them is generally perceived as more personal. Who doesn’t like it when they enter their bank and the teller already knows your name, the name of your children and asks about your dog that was sick last week? All of this breeds trust in a relationship, which leads to increased customer satisfaction and ultimately, increased business for the credit union. There are several reasons why joining a credit union makes sense.

Credit unions communicate better with their customers.
I know, it’s hard to believe with all the emails and junk mail you get from your bank, but credit unions simply do a better job when it comes to reaching out to their clients and letting them know about pretty much everything that’s going on. They also do it in the way that 65% of the customer base wants it done, via email. Why go through the expense of mailing out a bunch of stuff people don’t want or interrupting personal or work time via meaningless text messages?

Credit union websites are easy to use.
Easily, one of the biggest drivers of credit union success in the online world is the sheer simplicity of their websites and intuitive functionality. We’ve all been to those big bank websites and spent up to 15 minutes just simply looking for the login boxes. Then you have to find the bill pay function, or the account summary page or the place to change your mailing address. Most credit union sites understand that you are on their website to perform a necessary function and put these front and center on their sites, leaving all the bells and whistles to the big dogs. I’m not saying that having these bells and whistles on your site isn’t nice, but most of the time, it’s unnecessary. What is necessary is the ability of your customers to find what they need and be able to use it. Credit unions have this aspect down to a science.

The reason that I bring all of this information to the table is this. People like you and me are creatures of habit. We bank where our parents banked, where their parents banked, or where our jobs bank. Even if we are unsatisfied, we continue to bank in the same way, at the same place. Many of us are stuck in unsatisfying relationships with traditional banks and never realize that there are other options. So if you’re looking for a place to open an online savings account, credit unions offer a highly satisfactory alternative to traditional banking. They have all the same services and are generally much less expensive than traditional banks, perhaps including online banking. Take time out and take a look at your local credit union and see what they can do for you!

This is a post from The Smarter Wallet.

Credit Union vs Bank: Why Credit Unions Are A Top Banking Choice

When people don’t have bank accounts, I’ve often wondered what people do when they need to cash a check. I really started wondering about this a few years ago when I thought that it might be possible that I would lose my bank account thanks to some really bonehead decisions and a bank that was pretty inflexible when it came to dealing with it (aren’t they all?)

How To Cash Your Check When You Have No Bank Account

What I soon realized after looking around was that there were many avenues for individuals with checks to cash them, for a small or even not so small fee. Here’s what I’ve found:

Local Banks

This is most likely the cheapest route to go if you are trying to cash a check and have no bank account to deposit the money into. If you hold a check that is drawn on a bank that has a branch in your area, odds are, you’ll be able to cash it for a small fee. This fee is usually $5 or less (unlike many other bank fees that do exist). What’s nice about this option is that since the bank can verify that the funds are available for withdrawal, you can cash any type of check here as long as it’s drawn on the bank you’re trying to use to cash it.

If you have received a check from a lender that is in close proximity to a local bank, ask whether or not the bank will cash the check. In many instances they will, especially if the lender has been in the neighborhood for awhile and has built a relationship with the bank.

Retail Stores

Grocery stores and large retail establishments like Walmart are one of the best (and cheapest) places to cash a government or pre-printed payroll check. Most charge a flat fee of $3-$5 to cash the check, regardless of the amount of the check. The main drawbacks to this type of arrangement is that there are limitations on what types of checks are accepted for payment (read-no personal checks) and in most cases there is an upper limit to the amount you can cash with these institutions. I think the last sign I noticed at my local grocery store was $750 max, so no IRS refund checks of $5,000 need apply.

Payday Advance

Believe it or not, a bunch of payday advance companies decided to expand their business into check cashing. They’ll accept many more types of checks for cashing than retail stores including larger amounts and from a larger variety of issuers such as personal loan companies. For this consideration, the payday advance company will charge you a fee, which can either be a flat rate or a percentage of the face amount of the check, both of which will cost you more than the retail store would. But hey, if you have a check that a retail store won’t cash, here’s another option.

Pawnbrokers

Pawn shops will cash checks for you, but it’ll cost you. A pawnbroker will charge a fee for his services that is commensurate with the amount of risk he’s taking that the check will come back as insufficient funds. Just as with a payday advance location, a pawn shop will accept a wider variety of checks than retail stores, however, the price for this service will be considerably higher.

Signing the Check Over

While this is probably one of the least expensive ways to go when trying to get a check cashed, it may be one of the hardest. If you find yourself in a pinch, you can sign the check over to someone you trust (and who has a bank account) and have them cash the check for you at their bank. Because the individual has an active bank account at the bank in which he or she is cashing the check, there are usually no fees involved. However, asking someone to do this for you can be a humbling experience.

This is a post from The Smarter Wallet.

How To Cash Your Check When You Have No Bank Account

One effect of the economic recession? We want to save more money. And one area to evaluate for savings is in the area of insurance. After all, car insurance costs can be a huge expenditure in our budgets. That is why it is essential for us to make sure we are getting the best coverage for our dollars. Here are five great strategies that I have used to lower my auto insurance premiums and get the best value out of my driving dollars.

Reduce Car Insurance Prices & Costs With These Tips

1. Compare prices and speak to someone in person. It is essential that you know what all the other insurance companies are offering as far as auto insurance quotes. If you have had a policy with the same place for years, go online and do research on some of the top competitors. Most auto insurance companies offer easy quotes online. I suggest checking Geico, Progressive, Stare Farm, and Allstate and any other big name company with a good reputation. Here’s a list of web sites that can offer you additional leads:

Auto Insurance Sites

From these resources, gather your quotes, and if you find that your current insurance premiums are higher, then call your agent and discuss your findings. Inform the agent that you are trying to cut costs in these tough economic times and will be forced to switch agencies if the premiums are not lowered. They will want to keep you. Believe me! I got the best policy (price-wise) with Allstate, using this strategy.

2. Combine policies. If you currently pay for homeowners insurance or renter’s insurance, then you’ll want to combine this policy with your auto insurance policy. Most insurance companies offer a multiple policy discount if you have more than one insurance policy with them. This is another discount that I received with my Allstate policy.

3. Make sure you get all the discounts for which you qualify. Every insurance company has discounts that are offered. The trick is to make sure that you address every one that you qualify for on your plan. This is where “calling the agent and informing them of a cheaper policy” comes into play. They will come up with every discount in the book to get your policy lower and keep you as a customer.

Here are the ones listed on my policy: multiple policies, good payer, antilock brakes, premier plus, and passive restraint (air bags). You may also qualify for other discounts if you are a member of a business organization or a member of the military. Geico.com has a drop down box on their quote page asking if you are a member of specific organizations. Use this tool to compare the discounts from other companies with those of your current insurance company.

4. Find out if you qualify for a discount on your car insurance policy if you work from home. Do you work from home? Then your car can be designated as being used “for leisure”. I actually work from home; therefore, my car is considered a car for leisure. This qualifies me for more discounts on my auto insurance policy. Basically, if your car qualifies as being used for leisure, it is being used less, which cuts down on your accident risk. If you work from home, then call your insurance company and inquire about this discount.

5. Increase your deductible if you have emergency savings already in place. If you have already saved up a substantial amount of money in your cash and savings accounts, then you could consider increasing your deductible. Given that you have a backup savings fund to cover possible mishaps, you can afford to raise your deductible (and take some additional risks). Sure, you’ll increase the amount of money you’ll have to pay out of pocket before the insurance coverage kicks in, but the higher deductible can save you a substantial amount of money on your monthly premiums. And that, my friends, is money in the bank.

This is a post from The Smarter Wallet.

Reduce Car Insurance Prices & Costs With These Tips

What’s the very first “consideration” that consumers have in mind when choosing a bank? Often, it’s the question: is it safe?

But what does this particular question mean? Do I think that my bank would embezzle my money? Give it away to terrorists? God forbid, go under? In reality though, it’s about taking a gander at the bank’s financial well being and determining whether or not the bank is stable enough to handle my deposit.

Okay, so if I’d like to check up on the health of my bank or determine whether my online savings accounts are safe, where should I start? One place to start looking is a site like Bankrate.com. That is, if you are feeling good about taking someone else’s word for the stability of a company. In this day and age, we’ve found out the hard way that what we are being told, especially by representatives of the financial sector (even those who are paid to be unbiased or have third party opinions), may not be a very accurate description of the truth. So, then what?

Check Financial Statements

I could take a look at the bank’s financial statements. Everything I ever want to know about my bank’s financial condition is right there, in black and white, for the entire world to see, tucked away neatly in the annals of the SEC’s (the security exchange and commission) website. That’s right. Every publicly traded company must file annual and quarterly financial statements including profit and loss statements, income statements, and balance sheets with the SEC, which are then made public. But then again, have you actually ever seen one of these things? The accounting folks don’t get paid nearly enough for understanding what all that gibberish means. Those statements might as well be written in Latin for all the sense they make to me.

Look Into Ratings Services

Okay, so what else can you do? You could check with a trusted business rating site like Moody’s or FreeEdgar. These guys give you a rundown, mostly in layman’s terms, on what the bank is up to and how they have been handling their business…and all for free. This is actually a pretty good way to find out some intelligence on any company you might wish to do business with, so long as there is a recent review in the system. Here’s more on the subject of checking your financial company’s ratings in this article on how to manage risk.

Make Sure There Is FDIC Insurance

But then I started seeing the bigger picture here. As bad as things have been with the financial sector, with so many banks that have failed over the past five years, the number of people who actually experienced a loss when it came to deposits is extremely minimal. Why? Because in most cases, your deposit is federally insured by the FDIC. Before the financial meltdown, the FDIC insured your deposits against bank failure, robbery, etc. up to $100,000 at any one institution. Since the meltdown, that amount has been increased to $250,000. That means that the money in your account will be replaced if your bank fails. So are you FDIC insured?

Now you may wonder: doesn’t this make looking into the financial stability of a bank a moot point? In a way, yes. The major factors you should take into consideration when choosing a bank should have a lot more to do with how they plan to manage your patronage by offering free accounts, lower interest rates, etc. than with the financial stability of the bank. For instance, here’s how to compare online banks for your savings needs. Here are some online banks on solid footing:

In fact, gaining and keeping customers directly impacts the financial stability of the bank. These factors, coupled with the “Insured by the FDIC” brand, should be all the guarantee you need to make your first deposit.

Of course, I’m not suggesting that you blindly begin trusting any bank that displays the FDIC sign. You should know who you are doing business with. I’m merely suggesting that with the FDIC designation, the homework you perform may become a little less cumbersome.

This is a post from The Smarter Wallet.

Is Your Bank Safe? Check Bank Ratings

This guest post is by SurveyMagnet.com.

Romantic relationships are centered on emotions. Love, anger, joy, optimism, fear and trust are the guiding forces behind them. In a typical courtship, critical decisions are made amidst a sea of emotions.

As we all know, emotions and money are like oil and water. They just don’t mix.

Finding Balance Between Money & Personal Relationships

Few things in life are as black and white as financial transactions. This is completely contradictory to the emotional nature of relationships. Use the following 3 steps to defeat this contradiction.

#1 Set a Recurring Financial Meeting With An Agenda

WARNING: This will hurt, and if your finances are jacked up, it will be torture. The absolute best way to avoid financial troubles is to place the numbers under a microscope on a recurring basis.

No item is too large or small for scrutiny. Small ticket buys (parking, dinner dates, bowling) and big ticket items (rent, car payment, internet/tv, groceries) should not be surprises to either party.

Treat your financial meeting like the life altering business meeting it is. Your family budget, meeting time, meeting location, and agenda are non-negotiable. Do not create distractions (gym, work, movies, etc) to avoid the meeting. Ruthlessly correct any issues that occur.

#2 Have a Voice

It is very tempting to relinquish financial control to your significant other. After all, your hubby/lady is smart, financially astute, and they can be trusted to work in the best interest of your relationship.

But there are a few problems with this approach.

• Your Partner is Human – People make mistakes. Your partner could make an innocent mistake in taxes, bill paying, or account settling that takes years to fix.
• R.E.S.P.E.C.T. – A lack of respect is hard to overcome in a relationship and it is incredibly hard to respect a person who is clueless with respect to their finances. Honestly, an adult who does not handle their finances may as well be a child.
• Hidden Problems – Financial issues quickly spiral out of control when there is no system of checks and balances (see the real estate crash for proof). If your partner has complete control of the finances then you could be in a horrible financial position and never know it.
• Address Issues Directly – Be direct. Don’t beat around the bush about the mistakes made by yourself or your partner. Addressing issues directly is the best path to issue resolution and improvement.

#3 Remove Your Emotions

As I stated before, relationships are emotional in nature. Money is not. The following forms of payment are not accepted at most US retailers:

• Love
• Hugs
• Understanding
• Intentions
• Trust

If you follow any of the advice in this article, then you must understand one thing. Feelings will get hurt. It is completely unavoidable. You will challenge your mate. Your mate will challenge you. You will have to defend frivolous purchases. Your mate will shed tears. You will slam a door in anger. Your mate will blow you off a few times.

This is all part of the process. As you and your mate become more comfortable with the process, your emotions will subside. You will see how your constant measuring, budgeting, and system of accountability have strengthened your relationship and financial standing. This will far outweigh any emotions that you are dealing with.

Conclusion

Money can make or break a relationship. A good number of couples refuse to pay attention to their money until it is too late. Falling into this trap can lead to a myriad of easily avoidable negative situations.

Follow these 3 steps and you will be fine:

1) Set a Recurring Financial Meeting with an Agenda
2) Have A Voice
3) Remove Your Emotions

Follow this advice and blaze a trail to financial relationship bliss!

This is a post from The Smarter Wallet.

Finding Balance Between Money & Personal Relationships

A look at Ally Bank’s internet banking services.

Once upon a time, there were only a couple of online banks to choose from. Now competition is getting stronger with more online banks offering CDs, checking accounts, high yield savings accounts and money market accounts. Online banks such as Ally Bank might make brick-and-mortar banking a thing of the past with offerings such as interest bearing checking and no minimum deposit CDs.

How Do You Open An Ally Bank Account?

To open an Ally Bank account, you apply online, call toll-free or print the application and mail it. Visit the website to keep track of the status of your application so you know what’s happening. For a bit of background, Ally dates back to 1919 and was formerly known as GMAC Bank. Accounts offered by Ally Bank include interest checking, high interest savings, money market and various certificates of deposit. Your deposits are covered by the FDIC up to $250,000 per depositor. There are a variety of accounts to choose from at Ally. Let’s look at each more carefully:

• Ally lets you open a money market account with $0, no minimum balance and no monthly fees. An ATM check card and your first 50 checks are free. You earn daily compound interest and are allowed six transactions per statement with no fees. Here’s where to go for more information.
• Interest checking at Ally also takes $0 to open the account with no minimum balance. You get a free Debit MasterCard, checks, unlimited check writing, online banking and Bill Pay with no ATM fees. Accounts with a balance of $15,000 or more earn a higher interest rate. Here’s where to go for more information.
• A high yield savings account at Ally can be opened with $0 with no minimum balance or monthly fees. You get six transactions per statement cycle with no fees. Here’s where to go for more information.
• There are three different types of CDs to choose from. While you open with nothing and fund later, you can only make subsequent deposits when the term of the CD rolls over. The three Ally CDs are a no penalty CD, raise your rate CD and high yield CD.

Ally Bank Review: Online Savings, Checking Accounts, CDs

With little money to save, I need to make the most of what I have. Ally Bank offers an unprecedented opportunity for me to finally save money in a top online savings account, even if it is just $5 a week. Besides being an online bank rather than a bank with a physical location, what makes Ally different?

• No minimum deposits or balances are required. You can open a CD with nothing then make a deposit when you have the money. Even if it is just $10, you can start saving money while earning the highest possible interest for your deposit.
• Ally Bank offers pretty competitive interest rates. Also, interest is compounded daily rather than monthly or quarterly. That means you earn more for letting Ally Bank hold your money since many other banks pay interest on a monthly or quarterly basis.
• Ally Bank’s “Ten Day Best Rate on CD” policy means that you get the best possible rate within ten days of opening your account. If rates shoot up a percentage point five days after you open your CD, you can request the higher rate as long as you fund during that time.
• Ally Bank has a No Penalty CD. You can open a CD that won’t incur any penalties on any actions you take, plus it offers a great fixed rate. You can withdraw the entire balance within six days of funding with no penalties or fees.
• Check card convenience includes no fees at ATMs and interest paid on the balance in your account. It certainly beats my current ATM account that charges a fee for foreign ATMs and debit transactions!
• There is no small print or financial jargon to translate. You don’t have to be a financial genius to make the most of your money. The Ally Bank website is simple and straightforward. Questions are easily answered with a help option, online chat and a 24-hour toll-free number connecting you to a real person.
• Transactions are performed online. Funding your Ally Bank account is done through online bank transfers. These funds are usually available within three to five business days.
• “Sleeping Money alerts” from Ally Bank let you know when it is more profitable to move your money into another type of account. No matter how small your balance, you will still get Sleeping Money alerts from Ally. I appreciate this feature because I often don’t have time to research the best offerings every month. This helps you keep on top of your savings and allows you to grow your money over time.

Comparing Ally Bank to Traditional Banks

Ally Bank accounts offer the typical features you look for in any traditional bank including:

• ATM card
• Online bank transfers
• Bill Pay
• Checking
• Interest paid on your balance

Any of the everyday transactions that you handle with your regular account, you can do with an Ally Bank account. Don’t forget too, that Ally Bank also offers accounts in Canada.

The Bottom Line About Ally

While I will still maintain a regular bank account for checks I receive, for business purposes, I plan to open a money market and eventually a CD account at Ally Bank because they offer flexible terms, decent interest and the ability to save a little at a time. I can’t move mountains right now but I can start building hills. With no minimum balance requirement or fees, I don’t feel hassled. Plus, if I need the money, I can get it without paying exorbitant fees. All this makes Ally Bank a solid choice for online banking.

This is a post from The Smarter Wallet.

Ally Bank: Review of Online Banking Services

You’ve got your savings in a good high yield savings account and your online stock broker accounts have been doing well. But are these enough to cover the needs of your dependents when you’re no longer around?

You know you need life insurance yet you keep putting it off. Unfortunately, life insurance doesn’t typically get cheaper as you get older. Waiting and putting things off means that you could end up paying more every month for the same life insurance policy. When you figure out the basics of life insurance, you can make an educated decision based on your financial circumstances.

What Is The Purpose Of Life Insurance?

Based on the terms of your life insurance policy, its purpose is to cover expenses for your family or business associates after you die. These expenses may include health care bills, funeral fees, mortgage payments and the cost of continuing business operations without you. If you’re shopping for life insurance, here are a few resources to help you get started:

How Much Life Insurance Should You Carry?

There is a simple way to determine the amount of life insurance you need. Before you purchase a policy, you should figure out:

1. The total monetary amount of your short term needs. Short term needs include final expenses such as hospital bills, funeral costs, attorney fees, taxes, probate, outstanding debts and unforeseen expenses.

2. The total monetary amount of your long term obligations such as mortgage payments, loan repayments and college tuition.

3. The yearly cost of living to maintain your lifestyle multiplied by the years you expect to live that lifestyle (this typically includes your family’s lifestyle).

4. Add items 1, 2 and 3 then subtract that amount from your current net worth, which should include current and future payments from social security.

The number you get at the end of these calculations represents the estimated amount of life insurance you should purchase.

Determining The Length Of Your Life Insurance Policy

Determining the length of the insurance policy is another important factor. Term life insurance covers you for a specific period of time, such as 10, 20 or 30 years. Whole life insurance, also called permanent life insurance, covers the insured person for life. As a result, the premiums for whole life insurance are higher. On the other hand, whole life insurance builds cash value over the life of the policy while term insurance has no cash value at the end of the term if you are still alive. Also, the cash value of whole life insurance is tax-deferred.

Should You Buy Whole Life Insurance or Term Life Insurance?

Now that you know that there are two basic types of life insurance, let’s break them down further. There are three types of term life insurance: level, decreasing and increasing. With level premium term life insurance, the premiums are set with increases for inflation every two years. This is frequently an affordable way to get life insurance. Decreasing term life insurance is often purchased as mortgage protection insurance with the benefit decreasing along with the outstanding balance of the mortgage. For growing families that are paying down a mortgage, this is an ideal policy. Increasing term life insurance increases as you get older without ongoing proof of good health (e.g. without the need to prove that you’re in good health as you age). This is beneficial for people who may experience declining health with age and who don’t want their premiums to go up as a result.

There are also three types of whole life insurance including: single premium, survivorship and universal. Single premium life insurance is paid out in one large payment so beneficiaries can use the funds right away. Survivorship life insurance policies insure two lives to provide for the beneficiaries in any event. Universal life insurance policies allow you to change the death benefits and premiums as your beneficiary’s needs change to give families greater flexibility as their financial situation grows and changes.

Clauses To Check Out Before Your Final Decision

Before you make a final decision about life insurance, check out a few key clauses in your policy. The incontestability clause lets you know the length of time given an insurance company to question or disagree with any payouts they’re required to make against your policy. The standard time period is 2 years. The suicide clause specifies whether the policy is invalid or restricted in the event of suicide. Lapse and reinstatement clauses let you know the penalties for failure to pay premiums. “Simultaneous death of insured and beneficiary clauses” refer to rules covering the situation of who dies first and what payout is made in such circumstances.

This is a post from The Smarter Wallet.

Life Insurance 101

Up to this point, my savings goals have been pretty vague. Yes, I need to set aside money for retirement and college, but figuring out how to allocate so many dollars for the electric bill, car insurance, and everything else seems like an eye-glazing process. However, I’d like to try out a particular budgeting strategy that can help me learn how to save up to 40% of my income.

40% can seem like an extreme amount to save during a recession, so I wouldn’t depend on this to become an overnight goal. Instead, I need to take the time to evaluate my income, expenses, and savings goals as I explain below.

How To Budget & Save 40% Of Your Income

1. Do an Income Check

First, I need to list my sources of income and find out how much I bring in each month. This can include a salary, tips, proceeds from online auction sales or investments, or freelance income.

2. List Expenses, then Cut Back a Bit

Then it’s time to see what sort of regular expenses I have: mortgage or rent, groceries & household goods, transportation, utilities, school-related expenses, clothing, entertainment, gifts, insurance, credit card bills, and others. If I need to estimate, I can go back over my records for the last three months or compare this year to last year.

Throwing in a specific category in your budget for a small weekly or monthly treat may help head off any feelings of resentment or deprivation. For instance, I enjoy video games and I know where to find used games at reasonable prices; I can also sell off my old games in order to keep this particular budget category under control.

What about trimming the expenses? I can cut back on categories that won’t be so painful, such as entertainment, clothing, the internet plan, vacations, the long distance plan for the landline, groceries, or gifts. Also, I can look at a cheaper cell phone plan, make less expensive choices when eating out, or I can probably trade in a gas guzzling vehicle for something more fuel efficient.

If I’m not up to forswearing the coffee like David Bach suggests with his Latte Factor, then maybe I can downsize in another area, like my debts, so that eventually, I’ll have a 60% expenses to 40% savings ratio.

3. Debt: Pay It Off Faster

Debts such as credit cards, student loans, personal loans, and auto loans are a big drain for many of us. Paying off debt like a 19% credit card with a $9,000 balance can seem like a never-ending marathon. To shorten the race, I can try to call and ask for a lower interest rate. This has worked for me in the past.

If I’m about to embark on the hunt for a new auto loan, I’ll need to evaluate just how much car I need. Can a $13,000 car haul me around as well as a $30,000 one? Is there a way for me to transfer my current credit card balance to a card with a much lower rate? Questions like these can make me pay down debt at a much faster rate, which can help me move more money into savings. Here’s a look at some 0% balance transfer credit cards that may offer you better low rate options:

4. Say It Like a Soccer Announcer: $Gooooal!

Having specific financial goals gives us focus. So I thought I’d outline several savings categories with specific amounts to target. These categories can include:

• Short Term: These would include things like the tires I’ll need soon, the trip I might need to take to see relatives, or irregular expenses.
• Emergency Fund: Instead of relying on credit cards the next time I have car or job trouble, I can start building up a cushion to eventually equal a few months of expenses.
• Investing: After my debts are paid off, I can attempt to grow my wealth through investing.
• Retirement: A retirement calculator can give me a minimum savings target.
• School: I can estimate tuition, dorm, and other school expenses ahead of time.

5. It’s Not Magic, It’s Automatic

Going to the bank to transfer money from checking to a high yield savings account can eat up too much time on a work day. Instead, I can use an automatic savings plan to pull out the money from checking on paydays, and I can set up transactions at certain times each month.

What about additions to my regular income, like bonuses, raises, inheritances, income tax refunds, or even the $50 bill that Granny handed me for my birthday? Much as I’d enjoy a new smartphone or a dash through the department store, my savings will grow faster if I stash 40%, then retire some debt with the rest.

If 40% seems like a high percentage, I can try 5% this month, then scale up to 40% over a period of time. Besides, a drastic change to the finances overnight is less likely to stick than a goal that doesn’t seem punitive. If 5% seems high, then I can just start with $5, then try $10 the next month so that savings becomes an established habit.

This is a post from The Smarter Wallet.

How To Budget & Save 40% Of Your Income