Money Market Account Archives - Hanover Mortgages

Apache is functioning normally

September 14, 2023 by Brett Tams

Sure, savings accounts can be a good place to stow extra cash and build wealth. You’ll typically earn interest, helping your money grow and boosting your progress towards your financial goals.

However, unlike checking accounts, you usually can’t spend straight from a savings account. What’s more, you may find that there are limitations on the number of withdrawals or transfers you can make from out of your savings account.

If you want to avoid getting entangled with savings account rules and restrictions or triggering fees, here’s advice. Read on to learn the ins and outs of spending money from a savings account.

How Does a Savings Account Differ From a Checking Account?

You might think the main difference between a checking account and a savings account is how you view them–namely, one is for now, and one is for later. But the bank also views these two accounts very differently. Here’s a closer look at how savings accounts work vs. checking accounts.

• Savings accounts typically earn interest while checking accounts which generally earn zero or very little interest.

• Savings accounts may come with cash transfer and withdrawal limits. A federal rule called Regulation D used to limit certain types of transactions from a savings account to no more than six per month.

• In the wake of the coronavirus pandemic, the Federal Reserve lifted this rule to allow people to have easier access to their savings. Many banks, however, still enforce the six-per-month cap on savings account transactions.

• Savings accounts don’t usually come with debit cards that can be used to make purchases with money from that savings account. Only a few banks offer this service.

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Can You Write a Check From a Savings Account?

Typically, you can’t write checks from a savings account. Of course, it’s always possible to transfer money from a savings account to a checking account and then write a check from there.

If you want to save money and have the ability to write a check with the money you save, you may want to consider opening up a money market account.

Money market accounts are a type of savings account that often pay a higher interest rate than traditional savings accounts and generally include check-writing and debit card privileges.

However these accounts often come with minimum monthly balances, and falling below the minimum can trigger fees. Like other savings accounts, money market accounts may limit transactions to six per month (which includes writing checks and debit card payments).

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 4.50% APY on your cash!

How to Spend (and Save) With a Savings Account

To take advantage of the interest you’re earning on your savings, and avoid triggering penalty fees or the closure of your account, you may want to keep these savings account spending tips in mind.

Keeping Track of Your Withdrawals

It can be a good idea to find out what your bank’s policy is regarding monthly transactions from savings. Many institutions are sticking with the standard limit of six “convenient transactions” per month, while some are allowing more, such as nine transactions per month.

Convenient transactions include money transfers you make online, by phone, or through bill pay. Transactions, including ATM withdrawals and those that you make in person at the bank, do not typically count towards the monthly cap.

Paying Bills From Your Checking Account

Scheduling automatic bill payments from your savings account may put you over the savings withdrawal limit. It can be a better idea to have automatic bill payments or recurring transfers come out of your checking account.

Withdrawing Money Only for Large Expenses

If you withdraw money from your savings account for everyday spending, it can reduce the amount of interest you earn, and make it harder to reach your savings goals.

It can be wiser to only touch your savings when it’s necessary to cover an emergency expense or a large purchase (ideally, one you’ve been saving up for).

Building Your Savings

A savings account can help you work towards your financial goals, such as creating an emergency fund, making a downpayment on a home, or going on a great vacation. In some cases, you may even want to have different savings accounts for different goals.

To help achieve those goals faster, you may want to set up an automatic transfer from your checking account into your savings account on the same day each month (perhaps after your paycheck gets deposited). It’s perfectly fine to start slowly. Even small monthly deposits will add up over time.

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Maximizing the Interest You Earn

The higher the interest rate, the faster your savings will grow. That’s why it can be worthwhile to do some research into which institutions and which types of savings accounts are paying the highest rates.

Some options you may want to look into include: A high-interest savings account, money market account, certificate of deposit (CD), checking and savings account, or an online savings account.

The Takeaway

Savings accounts generally aren’t designed for making frequent transactions. Instead, their main purpose is to provide a safe place to store money for the medium- to long-term. This is one of the key differences between checking and savings accounts.

Savings accounts still allow you to have access to your money, of course. To avoid exceeding transaction limits, you can visit the bank in person or use the ATM to make withdrawals or initiate transfers (since these transactions typically don’t count towards transaction caps).

To make the most out of your savings account, you may also want to look for an account that pays a higher-than-average interest rate.

Open a SoFi Checking and Savings Account

Another savings option you may want to consider is opening a checking and savings account, which can combine the best features of each kind of financial vehicle.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.50% APY on SoFi Checking and Savings.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

August 30, 2023 by Brett Tams

When you deposit money into a bank account, you expect that money to stay there until you withdraw it. But how can you be certain your money will be safe if the bank runs into trouble? That’s where FDIC insurance comes in.

“FDIC insurance ensures the safety of depositor funds up to a certain amount and promotes stability in the United States banking system,” explains Jason Koontz, an independent consultant with decades of experience in the banking sector.

FDIC-insured accounts, like those offered by FDIC member Discover Bank^®, are protected up to $250,000 per depositor, per account ownership category, in the unlikely event of a bank failure. You probably have a lot more questions about FDIC insurance, so let’s dive into some answers.

What is FDIC insurance?

First, let’s start with what FDIC stands for: Federal Deposit Insurance Corporation. Managed by this independent government agency, FDIC insurance is a program designed to protect deposits against the possibility of bank failures.

Banks can apply for FDIC deposit insurance and, assuming they meet the standard for approval, pay premiums to the FDIC for coverage. FDIC protection is backed by the full faith and credit of the United States government and assures that even if a bank fails, depositors won’t lose their protected funds.

Why was FDIC insurance created?

The first deposit insurance programs in the United States were initiated and deployed at the state level. Starting with New York in 1829 until 1917, 14 states implemented plans to protect bank deposits and similar accounts. These programs were intended to protect depositors from bank failures and guarantee communities’ financial stability.

These efforts fell short, however, and by 1933, thousands of banks had closed and the entire U.S. financial system was faltering. Because past efforts to establish some sort of federal deposit insurance program had been unsuccessful, bank customers were left unprotected. Depositors lost $1.3 billion as a result of the thousands of bank failures stemming from the financial crash that led to the Great Depression. Considering inflation, that amount would currently equate to about $27.4 billion, according to the Pew Research Center.¹

In response, Congress passed the Banking Act of 1933, and President Franklin D. Roosevelt signed it into law. The act officially established the FDIC to restore confidence in the banking system and prevent further financial collapse. Since then, “no depositor has lost a penny of insured funds as a result of a failure,” according to the agency.

How does FDIC insurance help consumers?

While the FDIC insures banks, individual consumers benefit too.

“FDIC insurance benefits U.S. banking customers (citizens and foreigners) by providing peace of mind and confidence that their deposits are protected up to $250,000 per depositor, [per account category], per insured bank,” Koontz says. “In the event of a bank failure, the FDIC steps in to ensure depositors’ funds are reimbursed promptly, maintaining stability and helping to prevent panic in the banking system.”

Koontz explains that this protection applies to the accounts of individuals, families, and businesses and that it promotes trust and participation in the U.S. banking system. Bank customers don’t need to apply for FDIC insurance; they only need to make sure their bank is FDIC-insured.

You can usually find out if a bank is FDIC-insured by checking its website. Or you can search the FDIC database to find certified institutions in your area.

How does FDIC insurance work?

So, what does the FDIC do when an insured bank fails? Koontz explains that after a bank failure, the FDIC will take over as the custodian and manage the bank to minimize disruption.

“While this can happen on any day of the week, the FDIC often takes over a troubled bank on a Friday near the close of business,” Koontz says. He notes that the FDIC will have been doing plenty of work behind the scenes leading up to this day. “A Friday takeover allows the FDIC the weekend to work on the failed bank,” he continues. “The FDIC has several options for resolving a failed bank, including selling its assets and deposits to another institution, arranging a merger with a healthier bank, or creating a bridge bank to maintain banking operations until a suitable buyer is found.”

Of course, as mentioned above, the FDIC also protects the failed bank’s customers—up to $250,000 per depositor, per insured bank, for each account ownership category—if needed.

It’s also important to note that bank failures are very rare. Most of the time, banks are able to stay solvent. And if they’re FDIC-insured, the agency will examine and monitor them to ensure they comply with consumer protection laws.

How are consumers affected by bank failures?

If a bank fails, customers are at risk of losing unprotected funds. Funds may be unprotected if they’re held in a non-FDIC-insured institution, if they’re held in accounts that do not qualify for protection, or if the funds exceed the $250,000 limit.

In the rare occurrence that an insured bank fails, the impact on customers will depend on the steps the FDIC takes in response.

“If a bank is acquired by another institution, customers’ accounts and services generally continue without interruption, and they become customers of the acquiring bank,” explains Koontz.

In the case of a bridge bank, Koontz adds, customers can typically access their accounts and continue banking operations without significant disruption. “However, in some cases there may be temporary limitations on certain transactions or services until the resolution process is complete.”

How much does the FDIC insure?

The standard FDIC deposit insurance amount is up to $250,000 per depositor, per bank, for each account ownership category. That maximum applies to all the banks you have an account with, as long as the bank is an FDIC member. (Discover Bank is an FDIC member.)

You can use the FDIC’s Electronic Deposit Insurance Estimator, or EDIE, to determine your total coverage across all of your accounts and banks.

Koontz says it’s possible the FDIC may organize an arrangement to reimburse funds beyond the $250,000 guarantee, but you should not expect funds above that number to be protected. There are steps you can take, however, to maximize your FDIC protection.

How can you maximize your FDIC protection?

If you’re looking to deposit more than $250,000—whether as an individual, a family, or a business—then the FDIC insurance limits may be a concern. Fortunately, there are some strategies you can use to increase the protection you receive.

One option is to open multiple accounts with different ownership categories at the same bank. “The FDIC provides separate coverage for different ownership categories, such as individual accounts, joint accounts, retirement accounts, and certain trust accounts,” Koontz explains. “By utilizing these categories effectively, you can increase your overall coverage.”

Another tactic is to open accounts at different banks, Koontz says. While it could be a little more inconvenient to manage accounts at different institutions, he notes that it’s wise to avoid keeping all your eggs in one basket.

“By distributing your deposits among different [insured] banks, you can ensure that each account remains within the coverage limit,” advises Koontz.

It’s also possible to increase your coverage by opening a revocable trust account and designating multiple beneficiaries. A revocable trust is an account that pays out to beneficiaries upon the death of the account holder. Consider consulting a tax advisor to discuss your specific situation.

As of April 1, 2024, the FDIC will insure covered trusts up to $250,000 for each of up to five beneficiaries. That means a trust could be insured up to $1,250,000 for a single account holder. The covered amount for a joint trust, meanwhile, could be up to $2,500,000 for five beneficiaries.

Are you staying informed?

FDIC rules have changed multiple times since the program’s creation nearly a century ago. Koontz advises that you remain aware of any developments to be certain your deposits remain protected.

“It’s important to stay updated on any changes to FDIC coverage limits or regulations,” Koontz says. “Periodically review your deposit accounts and assess whether any adjustments are needed.” Again, that could include opening several different account types within one FDIC-insured institution or spreading out your accounts across several different FDIC-secured banks.

Call it a sunny day fund—online savings with no monthly fees

Discover Bank, Member FDIC

Feeling confident about FDIC insurance?

Koontz’s insights into what the FDIC does and how it can assist you as a bank customer should help you gain confidence about opening an FDIC-insured bank account. That could include an online savings account, a cashback debit account, a certificate of deposit (CD), a money market account, an IRA savings account, or an IRA CD.

While FDIC rules apply to every insured account, everyone’s financial situation will differ. “It is always important to talk to your banker, financial advisor, or even the FDIC directly for more personal guidance,” explains Koontz.

The FDIC is there for your benefit. When you appreciate how it works, you can build up your financial foundation with peace of mind. Ready to get started? Open an FDIC-insured online savings account today.

¹ “Most U.S. bank failures have come in a few big waves.” Pew Research Center, Washington, D.C. (April 11, 2023) https://www.pewresearch.org/short-reads/2023/04/11/most-u-s-bank-failures-have-come-in-a-few-big-waves/

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

Source: discover.com

Apache is functioning normally

August 26, 2023 by Brett Tams

Business cash management accounts are a hybrid business checking, savings and investment account. This combination lets business owners earn above-average interest while maintaining easy access to their funds.

These accounts typically leverage sweep networks, which distribute your funds across a number of Federal Deposit Insurance Corp. members. This allows you to maximize FDIC insurance coverage without juggling multiple business banks.

Cash management accounts can be a good solution if your business has a lot of idle cash to invest — think startups with seed funding or companies with large operating budgets. But if your margins are thinner, a high-yield business checking or savings account will likely meet your needs.

Business cash management accounts

Brex

Brex’s business account has no monthly fees or minimum opening deposit. You can open up to eight accounts under one employer identification number, allowing you to have separate operating accounts for different business functions, like payroll and accounts payable.

Account holders can designate a portion of their balance to be invested in a business money market account that earns 4.92% annual percentage yield (APY), as of this writing. Funds deposited in a Brex business account are held across a network of FDIC-insured banks, providing up to $6 million in coverage.

You cannot deposit or withdraw cash from a Brex business account. Instead, you can add or move funds via check, ACH or wire transfer. Read our full review.

Mercury

Mercury’s free business checking and savings accounts are eligible for up to $5 million in FDIC coverage through its partner banks, which participate in sweep networks to maximize coverage. These accounts do not earn interest, but eligible businesses can apply for a Mercury Treasury account to unlock the higher yields characteristic of a cash management account.

Mercury Treasury accounts tap into low-risk investments, like Treasury bills and money market accounts, and earn up to 5.43% APY as of this writing. Investments made through your Treasury account are insured by the Securities Investor Protection Corp. (SIPC) for up to $500,000 — not the $5 million in FDIC insurance.

You need at least $500,000 in your Mercury Checking and savings accounts to open a Mercury Treasury account. Monthly fees for Mercury Treasury start at 0.05% of your deposits across all Mercury accounts. Read our full review.

Arc

Arc’s cash management account is comprised of three accounts: Operating, Reserve and Treasury. There’s no monthly fee for operating and reserve accounts; treasury accounts have a monthly fee that starts at 0.02% of your account’s value annually.

Arc’s reserve account earns up to 4.00% APY and its treasury account boasts an APY of up to 5.26%, as of this writing. The actual yield on Arc Treasury accounts will depend on how you divvy up funds between money market and Treasury bills.

Money held in Arc Treasury accounts is FDIC insured up to $5 million through sweep networks and partner banks. Operating and Reserve accounts are FDIC insured up to the standard $250,000 per depositor, per account.

Rho

Rho offers business checking and treasury accounts, as well as corporate cards and accounts payable services, for incorporated businesses with at least $1 million in annual revenue or equity capital.

Treasury accounts earn up to 5.06% APY, as of this writing, and offer up to $75 million in FDIC insurance via a partner network. Checking accounts do not earn interest and are FDIC-insured up to $250,000. Rho accounts do not include ATM access, so you can’t withdraw cash, but there are no fees for ACH or wire transfers.

All Rho account holders are paired with a dedicated support specialist, plus general customer support (via phone or live chat) from 8 a.m. to 9 p.m. ET, seven days a week.

What is a business cash management account?

Business cash management accounts are a combination of multiple business bank accounts offered by one financial institution, allowing you to easily manage and move funds between accounts. Most business cash management accounts include the following:

Operating account: Used for day-to-day operating expenses, this account functions similar to a business checking account. Some cash management accounts allow for multiple operating accounts, so you may have one for payroll and another for vendor payments, for instance.
Reserve account: This is essentially a savings account, and it may or may not earn interest, depending on the financial institution. At Mercury, for example, savings accounts do not earn interest, but Mercury Treasury accounts earn up to 5.43% APY. Arc’s reserve accounts do earn interest — up to 4.00% APY — but Arc’s Treasury account earns up to 5.27% APY, as of this writing.
Treasury account: Most business cash management accounts let you allocate funds in your treasury account across high-yield savings, business money market accounts and treasury bills. Money in treasury accounts can earn 5% APY or more, depending on the account and where you allot your money.

Personal cash management accounts are usually offered by brokerages. However, business cash accounts are typically available through fintech companies like Brex and Arc, which offer business banking services through an FDIC-insured bank or investment broker. And most leverage sweep networks to offer FDIC insurance well beyond the standard limit ($250,000 per depositor, per account type).

Benefits of a business cash management account

Potentially high APY. The best business cash management accounts advertise rates of 5.00% APY or higher. But what you actually earn depends on the account you choose and how you allocate your funds.

Streamlined money management. Business cash management accounts may consist of multiple accounts, with funds spread across varying investments. But you can easily view and manage everything from one dashboard.

No transaction limits. Brick-and-mortar business banks typically limit how many transactions you can process each month. And most business savings accounts only allow six transfers or withdrawals per month. But business cash accounts have no such limits. Account holders can move money in and out of accounts as needed, though some withdrawals may be delayed — more on that below.

Increased FDIC coverage. Deposit accounts are typically insured by the FDIC for up to $250,000 per depositor, per account. But business cash management accounts often partner with a network of banks to spread funds across multiple institutions. These “sweep” networks allow you to unlock greater FDIC insurance coverage while only dealing with one financial institution.

That extended FDIC coverage may not apply to all of the funds in your cash management account, though. With Arc, for example, funds allocated to the Treasury account are FDIC insured up to $5 million, but money held in your operating or reserve accounts is subject to the standard FDIC coverage limit.

Drawbacks of a business cash management account

Substantial cash flow needed. While some business cash management accounts don’t have a minimum balance requirement, you do need a large operating budget and a chunk of idle cash to reap the benefits of this type of account. Companies with smaller cash reserves can achieve similar benefits with separate business checking and high-yield business savings accounts.

Limited access to cash. Cash management accounts are generous with free ACH and wire transfers, but cash is less accessible. Most business cash accounts don’t allow cash deposits, and some, like Brex, do not allow you to withdraw money at an ATM.

Lack of banking diversity. While business cash management accounts do leverage a network of banks to extend FDIC insurance coverage, you’re still dealing with a singular entity — typically a financial technology company. Should the fintech or its banking partner fail, your funds, while insured, may be unavailable for a time. Using separate accounts across multiple business banks can help minimize the disruption to your operations should any one of those banks collapse.

Source: nerdwallet.com

Apache is functioning normally

August 17, 2023 by Brett Tams

A money market account is an interest-earning savings account, with some features of a checking account.

Saving money is the best way to prepare for unexpected life events and take control of your finances. But where is the best place to save your money?

If you’ve been researching different savings accounts, you may have wondered, “What is a money market account?” at some point. As of March 2023, interest rates for money market accounts are up to 4.45%,which is higher than normal.

Keep reading for a money market account definition, its benefits, and how it stacks up to other kinds of accounts.

In This Piece:

What Is a Money Market Account?

A money market account (MMA) is a type of savings account that earns interest at a bank or credit union. They are sometimes called money market deposit accounts (MMDAs).

MMA interest rates are usually higher than regular savings accounts and have some features of a checking account, like debit card and check-writing privileges, though there are more restrictions.

How Does a Money Market Account Work?

Money market accounts pay more competitive interest rates than a traditional savings account, with more access to your money than a high-yield savings account. They may also require a larger minimum deposit and balance than a traditional savings account.

As a hybrid between a savings and checking account, money market accounts have some unique features.

Interest: The interest rate offered by MMAs is typically higher than regular savings accounts. It is a variable rate, meaning it changes as the market changes.
Access to your money: Some MMAs come with a debit card and/or checks that you can use to make limited purchases.
Minimum balance: Money market accounts may have a required minimum balance, ranging from $0-$25,000. Each bank has different requirements, and they may scale for getting certain APYs.

Although money market accounts have some features of a checking account, they aren’t meant to be used as a replacement for a traditional checking account.

This is because money market accounts often limit you to six transactions per month. This includes withdrawals or payments by check, debit card, draft, or electronic transfer.

However, you can usually make an unlimited number of transactions in person or by ATM, mail, messenger, or telephone check.

Benefits of Money Market Accounts

Money market accounts are great for short-term savings goals, like an emergency fund. You’ll earn a higher interest rate than standard savings accounts while still being able to easily access your money if needed.

However, this type of account comes with its own set of restrictions. If you’re considering opening a money market account, consider these pros and cons.

Pros of Money Market Accounts:

Higher interest rates than traditional savings accounts
Safe place to keep money with insurance up to $250,000 per account owner
More access to your money than other savings accounts with debit card and check features

Cons of Money Market Accounts:

Lower interest rates than other accounts like high-yield savings accounts or CDs
Requires a higher minimum deposit and balance than traditional savings accounts
Monthly limit on number of transactions

Remember that every financial situation is different, and while a money market account may work well for one person, it may not be a good fit for another.

Money Market Account vs. Other Accounts

Money market account features overlap with different types of savings and checking accounts. The differences between these accounts may be important depending on your financial goals.

If you’re not sure if a money market account is best for you, see how they compare to other accounts.

Standard Savings Accounts

Interest type: Variable

Higher interest rates: No

Insured: Yes

Debit card/checks available: No

Minimum deposit/balance: Yes

The biggest difference between money market accounts and traditional savings accounts is access to a debit card and checks with an MMA.

Money market accounts also generally offer a higher interest rate than savings accounts. In February 2023, the average interest rate for an MMA was 0.48% and 0.35% for a traditional savings account, according to the Federal Deposit Insurance Corporation (FDIC). However, some banks like Discover and Ally are offering up to 3.4% on their MMAs.

The difference is not always that substantial, as MMA interest rates vary with the market. If you find that the interest rate for an MMA isn’t that much higher than your standard savings account, it may not be worth the higher minimum deposit and balance requirements.

High-yield Savings Accounts

Interest type: Variable

Higher interest rates: Yes

Insured: Yes

Debit card/checks available: No

Minimum deposit/balance: Yes

Money market accounts and high-yield savings accounts are very similar. Both offer higher interest rates than standard savings accounts and are insured. In March 2023, MMA and high-yield savings account interest rates were comparable.

One main difference is the addition of debit cards and checkbooks with an MMA, allowing you more access to your money than a high-yield savings account.

If you’re torn between the two options, make sure to compare interest rates, minimum deposit and balance requirements, potential fees, and transaction limits.

Checking Accounts

Interest type: Variable (or none)

Higher interest rates: No

Insured: Yes

Debit card/checks available: Yes (unlimited)

Minimum deposit/balance: Yes

While money market accounts have some features of checking accounts, they aren’t meant to replace a checking account. You still need a checking account for daily expenses, since MMAs are usually capped at six transactions per month.

Additionally, most checking accounts don’t earn interest, and if they do it’s a very low rate. These accounts work best when used together—one can’t replace the other.

Certificates of Deposit (CD)

Interest type: Fixed

Higher interest rates: Yes

Insured: Yes

Debit card/checks available: No

Minimum deposit/balance: Yes

A certificate of deposit (CD) and a money market account are both insured savings accounts that earn higher interest rates than standard savings accounts.

In fact, CDs can earn even higher interest rates than MMAs. They also have fixed interest rates, meaning your money will earn the same amount of interest during its life cycle.

In February 2023, the FDIC reported an average interest rate of 1.36% for a 12-month CD, with banks like Marcus by Goldman Sachs and Discover offering up to 4.5%.

However, the money you put into a CD gets locked up for a set period of time, usually months or even years. If you withdraw money early, you have to pay a penalty. This makes it the least flexible savings account option.

If you have extra money you’d like to safely invest, a CD is a great option. But if you prefer more accessibility to your money, a money market account is the better choice.

Money Market Funds

Interest type: Variable

Higher interest rates: Yes

Insured: No

Debit card/checks available: No

Minimum deposit/balance: Yes

It’s easy to get money market accounts and money market funds confused, or even think they’re the same thing. In reality, these accounts are very different.

Money market funds are offered by investment funds, not government securities like MMAs. This means while money market funds may have a higher interest rate, they’re not insured by the FDIC or the National Credit Union Administration (NCUA), so you could potentially lose money.

You will also have less access to your money with money market funds and may have to pay monthly maintenance or management fees.

Investing in a money market fund may be a good idea for someone who already has a large amount of savings built up in other accounts and is ready to diversify their assets.

Money Market Account FAQ

Still have questions about money market accounts? Check out the answers to these frequently asked questions regarding MMAs.

What Is the Interest Rate for a Money Market Account?

Money market account interest rates in February 2023 were 0.48% on average, but some banks are currently offering up to 3.4%. The interest rate on MMAs is variable, which means it can change depending on the market.

Are Money Market Accounts Safe?

Yes, money market accounts are a safe place to save your money. They are insured through your bank or credit union by either the FDIC or the NCUA.

Your money is insured up to $250,000 per depositor per account ownership category by both the FDIC and NCUA.

What Is the Typical Minimum Balance for a Money Market Account?

The minimum balance required for a money market account depends on the bank or credit union. Minimum balance requirements could be anywhere from $0 to $25,000 depending on the bank or current promotion.

Generally, you can expect MMAs to require a higher minimum balance than standard savings accounts, but you may be able to find an account with no balance requirements.

Some banks have one requirement for avoiding fees and another for securing a specific interest rate. Compare rates from different banks to find the best deal.

Is a Money Market Account a Savings Account?

Yes, a money market account is a type of savings account with certain privileges of a checking account, like a debit card and checkbook.

Money market accounts are a great way to safely earn interest while working toward a short-term savings goal. If you’re not sure that a money market account is a perfect fit for your savings goals, compare high-interest savings accounts.

Source: credit.com

Apache is functioning normally

August 17, 2023 by Brett Tams

If you have financial goals, you need a financial plan. Here’s how to make one.

August 16, 2023

Having a financial plan could play a key role in achieving major life goals. Why wait any longer? Start assessing your current situation, setting financial planning goals, and thinking about how the right Discover® savings account could help you focus more closely on your financial future today.

The Best Laid Plans

Before you make a financial, you need a clear picture of where you stand today. Tracking your income and expenses on a regular basis and assessing your net worth — total assets minus total debts — helps you see how much money you can commit to individual financial goals.

Your First Home

Home ownership is at the heart of the American dream. The biggest obstacle facing homebuyers is funding a down payment – now often at least 20% of a home’s purchase price. The good news is there are many down-payment options for first-time buyers. Check with banks in your area to see what special programs may be available to you.

If you intend to buy a house within five years, it might be a good idea to include saving for a down payment when creating your financial plan. A good way to save for a down payment may be through short-term saving vehicles, such as those available through a Discover Money Market Account or Certificate of Deposit (CD) to help pay for your first home.

Your Child’s Education

Ideally you should start saving for your child’s education as soon as — or even before — he or she is born. According to Bankrate, tuition and fees at four-year public colleges have increased by 179% over the last 20 years. Depending on your child’s age, you may want to consider investing your education dollars in stocks or stock mutual funds. While stocks can be riskier than other investments over short time periods, over the long-term they have historically produced the highest returns.

There are many other education savings options, and some, such as state-sponsored 529 college savings plans and the Coverdell Education Savings Account, offer tax advantages as well.

Your Retirement

When making a financial plan, a secure retirement is probably your most important long-term financial goal. According to Bankrate, the common guideline is to replace 80% of your final working year’s salary for each year you spend in retirement.

That’s why it’s important to start saving for retirement early in life and keep saving as much as you can throughout your working years. Opening a Discover IRA CD is one of the easiest — and most effective — ways to save for this important goal.

Get the Help You Need

Knowing the right financial moves to make and when to make them is a complicated job that most of us don’t have the resources to handle alone. Consider consulting a qualified financial professional who can help you keep your financial plan on track with your ever-changing needs. And be sure to familiarize yourself with all the different ways that Discover’s savings accounts can be at the center of your strategy. Their great rates and convenient account management options may be just what you’re looking for.

Discover^®

Regardless of your time horizon, risk tolerance, or savings goal, you can always find the right savings vehicle for your needs at Discover^®. Discover^® offers an Online Savings Account to help you with your short-term savings goals, a full range of CDs and IRA CDs with terms from 3 months to 10 years as well Money Market Accounts that may be ideal for rounding out your overall savings strategy. Open a Discover® account online or call our 24-hour U.S-based Customer Service at 1-800-347-7000.

The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.

Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

* The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your tax advisor with respect to information contained in this article and how it relates to you.

Source: discover.com

Apache is functioning normally

August 16, 2023 by Brett Tams

When it comes to your money, safety first. Understand what bank accounts are FDIC-insured to ensure your deposits are protected.*

August 16, 2023

Bank failures aren’t common—but they can happen, typically when a bank is no longer able to cover its liabilities. If depositors get nervous about the viability of their bank, they might withdraw money en masse, known as a bank run. Bank runs can accelerate a bank’s failure, and ultimately the Federal Deposit Insurance Corporation (FDIC) will take control of the bank.

But depositors can rest easy if their bank is FDIC-insured. FDIC insurance is a program managed by an independent agency of the United States government designed to protect customers in the event of bank failure. The standard FDIC insurance amount is $250,000 per depositor, per insured bank, per account ownership category. That maximum amount of $250,000 applies for each bank you have a qualified account with, as long as the bank is an FDIC member. (Discover Bank is an FDIC member.)

So, what bank accounts are FDIC-insured? If you’re opening a bank account, it’s important to understand what FDIC insurance is and what it covers.

What is the history of FDIC insurance?

The Banking Act of 1933 was passed in response to the bank failures of the Great Depression. In addition to other reforms, the act created the Federal Deposit Insurance Corporation. In 1935, the government made the FDIC permanent and tightened its standards.

Banks must be able to prove that they meet certain eligibility requirements to qualify for FDIC insurance, which is funded by payments from covered banks. In the rare event of a bank failure, those funds are used to reimburse the insured accounts of customers at that bank, with certain limits and restrictions.

What are FDIC insurance limits?

Today, FDIC deposit insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. Coverage wasn’t always that high, however.

When the FDIC was established, accounts were only insured up to $2,500. Over the course of the century, the covered amount was gradually raised in an attempt to keep pace with inflation. According to the FDIC, the most recent coverage increase occurred in response to the 2008 financial crisis, when the covered amount went from $100,000 to the current $250,000.

How do account ownership categories affect FDIC insurance limits?

You can increase your FDIC coverage by opening multiple account ownership categories at the same bank. For example, if you open a business account and a personal checking account at the same bank, each would be covered up to the maximum per law.

A joint bank account, meanwhile, will also be insured separately from a single-ownership account and for each owner of the account. That means if you open an individual checking account and a joint checking with your partner, those two accounts would qualify for $750,000 of total insurance.

Note, however, that this applies to different ownership categories but not to all different types of accounts. That means an individual savings account and an individual checking account belonging to the same owner at the same bank will qualify for a total of $250,000 in FDIC insurance.

Are checking accounts FDIC-insured?

Checking accounts at FDIC-insured institutions are among the deposit products covered by FDIC deposit insurance, according to the FDIC. For your checking account to be eligible, there’s nothing you need to do. The funds you deposit into a checking account at an FDIC-insured bank are automatically protected up to the maximum per law.

Is an online savings account FDIC-insured?

All savings accounts offered by FDIC-insured institutions, including online savings accounts, are covered up to the maximum per law. For all FDIC-covered accounts, both the original deposit amount and the accrued interest within the limit will be protected.

When opening an online account, it’s especially important to double-check that the type of account you’re opening is FDIC-insured. For example, according to the FDIC, crypto savings accounts are not protected by FDIC insurance, even if offered by an institution that is otherwise FDIC-eligible.

Legitimate financial institutions should make clear which accounts are FDIC-insured on their websites. To be certain, always contact the financial institution directly.

Are high-yield savings accounts FDIC-insured?

High-yield savings accounts at FDIC-insured institutions are protected up to the maximum per law, according to the FDIC. If the interest on a savings account causes it to grow beyond $250,000, only the funds up to the limit will be guaranteed protection.

As with checking accounts, if you want to protect more than $250,000 in savings, you’ll need to open accounts under different ownership categories or have accounts at multiple banks.

Is a money market account FDIC-insured?

According to the FDIC, funds deposited into money market accounts offered by FDIC-insured institutions are protected up to the maximum per law, just like FDIC-insured savings accounts.

Money market mutual funds, however, are not protected by the FDIC. Why not? Money market accounts are a type of savings account, while money market mutual funds are a type of investment account. Investments are generally not eligible for FDIC protection.

Is a certificate of deposit (CD) FDIC-insured?

Certificates of deposit at insured institutions are covered by the FDIC up to the maximum per law.

A CD can offer better rates than a high-yield savings account, but CDs work a little differently than savings accounts. With a CD, your money is earning interest at a fixed, guaranteed rate, but if you withdraw the money before the end of its term, you may pay a penalty.

Are Individual Retirement Accounts (IRAs) FDIC-insured?

IRAs, or Individual Retirement Accounts, are also covered up to the maximum per law at FDIC-insured institutions.

For an account to be covered, it generally needs to be “self-directed,” meaning the account holder chooses how their contributions are applied. This could include 401(k)s offered through a job or IRA saving accounts that you choose to open on your own.

IRAs can also include CDs and money market accounts. Retirement CDs, money market accounts, and similar financial products are eligible for coverage.

While stock and bond investments are a common feature of many retirement plans, they are not eligible for FDIC coverage. That means it’s possible that only a portion of your 401(k) or IRA will be covered.

If you’re uncertain if a retirement account or asset is covered, check with the institution providing it.

Can you increase your coverage by adding beneficiaries?

It’s possible to increase your coverage by creating a revocable trust account with multiple beneficiaries.

Trusts are accounts that pay out to a designated beneficiary or beneficiaries after the account holder passes. FDIC coverage applies to each beneficiary for up to five beneficiaries. In other words, a trust account with one owner and five beneficiaries could be covered up to $1,250,000.

If the trust is jointly held between two owners, the FDIC will provide up to $250,000 in coverage per beneficiary per account holder. That means if you want to maximize your coverage to the absolute limit, it would be possible to create a jointly held trust with five beneficiaries insured up to $2,500,000 in total.

It’s important to note that this information is all according to FDIC rules taking effect on April 1, 2024. Under current rules, irrevocable trusts, which cannot be altered after they’re created, can only be insured up to $250,000 regardless of the number of beneficiaries. The new rules treat both types of trusts identically and add the five beneficiary cap for calculating coverage.

Because we’re talking about potentially millions of dollars, it’s all the more essential to consult a financial planning professional about your personal situation.

Will the FDIC insurance limits ever change?

While FDIC insurance limits have been set at $250,000 since 2008, it’s always possible that the insurance limit could be increased in 2023 or down the road, according to Bankrate.

Whether or not that happens in the near future will likely depend on how the current economic and political situation unfolds. If the past decades are any indication, Congress will probably need to raise the limit eventually to account for inflation and other factors. But it’s unclear when that might happen, and savers shouldn’t assume it will be any time soon.

You can contact the FDIC if you have any questions or use their coverage calculator to determine how much of your funds are insured.

What else can you do to protect your money?

Opening an account with an FDIC-insured institution is a wise decision. But bank failures are just one risk to manage. You might also worry about scammers and fraudsters who want access to your hard-earned cash. Learn how to protect your bank account from fraud in 6 steps.

* The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your financial advisor with respect to information contained in this article and how it relates to you.

Source: discover.com

Apache is functioning normally

August 15, 2023 by Brett Tams

Inside: Are you struggling to manage your money? Feeling overwhelmed with debt? If so, it’s time to take action and build better habits. This guide will teach you how to create a budget and start your savings. You need these financial tips for young adults.

The importance of sound financial advice for young adults cannot be overstated.

Often, a lacuna exists in our educational system where personal finance is concerned, leaving many young adults ill-equipped for the financial decisions that await them in their adult life.

Yet, you will encounter situations that require a sound understanding of budgeting, credit usage, investment, and an array of other financial tools without any formal education in these areas.

Financial advice can act as a compass, guiding you on a path to financial health and stability.

This early orientation can help you avoid the pitfalls of needless debt accumulation, poor money management, and inefficient financial choices like I made.

That is why it is of utmost importance to start imparting knowledge and financial habits to young adults as early as possible.

Why Financial Advice is Crucial for Young Adults

Money matters! Especially when you’re young and there’s a world of financial responsibilities unveiled before you.

Understanding financial basics early on is key to smart monetary decisions in the future. Here’s why you should consider this vital:

Knowledge Burst: Understanding finance terms, the implications, and their impacts arm you with knowledge for future decisions.
Saving for Later: Early investment in savings accounts or retirement funds can maximize your funds later in life.
Debts Control: Ensuring debts are paid off faster helps avoid excessive interest in the long run.
Investment: Stock or mutual fund investment can multiply your savings in the right condition.

Remember, your financial health requires deliberate action, start early!

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

What is the best saving advice for young adults?

The best saving advice for young adults is to start early and save regularly.

This will help you build up a nest egg that you can use in the future.

Personally, this is my own regret as such it took me way too long to become financially sound.

Also, you want to be mindful of your spending and live within your means.

Best Financial Advice for Young Adults

When you’re in your 20s, the world feels like your oyster, ripe with opportunities and potential.

But among this plethora of choices, the most important decisions you make may very well relate to your finances.

While the excitement of earning and spending your hard-earned money can be exhilarating, it is crucial to remember that wise financial decisions made early on can set the stage for long-term financial success.

We have curated some of the best financial advice to help you make informed decisions and set the foundation for a secure financial future.

1. Create a Budget

Creating a budget can seem like a daunting task. However, once correctly accomplished, it can undeniably make your life a lot easier.

Below are some reasons to start budgeting from the start:

Money management: Knowing the ins and outs of your financial transactions helps manage your money efficiently. A budget gives you a clear snapshot of your income and expenses, allowing you to make strategic decisions about spending and saving. This level of control can be incredibly liberating and reassuring.
Financial discipline: Creating a budget encourages discipline when it comes to financial decisions. It can show you areas where you’re spending more than necessary, such as an underutilized gym membership, frequent dining out, or an unused streaming subscription. By addressing these expenses, you could easily save an additional $100 per month.
Alignment with goals: A budget can provide clarity and align your financial actions with your long-term goals. If you are side-tracked and lose sight of these ambitions, the budget serves as a potent reminder to guide you back to the right path.
Effective savings: A budget constitutes a robust tool that allows you to maximize your income and inculcate a savings habit. Essentially, it’s a roadmap that shows you, in real time, where you can minimize and direct those funds into savings. Those savings can then be invested toward achieving significant life goals more efficiently.
Stress reduction: Tracking income and expenditure can culminate in a stress-free financial life. For example, it helps manage unexpected emergencies or allows you to enjoy after-office drinks without any worries about overspending.

To simplify the job, various user-friendly budgeting apps are available.

These digital budgeting tools or apps offer handy features that can streamline tracking expenses and income. These tools can automatically categorize transactions, display visual charts of spending, and send alerts when you’re nearing the limit of a budget category.

Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.

Start Your Free Trial.

So, no more wondering where your money went.

With a budget in place, you get to tell your money exactly where to go, and this is an empowering shift from feeling out of control to feeling in control of your finances.

By making budgeting a consistent part of your financial routine, you adopt a proactive approach to your money, making your life easier, and your future brighter.

2. Manage Your Debt

As a young adult, managing your debt is incredibly crucial. Not only does it set the foundation for your financial future, but it also helps to keep your credit score healthy.

Here are some top-notch expert tips on how to effectively manage your debts:

Avoid credit cards whenever possible. Although credit card rewards may seem appealing, they can often lead to unwanted debts. Instead, try using cash, debit cards, or cash app cards.
Don’t finance purchases that depreciate in value over time. Rather than taking a loan for things like cars or other depreciable assets, save up and pay in full.
Minimize education-related costs. This can be achieved by going to in-state schools, considering trade school or community college, living off-campus, and exploring scholarships or work/study programs. Learn how to pay for college without loans.
Pay off your debts methodically. Consider strategies like the debt snowball or avalanche methods to strategically pay off your debts. Use a debt payoff app to find your debt free date.

Remember, being in debt can delay your financial goals.

So, learning to manage your debts early on in your life can have a significant impact on your future finances.

3. Invest Wisely

Investing wisely is a cornerstone of solid financial advice for young adults. It sets the foundation for a financially secure future.

Most people are terrified of the concept of investing and stay away from it, which is the worst decision possible.

Investing is about putting your money to work for you, expecting growth or income over time.

Consistently adding money to your investment portfolio can be more beneficial than staying away or trying to time the market.

Investing is ideally a long-term endeavor. Patience is key – you can’t expect to make big gains or reach your financial goals overnight. It’s a process of steady growth.

Simplicity is key for beginner investors. Buying and holding index funds is a good example of a simple and passive investment strategy. Or you can learn how to invest in stocks for beginners.

4. Educate Yourself about Savings and Investment Accounts

Understanding savings is a fundamental aspect of personal finance, yet many young adults ignore this.

Beginning an emergency fund, no matter how small is one of the oft-repeated mantras of personal finance experts.

Consistently making savings a non-negotiable monthly “expense” not only provides a safety net for emergencies but also contributes to various future goals such as retirement, vacation, or a down payment on a home.

A foundational aspect of mastering your finances involves learning self-control, reducing the tendency to make every purchase on credit, and understanding the importance of saving money before making a purchase.

Taking the initiative to read personal finance books and gain knowledge about managing money can greatly aid in controlling your financial future and making informed decisions about savings.

Starting saving for retirement early is essential to secure financial stability in the future.

Learn how much money should I have saved by 25.

5. Limit Your Expenses

Understanding how to limit expenses can be a game changer for your finances.

Track your daily expenses carefully, even the small ones like your morning coffee, as they can add up and provide crucial insights into your spending habits.

Keep your monthly costs, such as rent, as low as feasibly possible, as this will save you substantial amounts over time and accelerate your ability to invest in assets like a home. Learn the ideal household budget percentages.

This one makes the biggest different to spend less money…Categorize your expenses and set specific spending limits for each group, reviewing and adjusting these as needed to curb any overspending.

Regularly review your finances, specifically your bank and credit card statements, every two to three months to identify and eliminate any unnecessary expenditures.

6. Build Passive Income Streams

Okay, this one is my top financial tip!

Navigating the financial world requires strategy, and for young adults, generating passion income streams is a game-changer. With the decline of traditional 9-5 jobs, it’s crucial to adopt flexible financial strategies.

Start identifying your passions that can be monetized. Think about your hobbies, skills, or areas in which you’re an expert. It could be anything from blogging to tutoring or even food delivery services.
Find ways to make passive income. Remember, every bit of extra income counts, and data suggests diversifying income streams can secure your financial future.
Continuous learning is your power tool here. Aim to broaden your financial literacy, understand investing, explore various earning methods, and strengthen your entrepreneurial spirit.

While cutting expenses helps, growing your income using your passions gives you control over your financial destiny.

So, don’t hesitate in doubling up your day job with your passion-driven side hustles.

Expert tip: One of the best ways to make money online for beginners is a key place to start.

7. Create a Cash Reserve

Understand that surprise expenses can unsettle your financial plan, like a sudden car repair costing $700. Having a cash reserve will keep you financially stable through these unexpected turns.

Start an emergency fund: Alongside your regular savings, begin an emergency fund. Aim to save around three to six months’ worth of income.
Prioritize savings: Consider your savings as a non-negotiable expense. You’ll soon realize you’ve saved enough for significant objectives like a down payment on a home.
Build a rainy day fund: This larger $10k-50k rainy day account will help in those long-term expenses or job loss.
Combat inflation: Choose a money market account to preserve the value of your savings, while ensuring quick accessibility in emergencies.
Automation is key: If you’re forgetful, set up an automatic transfer that channels funds to your savings account immediately upon salary credit.

Building up cash reverses will help you to improve your liquid net worth and have less stress around money.

8. Learn About Taxes

Taxes seem complicated, huh? Well, not grasping tax basics can give you a run for your cash. So, get started young and you might save up a fortune in the long run

Start by understanding your salary. The chunk that you take home (net pay) isn’t the whole amount (gross pay) that your employer agreed on. Learn more about gross pay vs net pay.

If you’re self-employed, remember, you’ve got to handle income taxes, and also the full FICA bundle.

Do your bit of math now and avoid an unexpected cringer next April.

9. Consider a Term Life Insurance Policy

Getting a term life insurance policy while still relatively young is a smart financial move that any savvy young adult should consider early in their career.

This safety net serves multiple purposes, especially in ensuring the protection of your future family if for any reason you’re unable to provide for them.

Term life insurance policies are typically far more affordable for young adults. The research notably reveals that the younger an individual is, the more affordable the life insurance policy tends to be. Therefore, beginning this investment in your early years enables you to lock in a lower premium rate, thereby saving significant amounts in the long run.

A life insurance policy is an important piece of your financial planning puzzle. Remember, cost increases with age so act fast!

10. Take Action and Stay With It

Taking action and sticking with it is crucial in managing finances well.

First, you’ve got to get clear about your financial goals. Want to set up a passive income stream or travel? Make them specific, feasible, and measurable.

Once you’ve set your goals, break them down into bite-size pieces. For instance, calculate the costs and set quarterly goals. Make sure to these vision board supplies to keep your goals front and center.

Ultimately, this proactive approach coupled with persistence can help you efficiently manage your funds and stay financially healthy.

FAQ

Honestly, this is completely up to you.

The better bet would be to learn about financial management topics yourself.

Finding a fee-based financial advisor will be difficult when you have no significant assets. And then, when you do, a financial advisor can put a drag on your investing portfolio.

If you decide to work with a financial advisor, find a fee-only financial planner who provides unbiased advice – since they aren’t driven by commission.

Financial planning while young—especially in your 20s—is key to future success and financial security. Here are some steps to establish strong fiscal habits:

Firstly, map out your financial goals. Do you anticipate student loans, a mortgage, or potential investments?
Secondly, budget diligently to save more money early in your career.
Next, consider eliminating outstanding debt quicker by applying saved money from part-time or full-time employment.
Lastly, explore investments such as mutual funds and stocks for optimal use of leftover money after bills are paid.

Remember, according to a study of 30,000 college graduates, 70% never took a personal finance course—making self-education critical.

Use These Personal Financial Tips for Young Adults

In conclusion, managing personal finances is a vital skill that unfortunately is not emphasized enough in our educational institutions.

It’s critical for young adults – you – to learn this skill to establish a strong financial foundation for their future. Especially if you are determined to become financially independent.

This begins by developing a sense of self-control and understanding the importance of delayed gratification.
Regularly monitoring your income and expenses, and adjusting your lifestyle to live within your means, is a crucial habit.
Additionally, the importance of starting an emergency fund and saving for retirement cannot be overstated.

By incorporating these financial tips into their lives, young adults can steer clear of unnecessary financial stress and ensure a secure and financially healthy future.

Take this Advice about Money

It is crucial to understand not just the mechanics of money, but also, the long-term implications of your financial decisions.

Take control of your financial future today, and you are sure to reap the rewards in the years to come.

Discerning financial advice from trusted sources, instead of relying on potentially misleading external influences, is also key. Remember, the sooner you start, the better off you’ll be in the long run.

Remember the data-driven fact: small changes in your everyday expenses can have as big of an impact on your finances as getting a raise.

Source: moneybliss.org

Apache is functioning normally

August 11, 2023 by Brett Tams

Hey everyone! Today, I have a great savings story to share from a reader named Nichole. She will be talking about how she went from -$20,000 to a six-figure savings by 26 years old. The following will be outlining my experience getting scammed and how it catapulted me into learning about how money works. I…

Hey everyone! Today, I have a great savings story to share from a reader named Nichole. She will be talking about how she went from -$20,000 to a six-figure savings by 26 years old.

The following will be outlining my experience getting scammed and how it catapulted me into learning about how money works. I will divulge all the things I’ve done to earn a six-figure savings, pay off over $20,000 in debt and stay consistent with saving for a home to pay cash. I will go over the importance of knowing your “why” and how it has a large part in saving money. I believe we all have the ability to be successful with our finances and sharing my story hopefully encourages you to stay motivated during your own journey.

Since I was a little girl I’ve always yearned for independence and responsibility. My mother tells the story like this:

“It was your first week of kindergarten and I walked you to the bus stop to drop you off. You didn’t even let me drive you that first day! When I met you at the bus stop after school at 2pm you look at me and say “mom, you don’t need to pick me up from the bus stop, I can walk home without you”. I had to explain to you that wasn’t allowed because you were only five years old and the school didn’t allow that.”

The moral of the story is, if I could do it on my own I did. This included making money so I could buy my own stuff.

Throughout elementary and middle school I sold things to make money: lanyards, bracelets, candy, even offered to do peoples homework for $5 in 6^th grade!

Earning money gave me more independence to pay for the things I wanted, so I always stayed motivated.

My parents never talked much about money, I just knew we had everything we needed and more. We were very middle class.

I was taught to avoid debt but to always have a credit card just in case an emergency happens. Oh, and you’ll always have a car payment, so get used to it

It wasn’t until sixteen years old that I learned my parents were always one catastrophe away from losing everything.

In 2008 my parents lost the home they custom built because they took out a no interest loan that they couldn’t afford once it ballooned.

This changed something in me, my world was shaken and I never knew it had a weak foundation to begin with.

I started to view money a different way.

I wanted it but didn’t know how to keep it safe from others that could take it away from me, like what my parents experienced. I didn’t want to repeat their money mistakes.

Fast-forward to 21 years old, I got married to my husband and best friend, yes so young, I know!

The following two years were spent finishing up my Bachelors in Communication and attempting to pay off our debt, we had about $20,000 wrapped up in student loans, credit cards and a car accident. We didn’t know much about money and we were still living with parents to try and save for a down payment for our first home.

This is how it’s supposed to work right? College, marriage, buy a home and have a baby. In that order.

In 2018, my husband and I put an offer on a home, 2 bed 1 bath fixer upper with a nice backyard and workshop in the back for $230,000.

We were excited for our new adventure but when it came down to our offer and one other, we lost. When we got the news our agent said, “yeah, they offered all cash, you didn’t have a chance”. We thought to ourselves, who the heck has that much money to pay cash for a home?! We brushed it off and figured it just wasn’t our time to buy. Little did we know the irony of this.

I started to really spend my time researching about money and how to leverage it and get rich! My goal was to find the secret sauce to success and wealth. I embarked on a downward spiral of YouTubes algorithm of financial videos and advice. Then I came across a very well-known financial expert that offered FREE courses about how to get rich, how could I pass that up? I signed up for the next free course.

Once there I was greeted with excited faces and tons of energy, oh yes, this was my moment to find the secret sauce! The lady speaking talked about all the homes she owns, the money she makes and extravagant trips she takes, I was hooked. I wanted that life, not my own, I needed change.

By the end of the presentation I was willing to do anything to continue my knowledge on financial freedom, or so I thought that’s what I was going to learn. I was the first person to stand up and run over to the tables full of iPads and “We accept credit” signs. I whipped out my credit card and signed up for my 3-day seminar. I don’t mind paying for education! I already had $13,000 in student loan debt anyway so who cares?!

The day of the seminar comes an I am elated, I am OVERLY ELATED. I couldn’t wait for my husband to share the same excitement I experienced at the last meet up. I was again, welcomed by excited faces and high energy. We had our notebooks, pens and open minds ready to learn how to get rich.

To no one’s surprise, we were let down.

Within 10 minutes of the presentation my husband looked at me with eyes saying “we got duped”. He didn’t have to say anything. Let me paint the picture for you.

The presenter had on a gold and diamond link bracelet and a fancy suit. He yelled and poured water on the floor for dramatic effect, handed out cash and even had us stand on our seats in unison shouting the same corny lines “we are warriors”. He informed us that he was going to teach us to buy homes with a credit card and leverage our credit for the best. He promised for the small price of $15,000 that we would learn all about the secret sauce to the rich *can you hear my sarcasm? *. He said we would have mentors along the way to help us buy these homes on credit. He told us not to come back the next day if we weren’t willing to pay for more classes. And we didn’t.

You get the point, it was a 3 days sale pitch to get us to buy more courses.

We walked to our car, now an extra $600 in debt and feeling like the most gullible people in the world. Christmas was only four days away and we were more broke than before we showed up. We had to sell personal items to have Christmas that year.

A switch went off in my head, I was angry. I was so angry that I fell into this scam, I was angry we didn’t get our home, I was angry we were broke, but ultimately, I was angry for not knowing how to manage my money. This stung extra because I hated the fact that in that moment I became my parents, I made a huge money mistake.

Anger is a funny thing, it can ignite the most creative sides of our brain. I decided I was going to get my money back.

What email did I send them?

A short summary of what I experienced and that they had 48 hours to get back in contact with me before I went to social media to expose them and my experience. I received a full refund the next day, with no response, even to this day.

Scorned is a nice way to put it.

I was now on a mission to learn all I could about how money REALLY works.

And so, I went back to my faithful teacher…YouTube of course! I searched and watched hours of videos until I came across one that made sense to me. A lot of financial jargon can be thrown around with no explanation, I don’t like that. I believe if someone can’t explain it easily then they don’t know enough about the subject to begin with.

Then I found the video that made sense: common knowledge and nothing you haven’t heard before (funny how that works).

I acknowledge that everyone has a different stance on money management and I take the view of, “to each their own”. I don’t think there is one “right” way but I found that following this new plan I was able to save more and feel good doing it than I ever did before.

These are the principles I followed, and they worked!

To put them simply they are:

1: $1,000 to start an Emergency Fund
2: Pay off all debt using the Debt Snowball
3: 3 to 6 months of expenses in savings
4: Invest 15% of household income into Roth IRAs and pre-tax retirement
5: College funding for children
6: Pay off home early
7: Build wealth and give

And then there is 3b – Save up for a home. This step is after you save your 3-6 months emergency fund and the current step I am on.

I had an epiphany, if I am in $13,000 worth of debt, and then add another $230,000 of debt for a house and a new car, then I’m going to be in some serious trouble with my monthly bills and interest I’m accruing. MOST Americans live like this. Banks don’t pay Trillions of dollars toward advertising if it didn’t work. Yes, I said “T”.

We paid off my student loans in full that day. I wish this was the end of our debt story but it is not.

My husband, who at this point in our journey is a new real estate agent, started to use a secret credit card to pay for real estate fees. We could have budgeted for these expenses but the shame of using the money I earned and him not contributing got the best of his ego. He bought a $200 chair for his new office, accrued office fees, all new clothes, etc…

Meanwhile I thought we were debt free and his parents were being nice by supporting his new venture! It is important for him and I to mention this part in our story because many people can relate to these feeling surrounding money: shame, guilt, and failure. It is a team effort.

Our social stigmas can convolute our ideas about money within a marriage. We are taught that the man makes the money, but sometimes the story doesn’t work like that and that’s ok!

The good news is, we’ve grown from this experience. We now work so closely with our money that we are each other’s cheerleader and in it to win it!

Since our journey has started we have:

Paid off my student loans— $13,000
Paid off all our credit card debt and consumer debt— $7,000
Paid off my car— $4,000
Paid for TWO cars CASH: A 2007 Volkswagen Jetta and then a 2012 Jaguar XF Portfolio to replace it when it died (quite a step up!) This is how we saved and bought our Jaguar cash summing— $14,400
Bought new appliances and toilets for my mother in laws home— $4,000
Given away money with a generous heart every.single.month (it’s part of our budget)
Accrued a six-figure savings and are on track to buy our first home cash in 2022!

How did we do it?

First, I’d like to mention, we are very normal people with normal jobs. I work in education and my husband is a real estate agent.

We didn’t invest in a stock that suddenly went up, win the lottery or get an inheritance.

We worked our butts off to get to this point in our journey and we still are.

Many people can do this and it starts with visualizing it and then believing you’ll get there.

We found out through our process it is exactly that, a process.

How we saved over six figures:

Following steps 1-7 about saving, investing and giving
Staying consistent! I can’t mention this enough, even if we go over our budget one month, we hop right back onto the savings wagon the following month
Side hustles—we have done it all! I was the cleaning lady at my job for 5 months, I baked cakes (and got quite good at decorating them), I made epoxy key chains, sold items we didn’t need, took on EVERY OT opportunity at work including working an extra 4 hours on top of regular work hours with students to help them during COVID, the list goes on. We take advantage of all extra earning opportunities
Cut down on spending—believe it or not anything outside of our bills and expenses we only allocate $200 a month for. This includes: toothpaste, if we need clothes, going out to dinners/lunch/with friends, medications, etc… Once the money is gone, its gone! Yes, I shop at Goodwill a lot and coupon hunt!
Cut out streaming services and use a family members account (one day we will get it back)
Use cash envelopes—We use this for bills that aren’t online to avoid going over our budget
Use a zero-based budget—We practice a zero-based budget approach with our money—all the money left over after our bills and expenses goes straight into the home savings. Read more about how this budget works here https://elizabethandinez.com/what-is-zero-based-budgeting-and-why-it-works/
Switch phone companies—we saved over $50 a month that went toward our home savings! We gave ourselves a raise!
Start a blog. My cousin and I started a blog and sell financial sheets on Etsy
Start giving to others every month. This is a part of our budget and the most fun you will ever have with money. Sometimes it’s to a waitress, a mother in a store buying food for her kids, a super awesome pet groomer, someone in a restaurant we want to get the bill for and most of the time its anonymously! Giving does something to the heart and is a huge part of our bigger picture of “why” we are doing what we are doing. This keeps us motivated to do more and stay the course. Having a bigger reason for why you save is a key factor for staying consistent
Stay diligent—we take every day as our opportunity to put extra into our savings
Meet with an accountability partner— We meet weekly to do a budget overview—this is important because we are each other’s accountability partners.
Practice putting out into the world what you want to receive, for example, a positive attitude! It’s amazing what happens when you attract positive outcomes, they come right back.
Visualize your goals and set intentions for them—this plays a large role in our success. We have charts around our room showing us our progress and how far we have come. Starting with the image in your head while also setting intentions for that goal will turn into real results! I suggest looking into videos or books on the Law of Attraction.
Open a Money Market account to help with depreciation and earn a little interest as you save. This is also good because the money isn’t as easily available as a checking’s would be. We get about $50 every month for FREE from interest
Attend a financial class—We’ve done this FIVE TIMES to be around likeminded people trying to get out of debt and follow the same plan. We know the information like the back of our hand but it is not about the knowledge, its about the behavior

Know your why

When you have a big enough “why” for the goal you are setting it becomes almost like second nature. You find ways to make it happen.

A good example (but a sad one) is if you have a sick child and not enough money for the surgery or appointment. Because your why for saving is so strong you are going to do EVERYTHING in your power to raise that money and make it happen, no matter what.

Without your why, the process is going to be daunting and drag.

You need motivation behind your goal, so find it.

Why are we saving like crazy anyway?

We decided we want to create generational wealth for our families. Money does not make you happy in life but it does clear up a lot of problems and make it possible to help others. We want to be able to take care of our family for generations.

We also want to be able to give to others. We give with open hands, not clinched ones. If you picture an open hand for a moment, palms up and open to receiving and letting go, vulnerable, not clinching, willing. Having an open hand allows money to flow freely in and out. Being open and quick to give to others rather than holding it tight allows you to see the miracles that money can make in another person’s life. We want to fill our cup to the top so that it pours over and we have enough to fill others.

Our plans for the future to become millionaires:

Buy our home cash
Up my work investing to 5% into my 403b for the complete company match
Put the max amount of $6,000 into each of our ROTH IRAS (as of 2021 that is the max amount allowed) We will set up automatic payments every month of $500 into each account to ensure we are hitting those highs and lows of the market every month
Save for a commercial real estate property
Save for rental properties. Because my husband is a real estate agent we are very interested in investing our money into real estate and handling rental properties in our area, specifically rehabbing trustee sales
Open a real estate brokerage account. This is one of our long-term goals and will one day be an investment we pay cash for to open
Earn income from the Elizabeth&Inez blog
Give to others so that their lives can be touched by the good in this world

Our journey is far from over but the successes along the way are proof of our bigger picture becoming a reality. We went from -$20,000 in debt to over a $100,000 savings from the beginning of 2019 to June 2021! Follow my blog for financial insight and more updates on our journey!

Do you have any questions for me? Ask away in the comments below.

Author bio: My name is Nichole Yanez and I am a financial blogger at Elizabeth And Inez. I talk about my experience as a millennial living in Southern California trying to buy my first home cash! I work in the field of education but my passion is money management and inspiring others to start their journey to financial freedom. I hope my story brings hope to others that they are capable of changing their family tree with three things: consistency, hard work and diligence. This is my story about financial deception and how it landed me into learning about money and how it works.

Source: makingsenseofcents.com

Apache is functioning normally

August 11, 2023 by Brett Tams

Most people want to save for the future, whether that means a short-term goal like a vacation in Bali next year or a longer-term aspiration, such as retiring by age 50. To fund these dreams, many experts recommend putting aside at least 20% of your paycheck.

However, each person’s financial situation is of course different. One person might have student loans they are paying off on a lower income while another might be earning a lofty salary with minimal debt. And yet a third might have a moderate income, some student loans, and they just closed on a home and are spending on major renovations.

So exactly how much you should save will depend on a variety of factors, such as your goals, your current income and debt, and your cost of living. Here, some guidelines to help you know exactly how much of your paycheck to save.

What Percentage of My Paycheck Should I Save?

Most of us know that saving money is important, but how much should you regularly whisk out of your checking account and into a savings vehicle? When it comes to what percentage of income to save for future expenses, financial advice can vary depending on where you look. Some experts suggest saving as little as 10% of each paycheck, while others might suggest 30% or more. A figure of 20% often seems a comfortable compromise.

The 50 20 30 Rule

According to the 50/30/20 rule of budgeting, 50% of your take-home income should go to essentials, 30% to nonessentials, and 20% to saving for future goals (including debt repayment beyond the minimum).

The right amount for you to save from each paycheck will depend on your income, your fixed expenses, as well as your short- and long-term financial goals.

For example, if the cost of living is high in your area, you may need to spend more than half of your take-home pay on living expenses, making it hard to put 20% of each paycheck into savings.

On the other hand, If your goal is to buy a home in two years, you may need to put more than 20% percent of your paycheck into savings in order to have your down payment in that timeline. If you want to retire early, you may need to put more of your income towards retirement every month than the average worker.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.50% APY, with no minimum balance required.

The Pros and Cons of Saving More or Less

While 20% is a good guideline, how much of each paycheck to save is a personal decision.

If you are trying to decide just how much of your paycheck to save, consider these points. Being aggressive with savings can have its benefits. You might also consider these the advantages that you miss out on if you save less.

• By saving more, you reach your goal faster.

• By maximizing the money you put away, you may rein in your spending and manage your money better in general.

• If your company offers a match for retirement savings, you can basically get free money by saving at the stipulated rate.

• Some savings vehicles offer tax advantages.

However, there are also downsides to saving as much as possible. You could avoid these by saving less. In other words, these are the benefits of saving less.

• By saving less, you might avoid living paycheck to paycheck, which is stressful.

• You can put more money towards paying down high-interest debt which can enhance your financial situation.

• You have more money for discretionary spending and enjoying your life.

Here’s how this stacks up in chart form:

Pros of Saving More/Cons of Saving Less	Cons of Saving More/Pros of Saving Less
Saving more means reaching financial goals faster	Saving aggressively can lead to money stress
Saving more can rein in spending and lead to better money management	Saving more can mean less money free to pay down debt
Saving more can potentially reap a company match via employee savings plan	The more you save, the less you may have for discretionary or “fun” spending
Saving more can mean tax advantages

Recommended: Cost of Living Index by State

4 Potential Savings Goals to Work Toward

Socking away money can be a good idea, but it is undoubtedly difficult to save. It can be helpful to really think about what it is you are saving for. Having a few specific goals in mind can help you determine how much you need to save each month and also help keep you motivated to maintain the discipline it takes to save.

Here are some common savings goals that can help you build financial wellness.

1. An Emergency Fund

Do you have a healthy reserve of cash you could tap to get through a difficult time or cover a large, unexpected expense?

If not, you may want to start saving up for an emergency fund that could help you handle a financial curveball, such as a job loss, medical emergency, or big ticket car or home repair.

Having this back-up fund in place can help ensure that you never have to rely on high-interest credit cards to make ends meet.

Ideally, an emergency fund will contain enough money to cover your living expenses for three to six months, but how much you’ll want to put aside will depend on your situation.

If you are married with no children, for example, you may only need to cover three months of expenses. If you have kids or you’re single, you may want to have an emergency fund that could cover at least six months’ worth of expenses.

It can help to keep the money in an account that earns more interest than a standard savings account, but allows you to easily access your money.

Some good options include: a high-yield savings account (online banks tend to offer good rates) or money market account.

2. Paying Off High-Interest Debt

Another important thing you could consider doing with your savings is paying off any “bad” or high-interest debt you may have. Some ideas for a debt management plan:

• A debt payoff strategy you may want to consider is the debt snowball method. With this approach, you start by paying off the debt with the smallest balance and put all your extra payments towards that until it’s paid off (while continuing to pay the minimum on your other debts).

You then put extra payments toward the debt with the next highest balance, and so on. This can give you a sense of accomplishment which can help motivate you to continue your aggressive repayment.

• Another approach is the debt avalanche method. This Involves putting all your extra payments towards the debt with the highest interest rate, while paying the minimum on the others.

When that debt is paid off, you then focus on the debt with the next-highest interest rate. Since you are concentrating on the debt with the highest interest rate, this strategy can end up being the most cost-effective.

3. Saving for Retirement

One of the key things to save for each month is your future. Exactly how much of your paycheck should go to retirement savings will depend on your age and when you want to retire.

If your company offers a 401(k) with matching contributions, it can make sense to put aside at least as much of your paycheck as your company will match (since this is essentially free money).

If you don’t have access to a 401(k) or want to contribute beyond that fund, you may want to open a Roth or Traditional IRA. Both types of IRAs have different tax benefits.

When you invest in a Roth IRA the money is taxed at the time of contribution but then in retirement, you can withdraw it tax free. Contributions made to a traditional IRA might not be taxed at the time they are made but are taxed when they are withdrawn in retirement.

When choosing how much of your paycheck to put into retirement savings, you may want to keep in mind that the IRS sets restrictions on how much you can contribute to your retirement funds each year.

4. Saving for Other Goals

After establishing plans for debt repayment, an emergency fund, and retirement savings, you may also want to consider working toward your other financial goals, like buying a house, saving for your kids’ future education, or going on a great vacation.

How much of your paycheck you should save for these goals will depend on what you want to accomplish and when you want to accomplish it.

When you’re saving for a big purchase, for example, you may want to start by determining how much money you’ll need and when you want to have the money.

You can then break that dollar amount down into the amount you need to save each year and month. This can help you determine how much of each paycheck you may want to put aside to help you achieve that goal.

• For savings goals you want to accomplish in the next three to five years, you may want to consider putting the money in a safe account that earns higher-than-average interest (such as a high-yield savings account or a CD).

• Longer-term savings goals, such as your children’s college education, can be invested more aggressively, since you’ll have more time to ride out the ups and downs of the securities markets. For college savings, you may want to consider opening a 529 savings plan.

💡 Quick Tip: Fees can be a real drag when you’re trying to save money. SoFi’s high-yield checking account has no account fees, including overdraft coverage up to $50.

Saving a Percentage vs. an Amount

There are different ways to look at saving: Some people follow the percentage method, while others prefer to think in terms of a dollar amount that gets socked away.

For many people, a percentage is a good way to go.

• That percentage can be “set it and forget it.” It can help guide you if, say, you get a raise. The amount you are saving will automatically rise with your salary.

• Similarly, if you are a seasonal worker, the amount you are saving will go down during your slow season. Say you earn $15,000 a month during the busy season and save 20%. That would be $3,000 a month. If your pay dips to $5,000 during the quiet season, only $1,000 per month would go into savings.

However, other people may find that putting aside a set amount, perhaps $1,000 a month, is a good way to save.

• That might make it easier for them to calculate and track their savings. It can be a way that people feel they are in control of their money.

• When their income rises or falls, they would have the opportunity to be hands-on with their money and determine whether to adjust the amount or not.

Here’s a look in chart form:

Saving a Percentage	Saving an Amount
“Set it and forget it” convenience	Can be simpler to remember and track
Automatically adjusts savings when your income changes	Can get you to check in with your money and adjust your savings amount regularly

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Starting to Save With SoFi

Better banking is here with up to 4.50% APY on SoFi Checking and Savings.

FAQ

Is it good to save 50% of your salary?

If you can afford to save 50% of your salary, that can be a habit that can help you reach financial stability quickly. However, many people will save less than that, with 20% of one’s take-home pay being a solid figure to aim for.

Is saving 10% of your paycheck enough?

Saving 10% of your paycheck is a good start and is certainly better than not saving at all. If you are just starting out, have a high cost of living, or have considerable debt, it can be a good move to start with 10% as your savings goal. However, many financial experts encourage people to save at least 20% of their take-home pay.

What is the 50 20 30 rule?

The 50/30/20 budget rule is a formula to help people manage their finances. It says that, of your take-home pay, 50% should go towards basic living expenses (the needs in your life); 30% should go to spending (the wants in life); and 20% should go towards saving for the future (including debt repayment beyond the bare minimum).

SoFi members with direct deposit can earn up to 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.50% APY for savings. Members without direct deposit will earn up to 1.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/2/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBK0523019

Source: sofi.com

Apache is functioning normally

August 9, 2023 by Brett Tams

Want to get paid sooner? Your checking account might be able to help.

August 9, 2023

Watching for a direct deposit to hit your bank account can be a stressful waiting game, especially if you have everyday expenses to cover and bills that need to be paid. If this is an all-too-familiar challenge, you aren’t alone. Many Americans live paycheck to paycheck, without much of a financial buffer between paydays. And even after your paycheck is sent to your bank, it can still take a few days before that money is in your checking account and available to spend.

Whatever the reason, being able to get your paycheck early can make a huge difference. And your checking account can actually help you do this, depending on your bank. So, how can you get your paycheck early using an online checking account? It just takes a few simple steps and a little know-how.

Can you get your paycheck early using your online checking account?

Yes! You may be able to get your paycheck early and access your cash even sooner than expected, depending on the checking account you pick. Early access to these funds could help you cover immediate expenses or pay bills without having to rely on credit cards or incur late fees.

Not all online checking accounts allow you to get paid early, but some do. For example, Early Pay is one of the many benefits of a Discover® Cashback Debit checking account, and this feature allows you to tap into qualifying deposits days earlier than scheduled.¹

What is Early Pay?

Early Pay is a no-fee service offered to Discover checking account customers, giving you access to qualified Automated Clearing House (ACH) funds up to two days early. (ACH is an electronic fund transfer network across which banks and credit unions transfer money.) Eligible funds can include a direct deposit paycheck from your employer or an ACH transfer from a government entity, just to name two.

With the Early Pay feature, your direct deposits are made available to you soon after Discover is notified that the pending transfer is on the way. This means you can pay bills, make purchases, and prevent overdrafts on your Discover checking account up to two days earlier than expected.

How do I set up direct deposit?

The process for setting up direct deposit will vary by the payor (your employer, in most cases). Payors often have their own direct deposit form for you to fill out, or you may be able to provide an ACH form that your bank generates on your behalf.

In order to set up direct deposit, you’ll need to provide the payor with information such as your:

Name on your account
Bank name
Bank account and routing numbers
Bank address

Also, you’ll likely need to tell the payor how you want the money deposited. Suppose you want half of your paycheck to go into savings, for example, or a set dollar amount to be redirected into another checking account. You may be able to specify those details when you set up direct deposit.

Checking with cash back and no monthly fees

Discover Bank, Member FDIC

What types of accounts are eligible for Early Pay?

Early Pay is available to Discover customers with online checking accounts, online savings accounts, or money market accounts. Early Pay isn’t available for Individual Retirement Account (IRA) savings accounts or IRA CDs because those are retirement accounts that aren’t typically used for short-term expenses.

What kinds of ACH deposits qualify for Early Pay?

If you have an online checking account, online savings account, or money market account with Discover, your ACH deposits may be eligible for Early Pay.

How early will direct deposit funds be available?

Discover Cashback Debit customers may be able to access their eligible direct deposit funds up to two days early. The timeline depends on when the ACH transfer is initiated by the payor and when Discover is notified that funds are on their way.

Will funds from my qualifying direct deposit always be available early?

Early Pay is available to eligible banking customers with qualifying direct deposits, but does direct deposit come early for all Discover customers, all the time? Not necessarily. Discover can’t guarantee that the funds will always be available early because of actions the payor may take. Timing can also depend on when Discover is notified of the pending payment.

How do I enroll in Early Pay?

If you’re wondering how to get your direct deposit funds early with Early Pay, it’s easier than you might think. Once you get set up with direct deposit, which is usually done with an employer or benefits provider like Social Security, Discover takes care of the rest. Or, if you’re already receiving qualifying ACH direct deposits into your checking, savings (excluding IRA savings), or money market account, you’re already automatically enrolled in the Early Pay feature. Once Discover is notified that a qualifying ACH payment is en route, you can have access to your money up to two days early.

Is there a fee for using Early Pay?

For Discover Cashback Debit customers, there’s no fee for the Early Pay feature. This means you can access your ACH deposits sooner at no additional cost.

Can I be informed when my direct deposit posts with Early Pay?

You sure can. With Discover Cashback Debit, you’ll automatically be set up with Early Pay email alerts, so you’ll always know when your paycheck or other qualified deposit hits your account. If you want to turn off email alerts, you can unsubscribe anytime. And if you prefer text or push notifications, you can turn those on in the Discover App.

Start using your checking account to get your paycheck early

When choosing a bank, you’ll want to look for important benefits such as no fees, expansive ATM networks, mobile check deposit, and even rewards on checking accounts. Being able to get your paycheck early might be one of the most beneficial perks, though, whether you need it to pay some bills or if you’re ready to make a big purchase.

Discover Cashback Debit customers enjoy more than 60,000 no-fee ATMs in their network, receive 1% cash back on up to $3,000 in monthly debit card purchases,² and can even get paid up to two days sooner with Early Pay—all with no fees. Take a closer look at Discover Cashback Debit and see if it’s right for you.

¹ Early Pay is automatically available to checking, savings (excluding IRA savings) and money market customers who receive qualifying ACH direct deposits. At our discretion, and dependent on the timing of our receipt of the direct deposit instructions, we may make funds from these qualifying direct deposits available to you up to 2 days early. See our Deposit Account Agreement for more information.

²ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.

Source: discover.com