From savings rates to budget programs, WalletPop experts answer personal finance questions
Question: What is the best savings interest rates right now? The INGdirect account is a good deal, everyone knows that. But if you have a MMA(money market account) linked to your checking it's easier to get your money in and out fast as you need it -- the downside is that the interest rate is lower and banks also have weird minimums sometimes for the better rates. Which banks are doing comparable rates to ingdirect and which ones have better deals as far as no minimum/low minimum?
Great question. Everybody is looking to earn a little more on savings. But the fact is, interest rates are low right now. So, it's not like you'll find double-digit savings rates.
- Online banks. As you mention, INGdirect.com is a good online savings bank that pays far more than average, as do EmigrantDirect.com and HSBCdirect.com. True, it can take a few days to make a money transfer from these online savings accounts. But how often do you need cash very quickly? A great site for most interest-rate topics is Bankrate.com, which offers interest-rate comparisons for saving and borrowing.
- Rewards checking. A relatively new type of account is rewards checking, some of which are now paying more than 4%. The typical catches are that you have to use your debit card for 10 or 12 purchases a month (using a signature, not a PIN code), have a direct deposit into the account and receive an electronic statement, not a paper one. Lofty rates usually only apply to the first $25,000, though some banks will pay rewards rates on higher balances. How can they do that? Basically, banks earn high fees on debit-card transactions and share that with you. To compare rewards checking accounts, go to CheckingFinder.com and HighYieldCheckingDeals.com.
- I-bonds. Through April of this year, Series I Savings Bonds are paying an annual rate of 3.36%. However, the rate adjusts every six months, based on inflation. So, your yield will be regularly changing. Learn more at SavingsBonds.gov.
- Pay debt. Are you trying to squeeze out a couple of tenths of a percent more on savings when you could pay off high-interest debt? Especially if you have credit card debt or auto-loan debt and already have a cash emergency fund, paying debt might be the best use of excess cash.
Most of the online budget software I can find only allow you to budget really one month at a time, and they suggest that you take all your monthly expenses and average them out (e.g. if you estimate that you're going to spend $120 in December, start saving $10 a month in January.)
I would set up an Excel spreadsheet template for my particular freelance business. If you don't know the Microsoft Excel program (you really don't have to know that much) you could ask a local CPA to do for you.
Last, you will probably discover that the program does not have all the features needed or that some features are not flexible enough. All this takes time and money and may not result in a good fit.
You don't necessarily have to enter each and every revenue and expense in the spreadsheet day by day. One useful practice is the traditional "shoebox" method. You put revenue and expense slips and receipts in a shoebox, sort them once a week or month, and enter totals in the spread sheet. It works.
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