Some of the largest banks call America home. These banks are backed by the Federal Deposit Insurance Corporation (FDIC) and offer a variety of products and services. If you prefer a big bank over regional banks or a smaller, community bank, you’ve come to the right place.
Below we’ve compiled a list of the largest banks in the U.S. Once you read through it and perform some of your own research, you should be able to choose a bank or two that meets your needs.
How to Measure Bank Size
First, let’s discuss how to measure the size of a bank. We can do so by looking at the number of customers, number of branches, and number of employees.
But perhaps the best way to measure bank size is by focusing on the total assets under management. This figure shows the actual size of a bank, regardless of how many employees, branches, or ATMs it has.
In our list of the largest banks in the U.S. below, you’ll find that we include each bank’s total assets so you can get a better idea of just how large it is.
Bank Services
We also thought it would be a great idea to briefly discuss how banks work and what they can do for you as a customer. Banks have been around since at least the 14th century. They offer a safe place for individuals and business owners to park their cash and work on various financial goals.
While every bank has their own unique lineup of services, most of them provide checking accounts, savings accounts, and loan services. Some go the extra mile with credit cards, wealth management services, and other conveniences.
Types of Banks
In addition, it’s wise to go over the types of banks at your disposal. The most common types of banks you’ll find include:
Retail banks: Retail banks serve the public and typically have branches and main offices. They provide a wide range of services, like checking and savings accounts, mortgage and loan services, auto financing, CDs, and individual retirement accounts (IRAs). Retail banks may be regional banks operating in various states.
Commercial banks: Also known as corporate banks, commercial banks gear their offerings to small business owners and larger corporate entities. In addition to the usual banking services, they may offer cash management, employer services, and commercial real estate services.
Investment banks: Investment banks are designed for corporate clients with complex needs, like mergers and acquisitions. These clients are large corporations, governments, and hedge funds.
Central banks: Central banks are not available to the public. Instead, they’re an independent institution that oversees the money supply and monetary policy in the country. The Federal Reserve Bank is the central bank in the U.S.
Banks vs. Credit Unions
While banks are quite popular, some customers use credit unions instead. While credit unions also offer banking services, like checking and savings accounts, they’re not for profit institutions that are managed by their customers or members.
Compared to banks, credit unions tend to deliver more personalized service. But they also provide fewer services and have fewer branches and ATMs. A credit union can make sense, depending on your unique goals.
20 Biggest Banks In The U.S.
Here’s an overview of the largest banks in the U.S.
1. JPMorgan Chase & Co.
Total Assets: $3.381 Trillion
Headquarters: New York City, New York
If you focus on consolidated assets, JPMorgan Chase earns the spot as the largest bank in the U.S. This investment bank is also a holding company for subsidiaries, including Chase Bank. Chase, which is J.P. Morgan’s consumer banking division, has more than 4,700 branches in the U.S. plus more than 30 branch locations abroad.
According to Chase, almost half of the households in the U.S. are Chase customers. It attracts digital savvy customers that value online banking and products with artificial intelligence (AI). In addition to consumer banking, JPMorgan Chase is a combined bank that offers commercial banking, asset and wealth management, and investment banking.
Chase offers some of the most popular cash back and travel credit cards that can earn you valuable rewards through their program, Chase Ultimate Rewards. Using these credit cards for everyday purchases can earn you travel points, cash back, and other benefits.
2. Bank of America Corp.
Total Assets: $2.440 Trillion
Headquarters: Charlotte, North Carolina
Bank of America is a multinational bank with nearly 66 million customers and small business clients across the globe. It has a few divisions, including Merrill, Bank of America Securities, and Bank of America Private Bank.
As a Bank of America customer, you can enjoy access to a wide variety of products and services as well as access to more than 4,000 branches and more than 17,000 ATMs.
Just like most big banks, Bank of America prides itself on a robust mobile app, the Zelle payment solution, and other intuitive digital tools. Its various service lines include consumer banking, corporate banking, credit cards, insurance, investment banking services, institutional banking, mortgage loans, private banking, private equity, and wealth management.
3. Citigroup
Total Assets: $1.720 Trillion
Headquarters: New York City, New York
Citigroup, which is widely known as Citi, is an investment bank and financial services firm. When Citigroup merged with Travelers Group in 1998, it became a major player in the financial space. Citibank, Citigroup’s retail banking division has more than 700 branches in the U.S. and over 1,800 branches outside the U.S.
Most of the U.S. bank branches are in Florida, California, New York, and Washington DC. Citibank manages over 138 million bank accounts and has 65,000 fee-free ATMs across the country. Over the years, it has earned high rankings for its digital money management tools, including one that shows customers a financial wellness score.
4. U.S. Bancorp
Total Assets: $582.25 Billion
Headquarters: Minneapolis, Minnesota
The parent company of U.S. Bank, Bancorp’s locations are mainly in the Midwest. It offers personal and business banking with more than 3,000 branches and 5,000 ATMs. Over the years, Bancorp has worked to become a responsible financial provider and earn a spot on the Ethisphere Institute’s World’s Most Ethical Companies list.
As a Bancorp customer, you can access information about your accounts through Google Home and Amazon Alexa. You may also download the handy mobile app to make mobile deposits and perform other services, like transactions via Zelle.
5. PNC Financial Services Group
Total Assets: $534.35 Billion
Headquarters: Pittsburgh, Pennsylvania
PNC is short for Pittsburgh National Corporation. PNC Financial Services is the bank holding company of PNC Bank, which has more than 2,000 branches across 21 states. It stands out among other large banks for its unique customer perks and products for individuals and business owners. The Virtual Wallet tool, for example, lets you manage your money online or on your mobile device.
You can keep your checking and savings accounts together or just stick to one type of account, depending on your particular needs. In addition to traditional banking services, PNC offers mortgages, home equity lines of credit, auto loans, personal loans and personal lines of credit, student loans, and student loan refinancing.
6. Wells Fargo
Total Assets: $1.71 Trillion
Headquarters: San Francisco, California
Wells Fargo made its debut in 1852 when it was first opened by investing partners, Henry Wells and William Fargo. It was initially designed as a bank and express delivery service for gold. Eventually, Wells Fargo expanded as a consumer bank to serve all types of customers with various banking needs. It is admired for its long list of offerings and the Wells Fargo mobile app that helps customers track their spending and simplify their bills.
While Wells Fargo has focused on consolidating and prioritizing digital banking services in recent years, it still has about 4,700 locations and more than 12,000 ATMs around the U.S.
In addition to personal and small business banking, Wells Fargo supports commercial banking, investing and wealth management, and investment banking.
7. Truist Financial Corporation
Total Assets: $532.08 Billion
Headquarters: Charlotte, North Carolina
Compared to the other large commercial banks on this list, Truist is fairly new. It was formed in 2019 as the result of one of the largest bank merger between BB&T and SunTrust.
Truist is made up of three major divisions, including Truist Bank, Truist Securities, and Truist Insurance Holdings. These divisions employ over 37,000 people that work in consumer and commercial banking, investment banking, mortgages, and insurance.
It offers a variety of noteworthy perks, such as no overdraft fees, a $100 negative balance buffer, and automatic upgrades. The bank also places a lot of emphasis on community involvement and giving back.
8. Goldman Sachs Group, Inc.
Total Assets: $501.91 Billion
Headquarters: New York City, New York
Goldman Sachs was founded in 1869 by Marcus Goldman, a German American shopkeeper. Its original purpose was to help merchants and small businesses with short-term funding. Eventually, Samuel Sachs joined Goldman in 1882. Today, Goldman Sachs has a reputation as a leading global investment banking, management, and securities firm.
In the fall of 2016, Marcus by Goldman Sachs, its online banking division made its debut and began to offer numerous financial products, like savings accounts, certificates of deposit, credit cards, and loans.
In addition to these offerings, Goldman Sachs provides asset management services, mutual funds, investment banking and management, prime brokerage, commodities, and commercial banking.
9. Charles Schwab Corporation
Total Assets: $407.90 Billion
Headquarters: San Francisco, California
Charles Schwab is a multinational financial services firm with a focus on investment accounts, such as individual retirement accounts (IRAs) and brokerage accounts.
You’ll find an extensive selection of funds with low expense ratios as well as commission-free stock and ETF trades. While there are over 360 Charles Schwab branches with financial consultants, you can take advantage of its services online.
Schwab also offers a high-yield checking account. Whether you’re new to investing or consider yourself a veteran, you can benefit from Charles Schwab.
10. TD Group U.S. Holdings
Total Assets: $405.22 Billion
Headquarters: Wilmington, Delaware
While TD Bank has roots in Canada, it’s been in the U.S. market since 2007 when it acquired Commerce Bancorp. There are more than 1,100 branches and 700 ATMs across fifteen U.S. states and Washington D.C.
TD Bank offers the typical lineup of banking products and services but is known for its branch convenience. Most branches have long hours, are open on the weekends, and provide curbside pickup for new debit cards.
If you prefer in-person banking, TD Bank is certainly worth exploring. Many of its accounts come with generous sign up bonuses and access to comprehensive online banking features, such as online bill pay, Zelle, and remote check deposit.
11. Capital One Financial
Total Assets: $388.44 Billion
Headquarters: McLean, Virginia
Since it was established in 1988, Capital One bank is one of the newer large banks on our list. In only a few decades, the bank has grown significantly, thanks to its credit card offerings in the early 90s.
Once 2016 came around, Capital One was named the third-largest credit card issuer in the U.S. These days, Capital One continues to offer credit cards as well as digital services through Capital One 360.
Capital One 360 stands out for its Capital One’s 360 Performance Savings account, which comes with no minimum opening deposit and no minimum balance requirements.
It also has a mobile banking app with mobile check deposit, customized alerts and notifications, Zelle, free credit score monitoring via CreditWise, and more. There are about 775 branches, 2,000 ATMs, and nearly 30 Capital One cafes.
12. Bank of New York Mellon
Total Assets: $365.10 Billion
Headquarters: New York City, New York
Bank of New York Mellon came about after a 2006 merger between Mellon Financial Corporation and The Bank of New York. The Bank of New York was originally founded in 1784 by Alexander Hamilton, the first Secretary of the Treasury of the U.S. Bank of New York Mellon is now one of the largest securities firms in the word.
It specializes in a number of solutions and services for corporations, insurance companies, banks, brokers, dealers, and other reputable clients in the financial industry. In addition, the bank offers private investment and wealth management services for wealthy clients.
13. State Street Corporation
Total Assets: $296.43 Billion
Headquarters: Boston, Massachusetts
State Street Corporation was founded in 1792 as a financial services and asset management company. It has more than 40,000 employees and a global presence in over 100 markets.
Its offerings include investment research and trading, investment management, and securities lending for clients, such as insurance companies, pension funds, and asset owners.
14. Citizens Financial Group
Total Assets: $226.53 Billion
Headquarters: Providence, Rhode Island
Citizens Financial Group, Inc. has been around since 1828. It owns Citizens Bank, its retail division and offers credit cards, deposit accounts, personal loans, student loans, refinancing, and a number of other financial services. Citizen Bank mainly operates in the Northeast and Midwest.
In addition to more than 2,700 ATMs, there are over 1,100 branches in New England states as well as Delaware, Michigan, Ohio, Pennsylvania, New York, and New Jersey. The bank provides extended call center hours, a streamlined online experience, and a highly rated mobile app.
15. Silicon Valley Bank
Total Assets: $211.82 Billion
Headquarters: Santa Clara, California
Silicon Valley Bank made its debut in 1983. Today, it serves as a full-service commercial bank for technology and life sciences companies. Aside from traditional banking services, Silicon Valley Bank offers foreign exchange, venture capital, and treasury management services.
It has supported innovation for several well-known tech companies, including Google and Facebook. Many people give it credit for establishing Silicon Valley.
16. Fifth Third Bank
Total Assets: $205.55 Billion
Headquarters: Cincinnati, Ohio
Fifth Third Bank is a subsidiary of Fifth Third Bancorp and known as one of the largest banks in the Midwest. It has approximately 1,100 branches that span across Ohio, Florida, Georgia, Kentucky, Illinois, Indiana, Michigan, North Carolina, Tennessee, and West Virginia.
As a customer, you can enjoy access to more than 50,000 ATMs across the country and no opening deposit requirements for checking and savings accounts.
In addition to deposit accounts, Fifth Third Bank financial institutions offer mortgages, auto financing, personal loans, insurance, and investing products. Products and services are available to business customers as well.
17. First Republic Bank
Total Assets: $197.91 Billion
Headquarters: San Francisco, California
First Republic Bank is a premier private bank with more than 80 branches across the country. Its vast lineup of products and services includes checking accounts, savings accounts, money market accounts, IRAs, CDs, and wealth management.
Business customers can take advantage of business loans, business lines of credit, commercial real estate loans, and small business loans. The bank focuses on philanthropy and constantly supports programs related to art and education.
18. Morgan Stanley
Total Assets: $191.35 Billion
Headquarters: New York City, New York
Morgan Stanley’s roots date back to 1935. Today, the bank is a reputable, multinational investment management and financial services company. It has over 700 locations in every state as well as Washington D.C.
Its investing division includes three portfolios, including the impact portfolio, market-tracking portfolio, and performance-seeking portfolio. Whether you’re a beginner investor or wealthy client, Morgan Stanley may be a solid pick.
19. KeyBank
Total Assets: $184.67 Billion
Headquarters: Cleveland, Ohio
KeyBank was founded in 1825 and is now considered a community bank with a presence in 15 states. It has more than 40,000 ATMs in its network and 1,000 full-service branches. The bank also partners with the AllPoint Network of over 40,000 ATMs nationwide.
Its standard services include checking accounts, savings accounts, home loans and mortgages, lines of credit, credit cards, investing, insurance, and debt consolidation. In 2021, KeyBank acquired several digital businesses including digital platform XUP Payments and GradFin, a student loan counseling fintech.
20. Ally Bank
Total Assets: $182.2 Billion
Headquarters: Sandy, UT
While it’s based in Utah, Ally Bank is an online only bank with a long list of digital banking solutions. Its deposit accounts come with no monthly maintenance fees or minimum balance requirements.
The bank also pays high yields on CDs and savings accounts than traditional banks with brick-and-mortar banks. As a customer, you can enjoy 24/7 customer services and access to more than 43,000 ATMs through the Allpoint network.
Bottom Line
As you can see, there are many large banks in the United States. Each one has its own unique perks and priorities. To choose the right bank, consider your location, needs, and preferences.
If you’re looking for personal banking services and prefer a digital platform, Goldman Sachs and its Marcus division may be the way to go. But if private wealth management is your top priority, you may be better off with Bank of New York Mellon. Best of luck in your search for the perfect large bank.
Largest Banks in the U.S. FAQs
What is a bank?
Put simply, a bank is a financial institution that can legally accept checking and savings deposits and distribute loans. Some banks also offer additional services like certificates of deposit (CDs), individual retirement accounts (IRAs) and wealth management.
What is the largest bank in the world?
The Industrial and Commercial Bank of China is the largest bank in the world. The bank’s assets add up to $4.324 Trillion.
What are the ten largest banks in the U.S.?
Ranked in total asset value, the ten largest banks in the U.S. include JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, U.S. Bancorp, PNC, Truist Bank, Goldman Sachs, Charles Schwab, and TD Group.
How do I choose a bank?
To choose the right bank, focus on what you’re looking for. For more personalized service, you might want to explore a community bank. But if you prefer branch locations across the country and a long list of offerings, one of the large banks on this list might be a better fit.
Is my money safe in a bank?
Your money is safe as long as the bank is insured by the Federal Deposit Insurance Corporation (FDIC). An FDIC-insured bank typically insures up to $250,000 per depositor. Note that you don’t have to purchase FDIC insurance. As long as you’re a customer at a bank that offers it, you’ll receive it automatically.
How does a commercial bank differ from a retail bank?
A commercial bank offers a variety of products and services to both individuals and businesses. Retail banks, on the other hand, focus their offerings to individual customers. If you own a business, you’d be better off with a commercial bank that can serve the financial needs of your organization.
Do online banks exist?
Absolutely! In today’s day and age, online banking is more popular than ever before, among larger banks and smaller banks. While some banks offer in-person and online services, other banks, like Ally Bank, solely operate online with no branch locations.
What are some other large banks not on this list?
Other big banks you might want to consider include First National Bank, Huntington Bank, Provident National Corporation, America Bank, and HSBC Bank USA.
Once every six months, whether I need to or not, I meet with my investment adviser from Fidelity. I’ve been doing this for five years, and have come to value the experience as truly educational. On Tuesday, for instance, my new adviser Michael talked me through some income planning.
My financial life has been turbulent over the past few years:
First, I was deep in debt and struggling.
When Get Rich Slowly began to grow, I paid off my debt and accumulated cash.
When I sold Get Rich Slowly, I invested the windfall in index funds and municipal bonds.
When Kris and I divorced, she received the municipal bonds.
When I bought my condo, some of my index funds were converted into real estate.
For years, my income and expenses have been all over the map with no semblance of normalcy and no consistency. Now, at last, things are settling into something of a routine and I can think about planning for the future. Since June, I’ve once again been tracking every penny I spend in order to get a clear picture of my financial situation.
In my meeting with Fidelity, I explained to Michael that my income is smaller than it has been since the 1990s. Between writing gigs and interest income on three business loans, I make less than $2000 per month. (I’m also being paid about $1000 per month principal on those three loans, which I treat as income even though it’s not. It’s more like savings.)
My monthly spending is reasonable except that I spend a lot on travel. My income (including principal on the loans) would come close to covering my expenses if I didn’t take two big trips (and several small trips) every year. But I do take those trips, and that adds $2000 per month to my expenses.
So far, I’ve subsidized my travel by slowly drawing down cash savings, but those funds will be gone by the end of 2014. It’s time to start thinking about the future. If I choose to maintain this sort of lifestyle, how will I fund it? Michael and I talked about the options.
Note: Mr. Money Mustache thinks I should just slash my spending. He interviewed me about this recently by email, and may write about it soon.
One path, of course, is to make more money, and that’s my top choice.
At any time, I could return to the traditional work force. It might be fun to do so, but I’d rather earn more from my writing. I could pick up paid gigs writing about personal finance — I don’t get paid for my work at Get Rich Slowly, and I’ve resigned from my column at Entrepreneur magazine effective next month — but I’ve found that getting paid to write about money takes the joy out of it. I could write another financial book; in fact, I’m doing so right now. Or I could change my focus to fiction, which holds a certain appeal. (I plan to take a fiction writing class starting in January.)
Another path is to start a side business. Or two.
I told Michael about my desire to open a money store where I’d sell books and magazines, hold classes about budgeting and investing, and offer one-on-one counseling. Or I could try to make money from another blog. I have several great domains and ideas on the back-burner, including a couple I could do with Kim. Or I could start some other of business. I do not lack for ideas!
Michael suggested another way to fund my lifestyle: “For a while, until you’re making full-time income again, you could take systematic withdrawals from your portfolio. You wouldn’t need to take a lot. Just enough to cover the difference between your existing income and expenses.”
He showed me Fidelity’s guide to retirement income investing, which includes a simple calculator that computes “potential sustainable monthly withdrawals” from a portfolio based on a starting balance, asset allocation, and life expectancy. In other words, you tell it how much you have and how long you expect to live, and the calculator tells you — at a “90% confidence level” — how much income your portfolio could give you for the rest of your life.
If we assume you’ll live until 80, for instance, and have a balanced portfolio (50% stocks, 40% bonds, 10% cash):
If you’re 30 years old and have $100,000 saved, there’s a 90% chance that your portfolio would produce $291 per month, adjusted for inflation.
If you’re my age — 44 years old — and have $1,000,000 saved, there’s a 90% chance that your portfolio would produce $3348 per month.
If you’re 60 years old and have $250,000 saved, there’s a 90% chance that your portfolio would produce $1202 per month for the next twenty years.
After playing with the numbers for a few minutes, I’d come up with a plan.
I like my lifestyle. It’s comfortable but not extravagant. Still, I’ve become lazy. It’d be good for me to exercise my frugality muscles a little more. I can cut back on food, for one. (My food expenses have been high for the past two years because I eat out a lot and I shop at a fancy supermarket.) I can also find ways to travel more economically by focusing on domestic travel instead of going abroad.
Meanwhile, I’ll fund my spending with income and cash savings for as long as possible. Also, I’ll strive to increase my income from writing (through the book I’m working on) and a couple of targeted websites (including at least one that I do with Kim). As a last resort, I’ll tap into my investments to subsidize my lifestyle, as Michael suggested. But I shouldn’t have to worry about that for a couple of years. By then, I hope to have established equilibrium!
Not everything in my meetings at Fidelity is useful. I don’t care about the hot new funds, and I’m not interested in annuities. But each time I talk with an adviser, I learn something new, and I think that’s the point.
It’s easy to get wrapped up in the day-to-day details of our own lives. We get mired in the minutia of our finances so that sometimes we miss the forest for the trees. Plus, it’s an objective third party can always see things we don’t, helping us to explore options we might not otherwise have considered.
2021 VA Home Loan Limit: $0 down up to $5,000,000* (Subject to lender limits) /2 open VA loans at one time $548,250* (Call 888-573-4496 for details).
How to Apply for a VA Home Loan?
This is a quick look at how to apply for a VA home loan in Plumas County. For a more detailed overview of the VA home loan process, check out our complete guide on how to apply for a VA home loan. Here, we’ll go over the general steps to getting a VA home loan and point out some things to pay attention to in Plumas County. If you have any questions, you can call us at VA HLC and we’ll help you get started.
Get your Certificate of Eligibility (COE)
Give us a call at (877) 432-5626 and we’ll get your COE for you.
Are you applying for a refinance loan? Check out our complete guide to VA Refinancing.
Get pre-approved, to get pre-approved for a loan, you’ll need:
Previous two years of W2s
Most recent 30 days paystubs or LES (active duty)
Most recent 60 days bank statements
Landlord and HR/Payroll Department contact info
Find a home
We can help you check whether the home is in one of the Plumas County flood zones
Get the necessary inspections
Termite inspection: required
Well or septic inspections needed, if applicable
Get the home appraised
We can help you find a VA-Certified appraiser in Plumas County and schedule the process
Construction loan note: Construction permit/appraisal info
Building permit
Elevation certificate
Lock in your interest rates
Wait until the appraisal lock in your loan rates. If it turns out you need to make repairs, it can push your closing back. Then you can get stuck paying rate extension fees.
Close the deal and get packing!
You’re ready to go.
What is the Median Home Price?
As of March 31st, 2021, the median home value for Plumas County is $294,510. In addition, the median household income for residents of the county is $55,359.
How much are the VA Appraisal Fees?
Single-Family: $600.
Individual Condo: $600.
Manufactured Homes: $600.
2-4 Unit Multi-Family: $850.
Appraisal Turnaround Times: 7 days.
Do I need Flood Insurance?
The VA requires properties are required to have flood insurance if they are in a Special Flood Hazard Area.
In Plumas County, rivers like the Middle Fork Feather River and Wolf Creek have flood hazard areas around them. However, the city of Quincy can see significant flooding around Spanish Creek which crosses through the north.
How do I learn about Property Taxes?
Charles W. Leonhardt is the Plumas county tax assessor. His office can be reached at 1 Crescent Street Quincy, California 95971. In addition, his office can also be reached by calling (530) 283-6380.
The state of California offers incentive programs that expand statewide for new, growing, and relocating businesses. Two of these programs are the California Competes Tax Credit which offers qualifying businesses with a tax credit, and the New employment Credit which offers a tax credit for taxpayers who hire full-time employees. Furthermore, the state offers several other programs to further diversify the state’s economy.
What is the Population?
The county’s population of 18,807 is 83% White, 9% Hispanic, and 3% American Indian.
Most county residents are between 18 and 65 years old, with 17% under 18 years old and 28% older than 65.
In total, the county has about 8,047 households, with an average of two people per household.
What are the major cities?
The county has one city and 46 census-designated places, including Quincy, which serves as the county seat.
About Plumas County
Plumas County is full of beautiful streams, rivers, and forests covering about 70% of the county. However, the most significant employment industries in the county are health care, retail trade, and construction. Hence the most common types of employment are administrative support, food preparation, and construction.
In addition to its existing industries, the county is also taking an active role in helping small businesses within the county grow. The county has a partnership with the U.S. Small Business Administration, which provides free business counseling, SBA guaranteed business loans, home & business disaster loans, and federal government contracting.
When it comes to education, the county is home to the Plumas Unified School District, which has eleven schools that serve about 2,147 students annually. In addition, higher education opportunities are also available in the county with the Feather River Community College District, which offers 4-year degree bachelor programs.
Finally, the county is also a perfect place for people who enjoy the outdoors, with places like Bald Eagle Mountain, Dixie Mountain, and Lake Almanor. Furthermore, both visitors and residents can enjoy the county’s many trails, camping grounds, and water-based recreational activities for the whole family to enjoy.
Veteran Information
The county is currently home to 1,852 veterans.
Plumas County is home to one VFW post:
Post 3825 Kenneth M. Hayes – 292 Lawrence Street, Quincy, CA 95971.
County Veteran Assistance Info.
Plumas County Veterans Services Office – 270 County Hospital Road, Suite 206, Quincy, CA 95971.
Apply for a VA Home Loan
For more information about VA Home Loans and how to apply, click here.
If you meet the VA’s eligibility requirements, you will be able to enjoy some of the best government-guaranteed home loans available.
VA loans can finance the construction of a property. However, the property must be owned and prepared for construction as the VA cannot ensure vacant land loans.
VA Approved Condos
There are no VA-approved condos available in Plumas County. Although if you’re still interested in getting a condo through the approval process, call us at (877) 432-5626.
In Best Low-Risk Investments for 2023, I provided a comprehensive list of low-risk investments with predictable returns. But it’s precisely because those returns are low-risk that they also provide relatively low returns.
In this article, we’re going to look at high-yield investments, many of which involve a higher degree of risk but are also likely to provide higher returns.
True enough, low-risk investments are the right investment solution for anyone who’s looking to preserve capital and still earn some income.
But if you’re more interested in the income side of an investment, accepting a bit of risk can produce significantly higher returns. And at the same time, these investments will generally be less risky than growth stocks and other high-risk/high-reward investments.
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Determine How Much Risk You’re Willing to Take On
The risk we’re talking about with these high-yield investments is the potential for you to lose money. As is true when investing in any asset, you need to begin by determining how much you’re willing to risk in the pursuit of higher returns.
Chasing “high-yield returns” will make you broke if you don’t have clear financial goals you’re working towards.
I’m going to present a large number of high-yield investments, each with its own degree of risk. The purpose is to help you evaluate the risk/reward potential of these investments when selecting the ones that will be right for you.
If you’re looking for investments that are completely safe, you should favor one or more of the highly liquid, low-yield vehicles covered in Best Low-Risk Investments for 2023. In this article, we’re going to be going for something a little bit different. As such, please note that this is not in any way a blanket recommendation of any particular investment.
Best High-Yield Investments for 2023
Table of Contents
Below is my list of the 18 best high-yield investments for 2023. They’re not ranked or listed in order of importance. That’s because each is a unique investment class that you will need to carefully evaluate for suitability within your own portfolio.
Be sure that any investment you do choose will be likely to provide the return you expect at an acceptable risk level for your own personal risk tolerance.
1. Treasury Inflation-Protected Securities (TIPS)
Let’s start with this one, if only because it’s on just about every list of high-yield investments, especially in the current environment of rising inflation. It may not actually be the best high-yield investment, but it does have its virtues and shouldn’t be overlooked.
Basically, TIPS are securities issued by the U.S. Treasury that are designed to accommodate inflation. They do pay regular interest, though it’s typically lower than the rate paid on ordinary Treasury securities of similar terms. The bonds are available with a minimum investment of $100, in terms of five, 10, and 30 years. And since they’re fully backed by the U.S. government, you are assured of receiving the full principal value if you hold a security until maturity.
But the real benefit—and the primary advantage—of these securities is the inflation principal additions. Each year, the Treasury will add an amount to the bond principal that’s commensurate with changes in the Consumer Price Index (CPI).
Fortunately, while the principal will be added when the CPI rises (as it nearly always does), none will be deducted if the index goes negative.
You can purchase TIPS through the U.S. Treasury’s investment portal, Treasury Direct. You can also hold the securities as well as redeem them on the same platform. There are no commissions or fees when buying securities.
On the downside, TIPS are purely a play on inflation since the base rates are fairly low. And while the principal additions will keep you even with inflation, you should know that they are taxable in the year received.
Still, TIPS are an excellent low-risk, high-yield investment during times of rising inflation—like now.
2. I Bonds
If you’re looking for a true low-risk, high-yield investment, look no further than Series I bonds. With the current surge in inflation, these bonds have become incredibly popular, though they are limited.
I bonds are currently paying 6.89%. They can be purchased electronically in denominations as little as $25. However, you are limited to purchasing no more than $10,000 in I bonds per calendar year. Since they are issued by the U.S. Treasury, they’re fully protected by the U.S. government. You can purchase them through the Treasury Department’s investment portal, TreasuryDirect.gov.
“The cash in my savings account is on fire,” groans Scott Lieberman, Founder of Touchdown Money. “Inflation has my money in flames, each month incinerating more and more. To defend against this, I purchased an I bond. When I decide to get my money back, the I bond will have been protected against inflation by being worth more than what I bought it for. I highly recommend getting yourself a super safe Series I bond with money you can stash away for at least one year.”
You may not be able to put your entire bond portfolio into Series I bonds. But just a small investment, at nearly 10%, can increase the overall return on your bond allocation.
3. Corporate Bonds
The average rate of return on a bank savings account is 0.33%. The average rate on a money market account is 0.09%, and 0.25% on a 12-month CD.
Now, there are some banks paying higher rates, but generally only in the 1%-plus range.
If you want higher returns on your fixed income portfolio, and you’re willing to accept a moderate level of risk, you can invest in corporate bonds. Not only do they pay higher rates than banks, but you can lock in those higher rates for many years.
For example, the average current yield on a AAA-rated corporate bond is 4.55%. Now that’s the rate for AAA bonds, which are the highest-rated securities. You can get even higher rates on bonds with lower ratings, which we will cover in the next section.
Corporate bonds sell in face amounts of $1,000, though the price may be higher or lower depending on where interest rates are. If you choose to buy individual corporate bonds, expect to buy them in lots of ten. That means you’ll likely need to invest $10,000 in a single issue. Brokers will typically charge a small per-bond fee on purchase and sale.
An alternative may be to take advantage of corporate bond funds. That will give you an opportunity to invest in a portfolio of bonds for as little as the price of one share of an ETF. And because they are ETFs, they can usually be bought and sold commission free.
You can typically purchase corporate bonds and bond funds through popular stock brokers, like Zacks Trade, TD Ameritrade.
Corporate Bond Risk
Be aware that the value of corporate bonds, particularly those with maturities greater than 10 years, can fall if interest rates rise. Conversely, the value of the bonds can rise if interest rates fall.
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4. High-Yield Bonds
In the previous section we talked about how interest rates on corporate bonds vary based on each bond issue’s rating. A AAA bond, being the safest, has the lowest yield. But a riskier bond, such as one rated BBB, will provide a higher rate of return.
If you’re looking to earn higher interest than you can with investment-grade corporate bonds, you can get those returns with so-called high-yield bonds. Because they have a lower rating, they pay higher interest, sometimes much higher.
The average yield on high-yield bonds is 8.29%. But that’s just an average. The yield on a bond rated B will be higher than one rated BB.
You should also be aware that, in addition to potential market value declines due to rising interest rates, high-yield bonds are more likely to default than investment-grade bonds. That’s why they pay higher interest rates. (They used to call these bonds “junk bonds,” but that kind of description is a marketing disaster.) Because of those twin risks, junk bonds should occupy only a small corner of your fixed-income portfolio.
High Yield Bond Risk
In a rapidly rising interest rate environment, high-yield bonds are more likely to default.
High-yield bonds can be purchased under similar terms and in the same places where you can trade corporate bonds. There are also ETFs that specialize in high-yield bonds and will be a better choice for most investors, since they will include diversification across many different bond issues.
5. Municipal Bonds
Just as corporations and the U.S. Treasury issue bonds, so do state and local governments. These are referred to as municipal bonds. They work much like other bond types, particularly corporates. They can be purchased in similar denominations through online brokers.
The main advantage enjoyed by municipal bonds is their tax-exempt status for federal income tax purposes. And if you purchase a municipal bond issued by your home state, or a municipality within that state, the interest will also be tax-exempt for state income tax purposes.
That makes municipal bonds an excellent source of tax-exempt income in a nonretirement account. (Because retirement accounts are tax-sheltered, it makes little sense to include municipal bonds in those accounts.)
Municipal bond rates are currently hovering just above 3% for AAA-rated bonds. And while that’s an impressive return by itself, it masks an even higher yield.
Because of their tax-exempt status, the effective yield on municipal bonds will be higher than the note rate. For example, if your combined federal and state marginal income tax rates are 25%, the effective yield on a municipal bond paying 3% will be 4%. That gives an effective rate comparable with AAA-rated corporate bonds.
Municipal bonds, like other bonds, are subject to market value fluctuations due to interest rate changes. And while it’s rare, there have been occasional defaults on these bonds.
Like corporate bonds, municipal bonds carry ratings that affect the interest rates they pay. You can investigate bond ratings through sources like Standard & Poor’s, Moody’s, and Fitch.
Fund
Symbol
Type
Current Yield
5 Average Annual Return
Vanguard Inflation-Protected Securities Fund
VIPSX
TIPS
0.06%
3.02%
SPDR® Portfolio Interm Term Corp Bond ETF
SPIB
Corporate
4.38%
1.44%
iShares Interest Rate Hedged High Yield Bond ETF
HYGH
High-Yield
5.19%
2.02%
Invesco VRDO Tax-Free ETF (PVI)
PVI
Municipal
0.53%
0.56%
6. Longer Term Certificates of Deposit (CDs)
This is another investment that falls under the low risk/relatively high return classification. As interest rates have risen in recent months, rates have crept up on certificates of deposit. Unlike just one year ago, CDs now merit consideration.
But the key is to invest in certificates with longer terms.
“Another lower-risk option is to consider a Certificate of Deposit (CD),” advises Lance C. Steiner, CFP at Buckingham Advisors. “Banks, credit unions, and many other financial institutions offer CDs with maturities ranging from 6 months to 60 months. Currently, a 6-month CD may pay between 0.75% and 1.25% where a 24-month CD may pay between 2.20% and 3.00%. We suggest considering a short-term ladder since interest rates are expected to continue rising.” (Stated interest rates for the high-yield savings and CDs were obtained at bankrate.com.)
Most banks offer certificates of deposit with terms as long as five years. Those typically have the highest yields.
But the longer term does involve at least a moderate level of risk. If you invest in a CD for five years that’s currently paying 3%, the risk is that interest rates will continue rising. If they do, you’ll miss out on the higher returns available on newer certificates. But the risk is still low overall since the bank guarantees to repay 100% of your principle upon certificate maturity.
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7. Peer-to-Peer (P2P) Lending
Do you know how banks borrow from you—at 1% interest—then loan the same money to your neighbor at rates sometimes as high as 20%? It’s quite a racket, and a profitable one at that.
But do you also know that you have the same opportunity as a bank? It’s an investing process known as peer-to-peer lending, or P2P for short.
P2P lending essentially eliminates the bank. As an investor, you’ll provide the funds for borrowers on a P2P platform. Most of these loans will be in the form of personal loans for a variety of purposes. But some can also be business loans, medical loans, and for other more specific purposes.
As an investor/lender, you get to keep more of the interest rate return on those loans. You can invest easily through online P2P platforms.
One popular example is Prosper. They offer primarily personal loans in amounts ranging between $2,000 and $40,000. You can invest in small slivers of these loans, referred to as “notes.” Notes can be purchased for as little as $25.
That small denomination will make it possible to diversify your investment across many different loans. You can even choose the loans you will invest in based on borrower credit scores, income, loan terms, and purposes.
Prosper, which has managed $20 billion in P2P loans since 2005, claims a historical average return of 5.7%. That’s a high rate of return on what is essentially a fixed-income investment. But that’s because there exists the possibility of loss due to borrower default.
However, you can minimize the likelihood of default by carefully choosing borrower loan quality. That means focusing on borrowers with higher credit scores, incomes, and more conservative loan purposes (like debt consolidation).
8. Real Estate Investment Trusts (REITs)
REITs are an excellent way to participate in real estate investment, and the return it provides, without large amounts of capital or the need to manage properties. They’re publicly traded, closed-end investment funds that can be bought and sold on major stock exchanges. They invest primarily in commercial real estate, like office buildings, retail space, and large apartment complexes.
If you’re planning to invest in a REIT, you should be aware that there are three different types.
“Equity REITs purchase commercial, industrial, or residential real estate properties,” reports Robert R. Johnson, PhD, CFA, CAIA, Professor of Finance, Heider College of Business, Creighton University and co-author of several books, including The Tools and Techniques Of Investment Planning, Strategic Value Investing and Investment Banking for Dummies. “Income is derived primarily from the rental on the properties, as well as from the sale of properties that have increased in value. Mortgage REITs invest in property mortgages. The income is primarily from the interest they earn on the mortgage loans. Hybrid REITs invest both directly in property and in mortgages on properties.”
Johnson also cautions:
“Investors should understand that equity REITs are more like stocks and mortgage REITs are more like bonds. Hybrid REITs are like a mix of stocks and bonds.”
Mortgage REITs, in particular, are an excellent way to earn steady dividend income without being closely tied to the stock market.
Examples of specific REITs are listed in the table below (source: Kiplinger):
REIT
Equity or Mortgage
Property Type
Dividend Yield
12 Month Return
Rexford Industrial Realty
REXR
Industrial warehouse space
2.02%
2.21%
Sun Communities
SUI
Manufactured housing, RVs, resorts, marinas
2.19%
-14.71%
American Tower
AMT
Multi-tenant cell towers
2.13%
-9.00%
Prologis
PLD
Industrial real estate
2.49%
-0.77%
Camden Property Trust
CPT
Apartment complexes
2.77%
-7.74%
Alexandria Real Estate Equities
ARE
Research Properties
3.14%
-23.72%
Digital Realty Trust
DLR
Data centers
3.83%
-17.72%
9. Real Estate Crowdfunding
If you prefer direct investment in a property of your choice, rather than a portfolio, you can invest in real estate crowdfunding. You invest your money, but management of the property will be handled by professionals. With real estate crowdfunding, you can pick out individual properties, or invest in nonpublic REITs that invest in very specific portfolios.
One of the best examples of real estate crowdfunding is Fundrise. That’s because you can invest with as little as $500 or create a customized portfolio with no more than $1,000. Not only does Fundrise charge low fees, but they also have multiple investment options. You can start small in managed investments, and eventually trade up to investing in individual deals.
One thing to be aware of with real estate crowdfunding is that many require accredited investor status. That means being high income, high net worth, or both. If you are an accredited investor, you’ll have many more choices in the real estate crowdfunding space.
If you are not an accredited investor, that doesn’t mean you’ll be prevented from investing in this asset class. Part of the reason why Fundrise is so popular is that they don’t require accredited investor status. There are other real estate crowdfunding platforms that do the same.
Just be careful if you want to invest in real estate through real estate crowdfunding platforms. You will be expected to tie your money up for several years, and early redemption is often not possible. And like most investments, there is the possibility of losing some or all your investment principal.
Low minimum investment – $10
Diversified real estate portfolio
Portfolio Transparency
10. Physical Real Estate
We’ve talked about investing in real estate through REITs and real estate crowdfunding. But you can also invest directly in physical property, including residential property or even commercial.
Owning real estate outright means you have complete control over the investment. And since real estate is a large-dollar investment, the potential returns are also large.
For starters, average annual returns on real estate are impressive. They’re even comparable to stocks. Residential real estate has generated average returns of 10.6%, while commercial property has returned an average of 9.5%.
Next, real estate has the potential to generate income from two directions, from rental income and capital gains. But because of high property values in many markets around the country, it will be difficult to purchase real estate that will produce a positive cash flow, at least in the first few years.
Generally speaking, capital gains are where the richest returns come from. Property purchased today could double or even triple in 20 years, creating a huge windfall. And this will be a long-term capital gain, to get the benefit of a lower tax bite.
Finally, there’s the leverage factor. You can typically purchase an investment property with a 20% down payment. That means you can purchase a $500,000 property with $100,000 out-of-pocket.
By calculating your capital gains on your upfront investment, the returns are truly staggering. If the $500,000 property doubles to $1 million in 20 years, the $500,000 profit generated will produce a 500% gain on your $100,000 investment.
On the negative side, real estate is certainly a very long-term investment. It also comes with high transaction fees, often as high as 10% of the sale price. And not only will it require a large down payment up front, but also substantial investment of time managing the property.
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11. High Dividend Stocks
“The best high-yield investment is dividend stocks,” declares Harry Turner, Founder at The Sovereign Investor. “While there is no guaranteed return with stocks, over the long term stocks have outperformed other investments such as bonds and real estate. Among stocks, dividend-paying stocks have outperformed non-dividend paying stocks by more than 2 percentage points per year on average over the last century. In addition, dividend stocks tend to be less volatile than non-dividend paying stocks, meaning they are less likely to lose value in downturns.”
You can certainly invest in individual stocks that pay high dividends. But a less risky way to do it, and one that will avoid individual stock selection, is to invest through a fund.
One of the most popular is the ProShares S&P 500 Dividend Aristocrat ETF (NOBL). It has provided a return of 1.67% in the 12 months ending May 31, and an average of 12.33% per year since the fund began in October 2013. The fund currently has a 1.92% dividend yield.
The so-called Dividend Aristocrats are popular because they represent 60+ S&P 500 companies, with a history of increasing their dividends for at least the past 25 years.
“Dividend Stocks are an excellent way to earn some quality yield on your investments while simultaneously keeping inflation at bay,” advises Lyle Solomon, Principal Attorney at Oak View Law Group, one of the largest law firms in America. “Dividends are usually paid out by well-established and successful companies that no longer need to reinvest all of the profits back into the business.”
It gets better. “These companies and their stocks are safer to invest in owing to their stature, large customer base, and hold over the markets,” adds Solomon. “The best part about dividend stocks is that many of these companies increase dividends year on year.”
The table below shows some popular dividend-paying stocks. Each is a so-called “Dividend Aristocrat”, which means it’s part of the S&P 500 and has increased its dividend in each of at least the past 25 years.
Company
Symbol
Dividend
Dividend Yield
AbbVie
ABBV
$5.64
3.80%
Armcor PLC
AMCR
$0.48
3.81%
Chevron
CVX
$5.68
3.94%
ExxonMobil
XOM
$3.52
4.04%
IBM
IBM
$6.60
5.15%
Realty Income Corp
O
$2.97
4.16%
Walgreen Boots Alliance
WBA
$1.92
4.97%
12. Preferred Stocks
Preferred stocks are a very specific type of dividend stock. Just like common stock, preferred stock represents an interest in a publicly traded company. They’re often thought of as something of a hybrid between stocks and bonds because they contain elements of both.
Though common stocks can pay dividends, they don’t always. Preferred stocks on the other hand, always pay dividends. Those dividends can be either a fixed amount or based on a variable dividend formula. For example, a company can base the dividend payout on a recognized index, like the LIBOR (London Inter-Bank Offered Rate). The percentage of dividend payout will then change as the index rate does.
Preferred stocks have two major advantages over common stock. First, as “preferred” securities, they have a priority on dividend payments. A company is required to pay their preferred shareholders dividends ahead of common stockholders. Second, preferred stocks have higher dividend yields than common stocks in the same company.
You can purchase preferred stock through online brokers, some of which are listed under “Growth Stocks” below.
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Preferred Stock Caveats
The disadvantage of preferred stocks is that they don’t entitle the holder to vote in corporate elections. But some preferred stocks offer a conversion option. You can exchange your preferred shares for a specific number of common stock shares in the company. Since the conversion will likely be exercised when the price of the common shares takes a big jump, there’s the potential for large capital gains—in addition to the higher dividend.
Be aware that preferred stocks can also be callable. That means the company can authorize the repurchase of the stock at its discretion. Most will likely do that at a time when interest rates are falling, and they no longer want to pay a higher dividend on the preferred stock.
Preferred stock may also have a maturity date, which is typically 30–40 years after its original issuance. The company will typically redeem the shares at the original issue price, eliminating the possibility of capital gains.
Not all companies issue preferred stock. If you choose this investment, be sure it’s with a company that’s well-established and has strong financials. You should also pay close attention to the details of the issuance, including and especially any callability provisions, dividend formulas, and maturity dates.
13. Growth Stocks
This sector is likely the highest risk investment on this list. But it also may be the one with the highest yield, at least over the long term. That’s why we’re including it on this list.
Based on the S&P 500 index, stocks have returned an average of 10% per year for the past 50 years. But it is important to realize that’s only an average. The market may rise 40% one year, then fall 20% the next. To be successful with this investment, you must be committed for the long haul, up to and including several decades.
And because of the potential wide swings, growth stocks are not recommended for funds that will be needed within the next few years. In general, growth stocks work best for retirement plans. That’s where they’ll have the necessary decades to build and compound.
Since most of the return on growth stocks is from capital gains, you’ll get the benefit of lower long-term capital gains tax rates, at least with securities held in a taxable account. (The better news is capital gains on investments held in retirement accounts are tax-deferred until retirement.)
You can choose to invest in individual stocks, but that’s a fairly high-maintenance undertaking. A better way may be to simply invest in ETFs tied to popular indexes. For example, ETFs based on the S&P 500 are very popular among investors.
You can purchase growth stocks and growth stock ETFs commission free with brokers like M1 Finance, Zacks Trade, Wealthsimple.
14. Annuities
Annuities are something like creating your own private pension. It’s an investment contract you take with an insurance company, in which you invest a certain amount of money in exchange for a specific income stream. They can be an excellent source of high yields because the return is locked in by the contract.
Annuities come in many different varieties. Two major classifications are immediate and deferred annuities. As the name implies, immediate annuities begin paying an income stream shortly after the contract begins.
Deferred annuities work something like retirement plans. You may deposit a fixed amount of money with the insurance company upfront or make regular installments. In either case, income payments will begin at a specified point in the future.
With deferred annuities, the income earned within the plan is tax-deferred and paid upon withdrawal. But unlike retirement accounts, annuity contributions are not tax-deductible. Investment returns can either be fixed-rate or variable-rate, depending on the specific annuity setup.
While annuities are an excellent idea and concept, the wide variety of plans as well as the many insurance companies and agents offering them, make them a potential minefield. For example, many annuities are riddled with high fees and are subject to limited withdrawal options.
Because they contain so many moving parts, any annuity contracts you plan to enter into should be carefully reviewed. Pay close attention to all the details, including the small ones. It is, after all, a contract, and therefore legally binding. For that reason, you may want to have a potential annuity reviewed by an attorney before finalizing the deal.
15. Alternative Investments
Alternative investments cover a lot of territory. Examples include precious metals, commodities, private equity, art and collectibles, and digital assets. These fall more in the category of high risk/potential high reward, and you should proceed very carefully and with only the smallest slice of your portfolio.
To simplify the process of selecting alternative assets, you can invest through platforms such as Yieldstreet. With a single cash investment, you can invest in multiple alternatives.
“Investors can purchase real estate directly on Yieldstreet, through fractionalized investments in single deals,” offers Milind Mehere, Founder & Chief Executive Officer at Yieldstreet. “Investors can access private equity and private credit at high minimums by investing in a private market fund (think Blackstone or KKR, for instance). On Yieldstreet, they can have access to third-party funds at a fraction of the previously required minimums. Yieldstreet also offers venture capital (fractionalized) exposure directly. Buying a piece of blue-chip art can be expensive, and prohibitive for most investors, which is why Yieldstreet offers fractionalized assets to diversified art portfolios.”
Yieldstreet also provides access to digital asset investments, with the benefit of allocating to established professional funds, such as Pantera or Osprey Fund. The platform does not currently offer commodities but plans to do so in the future.
Access to wide array of alternative asset classes
Access to ultra-wealthy investments
Can invest for income or growth
Learn More Now
Alternative investments largely require thinking out-of-the-box. Some of the best investment opportunities are also the most unusual.
“The price of meat continues to rise, while agriculture remains a recession-proof investment as consumer demand for food is largely inelastic,” reports Chris Rawley, CEO of Harvest Returns, a platform for investing in private agriculture companies. “Consequently, investors are seeing solid returns from high-yield, grass-fed cattle notes.”
16. Interest Bearing Crypto Accounts
Though the primary appeal of investing in cryptocurrency has been the meteoric rises in price, now that the trend seems to be in reverse, the better play may be in interest-bearing crypto accounts. A select group of crypto exchanges pays high interest on your crypto balance.
One example is Gemini. Not only do they provide an opportunity to buy, sell, and store more than 100 cryptocurrencies—plus non-fungible tokens (NFTs)—but they are currently paying 8.05% APY on your crypto balance through Gemini Earn.
In another variation of being able to earn money on crypto, Crypto.com pays rewards of up to 14.5% on crypto held on the platform. That’s the maximum rate, as rewards vary by crypto. For example, rewards on Bitcoin and Ethereum are paid at 6%, while stablecoins can earn 8.5%.
It’s important to be aware that when investing in cryptocurrency, you will not enjoy the benefit of FDIC insurance. That means you can lose money on your investment. But that’s why crypto exchanges pay such high rates of return, whether it’s in the form of interest or rewards.
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17. Crypto Staking
Another way to play cryptocurrency is a process known as crypto staking. This is where the crypto exchange pays you a certain percentage as compensation or rewards for monitoring a specific cryptocurrency. This is not like crypto mining, which brings crypto into existence. Instead, you’ll participate in writing that particular blockchain and monitoring its security.
“Crypto staking is a concept wherein you can buy and lock a cryptocurrency in a protocol, and you will earn rewards for the amount and time you have locked the cryptocurrency,” reports Oak View Law Group’s Lyle Solomon.
“The big downside to staking crypto is the value of cryptocurrencies, in general, is extremely volatile, and the value of your staked crypto may reduce drastically,” Solomon continues, “However, you can stake stable currencies like USDC, which have their value pegged to the U.S. dollar, and would imply you earn staked rewards without a massive decrease in the value of your investment.”
Much like earning interest and rewards on crypto, staking takes place on crypto exchanges. Two exchanges that feature staking include Coinbase and Kraken. These are two of the largest crypto exchanges in the industry, and they provide a wide range of crypto opportunities, in addition to staking.
Invest in Startup Businesses and Companies
Have you ever heard the term “angel investor”? That’s a private investor, usually, a high net worth individual, who provides capital to small businesses, often startups. That capital is in the form of equity. The angel investor invests money in a small business, becomes a part owner of the company, and is entitled to a share of the company’s earnings.
In most cases, the angel investor acts as a silent partner. That means he or she receives dividend distributions on the equity invested but doesn’t actually get involved in the management of the company.
It’s a potentially lucrative investment opportunity because small businesses have a way of becoming big businesses. As they grow, both your equity and your income from the business also grow. And if the business ever goes public, you could be looking at a life-changing windfall!
Easy Ways to Invest in Startup Businesses
Mainvest is a simple, easy way to invest in small businesses. It’s an online investment platform where you can get access to returns as high as 25%, with an investment of just $100. Mainvest offers vetted businesses (the acceptance rate is just 5% of business that apply) for you to invest in.
It collects revenue, which will be paid to you quarterly. And because the minimum required investment is so small, you can invest in several small businesses at the same time. One of the big advantages with Mainvest is that you are not required to be an accredited investor.
Still another opportunity is through Fundrise Innovation Fund. I’ve already covered how Fundrise is an excellent real estate crowdfunding platform. But through their recently launched Innovaton Fund, you’ll have opportunity to invest in high-growth private technology companies. As a fund, you’ll invest in a portfolio of late-stage tech companies, as well as some public equities.
The purpose of the fund is to provide high growth, and the fund is currently offering shares with a net asset value of $10. These are long-term investments, so you should expect to remain invested for at least five years. But you may receive dividends in the meantime.
Like Mainvest, the Fundrise Innovation Fund does not require you to be an accredited investor.
Low minimum investment – $10
Diversified real estate portfolio
Portfolio Transparency
Final Thoughts on High Yield Investing
Notice that I’ve included a mix of investments based on a combination of risk and return. The greater the risk associated with the investment, the higher the stated or expected return will be.
It’s important when choosing any of these investments that you thoroughly assess the risk involved with each, and not focus primarily on return. These are not 100% safe investments, like short-term CDs, short-term Treasury securities, savings accounts, or bank money market accounts.
Because there is risk associated with each, most are not suitable as short-term investments. They make most sense for long-term investment accounts, particularly retirement accounts.
For example, growth stocks—and most stocks, for that matter—should generally be in a retirement account. While there will be years when you will suffer losses in your position, you’ll have enough years to offset those losses between now and retirement.
Also, if you don’t understand any of the above investments, it will be best to avoid making them. And for more complicated investments, like annuities, you should consult with a professional to evaluate the suitability and all the provisions it contains.
FAQ’s on High Yield Investment Options
What investment has the highest yield?
The investment with the highest yield will vary depending on a number of factors, including current market conditions and the amount of risk an investor is willing to take on. Generally speaking, investments with the potential for high yields also come with a higher level of risk, so it’s important for investors to carefully consider their options and choose investments that align with their financial goals and risk tolerance.
Some examples of high-yield investments include:
1. Stocks: Some stocks may offer high dividend yields, which is the annual dividend payment a company makes to its shareholders, expressed as a percentage of the stock’s current market price.
2. Real estate: Investing in real estate, either directly by purchasing property or indirectly through a real estate investment trust (REIT), can potentially generate high returns in the form of rental income and appreciation of the property value.
3. High-yield bonds: High-yield bonds, also known as junk bonds, are bonds that are issued by companies with lower credit ratings and thus offer higher yields to compensate for the added risk.
4. Private lending: Investing in private loans, such as through peer-to-peer lending platforms, can potentially offer high yields, but it also carries a higher level of risk.
5. Commodities: Investing in commodities, such as precious metals or oil, can potentially generate high returns if the prices of those commodities rise. However, the prices of commodities can also be volatile and subject to market fluctuations.
It’s important to note that these are just examples and not recommendations. As with any investment, it’s crucial to carefully research and consider all the potential risks and rewards before making a decision.
Where can I invest my money to get high returns?
There are a number of places you can invest your money to get high returns. One option is to invest in stocks, which typically offer higher returns than other investment options. Another option is to invest in bonds, which are considered a relatively safe investment option.
You could also invest in real estate, which has the potential to provide high returns if done correctly. Finally, you could also invest in commodities, such as gold or silver, which can be a risky investment but can also offer high returns.
What investments can I make a 10% return?
It’s difficult to predict exactly what investments will generate a 10% return, as investment returns can vary depending on a number of factors, including market conditions and the performance of the specific investment. Some investments, such as stocks and real estate, have the potential to generate returns in excess of 10%, but they also come with a higher level of risk. It’s important to remember that past performance is not necessarily indicative of future results, and that all investments carry some degree of risk
A few short weeks are left for Congress — or, perhaps, President Joe Biden — to take action and lift the debt ceiling before tick, tick, tick … boom goes the economy.
The so-called “X-date” — when the federal government can no longer meet its legal obligations — could be as early as June 1, according to a May 1 letter from U.S. Treasury Secretary Janet Yellen to Congress. Yellen reiterated the same sentiments in another letter to Congress on May 15.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen wrote in the most recent letter. She warned of “catastrophe” in a May 11 news conference.
The Congressional Budget Office released its own projections on May 12, which left more wiggle room: somewhere in the first two weeks of June. The report also said the U.S. Treasury’s cash and extraordinary measures would be sufficient to fund the government until June 15.
While negotiations between the parties continue, we all wait to see if the federal government runs out of money to pay its bills and defaults. What comes next isn’t pretty.
A range of problems
If the default lasts for weeks or more, rather than days, it could trigger a fire-and-brimstone, Armageddon-level financial crisis for the U.S. and global economies.
A report from the White House Council of Economic Advisors in October 2021 warned of the possible effects of the U.S. defaulting, which include a worldwide recession, worldwide frozen credit markets, plunging stock markets and mass worldwide layoffs. The real gross domestic product, or GDP, could also fall to levels not seen since the Great Recession.
The U.S. has defaulted only once, in 1979, and it was an unintentional snafu — the result of a technical check-processing glitch that delayed payments to certain U.S. Treasury bondholders. The whole affair affected a few investors and was remedied within weeks.
But the 1979 default was not intentional. And from the point of view of the global markets, there’s a world of difference between a short-lived administrative snag and a full-blown default as a result of Congress failing to raise the debt limit.
A default could happen in two stages. First, payments to Social Security recipients and federal employees might be delayed. Next, the federal government would be unable to service its debt or pay interest to its bondholders. U.S. debt is sold as bonds and securities to private investors, corporations or other governments. Just the threat of default would cause market upheaval: A big drop in demand for U.S. debt as its credit rating is downgraded and sold, followed by a spike in interest rates. The U.S. would need to promise higher interest payments to justify the increased risk of buying and holding its debt.
Here’s what else you can expect if the U.S. defaults on its debt.
A sell-off of U.S. debt
A default could provoke a sell-off in debt issued by the U.S., considered among the safest and most stable securities in the world. Such a sell-off of U.S. Treasurys would have far-reaching repercussions.
Money market funds could see volatility
Money market funds are low-risk, liquid mutual funds that invest in short-term, high-credit quality debt, such as U.S. Treasury bills. Conservative investors use these funds as they typically shield against volatility and are less susceptible to changes in interest rates.
However, in the past, money market funds made up of U.S. Treasurys have seen increased volatility when the U.S. ran up against debt ceiling limits and signaled potential government default. Yields on shorter-term T-bills go up because they are impacted more compared with longer-term bonds, which gives investors more time for markets to calm down.
(Note that money market funds aren’t the same as money market deposit accounts, which are a type of federally insured savings account offered by financial institutions.)
Federal benefits would be suspended
In the event of a default, federal benefits would be delayed or suspended entirely. Those include: Social Security; Medicare and Medicaid; Supplemental Nutrition Assistance Program, or SNAP, benefits; housing assistance; and assistance for veterans.
Although a default wouldn’t affect Medicare and Medicaid recipients directly, delays in payments to providers could make them reluctant to treat Medicare and Medicaid patients.
Stock markets would roil
A default would likely trigger a downgrade of the U.S. credit rating — the S&P downgraded the nation’s credit rating only once before, in 2011, after a last-minute debt ceiling deal was reached. A credit downgrade happens when an international credit rating agency, like Standard & Poor’s, determines the country’s risk of defaulting on sovereign bonds has increased relative to other peer nations or an average, said Andrew Hanson, assistant professor of economics at the University of Tennessee, Knoxville, via email.
A default combined with the downgraded credit rating would in turn cause the markets to tank, the White House’s Council of Economic Advisors said in 2021.
If current debt ceiling talks continue for too long, the markets are likely to become more volatile. When markets are volatile, there is a risk of a run on banks — where deposit customers withdraw money because of fear their bank could collapse — in an already uncertain banking environment. If an institution isn’t able to meet the increased need for withdrawals, it could fail.
Interest rates would increase for loans
As debt ceiling negotiations linger, Americans could see rates increase on established lending products with variable loans, including personal and small-business lines of credit, credit cards and certain student loans. Issuers may also decrease existing credit lines.
Credit lenders may have less capital to lend or may tighten their standards, which would make it more difficult to get new credit.
Depending on the timing of a default and how long the effects are felt, rates could increase on new fixed auto loans, federal or private student loans and personal or small-business loans.
Credit card rates could rise
Americans could see rates increase on credit cards beyond what they’ve seen since the Fed began hiking rates in 2022. Credit cards already have higher interest rates than many other loans, so carrying a balance during these economic times is more expensive. Those with debt who are in a position to pay it off should start making moves to do so.
It’s also not uncommon for lenders to cut credit limits, close accounts or require higher credit scores for approval when the economy is in distress. Lenders took these actions during the Great Recession and early in the COVID-19 pandemic, according to a 2022 report by the Consumer Financial Protection Bureau.
Mortgage rates would likely increase
The real estate website Zillow projects that following the U.S. defaulting on its debts, mortgage rates could rise as much as two percentage points by September before declining. With that, we’d see a massive contraction of the housing market.
A debt ceiling crisis won’t impact those with fixed-rate mortgages or fixed-rate home equity loans. But adjustable-rate mortgage, or ARM, holders may feel these rising rates. Those in the fixed period of their ARM could see rates rise when reaching their first adjustment. Anyone struggling to keep up with payments is encouraged to reach out to their lender early to discuss their options. A HUD-certified housing counselor can help homeowners explore alternatives to delinquency and foreclosure.
If the prime rate (the baseline rate that lenders use to set interest rates for lines of credit) increases, borrowers with variable-rate home equity lines of credit, or HELOCs, will also see their rate climb.
Tax refunds could be delayed
If the debt ceiling isn’t raised, it could take more time for tax filers to receive their refunds — which usually come within 21 days of e-filing. If the government defaults, those who file late run a risk of a delayed refund.
Even the threat of a default can lead to a downgrade of the U.S. credit rating, but it won’t necessarily happen.
“Given the Treasury and FOMC’s commitment to honoring extant Treasuries, the chance of a U.S. credit downgrade has historically been very slim,” Hanson said.
Even if default is avoided, the uncertainty created by brinkmanship on the debt limit has “serious economic costs,” Yellen warned at a press conference in Japan on May 11.
“We could see a rise in interest rates drive up payments on mortgages, auto loans and credit cards,” Yellen said. “We are already seeing spikes in interest rates for debt due around the date that the debt limit may bind.”
Hanson said a default could make it more difficult to finance future spending with debt since fewer people would be willing to hold U.S. Treasuries rather than other sovereign bonds that have a higher credit rating. And also because yields on Treasury bonds would increase in an effort to incentivize investors to buy, at a cost to the Treasury.
NerdWallet writers Kate Ashford, Margarette Burnette, Taylor Getler, Jaime Hanson, Craig Joseph, Melissa Lambarena and Kurt Woock contributed to this article.
Flagstar Bank, a top-25 U.S. mortgage lender, recently participated in two M&A deals.
In December 2022, the bank concluded the merger with New York Community Bancorp after waiting for regulatory approvals for over a year. In March 2023, Flagstar surprised the market amid the banking crisis by acquiring some assets, liabilities and deposits ofSignature Bank from the Federal Deposit Insurance Corporation (FDIC).
So what do these transactions add to Flagstar?
Lee Smith, senior executive vice president and president of mortgage, said the Flagstar-NYCB transaction created a “bigger bank with scale, very little business overlap, and a more diversified business model.”
Meanwhile, Signature brought in high-net-worth customers and took the loan-to-deposit ratio to less than 90%, strengthening the bank’s balance sheet.
Smith, who thinks the banking crisis is much calmer now, said Flagstar’s current priority is integrating NYCB and Signature and looking for synergies when bringing systems together, including through real estate consolidation.
“There’ll be cost synergies, but you wouldn’t just think about them in terms of layoffs,” Smith said.
Regarding the mortgage business, Smith anticipates that the market will recover in 2023, with rates at the 5% level. But, according to the executive, Flagstar has built a diversified mortgage business to win in the market whether rates increase or decrease. This includes, among other businesses, origination, servicing, subservicing and warehouse lending.
“We are what we call a one-stop shop mortgage model,” he said.
In light of the recent M&A deals, Smith spoke to HousingWire from his office in Troy, Michigan, to explain the company’s business model.
This interview has been condensed and lightly edited for clarity.
Flávia Furlan Nunes: What was the rationale behind the merger with New York Community Bank?
Lee Smith: That is a transaction we announced in April of 2021, and we closed it on December 1, 2022. That’s something that had been in the works for 20. months. If you look at any bank M&A deal, that’s a typical time.
The beauty of bringing those two organizations together is it created a $90.1 billion bank at the year-end 2022. At Flagstar, we have a heavy mortgage business, a community bank, bank branches, commercial lending, including warehouse lending, and homebuilder finance.
NYCB was very concentrated in multifamily lending, particularly in the New York area. By bringing those two organizations together, you created a bigger bank with scale, very little business overlap, and you had a more diversified business model.
Together, NYCB and Flagstar have 435 bank branches. We’ve got a very diversified branch footprint. NYCB and Flagstar have known each other for a long time. It was a natural conversation. It was an opportunity to grow.
Nunes: Why did Flagstar acquire some Signature assets, liabilities and deposits when you were still integrating with NYBC?
Smith: More recently, we saw the banking crisis hit in March. Three banks – and a fourth with First Republic – were affected by that, Silvergate, Silicon Valley Bank, and Signature Bank. We knew Signature Bank well because they’re a New York bank. We are operating in the same market, same customers, sometimes competing against each other as just friendly competitors, sometimes working together.
Unfortunately, they were seized by the FDIC on the Sunday after Silicon Valley. When it seizes a bank, the FDIC runs a process to sell the assets and liabilities as quickly as possible. So, they hired bankers.
We were able to, given our knowledge of the bank, get involved in the process and submit a bid. We ended up buying $38 billion of assets, which included $25 billion of cash and $13 billion of loans. And we assumed $34 billion of deposits.
Nunes: What are the economics behind the transaction, considering Signature’s loans and assets acquired by Flagstar?
Smith: The signature business – again – has not much overlap. We didn’t take their multifamily loans because we already have a multifamily business at NYCB. We obviously didn’t take the crypto business loans and we didn’t take the venture loans.
But we took pretty much most of the other businesses. These businesses complement what we have because they’re dealing with high-net-worth customers. There are different industries that they’re focused on. They had a wealth business that we don’t have; they had a broker-dealer.
The economics are different when it’s a sale out of receivership. Of course, it’s happening quickly versus a normal process, which takes months. And the transaction transformed our funding mix and the liability side of the balance sheet. It took our loan-to-deposit ratio to less than 90%. And we were over 100% prior to the transaction. So, it really transformed our balance sheet.
Nunes: Why is Flagstar acquiring Signature and not NYCB?
Smith: It’s all going to be brand Flagstar. NYCB operated under a number of names because they’ve been acquisitive historically. And Tom [Thomas Cangemi, NYCB president and CEO] realized we’ve got to come together and have one name. Flagstar is already known nationally, just given our mortgage servicing businesses and certain other lending businesses. And it just made sense to make everything Flagstar.
So, we’re now a $124 billion bank. And we’ve got certain businesses that can be successful in a rising rate environment and businesses that will be successful in a declining rate environment. So, we’re balanced.
Nunes: How has been the integration of all these businesses? Will you have layoffs resulting from these integrations?
Smith: We’re working through that. We’ve talked publicly that the systems integration for Flagstar and NYCB will be completed in Q1 2024. Remember, with Signature, we’ve acquired loans and deposits. It’s a little different than the merger of NYCB because it isn’t like a full integration. It’s more about lifting loans and deposits and putting them into our systems. It’s easier, in theory.
The focus right now is on completing the integration. The cost synergies can come in a number of ways, including real estate consolidation as we bring systems together and move to one system. There’ll be cost synergies, but you wouldn’t just think about them in terms of layoffs. There are lots of ways you can realize cost benefits from bringing organizations together.
Nunes: What do you expect of the banking crisis? Would Flagstar acquire another bank?
Smith: Things are much calmer. The reason for that – and, again, this is my opinion – is, if you look at the banks that were seized, so Silicon Valley, Signature, and First Republic, it was more idiosyncratic; they had concentrations in certain areas. With the transaction done with First Republic and JPMorgan, I think we should be in much calmer waters now. We certainly want to digest what we’ve got. That’s our immediate goal right now.
Nunes: How is the landscape for mortgages? What do you expect for 2023 and 2024?
Smith: If you go back to 2020 and 2021, the mortgage market was in excess of $4 trillion in size. It was $2.4 trillion last year. If you look at the latest forecast – MBA, Fannie Mae and Freddie Mac – it’s on average $1.7 trillion this year. The Fed has raised rates quickly. When the market was $4 trillion, you could get a 30-year mortgage for 3%. Now you’re looking at 6.5%.
That’s a big change in a short time. It undoubtedly put a lot of pressure on the mortgage market. That’s why you’ve seen this big reduction in the market size. You’ve reported on it, and it’s public, we’ve certainly had headcount reductions. We’ve reduced the size of our mortgage origination business because we’re focused on profitability. We’re not about having a big market share if you’re not profitable.
It might not be the second half of 2023, but I think in 2024, you’re going to start to see rates come down, and you’ll start to see the 30-year fixed rate, instead of being 6.5%, we’re going to see in the 5%, and then that’s going to generate more activity.
Nunes: How is Flagstar getting ready for when the market turns?
Smith: From an origination point of view, we’ve diversified. We originate in six channels. Four are TPO channels—delegated correspondent, non-delegated correspondent, broker and bulk. Two are retail channels—distributed retail and direct to consumer. Because we’re a bank, we have a balance sheet and can issue our own RMBS [residential mortgage-backed securities].
As we originate loans, we’re creating mortgage servicing rights, and we like that asset. If you look at our balance sheet at the end of Q1, we have just over a billion dollars of MSRs. The MSR asset is a hedge against the origination business.
But then, here’s where it gets interesting for us. We’re also a big subservicer, with 1.5 million loans and almost half a trillion dollars of mortgages. That generates income. In a rising rate environment, there are fewer payoffs, so the loan count increases. And the other thing that that business does is creates escrow deposits that fund our balance sheet because we’re a bank.
And then that brings me to the next part of the flywheel: We’re the second largest warehouse lender in the country. And then we pick up as part of the Signature deal this treasury and cash management team that’s very focused on mortgage companies in terms of bringing in deposits and offering treasury and cash management services.
I tell you all that because, from a mortgage point of view, we’re hedged. We are what we call a one-stop shop mortgage model.
Accounting is the practice of tracking your business’s financial data and interpreting it into valuable insights. This allows you to generate crucial financial statements, such as a balance sheet, cash flow statement, and profit and loss report. It sounds simple, but in reality, a lot of behind-the-scenes work goes into accurately reporting on a business’s financial state.
Accounting requires meticulous record-keeping and financial transaction tracking year-round. Moreover, keeping accurate records helps ensure your business is prepared to file taxes, present information to investors or even apply for a loan.
Accounting basics
Recording financial transactions
For a small business, accounting involves tracking money flow in various forms, including operating expenses (e.g., marketing, utilities, rent), cost of goods sold, accounts receivable and sales. It also takes into account liabilities, such as accounts payable, business loans and taxes, and the value of your assets, such as cash and inventory.
Let’s say a client just paid their invoice online, or money was withdrawn from your checking account to pay a utility bill. Each transaction — money in or money out — gets recorded. Most business owners opt for small-business accounting software to help automate the process and reduce the likelihood of error.
Organizing financial transactions
A chart of accounts helps organize and make sense of all of a business’s recorded transactions. It’s essentially a list of financial accounts, and each time you record a transaction, you classify it under a particular account. Most accounts fall into five overarching account types: assets, liabilities, equity, expenses or revenue. Categorizing transactions accurately is critical for producing financial statements, which each pull information from specific accounts.
After you enter a transaction and categorize it under an account, your accounting software will create a journal entry behind the scenes. Most modern accounting software uses the double-entry accounting system, which requires two book entries — one debit and one credit — for every business transaction. These entries are summarized in the general ledger.
Running accounting reports
After recording and categorizing transactions, you can analyze the results by running reports. There are a few main financial statements that businesses rely on:
Income statement. Also called a profit and loss statement, the income statement consolidates data on revenue and expenses to show how profitable your business was over a specific period. It also shows how much it’s paid in expenses and taxes.
Balance sheet. The balance sheet takes your business’s assets (e.g., inventory, equipment and accounts receivable), liabilities (e.g., accounts payable or taxes owed) and equity into account.
Cash flow statement. As the name implies, this accounting report gives you an overview of your business’s cash flow. It breaks down how your business earns cash and what that cash is going toward. Ideally, your cash flow will be positive and indicate that you have enough cash to cover future liabilities.
Following accounting standards
GAAP accounting
The Financial Accounting Standards Board, an independent organization recognized by the federal government, established a set of standards called generally accepted accounting principles, or GAAP, that publicly traded companies must comply with. For example, a company has to reference specific time periods in reports and follow the same accounting method across time periods to ensure accurate comparisons. Though small businesses aren’t required to follow the same rules, doing so can help ensure a higher level of consistency.
How do small businesses use accounting?
You can use accounting to track cash flow and quantify your company’s financial health. In addition, accounting makes it possible to create financial projections to plan for the future and anticipate sales and expenses. Without accounting, it would be incredibly difficult to gauge your business’s performance and whether it’s on track to meet its goals and obligations.
What do accountants do?
Small businesses hire accountants to advise them on their financial situation and help file taxes. Aside from handling taxes and compliance issues, they can help you optimize budgets, spot opportunities to save, and even apply for business loans.
Whereas you might only periodically consult your accountant, a bookkeeper touches base more frequently and handles daily accounting tasks. Regardless of who you hire, knowing basic accounting principles can help you understand your business better and have more productive conversations with your financial team.
Frequently asked questions
What is a simple definition of accounting?
Accounting consists of tracking financial transactions and analyzing what they mean for your business.
How does accounting help small businesses?
Accounting helps you gauge where your small business stands financially, what it can afford at any given time, and where its money is coming from and going. In addition to this financial overview, proper accounting practices prepare your business to file taxes and produce financial statements needed for potential investors or business loan applications.
What do small-business owners need to know about accounting?
When running a small business, you should choose an accounting software product and consider hiring an accountant. Accounting software does a lot of the heavy lifting (such as keeping track of debits and credits) for you. However, it’s still important to understand basic accounting principles to know what’s happening behind the scenes. Business owners should be able to enter transactions, reconcile accounts and interpret financial statements accurately.
Do I need an accountant?
Accountants can help take some of the pressure off tax season by handling the preparation and filing for you. If your business can afford to hire an accountant, doing so could save you time and potentially even tax dollars.
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Do you want to create a personal financial statement, but aren’t sure where to start?
According to Mint.com, over 65% of people have no clue how they spent money last month. So, you can probably be pretty sure even less know how their personal finance situation.
With rising costs for essentials like housing and education due to inflation, there is no better time to get an accurate picture of your current situation today.
If you’re wondering how your finances measure up, a Personal Financial Statement can be an invaluable tool in helping you understand where you stand financially and prepare for changes ahead.
This article will walk through creating a sample personal financial statement template with examples of what this document might look like based on your situation.
A personal financial statement isn’t just for your loan applications anymore, it’s an opportunity for transparency in your finances too!
What is a personal financial statement?
A personal financial statement is a document that summarizes your assets, liabilities, and net worth. A PFS can help you understand your financial health so you can make informed decisions about your money.
A personal financial statement template will typically include three sections:
Assets: This section will list all of the money and property you own.
Liabilities: This section will list all of the money you owe.
Net Worth: This section will calculate your net worth by subtracting your total liabilities from your total assets.
Your personal financial statement should be updated on a regular basis, typically once a year. This will help you track your progress and make sure you’re on track to reach your financial goals.
What are the benefits of creating a personal financial statement?
There are many great benefits of a personal financial statement.
By creating a personal financial statement, you can see at a glance how much money you have coming in, going out, and what your net worth is. This information can be extremely helpful in making financial decisions and setting goals.
Benefit #1 – Understand Your Financial Situation
This is why you must spend the extra couple of minutes to create a personal financial statement form.
Most importantly, you get a better understanding of your financial situation. This includes seeing where your money is going each month and how much debt you have.
What we call around here at Money Bliss – the 1000-foot look from above. The outsider’s perspective of what is going on with your finances.
Benefit #2 – Helps you track your progress
When it comes to personal finance, one of the best things you can do is keep track of your progress.
Tracking your progress should be important to you! By seeing everything laid out in front of you, it becomes much easier to make informed financial decisions that will help improve your overall financial picture.
Benefit # 3- Find some areas of improvement
Since a personal financial statement is a document that summarizes your income, expenses, assets, and liabilities in one place it helps you see the financial big picture. Thus, spotting areas for improvement are easier.
For example, if you see that you are spending too much money on non-essential items, you can make changes to improve your financial health.
Benefit #4 – Useful Tool to Set Goals
Next, it can help you set goals. Once you see where you stand financially, you can set goals for paying off debt or saving more money each month.
This aids you to make better financial decisions by providing a clear picture of your financial situation.
Benefit #5 – Snapshot to help you stay motivated
Creating a personal financial statement can be incredibly helpful in staying motivated to save money and achieve your financial goals. Seeing your progress in black and white (or, more accurately, green and red) can be a strong motivator to keep going.
Using a personal finance statement is especially helpful if you’re working towards paying off debt or saving for a specific goal. It can be difficult to stay motivated when you’re not seeing progress, but seeing the numbers going down (or up) can give you the boost you need to keep going.
Benefit #6 – Monitor your financial health
Creating a personal financial statement can help you monitor your financial health and make informed decisions about your spending and saving habits.
If you see that your expenses are consistently exceeding your income, for example, you may need to make some changes to ensure that you are able to meet your long-term financial goals.
Easier to spot opportunities to save money or invest in assets that will grow in value over time.
Monitoring your financial health on a regular basis can help you avoid debt problems and keep track of your progress toward financial goals.
What are the types of personal financial statements?
A personal financial statement is a form or spreadsheet detailing a person’s overall financial health. This statement is typically used to apply for business loans or other forms of financing. There are two types of personal financial statements:
The first type is the balance sheet, which lists a person’s assets and liabilities.
The second type is the income statement, which details a person’s income and expenses.
The balance sheet provides an overview of a person’s financial situation at a particular point in time, while the income statement shows how much money a person has coming in and going out over a period of time.
Both types of statements are important in helping lenders evaluate a borrower’s ability to repay a loan. As well as for you to monitor your personal situation.
What are the components of a personal financial statement?
A personal financial statement is not just a document that shows how much money you have in your bank account. It also includes other important components to show a well-rounded picture.
Most people know that a personal finance statement includes income, assets, and liabilities. But did you know there are actually four main components of a personal financial statement?
A personal financial statement varies from a traditional balance sheet that is used for a company.
Income
Your income is everything you earn in a year from all sources, including your job, investments, alimony, and more.
You should list all of your sources of income on your personal financial statement so you have a clear picture of what you’re bringing in each month.
Include all sources of income, even if they are irregular or one-time payments.
List after-tax income.
If you are married or have a partner, include their income as well.
Update your income regularly to reflect any changes (e.g., new job, raise, bonus).
This will help you make informed decisions about your spending and saving.
Expenses
This is the money you spend each month on things like your mortgage or rent, car payments, groceries, and other necessary expenses.
Here are over 100 personal budget categories for various expenses.
Assets
Assets are everything you own like your home equity or the value of your car and can use to pay your debts. This includes cash, savings, investments, property, and possessions.
Calculate your total assets by adding up the value of all your cash, savings, investments, property, and possessions.
So, is a car an asset? Well it depends if there is a loan against it.
Liabilities
Your liabilities are everything you owe money on. This includes, but is not limited to:
Mortgage
Car loan
Student loans
Credit card debt
Any other personal loans
Your liabilities also include any money you may owe in taxes.
How to create a personal financial statement – Part 1
There are a few key things you need to know in order to create a personal financial statement.
The first part includes what is needed for your net worth – assets and liabilities. The second part includes your current income, expenditures, and savings.
We will show you next how to collect all of this information, then you can start to work on creating a personal financial statement.
Step #1 – Determine your current assets and business profit
The first is your current assets. Your assets are everything you own and can use to pay your debts. This includes your savings, your home equity, and any investments you have. You will need to know the value of all of these things in order to create an accurate personal finance statement.
To determine the value of your assets, start by looking at your savings. This can be any money you have in the bank, including checking, savings, and money market accounts. Add up the total balance of all these accounts to get your total savings.
Next, determine the value of your home equity. This is the difference between what your home is worth and how much you still owe on it. To calculate this, look up the current value of your home and subtract any outstanding mortgage or other loan balances from it. This will give you an estimate of how much equity you have in your home.
Finally, add up the values of any investments you have. These can include stocks, bonds, mutual funds, and other types of investment accounts. Once you have all these values totaled up, this will give you an estimate of your current assets.
Step #2 – Determine your current liabilities
Your current liabilities are all of the debts and financial obligations that you currently have.
This can include things like credit card debt, car loans, student loans, and any other type of loan that you are currently paying off.
To get an accurate picture of your current liabilities, you will need to gather up all of your bills and statements so that you can see exactly how much you owe.
Step #3 – Determine your net worth
Your net worth is your assets – your savings, your home equity, and your stocks and investments – minus your liabilities. To calculate it, simply subtract your total liabilities from your total assets. This will give you your net worth.
Your net worth is a good indicator of your financial health.
It can help you make decisions about saving and investing, and it can also be a useful tool for budgeting. If you want to improve your financial health, focus on increasing your net worth by saving more money and investing in assets that will grow in value over time.
Your goal is to double your liquid net worth quickly.
How to create a personal financial statement – Part 2
Now, you have developed your next worth statement. The next step in creating a personal financial statement is to determine your monthly cash flow of money or annual cash flow.
This second part includes your current income, expenditures, and savings.
Step #1 – Determine your monthly income
Firstly, you will need your income flow section. This could come from your pay stubs, or if you are self-employed, your profit and loss statements.
Your monthly income includes all money that you earn in a month, including salary, wages, tips, commissions, child support, alimony, and any other regular payments that you receive.
Step #2 – Determine your monthly expenses
The next piece is to determine your monthly expenses. This includes things like your mortgage or rent, car payments, credit card bills, and any other regular expenses. You’ll also want to factor in occasional expenses, like doctor’s appointments or annual membership fees.
Your expenses can be divided into two categories: fixed and variable.
Fixed expenses are those that remain the same each month, such as rent or mortgage payments, car insurance, and minimum credit card payments. Variable expenses change from month to month and can include items such as groceries, utility bills, entertainment, and clothing.
Step #3 – Determine your monthly savings
Typically, most advice will leave out monthly savings. However, this. is a critical piece to learning how to FI – financial independence.
Once you have both your income and expense information, you can begin to calculate your monthly savings. To do this, simply take your total income and subtract your total expenses. The remaining amount is what you have available to save each month.
Maybe you just calculated this and realize you have a negative number (meaning you spend more than you earn each month), then you will need to make some changes in order to improve your financial situation.
It is important to note that a personal financial statement is not static.
Your income and expenses can change from month-to-month, so it is important to recalculate your statement on a regular basis. Additionally, as you begin to save more money each month, the amount available for savings will increase as well.
How to use a personal finance statement template
A personal financial statement is a snapshot of your financial health at a given point in time. It lists your assets, liabilities, and net worth so you can see the big picture of your finances.
You can use a personal finance statement template to track your progress over time and make changes to improve your financial health.
Here’s how to use a personal finance statement template:
Enter your information into the template. This includes details about your income, expenses, debts, and assets.
Review your numbers and calculate your net worth. This is the difference between your total assets and total liabilities.
Watch for comparisons. Compare your net worth from one period to another to track your progress over time.
Make tweaks. Make changes in areas where you want to improve, such as increasing savings or paying down debt.
Repeat steps 1-4 periodically. Then you can see how well you’re doing and make necessary changes
How to interpret a personal finance statement
A personal financial statement is a document that shows your current financial health. It lists your assets and liabilities, giving you a clear picture of your net worth.
Positive net worth means you have more assets than debt.
Negative net worth means you have more debt than assets.
Your personal financial statement will help you to set financial goals and track your progress over time. For example, if you want to become debt-free within five years, you can use your statement to create a budget and track your progress each year.
If you have a negative net worth, don’t panic! You can improve your financial health by paying off debts and building up your savings.
Creating a budget will help you make the most of your income and make headway on your financial goals.
How to use a personal financial statement to make financial decisions?
This is the important piece of becoming a millionaire.
A personal financial statement can help you see where your money is going each month and make changes to ensure that you are saving enough for your future goals.
Way #1 – Look at your current financial situation
Your personal financial statement is a record of your income and expenses over a period of time. This information can be used to make financial decisions, such as whether to save money or invest in a new business venture.
If you are looking to save money, you will want to compare your total income to your total expenses. If your expenses are greater than your income, you will need to find ways to reduce your spending. You may also want to consider investing in a savings account or retirement fund.
If you are looking to invest in a new business venture, you will want to assess your current financial situation. You will need to determine how much money you can afford to invest and whether or not the venture is likely to be successful.
Doing this analysis before making any decisions can help you avoid making costly mistakes.
Way #2 – Determine your financial goals
There are a few key things to keep in mind when you’re determining your financial goals.
First, you need to think about your short-term and long-term goals.
Your short-term goals might include things like saving up for a down payment on a house or car or paying off high-interest debt.
Your long-term goals might include things like saving for retirement or sending your kids to college.
Once you’ve determined your goals, you need to think about how much money you’ll need to reach them. This is where a personal financial statement can come in handy.
This information can help you figure out how much money you have available to put towards your financial goals.
Once you have an idea of how much money you need to reach your financial goals, the next step is to develop a plan for how you’re going to save that money. This might involve setting up a budget and sticking to it, investing in a specific savings account or investment account, or taking advantage of employer matching programs if they’re available.
Making smart financial decisions is important for achieving both your short-term and long-term goals. A personal financial statement can help you determine how much money you need to reach your goals, and develop a plan for saving that money.
Way #3 – Make a budget
Your personal financial statement can be a helpful tool when you’re trying to make a budget. This document lists your income and expenses and can give you a clear picture of your financial situation.
To use your personal financial statement to make a budget:
Look at your overall income and expenses. This will give you an idea of where your money is going each month.
What are Necessary Expenses? Determine which expenses are necessary and which ones you can cut back on.
Prioritize your List. Make a list of your monthly income and expenses, with the necessary expenses first. And drop the expenses at the bottom of the list.
How Much is Left? Determine how much money you have left over each month after paying for necessities. This is the money you can use for savings or other goals.
Adjust your budget as needed based on changes in your income or expenses.
Way #4 – Invest in yourself
There are a lot of things you can do to invest in yourself, but one of the smartest things you can do is to invest in your personal finance education.
In fact, one of the popular millionaire quotes from Warren Buffet is:
Invest in yourself as much as possible.
Warren Buffet
Investing in yourself is one of the smartest things you can do.
Way #5 – Stay disciplined
Making financial decisions can be difficult, but if you have a personal financial statement, it can help you stay disciplined.
A personal financial statement is a document that shows your income, expenses, and assets. It can help you track your spending and see where you can save money. That my friend is black and white information.
Making financial decisions can be difficult, but if you have a personal financial statement, it can help you stay disciplined and on track.
What are some common mistakes to avoid when creating a personal finance statement?
There are many common mistakes people make when creating a personal financial statement. This can lead to an inaccurate picture of your financial situation and make it difficult to make informed decisions about your finances.
Any of these common mistakes can also lead to problems down the road because you will be unable to meet your financial obligations.
Not including all sources of income
Not including all debts and expenses
Forgetting to track new sources of income
Overstating or understating expenses
Not properly categorizing expenses
Forgetting to update (or review) the statement regularly
Not tracking progress over time
Too scared to seek professional help if needed.
By avoiding these common mistakes, you can create a personal financial statement that accurately reflects your financial situation and helps you make better decisions about your money.
How often should a personal finance statement be updated?
You should update your personal finance statement at least once a year.
However, you may want to update it more frequently if you have significant changes in your income or expenses. For example, you may want to update your personal finance statement after you get a raise or buy a new car.
A Personal Financial Statement Template Example
A personal financial statement is a document that summarizes your financial health.
It includes information about your income, expenses, debts, and assets. This information can be used to make informed decisions about your finances.
There are many personal finance statement templates available online. Some banks and financial institutions offer their own templates. You can also find templates in our free resource library. Once you find a template you like, you can download it and fill it out with your own information.
When filling out a personal financial statement template, be sure to include accurate and up-to-date information.
This will give you the most accurate picture of your financial health. Review your statements regularly to track your progress and make changes as needed.
Time to Create A Sample Personal Financial Statement
When creating a personal financial statement, it is important to include all sources of income, not just your salary. This includes any freelance work, investments, or other forms of passive income. Additionally, make sure to include any government benefits or assistance you receive.
Excluding all sources of income will give you an inaccurate picture of your financial situation and make it difficult to create a realistic budget.
This is something you need to spend dedicated time doing to create a personal financial statement worksheet.
Over time, this wealth management tool will help you to become the next millionaire.
Know someone else that needs this, too? Then, please share!!
Louisiana is a unique state, packed with interesting attractions, delicious food, and beautiful landscapes. But the state is also home to millions of residents in need of banking services. The best banks in Louisiana offer plenty of amenities, including low-fee checking accounts and ATM access where you need it.
10 Best Banks in Louisiana
Whether you’re looking for a national bank or a small regional bank, the best banks depend on the features that matter most to you. Here are some of the top banks in Louisiana to help you narrow down your options.
1. Hancock Whitney Bank
Based in nearby Gulfport, Mississippi, Hancock Whitney Bank has branches in Louisiana, Mississippi, Alabama, Florida, and Texas. If you’re looking for a regional bank with plenty of physical branches, Hancock Whitney could be a great choice. The checking accounts do come with monthly maintenance fees and a minimum deposit, but you’ll get competitive rates on CDs and personalized customer service.
Fees:
$7 monthly service fee
No overdraft fees
Balance requirements:
$25 minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at Hancock Whitney ATMs from Florida to Texas
$2 per out-of-network ATM transaction
Interest on balance:
Up to 5.00% APY on CDs
Additional perks:
Great rates on small business loans
IDProtect ScoreTracker helps you track your monthly credit score
2. Chime
Chime is an online banking option that has no local branches. You’ll get a totally free checking account and an online savings account that pays 2.00% APY. As long as you have at least $200 directly deposited into your account each month, you can qualify for Spot Me, which covers you for up to $200 in overdrafts.
Fees:
No monthly service fee
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at more than 60,000 AllPoint and MoneyPass locations
$2.50 per out-of-network ATM transaction
Interest on balance:
Up to 2.00% APY on savings accounts
Additional perks:
3. Gulf Coast Bank
Gulf Coast Bank is a local bank with branches in Baton Rouge and New Orleans. You’ll get personalized customer service and a checking account with no monthly fees. You can get fee-free ATM access at any Gulf Coast or Community Cash ATM nationwide.
Fees:
No monthly service fee
$35 overdraft fee
Balance requirements:
$20 minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at Gulf Coast ATMs
Fee-free at Community Cash ATMs
$1.50 per out-of-network ATM transaction
Interest on balance:
Up to 0.60% APY on savings accounts
Additional perks:
Nearly Virtual Mortgage provides a mostly paperless lending process
Check your credit score at any time in the Gulf Coast Bank dashboard
4. CIT Bank
CIT Bank is a mobile and online banking option with checking and savings accounts. Although the bank has no branches or ATMs, the interest-bearing checking account offers 0.10% APY on your checking balance, which bumps up to 0.25% APY once your balance reaches $25,000. CIT’s savings accounts and CDs come with impressive rates as well.
Fees:
No monthly service fee
No overdraft fees
Balance requirements:
$100 minimum opening deposit
No minimum daily balance required ($25,000 to earn higher interest rate)
ATMs:
No ATMs provided, but no CIT Bank fees for ATM use
Up to $30 in third-party ATM fees reimbursed monthly
Interest on balance:
Up to 0.25% APY on checking
Up to 4.50% APY on savings
Up to 5.00% APY on CDs
Additional perks:
Set travel alerts to avoid issues while away from home
Award-winning customer service
5. Red River Bank
With branches and ATMs across Louisiana, Red River Bank is a great local bank. You’ll get excellent customer service and checking accounts with no monthly fees. Red River offers ATM access at its own ATMs across Louisiana. You can also withdraw cash at Hancock Whitney ATMs in Louisiana and across the U.S.
Fees:
No monthly service fee
$34 overdraft fees
Balance requirements:
$50 minimum opening deposit
No minimum daily balance is required
ATMs:
Fee-free at Red River and Hancock Whitney ATMs throughout Louisiana and the U.S.
Interest on balance:
0.10% APY on checking
Additional perks:
Penny RoundUP moves money from each debit card purchase to your savings account
Wide variety of personal loans
6. GO2bank
Another mobile banking option with competitive offerings is GO2bank. You’ll get a fee-free checking account as long as you have at least one payment directly deposited to your account each month. But the real winner is GO2bank’s savings accounts, which offer 4.50% APY. Unlike other online banks, GO2bank also allows you to deposit cash at retail locations nationwide for a small fee.
Fees:
No monthly service fee with qualifying direct deposits
$15 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at AllPoint ATMs nationwide
$3 per out-of-network ATM transaction
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Cash deposits at nearly 90,000 retail locations nationwide
Secured credit card that helps you build credit
7. First Horizon Bank
It may have started as First Tennessee Bank, but First Horizon Bank has expanded to locations across the U.S., including Louisiana. It’s one of the best banks in Louisiana for those looking for a free checking account with local branches in 12 states. The interest rates are fairly low, but there is a money market savings account that offers up to 1.75% APY.
Fees:
No monthly service fee
$35 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum balance requirements
ATMs:
Fee-free at First Horizon ATMs
$3 per out-of-network ATM transaction
Interest on balance:
Up to 1.75% APY on money market savings accounts
0.30% APY on traditional savings accounts
Up to 0.10% APY on CDs
Additional perks:
Wealth management services available
Account recommender helps you choose between checking accounts
8. Chase Bank
There are some perks that come with a national bank, and Chase Bank is a good example of that. You’ll get a full suite of banking services, including multiple checking options and a free debit card that you can use at ATMs across the nation. If you prefer a bank with in-person service, Chase has 4,700 branches.
Fees:
$12 monthly service fee (waived with minimum deposit)
$34 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum balance requirement ($1,500 or $500 direct deposits to waive $12 service fee)
ATMs:
Fee-free at more than 15,000 Chase ATMs
$3 per out-of-network ATM transaction
Interest on balance:
0.01% APY on savings accounts
Additional perks:
$200 bonus on new checking accounts
Overdraft Assist gives you extra time to repair overdrafts
9. Regions Bank
One of the best regional banks in Louisiana is Regions Bank, which has branches in Louisiana, as well as Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, and Texas.
The basic checking account’s requirements to avoid monthly service charges include maintaining a $1,500 minimum balance or $500 in direct deposits.
Fees:
$8 monthly service fee (waived with minimum deposit)
$36 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum balance requirement ($1,500 or $500 direct deposits to waive $12 service fee)
ATMs:
Fee-free at more than 2,000 Regions ATMs
$3 per out-of-network ATM transaction
Interest on balance:
Up to .01% APY on savings
Up to 4.75% on CDs
Additional perks:
$50 Visa Reward Card for referring new account holders
1% annual savings bonus for connected savings account
10. Ally Bank
Ally Bank’s online banking options include an interest checking account that earns 0.25% APY. You’ll also get competitive interest rates on your savings account and CDs. Although there are no physical locations, you’ll have access to ATM withdrawals at 43,000 ATMs. If you regularly need to make cash deposits, though, Ally might not be the best bank for you.
Fees:
No monthly service fee
No overdraft fee
Balance requirements:
No minimum opening deposit
No minimum balance
ATMs:
Fee-free at more than 43,000 AllPoint ATMs
Refund of up to $10 in out-of-network ATM fees per cycle
Interest on balance:
0.25% APY on checking
3.75% APY on savings
Up to 4.50% on CDs
Additional perks:
Advanced investment services including Robo Portfolios
Spending buckets help you manage your finances
Bottom Line
Whether you’re looking to avoid monthly service fees or enjoy the conveniences of an online bank, it’s important to compare multiple accounts. The best banks in Louisiana may not be the ones that have the lowest fees. Instead, you may find that the convenience of a bank with higher fees makes it worth the extra cost.
A new bill written up by California Assemblymember Bob Blumenfield (D-San Fernando Valley) calls for a $20,000 fee to be charged to banks for every foreclosure they carry out in the state.
Aimed at reducing foreclosures in the hard-hit region, Assembly Bill (AB) 935 would fine mortgage lenders or loan servicers $20,000 per foreclosure in the form of a “foreclosure mitigation charge,” creating incentives to offer loan modifications or refinance alternatives.
Blumenfield said each foreclosure costs the local governments an average of $20,000 in the form of public safety calls and arrests, unpaid property taxes, inspections, trash removal, lawn maintenance, and other expenditures.
Each borrower loses some $7,000 in fees, and each foreclosure lowers neighboring home values by one percent.
The bill would supposedly generate up to $16 billion over the next two years, as nearly 800,000 foreclosures are expected in the Golden State.
So where would the money go?
AB 935 wound send 20 percent of the proceeds to K-14 public education, 20 percent toward public safety, 20 percent to redevelopment activities, 20 percent to cities and counties to pay for mitigating the effects of foreclosures on communities, and 20 percent toward small business loans.
California has seen more foreclosures than any other state, and is expected to see two million homes go through the process between 2008-2012.
This translates to roughly $632 billion in lost home value, $3.8 billion in lost property tax revenue, and $17.4 billion in costs borne by local governments.
For Los Angeles County during the same period, 381,000 foreclosures are expected, resulting in $150 billion in lost home value, $918 million in lost property taxes, and $2.8 billion in maintenance costs to local governments.