Archive for August, 2011

The Top CD Rates for The End Of August

This August we’ve seen a lot of things going on in the economy, there was a sudden fall in the market, the U.S. rating got downgraded, and CD rates dipped to its lowest in over 50 years. Now that it’s the end of August, certificates of deposit are holding steady to their numbers since last week. Below are the top ten contenders for 1 year certificates of deposit:

1. AloStar Bank of Commerce
Rate: 1.27% APY
Minimum Deposit: $1,000

2. E-Loan
Rate: 1.26% APY
Minimum Deposit: $10,000

3. Sallie Mae
1.20% APY
Minimum Deposit: $0

4. Aurora Bank
1.16% APY
Minimum Deposit: $1,000

5. Discover Bank
1.15% APY
Minimum Deposit: $2,500

6. Doral Bank
1.15% APY
Minimum Deposit: $1,000

7. Colorado Federal Savings Bank
1.15% APY
Minimum Deposit: $5,000

8. Ascencia (a Division of PBI Bank)
1.13% APY
Minimum Deposit:$500

1.11% APY
Minimum Deposit:$2,500

10. New Dominion Bank
1.10% APY
Minimum Deposit: $1,000

The National Average is currently at the low 0.41% so the rates above are already quite a steal. Now that interest rates are so low, people tend to wonder whether it’s a good idea to invest their money now. Well, the only other options are to either park their money in a savings account, or brave the volatility of the stock market. Most investors choose to play it safe by keeping their money out of the stock market, and since savings accounts always give the lowest rates, most investors choose to invest their cash in short term CD’s while waiting for the market to calm down. This could be a fairly secure investment move that can keep money safe until better times.

How To Earn Money While on Vacation

Paid vacations are one of the things that every employee looks forward to in each year of work. We break our backs everyday at a job we don’t even like, comforting ourselves with the thought that in a couple of months we will be eligible to have a vacation with pay. However, is it truly possible for us to go on vacation anytime we want, and still manage to rake in some money in our pockets while sipping pina colada in Hawaii? The answer, is most certainly a yes. So how is it done?

First of all, this occurrence is very common among the rich. And it’s not because they are already rich that’s why they can manage to go on vacations whenever they want, it’s about how they created that privilege for themselves in the first place. The answer lies in a thing called “passive income”.

Basically, there are two types of income, active income and passive income. Active income means money comes to the hands of the person out of doing work actively. This could mean doing any type of work in a job, while exchanging effort and time for money. Passive income on the other hand, comes into the hands of the person even when the person spends little time and effort on the activity.

Obviously, active income is where employees fall under. They go to a 7-5 job, and if they absent without reason, they don’t get paid. And the only way to get more money out of the job is to do overtime work, which is again exchanging time for money.

Passive income is something that investors, and the rich have. Even if they’re playing with their kids or vacationing in a deserted island, their money keeps working for them. Passive income can come from sources such as property rentals, royalties for creative material, recurring sales in a business, and even sales with a blog or website you happen to own. There are various sources of passive income, and this is the secret that people have to learn to be able to be financially free.

Ironically, people often work for active income, not realizing that passive income is the true goal of financial wealth. To sum it all up, active income is when you work for money, while passive income is when money works for you.

Even if you’re enjoying sushi in Japan, yachting in Greece, and enjoying the sun in the Bahamas, your money keeps working for you, and you still get paid. So is earning money while on vacation possible? For sure it is. Even if you decide to live in the beaches of Brazil forever, you can still have money in your pocket.

4 Smart Tips To Get A Low Private Student Loan Interest Rate

When getting any kind of loan, student loan or home mortgage it may be, the one thing we are all nervous about is the interest rate. After all, it determines how much in total we will be paying at the end of the road. For those who were smart enough to do some due diligence before applying, you may just be rewarded with a lower interest rate. Here are 4 smart tips to get you the rate you want.

1. Take Advantage of the 30-day Credit Window – We all know that one of the things that affects our credit score is shopping for the best interest rates. As ironic as this may sound, jumping from one lender to another in the hopes of finding a good rate can actually bring your score down. However, there is a 30-day credit window for private student loans that can afford you the luxury to do just that. At the end of the 30-day window, you will appear as if you’ve only gone to one lender (whether you’ve accepted them or not). This window can help you because it allows you to have lenders calculate your potential rates and it gives you the liberty to decline them or look for a better offer.

2. Make Use of APR Reductions – With the current economic state, lenders are all vying for your money. This means they have little promotions that make the loan juicier for you. This includes reducing your APR. Commonly, there is a reduction of 0.25% APR should you choose to pay off your bills via an auto-debit function. Plus, some banks will give even more deductions if you pay off your accounts through them. They can call it double business, but you can call it opportunity.

3. Know your Index – Before, the only student loans available are those variable upon an index. Rates are attached to a certain index, and the chances of it going up or down will depend upon said index. The most commonly used are London Interbank Bank Offering Rate (LIBOR) and Prime Interest Rate. Before committing to your interest rate, check the volatility of these indexes over a 6-month or 12-month duration. If you notice that the index is swinging dramatically, so will your rate. Just recently however, fixed private student loans have become available with a rate that doesn’t change for the length of your term.

4. Bad Credit Score? Get a co-signer – And finally, if you have a bad credit score, you can opt to bring in a co-signer with a strong credit history. This could be anyone, your parents, grandparents, extended family members, and basically anybody you can find who’d agree.

Most business deals are usually made with negotiations. When a lender gives you a rate, don’t immediately settle for it. Remember, there are ways to bring it down.

CD Rates Dropped Lower This Week, August 25th 2011

CD rates are either holding steady or continuing to drop. This week finds CD yields lower than last week. The average of one year CD’s dropped 1 basis point to 0.41 percent while the average for 5 year CD’s also dropped 1 basis point to 1.42%. Jumbo certificates of deposit of no less than $100,000 weren’t able to evade the drop with its 5-year jumbo rates down by a large 4 basis points to 1.46%. Thankfully, 1-year jumbo CD’s held steady at 0.45%.

Considering the state of the economy, many investors are looking to place their money in safer avenues. Generally, treasury bonds and certificates of deposits are considered to be safer than stock market picks. Despite the low yields and rates given by both types of investments, investors seem unfazed as evidenced by the $35 billion in four week Treasury bills sold by the Treasury Department even with an interest rate of zero percent.

Below are the top contenders of CD rates in different time frames.

1. 1 month CD
Lone Star Bank – 0.40%

2. 3 month CD
AloStar Bank of Commerce – 0.76%

3. 6 month CD
AloStar Bank of Commerce – 1.05%

4. 9 month CD
New Dominion Bank – 1.05%

5. 1-year CD
AloStar Bank of Commerce – 1.27%

6. 18 month CD
First Trade Union Bank – 1.30%

7. 2-year CD
Aurora Bank – 1.41%

8. 3-year CD
Discover Bank – 1.70%

9. 4-year CD
Discover Bank – 2.00%

10. 5-year CD
First Internet Bank of Indiana – 2.40%

Just like last week, AloStar Bank of Commerce beats other banks with their CD rates for short term certificates of deposit. Longer term CD’s are experiencing good rates with Discover Bank. However, most investors are only looking to put their money in short-term CD’s since the rates are considerably low. Once the market starts looking up, you wouldn’t want to have your cash stuck in a low rate for a period of 5 years or longer.

Certificates of deposits although safe investments, may trump the potential yield of money. They do however make a good and safe place to keep your cash until other investment vehicles stabilize.

Need To Budget? Use These Tools

Budgeting is something we all have to learn and have the discipline to upkeep. However most of us just budget on a whim, bending our rules here and there just to make ourselves comfortable. Also, most of us aren’t accounting majors so we don’t really know what a budget is supposed to look like anyway. Technology however seems to be hearing the plea of the regular folks and has come up with some nifty tools that can help us understand our budget more, and have the discipline to keep it up. Below are some of the best online budget tools that anyone can use to help increase savings:

1. PearBudget – One of the easiest tools to install, this tool is basically just a spreadsheet that can be opened using Excel, Word, and Open Office. All you have to do is open it in your computer, input your data and your budget is good to go. The best thing about it is, it comes for free.

2. BudgetPulse – This application allows people to monitor their financial condition. It’s based on user friendliness, comprehensiveness and ease of use. A good tool for those who just need the basics.

3. Expensr – This application helps you track how much money is going to food and gas. Plus, you can also compare your spending with similar people so you’ll know how to improve your spending. This tool also has a forecasting feature to help you steer clear from financial surprises.

4. Mint– This tool is a free online financial management tool that allows you to link your checking, savings and even credit card account to your Mint account. This helps you keep track of deadlines, and see every transaction. Although some people are worried about giving out the confidential information, the site uses Yodlee to manage security information which is the same company being used by Bank of America.

5. Mvelopes Personal – This is an online personal finance and spending management system which is probably one of the best of its kind. It helps you keep a budget and live within it, all done automatically. Although this application does not come for free, it’s well worth the money.

There are many other budgeting tools available online. Some come for free, and others for a fee. Try and check which one works the best for you. Maybe just a little software help is all that you need to get your savings and your finances in check.

Mortgage Rates Prediction August 22-26, 2011

Before we go on and analyze what’s going to be happening with mortgage rates this week, let’s first look at what happened last week. It seems as if mortgage rates are definitely dropping to historic lows, giving the lowest rates in the history of 50 years. As compared to last week’s low rate of 4.46% for the national average of 30-year fixed mortgages, this week’s national average dips even lower with a whopping 4.15% national average. Chances are, with an average like that, home buyers, refinancers and real estate investors are likely to find banks and other lenders who have rates at the upper 3% range.

The reason for a turbulent market last week is attached to renewed fears of debt contagion in Europe, as well as the possibility for the U.S. Economy to enter into a double dip recession. This week however, there are a couple of things to look forward to that can influence the market greatly. On Tuesday comes the new home sales for July, Wednesday is the Durable Goods Report, and Friday is the 2nd Quarter GDP and Fresh Consumer Sentiment Reports. Despite the historic low rates last week, analysts say that the rates did not fall as far as they were expected to, meaning, there is still room for the rates to go down. This week’s prediction is that the rates will see more low periods, and mortgage rates could still drop further to make new historic records.

Although a plummeting economy is generally bad for most, this could also mean a good time to buy for real estate investors and perhaps home buyers who are in the know. The same holds true for the stock market, and despite the volatility, veteran investors might be pressing on with their buying spree. Again, for those thinking about purchasing a new home or refinancing an old one, now would be the best time to act.

Overall CD Rates Hold Steady For Week Ending August 19th, 2011

This past week we have seen the Dow move up and down, but ending the week down 450 points. Many banks have cut their CD rates but overall the top CD rate leaders have held steady. The biggest drops come from a major Credit Union – Melrose. Melrose has consistently kept their rates higher than any other major nationwide bank, but since August 8th they have cut their rates down by about a quarter percent.

Here are the current rates offered at Melrose Credit Union:

  • 12 month CD rates down to 1.05% from 1.31%
  • 24 month CD rates down to 1.31% from 1.56%
  • 36 month CD rates down to 1.81% from 2.07%
  • 48 month CD rates down to 2.07% from 2.32%
  • 60 month CD rates down to 2.57% from 2.83%

For the week ending August 19th 2011, the top CD rate holders have held steady:

  • 3 month CD’s – AloStar Bank of Commerce at 0.76%
  • 6 month CD’s – AloStar Bank of Commerce at 1.05%
  • 12 month CD’s – AloStar Bank of Commerce at 1.27%
  • 24 month CD’s – MainStreet Bank at 1.50%
  • 36 month CD’s – MainStreet Bank at 1.90%, DOWN from 2.00% from August 8th
  • 60 month CD’s – MainStreet Bank at 2.50%

Overall the best CD rates have held steady, but we suspect another drop is coming. Connexus Credit Union was also offering some of the highest CD rates, even higher than Melrose Credit Union but have since dropped their rates also.

Connexus Credit Union requires a minimum deposit of $10,000 to receive the higher rates:

  • 6 month CD rate of 1.25%
  • 12 month CD rate of 1.50%, which is down from 1.75% on August 10th.
  • 60 month CD rate of 2.50%, which is down from 3.00% on August 10th.

With these lowered rates, this puts Melrose back in the lead with the best CD rates you will find on the market. Even thought they are a Credit Union, anyone can join as long as you meet a few requirements such as opening an account and funding a savings account. They also have a minimum deposit of $5,000, which might be a little high for the average saver.

Be sure to check out our CD rates page for the most up to date rate information. CD rates can change at a moments notice so be sure to check with the financial institution about their current rates before investing.

Should Retirement Savers Keep Their Money in Equity?

The market crash and economic crisis last 2008 was one of the most shocking things that could happen to retirement savers. It was when the value of their stocks dipped so low, many knees shook in fear. However, those who didn’t even bat an eyelash during the recession actually turned out to be winners, as statistics would show.

For the 401(k) investors who kept their equity and even continued to contribute despite the free fall last 2008, their average account balance grew by a staggering 64% from the period of October 2008 to June 2011. However, for those savers who decided to play it safe and withdraw their money between the periods of October 2008 and March 2009, and stayed out of equities through June 2011, grew their money only by a measly 2%.

For those who withdrew their money then jumped right back, experienced a growth of about 25%. All these values were taken from a study made by Fidelity Investments. They also concluded that people are in an all or nothing mindset when it comes to saving for their retirement. It’s either they join the ride for better or worse, or quit the game entirely.

So what do these statistics teach us? Well, we all know how the economy has been in a fluctuating stage lately and that stocks are going down again. The question is, should retirement savers let uncertainty grip them and push them to withdraw funds out of fear? Or should they hold on tight and wait for the waves to rise up again? As they always say, history repeats itself. This study should be enough of a guide for those looking for the right decision.

Top 3 Month CD Rate Drops To 0.76% APY

The leader of the 3 month CD rate, AloStar Bank of Commerce just lowered their rate to 0.76% APY from 0.81% APY.

The online bank has been offering the best 3 month CD for some time now and is a rate available to anyone nationwide. AloStar Bank of Commerce is based out of Birmingham, Alabama.

The next best 3 month CDs go to Virtual Bank and Hudson City Savings at a rate of 0.75% APY. The difference between the two banks is the minimum deposit required. Hudson City requires a minimum deposit of $500 for local residences or $5,000 for everyone else, while Virtual Bank requires a minimum of $10,000 to achieve this rate.

Hudson City Savings has 130 locations throughout New Jersey, New York and Connecticut.

Virtual Bank is based out of Palm Beach, Florida and is the online division of Lydian Private Bank.

The next best 3 month CD drops down to 0.70% APY from OneWest Bank with a minimum deposit of $1,000. Other than these banks, the next best CD rate starts at 0.50% from Discover Bank.

All of these banks allow savers from anywhere in the United States to obtain their rates as long as you meet their minimum required deposits.

Be sure to compare the best CD rates around the nation from our CD rates database.

Reasons Why A Bad Economy Can Be Good For You

Whenever an economic crisis hits, the media is filled with bad news, somber predictions, and all the reasons why people would soon be facing inevitable financial hardship. However, haven’t we ever noticed that when the economy takes a turn for the worse, some investors are as giddy as if it was Christmas morning? The thing is, a bad economy can be good, if you look at it the right way. Below are the 3 reasons why a bad economy can actually be good for you.

1. Low Mortgage Rates & Cheap Houses – When the economy is down, it brings every industry down as well including the real estate market. Although this could be bad news for people who have already bought property, savvy real estate investors are already scouting around looking for that perfect deal. In a depressed market, it’s always easier to find properties on the cheap, plus mortgage rates are extremely low, raking up the savings.

2. Own A Business? Say Goodbye to Competition – A bad economy can be very difficult for businesses because everything slows down. Consumer spending is at its all-time low, but yet there’s still that perpetual need to keep the cash flow circulating. A struggling economy can make business owners paralyzed, and this is when you step in to “steal” the competitor’s consumers. Some businesses are just not ready to survive a recession, while others thrive in it. By the time the economic crisis is over, it’s evident which businesses made it or not. Just be sure your business comes out alive and ready to take on the consumers lost by businesses who went bankrupt.

3. Cheap Stocks – Whenever an economic recession ensues, this signals major buying time for those who are interested in investing with stocks. For the seasoned investor, economic crises are what get him the big bucks. Some investors even park their money and just wait till the market goes low. A bad economy is like a stock free-for-all. Buy low, sell high as they always say.

These are only some of the reasons why there’s always a silver lining when it comes to a depressed market. This can signal major discounts and sales on worthwhile investments in the long run.

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