BankShout

Consider An Internet Only Bank

Kevin — Tue, 08 Feb 2011 20:57:10 +0000

About fifteen years ago, I moved back home from college and opened up an account at a local bank. It was a pain in the neck. I hated standing in line, I hated their hours, and I didn’t like all of their fees. At the time, I was one of the early adopters on the Internet, and I signed up for an account at an FDIC approved online bank. At first, I treated it just like a local bank account, writing checks to pay my bills. When I received a check, I used a postage paid deposit envelope to mail it in. When I needed cash, I just used an ATM. What I really loved was the great rates and lack of fees.

Later, the bank was purchased by a large multinational bank, and they added all of their traditional fees. I jumped ship and landed at another Internet only bank, where I have been ever since. They offer great rates, little or no fees, and excellent telephone customer service 24 hours a day. They even offer me a fee rebate on my debit card.

Even though you can now bank online with any company, the rationale for Internet only banks is still clear. Not having branches all over town saves money and allows them to offer low rates and fees. Not having to handle any cash must be a huge money saver as well.

What To Look For In An Internet Only Bank

The bank should have virtually no fees. You should not pay any ATM fees, and in fact, they should refund fees that other banks charge you for using their ATMs. My bank refunds up to $6 a month in other bank’s ATM fees, which I have found to be more than sufficient. Your bank should also be able to accept deposits via ATM through a common banking network that is available in your area. In addition, they should give you unlimited, postage paid deposit envelopes for mailing in checks.

The bank should also offer quality, telephone customer service. Feel free to call up the customer service line some time and see how long their hold times appear to be, and how knowledgeable their agents are. If necessary, just call them up and quiz them on the terms that you read off their website. If they don’t even know their own policies down cold, you might consider another bank.

Another thing that I look out for is the ability to set up autopay with an online bank. For example, I carry a cash back credit card which I pay in full every month. I earn great rebates. But the reason is because I always pay off my bills and avoid finance charges. I like things to be automated. So this is a very important feature for me. There is no point having a rewards credit card and then losing your points because of accidental late payments.

Finally, do your research online. There are many sites like this and others where people go to extol the virtues and decry the failures of their bank. The 21st century is now old hat, and we no longer expect to hold a newspaper, pay long domestic distance phone rates, or purchase music at a store; now may be the right time to stop dealing with a banks that invests it’s money in branch offices.

Earn 5% Cash Back with Perkstreet Financial

Sandra — Tue, 01 Feb 2011 22:55:30 +0000

If you’re like me, every penny counts. That’s why I wanted to let you know that from now until April 30th 2011, you can save 5% on your tax preparation bill if you use your PerkStreet debit card. You heard it right. From now until April 30th, you can actually pay 5% less everybody else you know, just by paying for your services with your PerkStreet card.

The following tax preparation services are eligible for the discount:

H&R Block
Jackson Hewitt
Liberty Tax Service

And, for the do-it-yourselfers out there, you can also save using TurboTax.com.

So, for those of you who already have a PerkStreet checking account and debit card, begin reaping your savings today by using your card at any of the merchants listed above. For those of you who are wondering just who PerkStreet is and how you can get in on such a great deal, I did a little research for you. Check out what I found below.

PerkStreet Financial Review

PerkStreet Financial is an online bank that offers its customers traditional deposit accounts, though for a lot less than their more traditional brick and mortar competitors. Basic PerkStreet accounts require a low $25 initial deposit, though there aren’t any minimum deposit requirements. The checks are free, no account maintenance fees, no bill pay or online banking fees, few ATM fees, and free “cash back rewards” debit card. In essence, this is one of the truly free checking accounts out there.

PerkStreet Debit Card Perks

In addition to all of the really neat features offered by PerkStreet, their cash back rewards debit card is truly unique. PerkStreet offers its accountholders the opportunity to earn cash rewards on just about every purchase based on your account balance and who you shop with. For example, PerkStreet accountholders with under $5000 in their checking account earn 1% cash back on all signature based debit card purchases. Bumping your minimum balance to over $5,000 nets you 2% and shopping with specific retailers nets you a cool 5% cash back.

There is no need for you to sign up for this perk, retailers (and their associated rewards tier) are announced periodically, and there is no limit to the rewards you can receive by using this program, so what have you got to lose? I do think that it is important to mention that the cash back rewards don’t actually come as a deposit into your account like you might have hoped. It comes to you by way of Visa or other retailer gift cards (like Starbucks and iTunes), which spend just like cash.

So, if you are looking for a great place to do your banking, take a look at PerkStreet Financial.

How To Refinance a Mortgage Online

Sandra — Tue, 01 Feb 2011 22:31:56 +0000

In today’s economic environment there are few things to get excited about. But, if you are looking to refinance your mortgage, there has never been a better time to do so, at least in terms of interest rates. Thanks to the sluggish economic recovery, interest rates are lower than they have ever been, making now the time to refinance your home. So, if you are ready to drop your mortgage interest rate a few points, fire up your computer and let’s get started.

Understand Your Current Situation

The first and probably most important step in attempting to refinance your mortgage is to truly understand your current financial situation. Along with your ability to prove a stable income and having the cash to pay closing costs and a down payment where necessary, you will need good credit. If you have a credit score of less than 640 you will have problems finding a lender willing to work with you to get your home refinanced. That’s not to say that it’s impossible, yet it will be difficult. Get a copy of your credit report from all three credit bureaus, review them and dispute any and all inaccuracies. If your credit score is still struggling thanks to some late or missed payments, postpone your refinancing until you improve your score. You can improve your score by making all of your payments on time every month as well as paying off accounts and reducing your liabilities.

The second step in getting your mortgage refinanced is to understand how much you qualify to borrow. In many areas of the country, many people owe more on their original mortgage than their houses are currently worth. If this is the case for you, you will need to be prepared to pay the difference between the value of your home and the upper loan limits for the lender you choose in cash. The easiest and most efficient way to figure this out is to utilize the mortgage calculators that are available online. These calculators will help you get an idea of what your home is worth, what an average lender is willing to lend on your home and whether or not you will have the cash to help bridge the gap.

Get Organized

Gather up all of your existing loan documentation as you will need it in order to compare your existing mortgage to the new ones. You will need to know what your current interest rate is, how much equity you have in your home, how much longer you have to pay on your existing loan as well as whether or not you have a prepayment penalty. Each of these factors will weigh into your decision about what loan product, if any, are right for your refinancing needs.

Now that you have your affairs in order, it’s time to start scouring the Internet for potential lenders. When it comes to making your short list, it’s best to stick with well-known and well established companies. This saves you from winding up providing your confidential information to identity thieves or other Internet scam companies.

Pre-Qualify

Next, you should complete the online pre-qualification processing with the companies you have listed from the prior step. The reason is because you want to make sure that you will qualify for a loan with the companies you are applying with. This step prevents you from having your credit report pulled by companies who won’t be able to help you and preserves your credit score for those who can. Plus, it doesn’t hurt that this process does not require you to much more than complete a relatively simple online form instead of submitting to a lengthy application process.

Make An Informed Decision

After you have completed the online pre-qualification process, most reputable online mortgage lenders will send you a list of mortgage products you qualify for and their associated interest rates. This is where being meticulous really counts. In order to make sure that you are choosing the right product, you have to not only compare interest rates and fees between the loan products being offered, but you also have to measure these against your existing loan. In order to be worth the time, effort and expense necessary to obtain a new mortgage, the interest rate, closing costs, PMI, and down payment should be significantly less expensive over the long run than your current interest rate.

Lastly, pick your lender and your loan and complete the online application. The main point to remember with any mortgage, but even more so with online mortgage lenders, is to get everything in writing. This allows you to remove any confusion later on in the process.

What Are The Benefits of an IRA Contribution?

Gretchen — Fri, 28 Jan 2011 13:00:11 +0000

Q: Most of my friends have some of their paycheck deposit into an IRA, but I haven’t started doing this. What are the benefits?

A: Did you contribute to your IRA this year? Have you thought about it, but haven’t gotten around to it? Do you hear the term IRA thrown around and wonder why you should bother?

There are two types of IRAs: traditional and Roth. Traditional IRA contributions are tax-deductible, meaning that you do not have to include the value of the IRA contribution in your taxable income for the year. In return, you agree to leave the money in the account until you are at least 55 years old, and pay tax as you withdraw it. If your retirement income is taxed at a lower rate than your current income, this means that you will pay less tax overall on both the contributions and on any earnings in the account.

Roth contributions don’t provide any tax benefit now — there’s no deduction in you income when you place funds into a Roth IRA. However, leave the money alone until you’re 55 and you can withdraw it — and any earnings — tax free. This means that if you start saving in a Roth while you’re young, allowing the money to grow over time, you can have thousands of dollars worth of retirement income that will never be taxable.

Both IRA types can be big benefits for savers, and many people choose to fund both types of accounts to diversify their current and future tax obligations. Note, though, that the benefits of IRAs are reduced or even eliminated as your income grows. Review IRS Publication 590 for all the IRA rules, and remember: you have until April 15 of this year to make a contribution for 2010.

How Do I Complete an Annual Investment Review?

Gretchen — Fri, 28 Jan 2011 13:00:06 +0000

Q: This is the first year I’ve actually invested and I want to complete an investment review. How can I do this?

A: By this time in January, your mailbox should be filling up with annual statements for your 401(k), IRA and bank accounts, which means it’s the perfect time to perform a simple investment review. It can be difficult to know how to do a review: what should you look at? How do you know when to take action?

With any investment review, begin with each investment’s return on investment (ROI) or annual percentage yield (APY) numbers. Trouble is easy to spot as a negative number — make a note of any investments that have lost money during the year for further investigation.

Other issues may require more research. Many investment account statements will provide a “benchmark” — the performance numbers of similar assets for purposes of comparison. Company annual reports will show the stock’s performance in previous years, the company’s own projections for growth and other companies in the industry. Mutual funds will typically use an “index” — a group of companies that is similar in nature to those owned by the fund.

Use the benchmarks to determine whether your investments are growing or providing income at the same rate as their peers. If you feel that performance is unsatisfactory, read through the annual reports for an explanation. Depending on how long and how badly the investment is performing, you can place it on a watch list or decide to sell it right away.

Next, review all your investments as a whole in comparison to your long term goals and overall investment strategy. If you are getting older, you may want to move a larger portion of your portfolio into less risky investments, or switch from growth to income producing options. You may have cash that should be earning interest or dividends rather than sitting in your checking account.

Finally, make sure to rebalance. Growth rates differ, and that perfect 60% stock, 40% bond portfolio may have evolved into 80-20 or 50-50. Buy and sell as needed to return your portfolio to the desired mix.

How To Save Money With Online Banking

Kevin — Fri, 28 Jan 2011 13:00:02 +0000

We live very busy lives today and so for those of us who take advantage of it, online banking can be one of the great time-savers in our daily routine. Nearly every bank now offers online banking, some with more functionality than others. If you’re not taking advantage of it, you’re definitely losing both time and money.

The two greatest boons you’ll see from the best online banking are time savings and, in many cases, higher interest rates. Let’s look at these two money savers.

Time Savings

You will obviously save a lot of time when you use online banking since it means you don’t have to make the trip to your local bank branch or schedule your day in order to work in that trip. You may also save money since you can do balance transfers, deposit monitoring, and other things without an ATM using just your Internet connection.

You’ll also save time waiting on the phone for a representative to talk to just to make a balance inquiry or a transfer request. In fact, since most online banking also includes mobile banking, you can do a lot of your banking on the go from your mobile phone as well.

All of this means you’re saving time. Time is not just money, but it’s the one commodity that all of us have a limited supply of. There are only 24 hours in a day and 7 days in a week. Wouldn’t you rather spend the time wasted visiting your local bank branch just to check on accounts or open a new CD with your family?

Money Savings and Higher Interest

Saving time is one thing, but if it doesn’t save you money, you’re only halfway ahead. You can save money with online banking in several ways. The best internet banking allows you to transfer money (make payments) on in-bank accounts, such as moving money from checking to your credit card balance to make a payment.

It also allows you to use Bill Pay features to pay many of your bills, such as household utilities, without writing a check ñ just virtually draft a payment and send it electronically through your secure online banking portal. You can set these payments up to be automated, so you don’t have to do it yourself anymore too. That saves time, saves money in avoided late fees, and gives you peace of mind knowing your bills are covered.

Many banks offer Internet specials on accounts and higher interest rates that are only available to those who open those accounts online. Many so-called “Virtual Banks” have appeared as well. These are banks that exist only online without any branches (and their related overhead) or that have branches only in a small geographic area, but have opened themselves up nationally via the Internet.

In nearly all cases, these online banks, whether brick-and-mortar or virtual, usually offer higher interest rates to customers on the Web versus their face-to-face consumers. This is because online accounts have lower overhead: no teller to pay, no storefront to keep open, and often no paper to be mailed.

All in all, you can save time, money, and even gain higher interest by using online banking. There’s nothing to lose!

How to Apply for a Mortgage Online

Sandra — Thu, 27 Jan 2011 13:00:56 +0000

Over the past decade, the Internet has revolutionized the way we conduct business. More and more people are using the Internet to pay bills, to shop, and now to apply for mortgages. In today’s world, consumers in the market to buy a new home can find homes, take virtual tours, apply for and close mortgage loans without ever leaving the comfort of their own homes. But, while all of this convenience is great, applying for a mortgage loan online can be a bit tricky. Here are a few tips that will help you navigate through the online mortgage application process.

Get Your Credit Report

The first and probably most important step in applying for an online mortgage is to understand your current financial situation. When it comes to getting a mortgage, the most important aspect of your finances is your credit report. Your credit report contains a detailed history of all the accounts you’ve maintained in the past and chronicles your payment history. It is important to know that many credit reports contain inaccuracies and correcting them is vital to the success of your mortgage application endeavor. You are entitled to one free credit report from each of the three major credit reporting agencies (Equifax, Experian, and Trans Union). To get this report, simply request one online at each of the agencies’ websites.

Using Mortgage Calculators

The second step in applying for an online mortgage is to understand how much you qualify to borrow. The easiest and most efficient way to do this is to utilize the mortgage calculators that are available online. You can find a bevy of calculators on real estate sites as well as mortgage lender and other financial sites. In order to get accurate results using these calculators, you will need to know how much money you make before taxes and how much money you pay out to your other creditors each month. Then, plug in the sales price you think you can afford and let the calculator reduce this down into monthly payments. Using these calculators will also give you a chance to play around with interest rates. This will give you a realistic view of what you can expect to pay each month for the mortgage you choose.

Make a Short List

Next, make a list of lenders you wish to review. This list can include traditional lenders that allow applicants to apply for mortgages online as well as web based lenders that lack a traditional brick and mortar presence. The main idea here is to create a list of well-established lenders that you can compare rates and terms. It is best to stay away from newly established mortgage lenders or lenders with weaker reputations as con artists like to utilize the relative anonymity of the Internet to separate you from your cash.

Weed Out Lenders

Complete the screening process with the lenders on your short list in order to whittle down your list of lenders to two or three. Most online lenders will ask you to complete some basic information in order to screen out applicants who simply don’t qualify for their mortgage products. This is a good thing since the screening process does not affect your credit rating like hard inquiries do. Plus, it gives you the opportunity to rule out lenders with whom you can’t work with before completing the lengthy application process.

Compare Offers

After you have completed the screening process, many online mortgage lenders will send you a list of products you qualify for and their associated interest rates. Now, interest rates may change slightly after you apply, based on your creditworthiness and length of your loan, but you will be able to get a real sense of what the lender has to offer during this period. Interest rates are not the only factor to consider when applying for a mortgage, it is one of the most important, so eliminate lenders from your short list who are not offering as good an interest rate as some of the others.

Next, compare other elements of the mortgage between the remaining lenders. This will include closing costs, prepayment penalties, and other fees assessed by the lender. Obviously, the goal here is to find the most cost effective mortgage solution.

Complete the Online Application

Complete the online application with the lender who is offering the best deal and be sure to get everything in writing. Mortgage loans are much more complicated than other types of loans and having everything in writing ensures that there is no room for confusion. It is important to know that lenders, whether online or not, are required to forward this information to you within two days of the submission of your application. If your lender seems hesitant to forward anything to you in writing, then find another lender.

What’s the Fastest Way to Get My Tax Refund?

Gretchen — Thu, 27 Jan 2011 13:00:54 +0000

Q: I don’t want to wait to get my tax refund this year. How can I get it faster?

A: There are a number of things you can do to ensure your tax refund comes as quickly as possible. While you may not be able to complete every step, each piece reduces overall time.

File early. You can file your taxes as early as January 1, but filing any time before April will reduce the number of returns in the queue and hasten processing.

Use electronic filing. There is no excuse not to transmit your return to the IRS electronically:

Most tax preparers offer free e-filing services. See this page to find a preparer near you.
If you use tax preparation software, e-filing is built in.
Those with adjusted gross incomes of $58,000 or less can use the IRS Free File program: free preparation and e-filing through various online programs.
Use Free File Fillable Forms to transmit hand-calculated returns.

Electronic returns are checked for basic errors (think math and income data) as they are completed. If you have an error, your return will be kicked back to you right away so you can correct and re-file immediately.

Set up electronic deposit. Give the IRS your bank info, and they’ll pop your refund right into your checking or savings account.

Check out the status of your refund on the IRS Refund Status page. Information is available starting about 72 hours after your e-filed return is processed, or 3 to 4 weeks after the mailing date for paper returns.

What Documents Do I Need to Start My Taxes?

Gretchen — Thu, 27 Jan 2011 13:00:11 +0000

Q: I want to start filing my taxes early this year–for once. What do I need to do this?The fastest way to get that tax refund is to file your taxes as soon as possible after January 1. By this time in the month, your W-2s, 1099s and earnings statements should be filling your mailbox and you’re itching to start. Or maybe you know you’ve got a lot of work to do before April 15. Whatever the case, here’s what you’ll need for your date with that 1040 form:

Copies of last year’s state and federal tax returns
Social Security numbers for yourself, your spouse, and any dependent
W-2 forms from your employers if you are an employee
1099-MISC forms from companies where you contracted work
Form 1099-INT and 1099-DIV for interest and dividends paid to you during the year in savings or investment accounts
1099-R forms if you took a withdrawal from a 401(k), pension, IRA or other qualified retirement plan
K-1 forms or income receipts if you took distributions from a trust or received income from a partnership, S corporation, royalties or rental real estate
Statements of unemployment or Social Security benefits
Receipts for business income and expenses if you are self-employed
Records of all contributions to IRA accounts
Fair market value statements for health savings and other tax-preferred accounts

If you itemize your deductions, add the following to your list:

Receipts for medical and dental expenses, charitable contributions, gifts and taxes paid during the year
1098 forms for all home mortgages
Receipts for non-reimbursed work expenses
Value of any casualty and theft losses

For filing instructions, take a look at IRS Publication 17, and check out the IRS’s 1040 Central for links to common tax forms, instructions and additional information.

Discover Bank Review

Sandra — Wed, 26 Jan 2011 13:00:36 +0000

When it comes to Discover Bank, most people think about credit cards. But, what many people don’t know is that Discover Bank offers a wide variety of banking products and services, many of which beat the offerings of most local and national banks, hands down. For instance, did you know that Discover Bank online savings accounts currently earn over four times the average in interest?

Now that I have your attention, here are a few other things you may not know about Discover.

Discover Bank entered the scene in 2000, thanks to a collaboration between Greenwood Trust Company and Discover Financial Services, formerly known as Sears Financial Services. The marriage was a natural fit since Greenwood Trust Company was already issuing Discover credit cards.

Discover Bank Review

Thanks to a well funded advertising campaign, most people are already familiar with Discover’s credit card offerings. They are one of the few issuers that have consistently offered cash back on their credit card products. But, Discover Bank also offers many other traditional banking products and services that you may not be as familiar with. They offer the same perks as your current bank including interest bearing deposit accounts, FDIC insurance up to $250,000 per accountholder and live customer service.

Online Savings. This is the one area where Discover Bank really shines. Though you need a minimum deposit of $500 to open an online savings account, you don’t need to maintain this balance in order to enjoy interest rates of up to four times the national average. You don’t even need to maintain this balance in order to keep from having to pay monthly maintenance fees.

Money Market. Now, in order to enjoy Discover Bank’s money market accounts, you will need to find $2500 you are willing to part with since this is the amount you’ll need to open and maintain this account. But, you can expect to earn a much better interest rate than your current checking account. If you are looking for a more versatile savings account, this product may be able to provide what you are looking for. If you maintain a balance of $10,000 or more in your account, you can enjoy interest rates as good as the online savings account offered by Discover.

Certificates of Deposit. You have probably heard of CDs, but many people don’t understand how they work. CDs are like loans you make to your bank. You decide how much to loan them and for how long. For this consideration, the bank will pay you interest. Obviously, the longer you leave your money in the CD, the higher your interest rate will be. When it comes to interest rates on CDs, Discover Bank is extremely competitive.

These are just a few of the products offered by Discover Bank. They are also extremely competitive in the student and small business loan segments. So, if you find yourself in the market for a new bank, take a look at Discover Bank. You’ll be glad you did.