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The Baby Steps Explained, And Why They Work!
These are the steps that introduced me and my husband to what financial independence is and for that I am eternally grateful. But a lot of important considerations get looked over if you just find a list of the steps…
The post The Baby Steps Explained, And Why They Work! appeared first on Modern Frugality.
Source: modernfrugality.com
An Alternative to Paying Mortgage Points
If and when you take out a mortgage, youâll be faced with an important choice. To pay or not pay mortgage points. In short, those who pay points should hypothetically secure a lower interest rate than those who do not pay points, all else being equal. Thatâs because mortgage points, at least the ones that [&hellip
The post An Alternative to Paying Mortgage Points first appeared on The Truth About Mortgage.
Source: thetruthaboutmortgage.com
Donât Freak Out About the Recent Mortgage Rate âSpikeâ
Queue the panic. Mortgage rates have officially spiked and the media is all over it. Yep, the average rate on a 30-year fixed mortgage increased from 2.65% to 2.79% this week, per Freddie Macâs weekly survey. Freddie Mac Chief Economist Sam Khater noted in the weekly news release that mortgage rates have been under pressure [&hellip
The post Donât Freak Out About the Recent Mortgage Rate âSpikeâ first appeared on The Truth About Mortgage.
Source: thetruthaboutmortgage.com
Money Market Vs Savings: What’s The Difference?
Money market accounts and savings accounts have a lot of similarities than you may think. Among other things, both allow you to achieve your saving goals risk-free or very low risk.
However, the choice between money market vs savings accounts often boils down to interest rates and fees. So, before you decide on which account to open, it’s important to compare many of their features.
Money Market vs Savings: Overview
Money market accounts and savings accounts have a lot in common.
Both types of accounts allow you to deposit a certain amount of money with a bank and you get some type of interest on your money in return.
Your money in a savings account and a money market account are FDIC insured. There are some key differences, though. Money market accounts offer a higher interest rate than savings accounts.
| CIT Bank Member FDIC | Savings Builder that fits your lifestyle. Earn up to 0.95%APY. Open an account today and start earning. Minimum monthly deposit of $100 OR minimum balance of $25k. LEARN MORE |
Most savings accounts require no minimum balance, while money market accounts usually require a high minimum balance–around $1,000.
Savings accounts are very liquid, meaning that you can easily transfer money between checking and savings accounts.
On the other hand, money market accounts, while also liquid, will penalize you if you fall below the minimum required deposit.
Money market accounts have check writing privileges, while savings account have none.
Click here to open a money market account today.
| *TOP CIT BANK PROMOTIONS* | ||
|---|---|---|
| PROMOTIONAL LINK | OFFER | REVIEW |
| CIT Bank Money Market | 1.00% APY | Review |
| CIT Bank Savings Builder | 0.95% APY | Review |
| CIT Bank CDs | 0.75% APY 1 Year CD Term | Review |
| CIT Bank No Penalty CD | 0.75% APY | Review |
Money Market vs Savings: Table
This table below compares some of the features found in savings and money market accounts.
| Money Market Accounts | Savings Accounts | |
|---|---|---|
| FDIC-insured | Yes–up to $250,000 | Yes–up to $250,000 |
| Checks | 6 check per month | No |
| Minimum balance | Yes –usually $1,000 | None |
| Transactions | 6 per month | 6 per month |
| Interest rate | Yes | Yes |
| Best Account | CIT Bank Money Market Account | CIT Savings Builder |
What Is A Money Market Account?
A money market account or MMA is a type of bank savings account, but with some additional and different features than a regular savings account.
The interest rate on money market accounts are better than that of savings accounts. Moreover, they offer check-writing privileges.
That means you can write checks to 3rd parties, typically up to 3 per month, against your balance. They even offer debit card privileges as well.
Lastly, the FDIC insures MMA up to $250,000, just like a savings account.
One thing to note is that you should not confused MMAs with money market funds.
While they are great place to park your money as they invest in short-term investments such as certificate of deposit, treasury bills, and other government securities, they are not the same thing.
Pros & Cons of Money Market Accounts
Pros
1) Interest rates
One of the reasons most people prefer an MMA is the fact they offer a much higher interest rate than savings accounts.
2) Check writing and debit card privileges
MMAs offer check writing and debit card privileges. But there is a limit. You can only write six checks per month against your balance.
So, MMAs are best for those who do not need to write more than six checks. Also, there is no penalty when withdrawing your money.
3) FDIC insured
The Federal Deposit Insurance Corporation (FDIC),an independent federal agency, insures money market accounts, just like savings accounts, up to $250,000.
Cons
1) Account minimums
MMAs generally require a deposit minimum amount to open the account and requires you to maintain a minimum balance to receive the best interest rate.
So MMAs are a good choice for those investors and savers who can maintain a high daily balance in the account.
2) Account fees
Another drawback of MMAs is the fee. If you don’t maintain the required minimum balance, a fee will apply.
So, maintaining the minimum balance is important because any fee will eat out your interest or earnings.
What is a savings account
A savings account is a deposit account that you can open at a bank or other financial institution. This account pays very little interest.
However, it is very safe and it is a good option to save your money.
Savings accounts are generally good for students or those with very little money and those who want easy access to their funds without penalty.
They are a good place to save money for short-term goals such as saving money to buy a house, or building an emergency fund.
You have unlimited money withdrawals. However, you can only make six withdrawal transactions.
Click here to open a savings account now.
Pros and Cons of Savings Accounts
Pros
1) FDIC insured
Savings accounts are FDIC insured-or NCUA insured (if offered by a credit union)
2) Liquidity
Savings accounts are very liquid. That means you get quick access to your funds at any time without any penalty.
3) Minimum balance
Unlike money market accounts, savings accounts typically have no initial deposit or minimum balance requirement.
However, a high-yield savings account may require a minimum balance. And a maintenance fee or a penalty may apply if your balance falls below the required minimum.
Cons
1) Interest
A regular savings account pays interest just like a money market account, though the interest paid by a savings account is very, very low.
Money Market vs Savings: which one should you choose?
Best Money Market Accounts
CIT Bank Money Market Account
The CIT Bank money market account is one of the best ones out there. Currently, the money market account offers a 1.0% APY.
This is very competitive comparing to other MMAs. Moreover, CIT Bank’s MMA has a required account minimum of only $100.
Open a CIT Bank Money Market Account.
Best Savings Accounts
CIT bank Savings Builder
The CIT Bank Savings Builder is among the best savings accounts where you can a very competitive interest rate.
In fact, you can earn a better rate with CIT bank Savings Builder than most money market accounts. The Savings Builder is currently offering a 0.95% APY.
To get this competitive rate, you can 1) open the account with a minimum of $100 and deposit at least $100 per month afterwards.
Or, (2) open an account with a minimum of $25,000.
Open a CIT Bank Savings Builder today.
What should you use a money market account and savings account for?
Both MMAs and savings accounts are great places to park you hard earned cash safely. Indeed, they are great places for short term goals like:
Emergency fund: If you’re saving money for a rainy day such as a loss of job, paying medical bills, major car repairs, an MMA or savings account is a good place to do it. The reason is because the money is safe there and you have quick and easy access to it. According to experts, you should have at least 3 to 6 months of living expenses in that fund.
Down payment: Savings accounts and money market accounts are great places for a down payment on a house.
Other popular reasons for saving money in a savings accounts and MMAs are for large purchases such as a car or vacation.
Money Market vs Savings: the bottom line
Deciding on a money market account and a savings account depends largely on what is important to you. For example, are you looking for a better interest rate? If so, an MMA is a better choice.
However, if one of your concern about whether you choose an MMA or a savings account is liquidity, then a savings accounts may be appropriate.
Another factor to consider is how frequently you will need to access your funds. Both accounts however are safe. They are both insured by the federal government up to $250,000.
One thing to keep in mind, however, these accounts generally offer interest rates that are inferior to other investments such as mutual funds or stocks are offering.
For that reason, use these accounts for short-term solutions.
Related:
- CIT Bank Savings: How Much Can You Earn
- 7 Short Term Bonds to Buy in 2020
Speak with the Right Financial Advisor
- If you have questions about your finances, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
- Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
| *TOP CIT BANK PROMOTIONS* | ||
|---|---|---|
| PROMOTIONAL LINK | OFFER | REVIEW |
| CIT Bank Money Market | 1.00% APY | Review |
| CIT Bank Savings Builder | 0.95% APY | Review |
| CIT Bank CDs | 0.75% APY 1 Year CD Term | Review |
| CIT Bank No Penalty CD | 0.75% APY | Review |
The post Money Market Vs Savings: What’s The Difference? appeared first on GrowthRapidly.
Source: growthrapidly.com
5 Best Short Term Investments to Grow Your Money
Short term investments are those investments that can yield their returns within a short period of time — usually within 1 to 3 years. (contrary to a long term investment such as saving for retirement).
In other words, short term investing are typically used to meet short-term financial goals (such as buying a house or go on a vacation).
A bank checking account is one of the best known and popular ways to save for such a goal.
But your traditional checking account only pays a meager return, if at all.
If you can’t find an alternative to a checking account, no need to fret.
There are plenty of short term investments that will help keep your money safe and earn a good return at the same time.
Below, we’ve curated the best short term investments to help reach your investment goals.
| Get Matched With 3 Fiduciary Financial Advisors |
|---|
| Answer a quick question to start your matching process with advisors in your area. |
| When would you like to retire? |
| Select an answer |
Things to consider:
First thing first, before you make any short term investments, you should know about the risk, return and investing time frame of short term investments.
- Average return to expect: 1 to 4% per year;
- Risk: very low to low risk of losing money;
- Time frame: 0 to 3 years
Best short term investments:
If you’re saving and investing money for the short term, i.e., to use it as a down payment on a house, you will not invest that money in stocks or mutual funds, right?
That’s because, stocks are high risk investments. And if you need the money for a certain time, it might not be available due stock market volatility.
Instead, a smart choice is to save that money in a low-risk investment where you can protect the capital invested and earn interest/income at the same time.
If you have a different investing goal, such as saving for retirement, it’s best to look at stocks or mutual funds. Investing in stocks or mutual funds is considered a long term investment as opposed to short term investing.
If you’re interested in investing for the long term, here’s how the stock market works.
So, what are your options? Here are some of the best short term investments to consider to earn some interest on your money.
1. Savings account.
A savings account at a bank is an excellent choice. And they usually pay more interest than a regular checking.
They are quite safe. Savings account are insured by the FDIC, but only for up to $250,000.
That means if a bank goes bankrupt, the government will step up and give you your money back.
In addition, they are very liquid. You have access to your money fairly easy.
CIT Savings Builder – Earn 0.85% APY. Here’s how it works: Make at least a $100 minimum deposit every month. Or Maintain a minimum balance of $25k. Member FDIC. Click Here to Learn More.
2. Certificate of deposit (CDs).
If you want a good rate of return on money that you don’t plan on using within the next couple of years, CDs is a safe place to do invest it.
Banks sell certificate of deposit for a specific dollar amount and length of time. As an investor, you agree to leave a certain amount of money with the bank for a specific time.
When the time is up, the CD matures. Then, you get your money back, plus interest.
CDs are also FDIC insured for up to $250,000. They provide a safe and competitive yield. That makes them some of the best short term investments to consider.
The minimum deposit requires to open a CD depends on the bank. But it usually ranges from a few hundred dollars to thousands.
The CIT Bank is paying 1.30% for an 11-month CD. There is an opening minimum of $1,000. With most CDs, if you tap into your money before maturation, you will get hit with an early withdrawal penalty.
However, with this CIT Bank CD, there is no penalty if you withdraw early.
CIT Bank has various types of CDs. If you prefer longer terms CDs, check them out now at the CIT Bank website.
3. Money market fund
While you can keep your cash at a bank in a savings account because they’re safe there, you don’t have to.
You can try a money market fund. They are safe as well.
A money market fund is a type of mutual fund (but thy don’t focus on stocks or bonds).
Mutual funds companies such as Vanguard offer money market funds.
Money market fund is not insured by the government, so there is a possibility you can lose money. However, they are quite safe.
They’re safe, because they have a dollar invested in securities for every dollar you deposit in your fund.
The principal money you invested does not change in value. When you invest in a money market fund, you earn dividends. That’s a good advantage.
Another advantage of a money market fund as a short term investment is that it provides higher yield than bank savings account.
It also allows you to write checks without incurring any charges.
So, if you’re saving money for a home that you’re going to buy soon, a money market fund is a safe place to grow your money.
4. Short-term corporate bond funds.
Bonds, in general, are similar to CDs. An exception is that they, just as stocks, are securities that trade in the market.
So, they may fluctuate in value, but not as much as stocks.
Bond funds are a collection of bonds from companies (large, medium, or small) from different industries. Hence, the name “corporate bond funds.”
Investing in bond funds can be used as a short-term investment. Sometimes, investors consider corporate bond funds to diversify their investment portfolio.
Just like a money market fund, corporate bond funds are not FDIC insured. But they are just as safe as a money market fund.
Plus, you don’t just invest in one bond or two bonds. If one bond in your investment fund takes a hit, it only affects a small amount of your money.
So while they are riskier than money market funds saving accounts, CDs, short term corporate bonds pay you more. That makes them one of the best short-term investments out there.
5. Treasury bonds.
One of the best ways to invest money in the short term is to buy treasury bonds. Treasury bonds are issued by the U.S. government.
There are three types: treasury bills, treasury notes, and treasury bonds. They are like CDs. Once the bond matures, you get the full money invested, plus interest.
Treasury bonds may provide the same or a better interest rate than CDs. But a big advantage is that, while they’re not FDIC insured, they are backed by the U.S. government.
In other words, the government promises to repay your money, which is considered to be very safe.
So if you have more than $250,000, you should consider a treasury bond.
Another advantage is that while interest on a CD is fully taxable, Treasury’s interest is state-tax-free.
In conclusion, short term investments are those in which you make for a certain and short period of time for a specific goal.
Short term investments aren’t the best if you’re seeking high returns.
But if you’re a beginner investor you should consider placing some of your money into these best short term investments.
Remember: don’t invest your money in stocks when you plan to use it within the next five years, because a stock market drop can dry out your investment portfolio.
Read more:
- The Best Ways to Invest $1000 For Good Return
- How to Invest With Little Money (Even With $5)
- How to Invest 100k to Build Real Wealth
Speak with the Right Financial Advisor
If you have questions beyond short-term investments, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
| *TOP CIT BANK PROMOTIONS* | ||
|---|---|---|
| PROMOTIONAL LINK | OFFER | REVIEW |
| CIT Bank Money Market | 1.00% APY | Review |
| CIT Bank Savings Builder | 0.95% APY | Review |
| CIT Bank CDs | 0.75% APY 1 Year CD Term | Review |
| CIT Bank No Penalty CD | 0.75% APY | Review |
The post 5 Best Short Term Investments to Grow Your Money appeared first on GrowthRapidly.
Source: growthrapidly.com
3 Tips for Finding an Affordable Life Insurance Policy
Life insurance offers protection for your familyâs financial security. Many people buy themselves a life insurance policy that will protect their family. Itâs also possible for people to purchase life insurance policies for someone else. For example, children can purchase policies for their parents and vice versa.
Life insurance coverage offers valuable financial protection. You need to find a policy that meets your coverage needs and fits your budget. Here are three tips that will help you find the right fit:
Understand Policy Options
Premium rates vary based on the kind of policy you choose. There are two broad categories of life insuranceâtemporary and permanent.
Temporary life insurance, or term life insurance, offers a death benefit payout if the insured passes away during the timeframe the policy covers.
Policyholders can choose the length of the term and the death benefit amount. Some companies offer additional coverage options, called rides, that can be attached. These range from accelerated death benefit riders to return of premium riders. These additional riders add more value to the policy, which also affects the rates.
Permanent life insurance has its own two categoriesâwhole life and universal life. Both kinds of permanent life insurance accrue cash value over time. The cash value can be used to purchase paid-up additions, pay premiums or be borrowed against.
Like term life insurance policies, policyholders can choose to add additional coverage with riders. Riders vary by company and affect the monthly premium.
Whole life policies typically have the highest premiums because the coverage is permanent, and thereâs generally a guaranteed cash value growth rate. Most whole life policies come with high death benefit amounts. Policyholders can choose the amount when they sign up for the policy.
However, for those who need less coverage or only enough to cover funeral expenses, final expense insurance policies are a great option. Final expense insurance is designed for seniors. Itâs a type of whole life insurance, but the death benefit amounts are much lower. Because the death benefit is only enough to cover funeral expenses, premiums tend to be lower.
There are a few kinds of universal life insurance policies. The biggest difference with these policies is how the funds are invested. The cash value of variable universal policies is invested in multiple accounts, including stocks and bonds. The cash value of indexed universal policies is invested in indexes, which are diversified investments.
Because there is no guarantee of how the cash value will grow in the investments, universal life insurance premium rates tend to be lower than whole life insurance premium rates.
Work with an independent agent
While the various types of life insurance are common among life insurance companies, not all companies carry every kind. Itâs a good idea to know what kind of life insurance policy you want before starting to work with companies.
If youâre not sure what kind of life policy you want, work with a life insurance agentto ensure that you find an affordable policy that meets your coverage needs. A licensed agent can help you through the entire process of selecting and applying for a policy.
Working with a licensed independent agent also has other advantages. The specific terms, riders and premium rates can vary by company. Independent agents sell policies from multiple companies, so they can help you compare similar policies across companies.
An independent agent can help you understand the underwriting process and find a policy that is a good fit for your situation. In addition to comparing coverage and terms across companies, an independent agent can help you compare premium rates.
Working with an independent agent makes the research process easier for you because you donât have to reach out directly to companies. Instead, you can work with one person to find the best company and rate for you.
Use quote websites wisely
While some people like working with an agent, others may prefer to do independent research. Quote websites come in handy because they make it easy to quickly view your options.
There are many life insurance quote websites to choose from. So, how do you know if youâre working with a good company?
First, itâs important to understand what kind of quote website youâre using. Some websites, like Geico and Progressive, show quotes from multiple life insurance companies. These quotes allow visitors to compare their policy options across companies. However, these companies just show quotes and connect their visitors to companies.
Others, like Bestow, Haven Life and Ladder, only show quotes for the policies they offer. These companies help their clients through the application process, which is another benefit of working with them.
Others, like Quotacy, show quotes from multiple life insurers and help their clients through the application and underwriting process. Quotacy agents even assist their clients in making updates to their policy after they purchase a policy.
Second, itâs important to know what kinds of policies the website shows. Many online tools focus solely on term life insurance. While this is a shared characteristic across many quote websites, each one has its unique features.
For example, Ladder stands out because its policies allow policyholders to adjust coverage during the term as their needs change.
In contrast, other quote websites show quotes for different kinds of permanent life insurance. This is true of many sites that only offer quotes, like Geico and Progressive. Websites that offer more comprehensive services, like Quotacy and Policygenius, also offer quotes for permanent life insurance policies.
Finding affordable life insurance
Life insurance offers valuable financial protection for your family. It can pay off remaining debt, cover funeral expenses and even replace income.
While the protection offered is highly valuable, itâs important to find a plan that fits into your monthly budget. The first step is determining what your needs are and which kind of life policy best meets those needs. From there you can work with an independent life insurance agent and do your research into policies and premium rates offered by different life insurance companies.
Alice Stevens loves learning languages and traveling. She currently manages debt and tax relief, life and health insurance, and car warranty content for BestCompany.com.
The post 3 Tips for Finding an Affordable Life Insurance Policy appeared first on Credit.com.
Source: credit.com