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The Federal Deposit Insurance Corp. (FDIC) saw its insurance fund, which protects bank deposits, fall 20% in the second quarter to $10.4 billion, the lowest level in 16 years. The FDIC, which closed 81 banks this year, said it still has 416 banks on its “problem list,” up from 305 at the end of March.

Despite the drop, you probably don’t have to worry about the money you have deposited in most checking and savings accounts. “While challenges remain, evidence is building that the U.S. economy is starting to grow again,” said FDIC Chairman Sheila Bair. “Banking industry performance is–as always–a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry’s bottom line.”

So what do you need to know about how the decline of the FDIC insurance fund could affect you?

  • Banks might be less willing to lend money if they have to pay special fees to get more cash in the fund
  • Banks might offer lower interest rates on savings accounts, CDs, and money market accounts
  • Make sure to cap deposits to $250,000 or less per depositor for each account

The bottom line is that it’s still safe to deposit money in banks. Look for competitive interest rates on deposits.

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UFB Direct

Category: Uncategorized- fhuff- 6:05 pm/ August 26, 2009

UFB Direct has an online savings account with an annual percentage yield (APY) of 2% (as of Aug. 26). You can open a savings account with as little as $1, so it is affordable for people who don’t have a lot of money already stashed away. Details of the offer include:

  • No account minimums
  • No monthly maintenance fees
  • Insured by the Federal Deposit Insurance Corp. (FDIC) up to $250,000 per person
  • ATM fees charged by other banks reimbursed up to $4.50

Interest on UFB Direct savings accounts is accrued daily and is compounded monthly. Savings rates can change at any time so check with UFB Direct for the most recent APY. Statements are sent electronically, but you can request paper statements. However, there is a fee for paper statements beginning with the third billing cycle.

Savings accounts are allowed six pre-authorized transfers per cycle period. Although ATM cards are available for savings accounts, bill pay and debit cards are not. Also, account holders who have a negative balance for more than five days are charged a daily fee until enough money is deposited to bring the account back to a positive balance.

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Horizon Community Bank

Category: Bank Deals, CD Rates, Checking Accounts- Editor- 10:25 am/ August 25, 2009

One of our visitors was kind enough to submit this bank deal (thank you, riddings) :

Horizon Community Bank

STAR Checking is offering 4.01% APY on balances between $1 to $25,000.

Visit our CD Rates page or Savings Account page for more bank deals.

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Bank Overdraft Fees Continue to Rise

Category: News and Notes- fhuff- 6:37 pm/ August 20, 2009

It’s important to look for more than the best rates when comparing different bank deals. You also need to examine what types of fees will be involved before signing up for an account. For instance, the largest U.S. banks have raised fees, added new fees, and decreased time limits for triggering fees when banks pay overdrafts, according to a recent survey by the Consumer Federation of America (CFA).

Banks charge a flat fee for overdraft protection, which basically loans money to an account holder when there isn’t enough money to cover transactions such as paying checks, debt card purchases, or ATM withdrawals. In many cases, people receive no notification about the overdraft until after the fact. If they are unable to repay the overdraft amount plus the fee, additional fees may be charged.

The median overdraft fee is $35 for the top 16 U.S. banks. Nine of those banks have a tiered fee system if there is more than one overdraft on an account. Also, 10 of the banks don’t limit the number of overdrafts that can occur in one day, so account holders can get hit with multiple overdraft fees. These fees are so pervasive that U.S. banks are expected to collect $38.5 billion in overdraft fees this year, according to Moebs Services, a research firm.

Don’t just choose an account based on a table of the best rates. Read the fine print of any bank deals you are considering so you understand all the terms.

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PNC Bank

Category: Bank Deals, Checking Accounts- fhuff- 3:40 pm/ August 18, 2009

There are still a few days left to sign up for a PNC Bank Virtual Wallet or checking account that offers a $75 bonus. These bank deals are only being offered through Aug. 22. Other details of the offer include:

  • $75 bonus is credited to account within seven days of the first direct deposit, which must occur before Oct. 31, 2009
  • Minimum amount of each direct deposit must be at least $400
  • Transfers from one account to another or deposits made at a branch or ATM don’t qualify as direct deposits
  • Bank deals are good only for new PNC Bank checking account customers

New checking accounts that qualify for the offer are the PNC Free, which has no minimum balance requirement and no monthly fees; PNC Performance, which requires a monthly balance of $2,500 to avoid a monthly service charge; and the PNC Performance Select, which requires a monthly balance of $10,000 to avoid a monthly service charge. The Performance and Performance Select checking accounts earn interest on balances of $2,000 and up.

The Virtual Wallet is aimed at helping you spend, save, and grow your money. It’s made up of a checking account, short-term savings account, and long-term savings account with a high-yield interest rate that is currently 1.75% APY. The Virtual Wallet also has online bill pay and a calendar, among other features.

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