Christian Finance Blog

I just saw a post on FatWallet that talks about the Provident Direct online high yield savings account that’s currently paying 4.50% (edit: now only 3.75%)! It seems like a good deal especially given today’s market conditions. However, the Fed is expected to drop rates again tomorrow so who knows how long this rate is going to stay competitive. Currently, it’s the highest that I know of. It’s also FDIC insured at Provident Bank which has been around since 1886. The online portion has been around since November 2007.

It says that there are no minimum balance requirements and no monthly fees. You only need a dollar to open. The major downside is that withdrawals are limited to $5000 per transaction but you can do multiple transactions per day. However, savings accounts are government regulated and cannot exceed more than 6 transfers out in a month. Any withdrawals after that will be charged a $5 fee. You can bypass the $5000 limit by “pulling” from another account rather than “pushing” from the Provident account. Apparently there’s also a $25 fee for closing the account within 180 days and a$5 monthly fee if the balance dips below $300.

I’ll have a full review when I open an account in a little bit. I’m going to wait and see what happens to the rate first. It would be a great place to park my emergency fund which is currently only earning 3.85% at FNBO Direct.

In other news, there’s a new concept in the online savings space that I stumbled onto today. It’s called SmartyPig and it basically combines an online savings account with social networking. The basic premise is that you need to set goals that are funded by monthly deposits into SmartyPig. The goal is active until it is reached. The social aspect comes in when you make your goal public. People can help fund your goal by using a credit or debit card (with a $4.95 processing fee). Once goals are met, you can “withdraw” the money via MasterCard debit card or a gift card from participating retailers. At this time, there is no way to receive that money via ACH transfer in cash. This is apparently done so that it’s harder to use the money since the purpose is to save it.

Deposits are FDIC insured and held at West Bank, which has $1.3 billion in assets. Deposits also earn a very competitive 4.30%, albeit with some limitations. I think it’s a good idea, but I definitely wouldn’t use it to hold my emergency fund because it’s not liquid enough. However, I don’t think it was intended for that purpose either. I think there’s a market for this and if it helps people to set savings goals and encourages them through the social aspect, it could be a winner. I’m holding off on it for now, but maybe I’ll revisit it later. Maybe I can set up a public goal to get out of debt and you guys can contribute!

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The Fed recently cut the federal funds rate (the rate that affects consumer loans such as home equity lines of credit, auto loans, and credit cards) by a half percent after cutting it by three-quarters of a percent on January 22 in an emergency meeting. The federal funds rates now stands at 3% which is the lowest it has been in two years. The discount rate (the rate at which banks borrow from the Fed) was also cut half a percent to 3.5%.

What does this mean to you and me? The rate cuts means lower rates for borrowers but also lower rates for savers. Average 30 year mortgage rates now stand at 5.49% which is also the lowest in two years. If you’re looking to buy a home, it seems like now’s the time to buy with home prices considerably lower than even a couple years ago in some markets. It may also be time to refinance your existing home mortgage if you can save at least one percentage point or more.

You should also see lower rates for your variable credit cards. If you don’t, give your credit card company a quick call and ask them to lower the rate. If they don’t, ask for the retention department and threaten closing your account and transferring balances elsewhere. The retention department has the power to lower the rate for you. Of course, this doesn’t affect you if you pay off your credit balances off each month.

But these rate cuts also mean lower rates for your emergency cash savings in CDs and savings accounts. ING Direct now stands at 3.40% and Electric Orange is at 2.25% for balances up to $49,999 (if you want a free $25 for opening an account, let me know). FNBO Direct (which is where most of my emergency fund now sits) is at a still-great rate of 4.30%. WaMu’s online savings account now stands at 4.25%. HSBC Direct stands at 3.80%. You can check out Bankrate.com for the latest rates. But your emergency fund is not designed to make you money; it’s just there for an emergency and it’s nice to earn a little interest on it. But if you already have your 6 to 9 month emergency fund in place, it may be time to look at longer-term investments in the stock market. I absolutely love Roth IRAs and an index fund within a Roth IRA is perfect for most people! If you have a 401K offered by your employer, it may be time to increase your contributions.

One last thing to remember. Just because the rates are lower doesn’t mean you have to borrow. Remember that the goal is to save more and not spend or borrow more. But at the same time, there may be some opportunities to save some money. God Bless!

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If you’re looking for a new checking account or need to have an additional one, here’s some more incentive. Now through February 29, 2008, if you open a checking account with Bank of America, they will deposit $100 within 90 days of opening the account. The best way to do it is to open it online as then MyAccess Checking is absolutely free with no monthly maintenance fees, no minimum balance requirements, and no direct deposit requirements! That’s what I like! You must open with at least $100 to be eligible for the bonus. That’s a 100% return almost instantly.

This is not eligible for existing customers or for student checking. If you open at a local branch, use offer code AOU2612. It comes with free online banking with bill pay, Bank of America Visa debit/check card with Keep the Change program and unlimited check writing. So if you need a new checking account or even if you don’t, it’s an easy way to get a free hundred dollars! Be aware that they will 1099 you as interest income.

Just think of it as an early Christmas present from me to you! Merry Christmas and remember the reason for the season!

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Since ING Direct purchased and acquired ShareBuilder on November 19, 2007 for $220 million, everyone was wondering what changes would come about. Well, there’s good news! Not only did they change the color scheme, but the price for real-time trades has gone down to $9.95 per trade rather than the old $15.95. That’s a 35% discount! This price brings ShareBuilder in line with other discount online brokers, but it still does not beat free stock trades with Zecco. Contact me if you want to open a Zecco account for a FREE $25 bonus!

ING Direct is the country’s largest direct bank with assets of $77 billion with about six million customers. I contacted media relations for ING regarding the changes that would come about due to the acquisition but they have not gotten back to me yet. I’m interested to see if there will be more changes since I am a customer for both ShareBuilder and ING Direct. It would be great if there were instant transfers from ING accounts to/from ShareBuilder just like the transfers between Electric Orange (checking) and Orange Savings.

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ING Direct recently dropped their Orange Savings rate from 4.30% to 4.20% due to the recent Fed rate cut. You can still get their $25 for opening an account. If you’re interested, send me an email!

WaMu’s online savings account also dropped recently from 5.00% to 4.75%. It’s still a great rate from a reputable bank with the advantage of having local branches.

As of this post, FNBO is still at 5.05% and HSBC’s at 4.50%.

Here’s another $50 bank bonus! This time it’s from the well established Wells Fargo bank with nationwide branches. All you have to open a free checking account with a minimum of $100 and you’ll receive $50 within 30-45 days of opening the account. That’s an easy 50% return on your money for FREE! Free checking has no monthly service fees and no minimum balance requirements. Be aware that they do a hard credit check.

Here’s the fine print straight from the page:

Offer subject to qualification. Limit one $50 bonus per household. To qualify for your $50 bonus, you must open and fund a new personal Wells Fargo checking account with a minimum initial deposit of $100 (not including the $50 bonus) by November 30, 2007. The $50 bonus is available with all Wells Fargo checking accounts, including non interest-earning checking accounts, except for Wells Fargo College Checking®, Wells Fargo Teen CheckingSM and Wells Fargo Opportunity Checking® accounts. The $50 bonus will be deposited to your new Wells Fargo checking account within 30 to 45 days of opening. The bonus is reported as interest on your Wells Fargo checking account for IRS tax reporting purposes. Offer may not be combined with any other offer.

Just wanted to let you know that I just received my free $100 from the Citi offer I talked about a couple months ago. I only deposited $1 and I got $100 in return! Easy money! The Citi offer is now expired but there are others offers available like the Wachovia $50 bonus and an ING Direct $25 bonus for opening a new account with at least $250. If you’re interested, shoot me an email!

Also, if you’re interested in earning 9.40% (or more) lending money to other people in the US through Prosper, sign up through this link and you’ll get $25 just for signing up!

If you have a local Wachovia Bank (Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kansas, Maryland, Mississippi, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington, D.C.) you might be interested in opening a free checking account with them for a free $50 bonus!

All you have to open a free checking account (no minimum balance requirements, no monthly service fees, and no direct deposit requirements) with $100 and you’ll receive a free $50 bonus within 120 days of opening the account. That’s an easy 50% return on your money and you’ll also get a bank that’s been ranked #1 in customer satisfaction for 6 years straight! You have to open the account by 1/31/2008.

I’m thinking about opening an account because there’s a local branch nearby. However, I probably won’t be using it as my primary bank because their ATM network is not as extensive as WaMu’s.

Here’s the fine print from the site:

To qualify for the $50.00 bonus, you must be a new customer and open your new Checking account between 9/19/2007 and 1/31/2008 with a minimum of $100.00 in new funds to Wachovia.

The account must be in good standing in order to remain eligible for the bonus. Your bonus will be directly deposited into your new Checking account within 120 days of account opening. Limit one bonus offer per household. If you need to contact us regarding this offer, please reference pricing code “ATM2″.

The value of this bonus will be reported to the IRS, state or local tax authorities if required by applicable law, and the recipient is responsible for any federal, state or local taxes on this bonus item. Not valid with any other offers. Accounts subject to approval.

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I just saw this at FatWallet. It’s a $50 bonus for opening an Orange Savings account with ING Direct with a $250 minimum. Normally they only pay out $25 so this is a great deal and an easy 20% instant return on your money. Just go to the special New York Times ING Direct page and enter the code NY3. But hurry up because this expires 9/30/2007.

The interest rate right now is about 4.3% which is still better than most banks! And apparently the $50 bonus posts right away! You don’t even have to wait for it! Also there is no credit check or hard pull when opening this account.

**This is no longer valid but you can still get the regular $25 bonus with a deposit of $250. That’s an instant 10% return! All you have to do is contact me!

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Since the Fed lowered the discount rate (the rate at which it lends money to banks), many online savings accounts have followed and have lowered their rates. FNBO Direct was offering a 6% promotion but is now offering a still-respectable 5.05%. Here is an interest rate round-up from around the web:

ING Direct: 4.5% to 4.3%

ING Electric Orange: 4% to 3.5%

HSBC Direct: 5.05% to 4.5%

FNBO Direct: 6% to 5.05%

Emigrant Direct: 5.05% to 4.75%.

Bankrate has some more interest rates from online savings accounts and more. Check it out.

Expect other banks to follow. Also as of right now, Washington Mutual’s online savings is still at 5%. So your emergency funds will be earning a little less interest but loans should be cheaper. Money market accounts may seem like a better alternative if you want higher rates but some aren’t FDIC-insured. I’m still not quite sure what I going to do with my emergency fund right now. I may keep it at FNBO but I’ll keep my options open. I’m going to wait a little bit while all the banks catch up and lower rates and then see who has the best rate.

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