Archive for February, 2011

Walden Savings Bank Offers 6 Month CD Rate At 0.75%

Looking for a short term place to store your cash? Placing your money into a certificate of deposit will earn you more than most bank savings accounts. By putting your money into a 6 month CD, you not only earn more than the average savings account, but you also don’t have to wait too long before you have access to that cash again. Short term CDs are a great way to earn a quick few bucks while you wait to make that purchase or if you are waiting to use that cash. I recently placed my money into a 6 month CD because I knew I could earn more than leaving it in a savings account, but also wanted the ability to use my money in the next 6 months to buy a house. Right now isn’t a good time to buy a house, so my money was just sitting in my bank account collecting dust, or a few pennies from its extremely low and offensive interest rate.

Walden Savings Bank has been around for over 135 years and has always provided some of the best CD rates to its customers. Walden is currently offering its six month CD rate at 0.75% APY, with a minimum deposit of only $1,000. This CD will automatically renew at the end of its term so its important that you let the bank know your intentions during that time, otherwise you might get stuck in another 6 month term. There are penalties for early withdrawals so be sure you read the fine print.

Walden Savings Bank is headquartered in Montgomery, New York and is a federal chartered mutual savings bank that opened in 1872. Walden Savings Bank maintains 11 full service branches in southeastern New York (Walden, Washingtonville, Montgomery, Cornwall-on-Hudson, Pine Bush, New Windsor, Gardiner, Scotts Corners, Circleville, Middlehope and Florida). You will want to visit one of their branches to learn more about their savings and other options offered.

Be sure to check out our most up to date CD rates table to find the best rates for any CD term.

24 Month CD Rates Stay At 1.75%

Salem Five BankOver the past few weeks, CD rates have changed quite a bit. Banks seem to be battling out for the top spots of most of the CD rate terms. This battle between banks isn’t much to write home about, but it’s a positive sign that CD rates might actually go up in 2011.

One of the most popular CD terms is the 24 month certificate of deposit which has not moved since Jan. 12, when Salem 5 Bank took over the spot from Melrose Credit Union. The Salem, Mass. based bank offers a rate of 1.75% APY on a minimum deposit of $10,000, kind of high for the average person.

These rates are much higher than what the large banks are offering and are much higher than the national average, which is currently sitting at 0.73% APY (24-month term). So if you want the best CD rates then you must look further than your local bank. Be sure you do your research to find the best CD rates, before signing anything at any bank.

Here are the next best 24-month rates:

If you find it hard to put $10,000 into a certificate of deposit then there are other great options. By putting extra money into a CD, you can usually get the best rates. Some banks offer lower minimums of $500, but you lose some of your interest. Usually the lost interest rates will not make much of a difference. 5 tenths of a percent will make very little difference. For example, if you put $5,000 into a 24 month CD at a rate of 1.60%, at the end of your term (24 months), you would have made $161.28 profit. Now if you placed the same amount of money into the same CD term, but lowered the rate to 1.55%, your profits would be about $156.20, a difference of $5.08 or 1 coffee! So if you cannot afford to meet the minimums of some of these CDs, then find the next best option, you probably aren’t missing out on much.

Be sure you get the best rates from your certificate of deposit by comparing CD rates from our up to date database.

Best CD Rates For February 17, 2011

This could be the first signs that CD rates will start increasing. One day after Sovereign Bank took the top spot for the 60 month CD term, a California based bank- Kaiser Federal Bank matched the same 3.0% APY. Kaiser Federal Bank raised its rates from 2.75% to 3.0% APY, making it a two way tie for the best available 5 year CD.

Kaiser requires a minimum of $10,000, which is much higher than Sovereigns’ minimum of just $500.

Here is a list of the top CD rates available nationally:

*TermBankFebruary 17December 1
3 Month CDCalifornia First0.80% APY0.95% APY
6 Month CDMetropolitan National1.15% APY1.15% APY
12 Month CDIncrediblebank1.45% APY1.51% APY
24 Month CDSalem 5 Bank1.75% APY1.76% APY
36 Month CDMelrose Credit Union2.17% APY2.27% APY
60 Month CDSovereign Bank3.00% APY3.03% APY

Be sure to get the best CD rate available by checking out our CD Rates board.

MBA looking to help Underwater Homeowners

Are you an underwater homeowner? Looks like the MBA has got your back.

The Mortgage Bankers Association currently have their eye on the government’s HARP program to make it more accessible and available for homeowners who are having trouble with their mortgage. Right now they are urging the government to reduce, and to even completely eliminate, the limit on how far an underwater homeowner can qualify for the program.

So what exactly is the HARP program all about that is getting the MBA’s attention? HARP, an acronym for Home Affordable Refinance Program, was developed by the government to help underwater homeowners improve their financial status by availing of lower interest rates on their homes. Lenders are provided incentives to encourage them to allow homeowners to refinance with them, despite the fact that their loan may be more than what their property is worth.

Certainly, this impossibility sounds too good to be true. And it does seem to be so. The HARP program has fallen far behind on their original projections, achieving only a total of half a million borrowers, compared to their original projection of 4 – 5 million. That’s a huge gap from the original numbers that provided hope for many homeowners.

Fannie Mae and Freddie Mac, the lenders that are involved with the program are rumored to be gradually put to the end by the government to reduce their role in mortgage markets. This possibility has pushed the MBA to further seek reforms in the program.

At this time, mortgage rates are also rising by more than three-quarters of a percentage point from their lows in November, making refinancing less of a juicy option for homeowners. With these markets, the MBA continues to push for the lowering of requirements plus the extension of the deadline of the program. HARP is supposed to be expiring come June this year. But hopefully it can be extended until December 31, 2012 to match the deadline of a similar program called HAMP mortgage loan modification.

Among the things the MBA is advocating for, it is also calling for Freddie Mac and Fannie Mae to adopt standardized guidelines in the HARP to things such as borrower and loan type eligibility, employment requirements and property inspections, closing costs, and income documentation. Having requirements that are less strict will allow more underwater homeowners a chance to avail of HARP refinancing, and giving them the chance to move up from their rocky financial situations.

What Posting on Facebook Could Mean to your Money

Social networking sites are the new wave of the generation. People are crazy about them. And they have a lot of reason to be. Social networking sites, Facebook especially, have revolutionized the way people across the globe communicate. Making it easy to connect with friends and business connections you otherwise would not have gained contact with. However, Facebook is not all fun and games. It could be a breeding ground for financial disaster.

Identity thieves feast on personal information such as your full name, birth date, birth place, email address and even your pet’s name. It only takes a few of these information to hack into your personal accounts. And with the advent of online banking, these information could just be the thing identity thieves need to make a run for your money.

Identity thieves are smart. They can get one little detail from you and connect it with another. Although it may seem harmless to post a picture of your favorite dog and place a caption of just how much you think Fifi looks cute in this picture, that little piece of information could be the answer to the security question banks and other financial institutions ask you when you forget your password. The thing is, when you post too much information on Facebook, even a high school student can go ahead and hack (and possibly drain)  your account.

Here are some things you can do to protect yourself from identity thieves in Facebook:

  • Do not place critical personal information such as birth date, birth place and your full address. These information can be critical to identity thieves.
  • Do not place contact information such as your home phone number, cellphone, and  email address
  • Do not post your daily whereabouts. You’re making it doubly easy for stalkers to find you. Instead of posting where and when your hot weekend party will be held and how excited you are, post the details after the event. That is, if you really need to do so.
  • Do not add everyone up as your friend. When Facebook and other social networking sites are concerned, you shouldn’t be overly friendly. Only add friends that you know personally, not friends of friends or someone you just met at the local grocery store or at the bar.
  • Be careful when answering seemingly harmless quizzes such as “10 Things Other People Wouldn’t Know About You”, this could have been made specifically to gather personal information.

Although social networking sites pose a threat to your identity, they are changing the way the world communicates and it’s always better to have one than none at all. You just have to be vigilant about the information you’re disclosing, especially if these information could be clues for identity thieves to gain access to your email, your SSS number, and even your personal bank account.

CashBack Credit Cards: The Real Deal

With all the promotions and tactics that banks and other finance institutions are throwing at people just to get them to invest, with every “good thing” they propose we start to wonder, “What’s the catch?”

When it comes to cash back credit cards, the deal is this: pay for your bills, groceries, and other purchases with your credit card, and you get a rebate by the end of the year. Sounds good right? So the question that follows is, “Do they really work?”

In all simplicity, cash back credit cards do give you what they promise. However, in order to actually make the most of it, you have to start reading the fine print. Here are the things you need to be aware of:

Fees – That’s right, does your cash back credit card have an annual fee? Most people tend to forget this little detail, and are shocked at the start of the year when they check their mail and find their statement ridden with a few hundred dollars in fees. There are other cash back credit cards that don’t sport this annual fee, so having those will be to your advantage.

Percentage Rates – Usually when we think of credit card rates, the lower the number, the better. But in this case, it’s the opposite. You would actually want your rebate rate to be higher because that means you’ll be getting more from your cash. Some cash back cards give you 1% back annually, but others can give as much as 5%. However, check to see when you’ll start building the rebate. Some cards require you to have spent a certain amount on the card before you start earning. Others give you a bigger rebate for certain grocery stores, gasoline stations, and shops. The more you know, the more you earn.

Pay it Monthly – With some cash back cards, failure to pay your credit card debt monthly will mean automatic cancellation of your rebate. Plus, some cash back cards have higher interest rates than ordinary cards. If in case you feel that you can’t pay off your credit card debt monthly, it’s better to get an ordinary card.

List it Down – Finally, the best way for you to make the most of your cashback card is to list down your credit card expenses. This will give you an idea of how much you expect to get by the end of the year. If you don’t keep track, you probably won’t feel the difference anyway.
Cash back credit cards really do give you a rebate on the money you spent using the card. But when it comes to credit cards, the best thing is to have discipline over yourself and not to have the attitude of “I’m going to get more by the end of the year if I spend more anyway!”. If you don’t have the discipline and if you have a spender’s mentality, it may just be better to pay cash instead.

Scrambling for a Student Loan? Get It at the Last Minute

As problems with student loan availability arise, many undergraduates are starting to wonder if they can still get a student loan for the next semester. Difficulties emerge when students are having trouble finding a student loan because of strict criteria, or because their federal provider backed out. At this economy, students shouldn’t be overly confident that they can get a student loan. There might still be a chance that they can’t.

If you’re a student who’s facing the possibility of not being able to enter college next semester, here are a few solutions you can find – at the last minute.

  1. Head to your college’s financial aid office and ask them about the availability of federal student loans. One loan you can consider is the Stafford student loan. Stafford loans offer a low interest rate of 4.5%, and you can have up to $20,500, depending on your degree status and number of years in school. Requirements include being a US Citizen or permanent resident, you must have a financial need, and you must be enrolled to the school. The best thing about Stafford loans is that they don’t have a credit requirement.
  2. Ask if your school participates in the program that allows students to get a direct Stafford loan. If they have it in their program, ask if you’re eligible. Having a direct loan offers better repayment options for students.
  3. Sometimes your Stafford loan amount isn’t enough to cover your existing need. If this is the case, you can ask your college if they offer Perkins loans as well. Interest rates for Perkins loans is at 5%. Perkins loans will also need to assess if the student has a financial need.
  4. PLUS loans are also available if in case you don’t qualify for a Perkins loan. The advantage of PLUS loans is that they have a higher limit than Stafford loans, allowing coverage for most, if not all, of the needs for the semester. The downside is, PLUS loans are put in the parent’s name, not in the student. If parents are not eager to have a big amount of debt in their name, students can opt to split repayment costs and have it put in writing.
  5. When parent’s credit isn’t good enough to qualify for a PLUS loan, your college aid administrator just might be able to grant you an additional Stafford loan to cover the amount you lack.

Finally, if you’ve followed all the steps enumerated above but you still can’t seem to make ends meet, it’s time to recheck your college plan. Try to see where you can cut expenses and if you can work more hours to gain extra cash. Save with the small stuff and you might just be able to pull through.

How To Get The Best CD Rates? Use A Calculator

Certificates of deposits are a good place to park your money in between investments. In a short amount of time, certificates of deposit will allow you to keep continuous growth of your money through a set rate of interest within a predetermined amount of time. Maturities of CD’s can range from weeks to years, with the interest rate directly proportional to the amount of time the money is tied up. Many banks and other financial institutions offer this kind of investment, the problem is, which CD do you choose?

Nowadays there is a plethora of certificates of deposit offered by numerous banks and investment firms. Not all of them are alike, so it can be confusing to figure out which one out of all the CD’s will give you the best rates. So how do you find out which one is best without having to break your neck looking over the numbers?

The answer – use a certificate of deposit calculator.

When looking over a certificate of deposit, there are a number of factors to consider. You have to take into account the initial deposit, total of months required, interest rates, number of times the interest will be compounded, plus the fees and penalties in case of an early withdrawal. Using a certificate of deposit calculator, you will be able to find out how much total interest you can earn with a particular CD.

The calculator will show you the amount of annual interest, plus your compounded interest, giving you your annual percentage yield or APY. Getting the annual percentage yield will enable you to compare one CD from the next. The higher the annual percentage yield, the better the CD.

Using the certificate of deposit calculator will help you arrive to a conclusion on which CD gives you the best return for your money. When investing, it’s always smarter to look over all your options before committing to only one. Remember, certificates of deposit may be a great way to grow your money in a short span of time. But you will still need to check which provider offers the best CD rates, and with the least fees and penalties.

Does the Interest-Only Mortgage Sound Too Good To Be True? – Maybe It Is

In this day and age, getting a loan is as normal as buying a refrigerator for your kitchen. Everybody has one.

Loans have become a necessity. Without them, we won’t be able to buy our dream house, get that ideal car, or move in to that bigger apartment. We try to keep our credit record clean so we can get a lower interest rate for our mortgage. And when we see an offer that says “interest-only” or “no down payment required” it’s as if we’ve died and gone to heaven. But are these mortgages really as good as they sound? Or are we in for a financial ride?

An interest-only mortgage is a way to borrow money, and pay less on a monthly basis. It may sound like a good deal, pay only the interest now (resulting in a lower monthly payment) then pay the rest of the balance later when your financial situation improves. The problem is, you may be taking on a loan that is more than your bank account can bear, and you might find yourself in a rough spot in the future.

So what happens with an interest-only mortgage? First, interest-only is not the loan itself, but it is an option that can be attached to a home mortgage. Here, a borrower only pays the interest on the principal for a set period of time. When you’re paying only for the interest, your initial monthly amortization may appear to be quite low. However, since you have not contributed any amount to your principle, the borrower is not building any equity.

Interest-only loans can be dangerous for people who cannot really afford an increase in monthly payments. Although it may sound promising to start a loan on low monthly amortizations, the balance will eventually increase as time passes. The people who are expecting an increase in salary in the future may feel confident at present, but when things don’t go as planned, this mortgage may turn from being a dream to a nightmare.

Interest-only mortgages although dangerous for the average person, are still good for savvy investors who clearly know what they are up against. People who plan to flip their homes or refinance before the interest-only period is over, may also benefit from this kind of option to a loan.

When considering loan types, interest rates, and mortgages, it is best to do a thorough review on what the mortgage really means for you now, and in the future. This will allow you to save thousands of dollars, and it won’t leave you with a loan that’s too much for your checking account.

Why you Should Start Saving for Retirement Now – Even When You’re 20

When you’re in your 20’s, it feels like the world is at your feet. You’re single, you have a regular job (and sometimes even high paying, if you’re smart), and you have a lot of cash to burn. It only seems natural to go ahead and get that car loan, rent a classier apartment, spend your dollars on shopping or vacations, and live a financially carefree life.

You tend to think, “I’m still young, I have loads of time to start saving”. But before you know it, you’re at your 40’s or even 50’s, with a never-ending house loan, and kid’s college to think about. You look at your account and sweat starts pouring down your forehead. With only 10 more years to start saving for retirement, the future is starting to look bleak.

Before you find yourself in this tight situation, it’s time to use that brain of yours and realize the importance of saving for retirement now. Do you know that the best time to start saving is when you’re at your 20’s? And if you only could, you should’ve even started saving when you were 10!

And this isn’t only because of the length of years you have until you turn 60, but this is because of the power of compounded interest. If you haven’t heard of the term before, compounded interest happens when interest is added to the principal, and as time wears on, the interest gained will also earn interest.

To illustrate this concept, let’s say you put $1,000 in the bank with 20% annual interest. By the end of year one, your money would have earned $200, for a total of $1,200. By the end of year two, your money (which is now $1,200), will earn another 20%, earning you a total of $1,440.

If you’ve made the connection, the more number of years you keep your money where it earns a steady percentage of interest, the more money you get!

Let me drive home this point. If you started saving that $1,000 at age 50, by age 60, you would get $6,191.73. But if you started saving that $1,000 at age 40, by age 60 you would have.. (drum roll please).. $38,337.43. Shocking difference? Try calculating if you saved that $1,000 at age 20. You would probably faint.

When people advise you to start saving when you’re young, it’s not for naught. And aside from saving young, you also have to know where to put your money to get the best interest rates. Whatever happens, don’t put off saving for your retirement. Or else there will be nothing left for you but regret.