CD Ladder Basics: Diversifying With Certificates of Deposit

by Ben S. on August 10, 2009Financial and Bank Products | 1 comment

Tired of living with low interest rates in savings accounts? Maybe you should consider CD laddering.

Heard the phrase, but not sure what it means? A CD ladder. Sounds like a product to stack your music. I wouldn’t say that the phrase is familiar to me, but the concept is.

A CD is a certificate of deposit, a guaranteed investment for your money. Because it is guaranteed, you are purchasing something that has a stated rate of return or interest you can earn on that money. Laddering your CDs is a popular strategy in which you purchase CDs with staggered maturity dates.

CD Ladder Basics: Diversifying With Certificates of Deposit

The purpose really is to fit CD laddering into your investment portfolio with a set time frame between roll over of the deposits. Traditional planners may suggest rollovers to take place annually, so that every year you will have an investment come due and can make decisions based on your current (and the current market) situation. Typically, you would roll that investment over, ensuring that its maturity date follows the course of your other investments.

Building a CD ladder can be done without professional help, if you prefer. Choose a financial institution, bank or credit union that offers a good rate of return and with terms you are comfortable with. Instead of putting all your eggs in one basket, stagger the purchases’ maturity dates. Once one CD matures, roll it into a new one.

Even experienced investors who are comfortable with a high degree of risk should consider purchasing CDs as part of their portfolio. A good financial planner can help stagger your guaranteed investment purchases and build a well rounded portfolio based on your needs and risk tolerance.

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A New Chase Business Checking Account Gets You $100

by Guest Blogger on August 6, 2009Financial and Bank Products | 5 comments

Check out the latest promotion from Chase bank.

For quite sometime, my husband owned a Chase bank account while I didn’t. Instead, I had opened both personal and business accounts with Washington Mutual. But then as fate would have it, Washington Mutual was bought out by JP Morgan Chase, so now my WAMU personal and business accounts have ultimately ended up with Chase through no deliberate action of mine. But here’s something I found out as one of their new customers: if you’re opening a new Chase business checking account, you may qualify for a $100 bonus.

This Chase promo is valid from June 10, 2009 to August 28, 2009. This means that there’s still plenty of time to take advantage of a sweet deal. There is one catch: where you live. Only certain states are participating in this Chase business promotion including: IL, WI, MI, IN, NY, CT, NJ, OH, WV, KY, FL, LA, OK, TX, CO, AZ, WA, ID, OR and UT. Unfortunately, this offer is only applicable in these states.

Open A Chase Business Checking Account And Get $100!

So what do you need to do to get the one hundred bucks? You need to open a Chase business account with a $500 minimum balance within thirty days to qualify for the money. To open the account, you simply print this coupon (the promo is over) and bring it to a local Chase branch to get started. From my experience opening business accounts, I recommend that you also bring your certificate of doing business, two forms of identification and your federal and state tax identification numbers.

The account must be opened with funds that are not currently on deposit with Chase or any of its affiliates. This means I can’t use my existing WAMU money to qualify for this Chase promo since account conversions don’t count. Also, only one business banking bonus is applicable per year so people who open multiple accounts will only be eligible for receiving the bonus one time.

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Are You FDIC Insured? Make Sure Your Money Is Safe

by Carol on August 5, 2009Insurance, Money Management | Comment

Having worked in a financial institution for seven years, I was amazed at how little consumers understand federal deposit insurance. I guess I shouldn’t be so surprised because I myself was not aware of FDIC insurance prior to working at my job in the financial industry. I just assumed I was one of the few who were ill-informed. Sadly no, many people aren’t aware that FDIC coverage exists.

So What Is FDIC Insurance?

Here is the formal description of the Federal Deposit Insurance Corporation (FDIC):

The FDIC is an independent agency of the United States government that protects the funds of depositors that are in FDIC-insured institutions. The FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920’s and early 1930’s. Since the FDIC was put in place, nobody has ever lost any money that’s been covered by FDIC insurance.

Bank funds are insured up to $250,000 for each depositor. You should know that this is in effect until December 31, 2013, at which time, this will decrease back to $100,000 per depositor. However, certain retirement accounts (like IRAs) will still be insured up to the maximum of $250,000 per depositor after January 1, 2014.

Some quick facts to know about your FDIC insurance:

  • Coverage is automatic, you need not apply, as long as your financial institution is FDIC-insured.
  • FDIC guarantees CDs, savings accounts, checking accounts and other deposit accounts.
  • FDIC doesn’t guarantee products such as life insurance policies, municipal securities, annuities, mutual funds, stocks and bonds.
  • Deposits held at different FDIC-insured banks are subject to separate FDIC insurance coverage plans.

If you have questions regarding your bank or are curious about particulars, the FDIC has a website with many links and tons of information on this topic. If you wish to confirm that a bank is insured, you can use the FDIC’s Bank Find service or you can call the FDIC toll-free.

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Credit Card Default, Cheap Cooking and Wasted Money

by Ben S. on August 3, 2009Personal Finance Roundups | Comment

Time for some personal finance readings for the week! Here were some articles I enjoyed reviewing over the weekend:

One Mint answers the question: could you be sued for credit card default? Unfortunately, the answer for consumers is “YES”. If you find yourself in court, the state can effectively garnish your wages! Let’s not assume that we can get away with skipping out on our credit card payments.

The Money Maniac tells us which steps to follow in order to begin investing. Some great tips here, ranging from working to build your capital, to identifying when you plan to buy and sell. The important thing is that you start investing as early as you can!

Mrs. Bankrupt takes a walk through credit for the benefit of those who are “credit challenged”. She asks various basic questions here whose answers we should be fairly familiar with: what is a secured credit card? How about pre-paid cards and unsecured, “bad credit” cards? Should you get a debit card?

Debt Loans shares with us what we need to know about our loan company. Some things we should be asking: is the lender reputable? Do they deal with secured or unsecured loans? How will our credit standing affect business with our lender?

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Compare Auto Loan Financing Options Before Buying A Car

by Carol on July 30, 2009Loans and Financing | Comment

I don’t know about you, but vehicle maintenance, unreliable vehicles and I do not get along. Repeat: we do not get along. Last year my husband and I started looking around for a new, (whoops, when I say new I mean newer, not new) vehicle. I’ve got a used car three years in my possession with way too many miles per year and I’m starting to think it’s time to be looking around for a replacement.

But with the way gas prices were behaving in 2008 and with me stuck with an SUV gas guzzler, it wasn’t a good time to talk trade. So, another year has passed and now the car is starting to show its age: engine lights are coming on; the electric door locks have quit, leaving me unable to lock my vehicle; the seat is cracking. Is anything made to last more than 4 years in this country anymore?

So, time to start looking at options. The biggest job may not be searching for the vehicle, but reviewing all the financing options. The vehicle shopping is more fun, mind you, but let’s talk about the financing part. I strongly believe that it’s important to decide how much you can afford and how you’re paying for a vehicle before actually shopping for one. Nothing is worse than picking out a vehicle only to find out that it is not within your ability to pay. It is great to be able to drive a vehicle that is paid for, but if you are like me and 70 percent of Americans, you will likely finance your next vehicle purchase.

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On Bank Mergers and the Hostile Takeover

by Guest Blogger on July 28, 2009Economy | Banking Industry | 1 comment

Once in a while I think back to those days when corporate raiders were chewing up and spitting out large corporations. Like natural selection in the animal kingdom, these raiders sought out those companies that were sick or injured, from which they made a nice profit.

The reality though is that despite changes in our economy, corporate raiders are still alive and well today. They are a little better disguised in most cases, often hiding behind charitable activities or buried within the board of a larger company, but they live on.

On Bank Mergers and Corporate Raiders

Companies are bought and sold quite frequently. Often you don’t hear about such cases because things happen behind the scenes, quietly — say when two companies take part in a merger. A merger is simply the situation wherein two friendly companies come together and form one entity. Often, two small, lesser known companies that are having trouble growing, recognize that by merging, much of the overhead is eliminated and, in turn, saves money. Because most companies that merge aren’t exactly the same size, money often changes hands to make the deal equitable.

Sometimes, high profile mergers take place. AOL and Time Warner merged. Morgan Stanley and Smith Barney have as well. And taking a look at the auto industry of the 90’s will reveal many more.

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Living With Low Interest Rates and Poor Investment Performance

by Carol on July 26, 2009Economy | Banking Industry, Money Management | Comment

What it’s like living in a new market environment where the stock market is down and interest rates are low.

I am the cheese, and he is definitely the ham, in more ways than one: I’m talking about myself and my husband. I guess that is why they call us the sandwich generation. We have aging, financially needy parents, two sets of kids, two of which are in university (help!) and two in middle school. And us, we’re just a couple of pigeons stuck in the middle of it all. When I think about our investments and our family situation — well, I wonder if there’s really anything left for us to invest!

Living With Poor Investment Performance

My husband called the other night wondering if there was any new mail. “Yep, your pension statement came,” was my response. “Oh great, how bad is it now?” was Rick’s obvious next question. Happily I can report that his pension is back to where it was a year ago. Celebrations all around! Never mind that most of the money we’re seeing here have been contributions we’ve made over the last 12 months. Frustrating, yes. But, keeping our financial situation in mind, we won’t be touching that nest egg for a long time. This is one of those times when Rick’s attitude of “throw it in some risky, some middle of the road stuff” has been tested the most. I’m always the one pushing for guaranteed stuff.

I am proud of us: so far we haven’t bailed out of anything, tempting though it has been. Maybe that means we have a decently rounded mix of CD’s, stocks and other high risk investments along with a ton of balanced funds. Still though, it has been quite the roller coaster ride. Either that or we were just scared into procrastination.

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Joined The Money Bloggers, Our New Blog Network!

by Ben S. on July 23, 2009Personal Finance Roundups | Comment

I have some updates for you, and it’s great news! We’ve just joined a new blogging network called “The Money Bloggers” which is comprised of up and coming blogs. This network is still in flux as we’re currently actively recruiting members, so for now, I’m only listing those blogs that have been confirmed as being part of the group:

I’m excited to be part of a new blog network. It always helps when you’ve got friends in this “field”.

Also, I had my first taste of the carnivals this past week! Here were some places where I made my debut. Do check out the financial articles showcased in these carnivals. They are all so great!

Great Personal Finance Carnivals To Visit

Enjoy!

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