Ever heard of Smarty Pig, a great web 2.0 concept of saving money with a goal. You set your own goal, how much money you want to save and it will suggest you the monthly deposit required to meet that goal. Easy fellas, don't flame me what I like best is their highly competitive interest rate.
Current APY: 2.75% which is sort of industry leading online saving account interest rate.
so what's a catch ? You cannot withdraw partial money, either you close your account before meeting your goal or save enough to meet your goal. You can withdraw money only in these two conditions. I don't think it's bad for a saver, looking for high yield. You have an option of taking money out via a gift card with some added bonuses too.
Is it safe ? Money is held at West Bank, an FDIC insured bank. FDIC insurance covers an individual account holder for up to the maximum allowed by law, currently 250K in accounts held at west bank.
Is web site safe ? Com'on this web 2.0 has one of the stringent signup process, I have ever seen. This is the only bad experience so far, however I see potential benefits of doing it.
Your password need to be One capital case, one small case and 1 number. Pretty awkward password requirement.
This is followed by signing up for security questions, which is followed by a security phrase and after the phrase I need to pick a picture that they will show me when I log-in every time to prevent phishing.
This is not enough, then they will need a driver license along with SSN. Why on earth I need to provide DL number to open a savings account.
Now I will have soft pull on credit and will need to answer 2 questions from credit report to ascertain, it is me and only me opening the bank account.
With Smarty pig, you can start multiple goals and start saving for it. Say down payment of a house or a big screen tv. You decide time frame and amount to fund each month.
You can even use their widget or share your savings goal with friends and family. If this is not enough, you can also allow others to contribute to your savings goal. This is kinda nice web 2.0 social.
Please read FAQ from SmartyPig and do your own research if you are interested in opening an account with them.
some tit bits for reader looking to save money during this uncertain recessionary times.
WAMU is now chase and with it goes high interest online savings account / CD's.
Recently I came across a new bank "Ally Bank", where like all other banks money up to 250,000 is insured by FDIC. Best part of Ally Bank is No Penalty CD for 9 months with 2.00 APY, daily compounded interest :)
I am a big fan and regular user of Schwab Visa Signature card for their 2% cash back in brokerage account .However, I've always used American express for any big purchase for easy extended warranty.
Readers, even visa offers such extended warranty, price protection & return protection. They even offer a cheap extended warranties
It's a score to measure how much you value financial responsibility. It is measure of how likely you are to pay, what you owe. Higher your credit score, lenders will be more willing to offer better rates. It is true from mortgage to car payments.
Credit score ranges from 300 to 850. Higher score represents less risk for a lender, hence favorable rates.
National average of score and rates for a loan of 300,000.[as of 5th May, 09]
Score APR Monthly payment
760-850 4.555% $1,530
700-759 4.777% $1,570
680-699 4.954% $1,602
660-679 5.168% $1,641
640-659 5.598% $1,722
620-639 6.144% $1,827
See how much financial responsibility helps with lower payments, effectively helping you in building wealth.
New Immigrants - How can I build my credit: If you are new to US whether from Canada, Europe or Asis you will need to build credit before lenders can offer bigger loans.
Secure credit cards are a great place to start with.
If your spouse has a good credit history, add yourself as a registered joint user on a card.
Departmental credit cards are easier to get, whether it is kohls or Target.
Get utility services in your name.
Be responsible from start, pay what you owe and preferably in full for credit cards.
Monitoring credit score and report: If this is that important for a financial well being, everyone should take care of continuously monitoring it for any fraudulent entry or identity theft. The federal Fair Credit Reporting Act (FCRA) requires that U.S. consumers be entitled to a free credit report each year. The government’s goal is to make sure that consumers stay informed, fight identity theft, and get fair treatment.
There are three commonly used Consumer Credit Reporting Agencies by lenders.
Equifax
Experian
Transunion
If you apply for a car loan or a credit card, any one or more of these agencies will be used by your lender to see your credit worthiness. These credit agencies collect information from parties that have previously extended credit to you, such as a department store or a bank. All new enquiry also go in your credit report.
Some key credit score points:
Avoid over extending on credit available, this is a potential sign for a lender that you may default.
Before any big purchase like house or a car, don't apply for new credits in last few months and cut down on credit taken. Try to pay off other debt first, before taking on these massive loans.
Credit is not bad, using it irresponsibly is.
Pay bills on time, whether it is utility bill or loan payment.
Monitor your credit report and dispute if something is not true with the credit reporting bureau.
Protect your identity, never disclose personal information to others if not required.
It all started few years back, buy $100 worth of stuffs and we will offer you $1 cashback. Every financial institution started offering different flavors of Rewards or Cashback credit card. Some like American express offer higher cashback once you reach some annual purchase threshold, whereas discover offers 5% on chosen category for few months with some upper limit and rest still on 1%.
I love having cashback credit card. Being paid to shop is great. Just remember to pay your balance off every month. So, "Which cards offers best cashback and other incentives"
Charles Schwab Visa Signature cards seems to be very promising. I applied and was approved online, will see how it works out for me. link to schwab card.
Key Benefits for me
No foreign exchange transaction fee. Other cards except capital one charge you around 3%
2% Cash back on all purchases. No need to wait for some 5000 or x points for redemption. After every month cycle, 2% cashback is credited to your schwab brokerage account.
Benefits of Visa Signature card and no preset spending limits.
Fidelity retirement rewards card was close second, with same 2% cashback. However they are offering american express branded cards, with foreign transaction feee and redemption after 5000 points.
