Bank Deals, Checking Accounts, Savings Account Rates, Uncategorized

Do you want to get your kid to save more money for college? The Ultima Bank Minnesota SMART Smart Savings account can help. SMART, which stands for School Money at Right Time, is for savers who are 18 or younger. Details of the savings account include:

• No minimum deposit required
• Savings rate of 2.02% APY on any amount
• Interest begins accruing on first business day after deposit and is credited quarterly
• Savings rate is subject to change at any time
• Withdrawals before 18th birthday are subject to a penalty equal to six months interest
• Limited number of monthly transactions after 18th birthday
• SMART savings converts to a regular savings account on 19th birthday

The SMART savings account is designed to complement Ultima Bank Minnesota’s student checking account. Using the savings and checking accounts can help kids learn to manage money responsibly from a young age.

The checking account has no minimum balance requirement and has no limitations on writing checks. The account also offers the following freebies if the account is administered electronically–online statements, direct deposit, transfers between accounts, and bill payment. Statements received by mail are free, but if check images are included there is a $3 fee.

So you want to stash some cash in a safe place but aren’t sure whether or not to open a money market account or a certificate of deposit. Here are some things to consider.

Money Markets Offer Checks

First, let’s look at how these products work. A money market account is basically a savings account, but pays more than many regular savings or checking accounts. Right now the average yield on money market accounts is 1.3%, nothing to write home about but you do get a small return on your money.

Money markets usually allow you to write a limited number of checks. Money market rates can fluctuate. Begin hunting for money market rates here.

CD Rates Vary Based on Term

Certificates of deposit tie up your money for specific periods of time for the privilege of earning interest. CDs can have a maturity of a few weeks to several years. The longer your money is in a CD, the higher the rate of interest you can get. Right now, the average 2-year CD rate is 1.96%. Search for CD rates here.

If you want your money to stay safe, CDs offer FDIC insurance up to $250,000 per individual. But you won’t have access to your money during the term of the CD and have to pay a penalty for early withdrawal.

Federal Reserve Chairman Ben Bernanke says the recession is likely over. However, he said that although the economy is probably growing now, unemployment will continue to rise from its current level of 9.7%. About 6.9 million jobs have been lost since the recession began in December 2007, and many of those people will have a tough time for a while to come.

“From a technical perspective, the recession is very likely over at this point. It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was,” Bernanke warned.

This means that many Americans who have drastically cut back spending, will probably  continue to hold on to their wallets and put more money into savings. The average U.S. savings rate has risen to 4.5% this year.

So where should you put your money if you want to save more whether the economy is truly on the upswing or not?  A certificate of deposit can be a good place to put money that you won’t need to get at for a while. Begin your search for a certificate of deposit here. If you need to keep your money more liquid, look for basic savings and money market accounts.

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.

WTDirect has one of the best savings accounts for large balances in the U.S. The bank’s savings rate is 1.76% annual percentage yield (APY).  WTDirect is a unit of Wilmington Trust, a 105-year-old bank. Details of the savings offer include:

• No minimum deposit required to open account
• Account must be opened online
• Depositing money by check, transferring funds, or wiring money
• Deposits can be held for several days
• FDIC-insured up to $250,000 per depositor

The highest savings rate of 1.76% will be earned during the first 60 days your account is open, regardless of the balance. After 60 days savings rates are in two tiers. To get the best rate on a savings account after 60 days you need a minimum balance of $10,000. Accounts with a balances below $10,000 earn a lower interest rate, which is currently 0.15% APY. Interest rates are variable so they can change at any time. Interest is compounded daily and credited to savings accounts once a month.

Money in savings can be withdrawn or transferred to another account six times each month. The minimum amount that can be deposited or transferred is $1, and the maximum withdrawal or transfer amount at one time is $250,000. But the maximum that can be deposited or withdrawn during each calendar month is $500,000.