Monday, August 13, 2012

Where to Find Better Interest Rates For Your Savings

Are you tired of earning a pittance on your hard earned savings? Not too long ago you could earn 3%, 4%, 5% or more by sticking your cash in a high yield savings account. But today? Not even close. Interest rates now top out in the low 1% range, and it seems like there’s no light at the end of the tunnel.
So what’s a savvy saver to do? Well, you could just accept the low rates as an unavoidable consequence of the current economic landscape, or… You could get creative and get at least a bit more bang for your buck. Here are three ways to get a better rate for your savings.

High yield (rewards) checking accounts

While savings accounts were once home to the highest interest rates, checking accounts are now getting in on the action. Be forewarned that you may have to jump through some hoops – like setting up direct deposit and making a minimum number of debit card transactions per month – but if you’re up to the challenge, you can score a great rate.
For example, MoneyRates.com currently lists reward checking accounts with rates as high as 5.01% APY. Note that many of these offers are regional, so you may have to shop around a bit, but there are some killer deals out there for the taking.

Long-term CDs with low penalties

I’ve mentioned this one in the past, but if you can find a bank with a low penalty for early withdrawal, you can use long-term CDs to get a higher interest with minimal downside risk. For example, Ally Bank has a 60 day interest penalty if you break their CDs early.
Given that Ally’s five year CD rates are paying roughly double what you can get from an online savings account, the break-even point is roughly four months. Beyond that point, you’ll come out ahead relative to having your money in a savings account, even if you have to access the money before the CD matures. And if rates rise dramatically, you can simply break your CD and re-invest.
If you go this route, here’s a tip: Split your money into multiple CDs. That way you can access just a portion of it without paying a penalty for early withdrawal of the full amount.

Series I savings bonds

Another solid option is to use Series I savings bonds, which are inflation-indexed bonds offered by the U.S. government. Rates on I bonds are updated semi-annually in May and November. As of right now, newly-issued I bonds are paying 4.6%, though that number will fluctuate over time depending on the inflation rate.
The downside here is that I bonds cannot be redeemed during the first 12 months, so they’re not a great vehicle for your emergency fund – or at least not for yourentire emergency fund. But once that 12 months is up, you can redeem them. Between 1-5 years after they’re issued, there’s a 90 day interest penalty, and after five years you can redeem them penalty free.
Beyond offering a decent interest rate (at least relative to a savings account), interest that you earn from I bonds isn’t taxed until redemption (i.e., it’s tax deferred) and it’s also exempt from state income taxes – as well as federal taxes if you use the proceed to for eligible education expenses.

But don’t get greedy…

And now… A word to the wise. In general terms, if you’re holding cash, you probably want if to be both safe and reasonably liquid. You should thus avoid locking it up or taking unnecessary risks with it. In this vein, I would recommend shying away from things like peer lending.
While outfits like Lending Club tout 8-10% annual returns, and you sometimes see them mentioned in discussions related to improving your interest rates, the reality is that they are neither risk-free nor liquid. While investments like this may have their place in your portfolio, they’re far from being a cash equivalent.


Monday, August 6, 2012

Types Of Home Loans


The biggest purchase a family will probably ever make is their home.  Researching how to make an informed choice on where and what type of home loan to apply for can seem to be a lot of work. It truly isn’t though.  Anyone who has access to the Internet can cut their research time down by merely researching instead on different types of home loans.
There are literally thousands of articles out there that can educate a consumer on any topic they need. This is truly a benefit that the age-of-Internet has brought to consumers. There are many online sites that will give you the benefit of their research to help anyone to find just the right home loan.  So researching via the Internet, will find a person all they would need to know about the different types of loans.
In this regard, the Internet makes it so much easier for the consumer who is contemplating becoming a first time home owner, to research types of home loans. Letting someone else who has done all the research inform the consumer is a great time-saving tool for busy consumers.
The simple act of typing what the loan is needed for and asking for the top recommendations from experts can prepare them to get their loan. Using all the technological tools available will greatly minimize finding out all a person needs to know on this subject.
The consumer contemplating the types of home loans can learn all they need to know about the difference in each. There are VA loans or Veterans Association loans. If at any time you’ve served in the service a consumer may qualify for this type of mortgage. It basically is a mortgage that is secured by the military. Basically, they the military, becomes the co-signer.
Then another option is the FHA or the Federal Housing Association. FHA loans are usually made available to lower income consumers, which reside in America. These loans are usually backed by the government. These loans can be very helpful to people that cannot afford a conventional down payment.
Then there are variable rate loans and fixed rate loans. The difference between a fixed rate and a variable rate are in how they set the interest that a consumer needs to repay. Obviously the fixed rate is one interest rate that is set for the term of the loan. A variable rate is one that the interest rate fluctuates during the course of the loan. Obviously there are advantages and disadvantages to each and a fair amount of research will be required to pick out just the right rate for the prospective home owner.
Here is where types of home loans come in handy. The research to be an informed consumer in the area of home loans can be greatly cut down by the Internets vast amount of available research. Not only can a consumer learn exactly what’s available out there for them to choose from, but, they can learn the right questions to ask when actually picking one.


Blog by Sterling Van Dyke Credit Union. Sterling Van Dyke Credit Union services anyone working or living in Macomb, Oakland or Wayne County, Michigan. Current residents, retirees receiving a pension or social security and immediate family members are eligible to join. Sterling Van Dyke Credit Union is owned and operated entirely by its member and strives to follow the purpose of the credit union as set forth in the bylaws.

Friday, August 3, 2012

Seven Frugal Ways to Keep Your Kids Busy This Summer


For kids, summer is a lovely long stretch of day camps, playing with friends, going to the pool, and generally having fun. But for parents, struggling to keep those little folks busy can get costly. Trips to amusement parks, sporting events, museums, and such can seriously stretch a budget. And that’s not even counting thefamily vacation!
But it doesn’t have to be that way. While some summer outlays cannot be avoided, many expensive activities can be replaced with cost-free alternatives. Here are seven cheap ways to keep junior busy.

Treasure hunt

Write clues on scraps of paper and hide them in your yard, house, garage, wherever, and have each clue direct your kid to the next clue. Make the clues as easy or hard as needed, depending on how clever you believe your child is. If your child is into math, make the clues involve some calculations. Make the last clue lead to some treat. You can do this game with a group of kids, too, by dividing them into teams and setting up multiple clue trails.

Scavenger hunt

An alternative to the treasure hunt is a scavenger hunt. Make a list of items your child (or each team) is required to find. As with the clues in the treasure hunt, make the items as easy or hard to find as needed depending on your child’s abilities.

Camera day

Remember when using a camera was an expensive proposition, with the cost of film, developing, and prints? That’s a thing of the past — your digital camera doesn’t cost anything to use… But your kids will still get a thrill out of being photographers for a day.
Take them to favorite places and let them shoot away. Get on the bus or train, visit the park or beach, anyplace you like going. They’ll get an extra thrill documenting every step of the way. Upload the photos to your computer and print out a select few to create a collage. It will be a day to remember, and your wallet will be just as thick as it was when the day started.

Magic show

Do you remember the fun you had the last time you saw a magic show? Let your kids in on the action by having them set up their own magic show for friends and family. Here are two easy tricks any kid can master:
  1. Shuffle a deck of cards and quickly glance at the bottom card. Let someone pick a card, any card. Have the person put the card at the bottom of the deck. Lightly shuffle the deck again. Flip through the deck until you find the card that was originally on the bottom; the next card should be the card the person picked. Pull it out with a flourish!
  2. Next hold a carrot under a handkerchief as if it’s your finger. Tell the crowd you’ve discovered a secret formula for resisting pain. Poke a pin deep into the carrot… The crowd will shudder while you coolly pull it back out without a wince.
You can find plenty of other easy tricks online.

Lemonade stand

Even if your kid’s not a budding entrepreneur, she’ll love the thrill of the first paying customer. A lemonade stand is an easy proposition — mix up some powdered drink, set up a table on the sidewalk, and make a sign. No one gets rich this way, but it does introduce your child to the basics of sales and profit, and keeps her occupied for a few summer hours.

Scrap paper poetry

Rainy day? No problem. Before you let the kids park in front of the idiot box — I mean TV — engage them in a game of scrap paper poetry. Each player writes ten random words on slips of paper. All the slips go into a hat, and each player draws ten out. The players then arrange the words, and no other words, into simple free-form poems.
This may sound a little silly, but kids have an innate sense of language and find great humor in atypical arrangements of words. This game won’t cost you a penny but could keep the little minds and hands occupied for an hour.

Super bubbles

Every kid likes to blow bubbles using those little wands. Do that traditional pastime one better by creating super bubble wands from old wire clothes hangers. Just bend them out into big circles or ovals, pour the bubble liquid (or dishwashing liquid) into a flat plate or pan, dip the wands in, and wave them in the air. Pennies spent, giant bubbles created!