Banking

Daily Financial Advice Mallard 3-1-2014

Daily Financial Advice Mallard 3-01-2014

The moment you think it would be a good idea to withdraw money from the ATM at the bar It’s time to leave the bar.

Happy Saturday! As a reminder watch out when withdrawing money from ATM’s as they will charge you fee’s as high as $3 to withdraw money if it isn’t your own bank. If you are at a bar and have run low on money maybe it is best to slow down for the night or to head on home.

Savings Bonds for Kids

Given that fact that savings bonds take 20 years to mature, they are a great way to invest in the future of children. Series EE bonds were originally offered in July of 1980 to replace Series E savings bonds. Series EE bonds form reliable, low risk government backed savings products that can be used as the cash investment to finance children’s education.

savings bonds for kids

Series EE bonds are now issued in electronic form, from the 1st of January, 2012, a departure from the previous paper based savings bonds. They reach maturity after 20 years and double in value. For instance, EE based bonds issued with a face value of $100, are sold for $50, and are usually worth $100 at maturity.

Series EE savings bonds can be purchased in amounts of $25 or more with some common denominations including $50, $75, $200, $1000 or $5000. Electronic EE savings bonds are usually purchased at face value so that a face value $200 electronic EE bond is purchased for $200. The minimum purchase of an electronic EE is $25 while the maximum purchase of electronic EE savings bonds annually is capped at $10,000.

Savings bond are great as gifts or as secure investments that can be redeemed in the future. Though they are redeemable after 20 years from issuance, Series EE bonds can continue to earn interest for a total of 30 years. The interest earned monthly is paid when the holder cashes their bond. For bonds that were issued before May 2005, the rate of interest is usually recomputed every 6 months at 90% of the 5 year average treasury yield calculated based on the preceding 6 months. For bond issued in or after May 2005, the fixed interest rate based on the life of the bond is 0.20%.

Other U.S. savings bonds are the Series I bonds. These are variable yield based bonds whose interest rate is calculated based on the inflation rate. The interest rate of these bonds is calculated based on two components, a variable rate reset every six months on the 1st of May and the 1st of November each year, and a fixed rate which remains constant over the life of the bond.

Savings bonds are a flexible investment tools that offers a fixed or guaranteed rate of return for the person bearing the bond. For children, this is a great way to secure the future by providing a safe financial position that is adequate to meet the future needs of the child.

Banks vs. Credit Unions

Before starting a savings account, making investments, and making your own financial plan, you have one choice to make. Should you put your trust in a bank or a credit union? From the outside, the two financial institutions appear the same. What you do not know, however, could be the difference between becoming a member of a local bank or the local credit union.

Charles Funk, president and chief executive officer of MidWestOne Bank in Iowa City, Iowa delves into the subject.

“From the outside, banks and credit unions look basically the same,” Funk says of the two financial institutions. However, there is one distinct difference. Credit unions were created with the goal and mission to serve the under served. Taking a quick look at how credit unions have grown into a large brand shows how the original goal has been strayed from.

Banks have common stock and shareholders, whereas credit unions have members instead of shareholders. This also means that, unlike banks, credit unions do not pay income taxes. This allows them to use more of the money the collect for profit.

Banks and credit unions both offer similar services, from checking to savings accounts but how they operate on the inside is not as similar as the outside appears.

When it comes down to it, the choice between using a bank or credit union is up to the student. The thing to remember is to check all available options and find the one that works best for you.

How to Find Low Cost Banking

Nowadays, our credit defines us. Our credit is often what determines whether we get a checking account free of charge, for a nominal fee, or for an outrageous charge. So many banks are making us pay more to get less. If you want to get the best checking account for the absolute ideal amount of money – you know, the best bang for your buck – check out these tips:
Low cost banking

1. Better prices may be found in smaller places – While large branches will have more branches and ATM’s, they offer convenience, which means higher prices. However, smaller banks will have less branches and ATM’s so the convenience won’t be there, but they price is much more affordable. So, if convenience isn’t an issue for you, then you can find low cost banking easily at smaller branches in your area.

2. Always maintain the required minimum balance – A number of banks will require that you maintain a certain minimum balance in order to have free checking. For example, so long as you don’t dip your account balance under $500.00, your checking account is free; otherwise, you have to pay, say, $10.00 per month for the account services. If your bank requires a minimum balance, find out if it an average balance over a certain period of time or if it is a daily minimum balance, so that you can make sure you are up to code.

3. Get overdraft protection, but don’t bounce checks – As difficult as it may be to not write that check to buy that hip new shirt at the local clothing store, it will save you money in the long run not to write it. Sure, you may have overdraft protection, but writing that check and having it accepted is going to cost you a decent chunk of change. In fact, banks are constantly raising their prices on how much a returned check costs. Then, just think if you have exceeded your overdraft protection limit, you are going to be out even more. Not only will you be paying for the returned check fee at your bank, but you will pay for the same fee at the store that you wrote the check. As a general rule, this is a $30+ charge each time, at each location.

4. Purchase your own checks – Believe it or not, you can save a ton of money by buying your own checks from a third-party source rather than from the bank itself. Sometimes, you can save as much as 50 percent! And, more than likely, you’ll have a much wider selection of excellent check designs than you would have at your financial institution.

The above-mentioned four tips will help you ensure that you get more of what you want and need out of a checking account from a low cost bank for an affordable price that won’t break the bank!