Author: Margarette Burnette

Apple’s New 4.15% APY High-Yield Savings Account: What to Know

Posted on by Margarette Burnette

Apple Card users have a new option for a high-yield savings account, one that pays a 4.15% annual percentage yield. On Monday, Apple announced that the new federally insured account — serviced by Goldman Sachs Bank — is available to customers.

The account has no monthly fee or minimum balance requirement, and, at 4.15%, the APY is notable. That’s much more than the average savings rate for savings accounts, which was 0.37% as of March 2023, according to the Federal Deposit Insurance Corp.

With a 4.15% APY, an account with a $5,000 deposit will earn $211 in interest after one year, per the NerdWallet savings calculator.

There is a catch, though: The account is available only to people who have an Apple Card. This credit card offers a reward called Daily Cash, in which you can get up to 3% cash back on purchases. Daily Cash funds can now be automatically deposited into the new high-yield savings account. (You can also opt for a different destination for Daily Cash, such as your Apple Cash account, instead.)

In addition to depositing money earned through Daily Cash, you can deposit funds into the savings account via ACH transfer from a linked external account.

How Apple Card holders can set up the high-yield savings account

To open the account, you will need to go to your Apple Card in your Apple Wallet app and set up Savings. You’ll need to provide your Social Security number or individual taxpayer identification number to get an account, according to Goldman Sachs. You’ll also need a U.S.-based address (including U.S. territories and U.S. jurisdictions).

Funds in this account are federally insured up to the FDIC’s insurance limits. FDIC insurance generally covers bank account balances up to $250,000, per depositor, per insured bank, per ownership category. (Examples of ownership categories are “single accounts” and “joint accounts.”)

How to access the account

You can access your account, including balance and interest earned information, in the Apple Wallet app. The Apple device must have iOS 16.4 or later.

For transfers, as noted earlier, you can move funds to and from a linked external account. You can also transfer to and from your Apple Cash account.

How to find high-yield alternatives

If you don’t have an Apple Card or don’t want to open one, you can look for other high-yield savings accounts. Many tend to be online only. This means institutions that offer them typically don’t have the costs of paying for bank branches and in-person tellers, so they can pass on the savings in the form of high APYs and no monthly service fees.

Today, some of the best federally insured savings accounts have rates around 4% APY, often with no monthly fees or minimum requirements.

Whether you’re an Apple customer and choose to open its new savings account or you choose a high-yield alternative, putting your money in a high-interest account is a smart way to help your savings grow.

Margarette Burnette writes for NerdWallet.

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5 Key Numbers to Know About Savings Accounts

Posted on by Margarette Burnette

You don’t have to be a numbers person to have a healthy bank account. But when it comes to savings, knowing a few key figures can help you maximize your options. Here are five numbers that can help you determine if a savings account is ideal — or if it could cost you.

1. Minimum amount to open

Some banks require a minimum deposit to establish an account. The minimum requirement is typically $25 to $100, according to the Consumer Financial Protection Bureau, though there are accounts with a $1,000 or even $5,000 minimum. But if you have to save up just to open a particular savings account, that account might not be right for you. And there are plenty of savings accounts with no minimum to open.

To really benefit from savings, including having an adequate reserve for emergencies, you’ll want an account where you can easily manage the opening deposit so you can start making regular deposits and saving.

2. Interest rate

The interest rate is how much money your money earns while it sits in a savings account. For savings accounts, the interest you earn over a one-year period is often expressed as the annual percentage yield, or APY. So if you have $100 in an account and the interest rate is 1%, your money would earn $1 in interest. Over time, the interest earned in savings accounts also earns interest, something known as compound interest.

These days, many savings accounts earn low rates. According to the Federal Deposit Insurance Corp., the national average rate for savings is only 0.06%. But some of the best accounts have yields that are many times higher, with low (or no) minimum deposits.

Look for financial institutions that offer high interest rates compared with their competitors. The higher the interest rate, the faster your balance can grow.

3. Monthly fee

The monthly service fee is an important number to watch because it can work against your savings goals. Some financial institutions charge this fee, typically around $5 a month, for having a savings account open at their bank. But if you’re paying $5 a month, you’re paying $60 a year — money that you could be saving.

Some financial institutions may waive the fee for customers if they meet certain requirements, such as signing up for automatic deposits or keeping their balance above a certain amount (see #4 on this list). But many of the best savings accounts don’t charge these fees at all.

If you choose an account that has a monthly service fee, go for one whose fee you can easily waive.

4. Minimum amount to avoid a monthly fee

Many banks that charge a monthly fee will waive it if you keep a minimum balance throughout the month. A typical minimum daily balance — for a bank that has one — is $300. If you don’t want to have to keep track of a minimum daily balance, avoid the cost (and potential hassle) by simply putting your money in a savings account that does not charge a monthly fee.

5. Excess withdrawal limit

This is a fee that some banks and credit unions charge if you have too many withdrawals from your savings account each month. The transactions, known as convenient withdrawals, include online transfers, overdraft protection transfers and phone-initiated transfers.

A bank or credit union may charge a fee if you make more than six of these withdrawals in a month, typically around $5 to $10 for each excess transaction. The restriction was previously in place because of federal regulations. But in April 2020, the Federal Reserve gave institutions the ability to eliminate this limit and “allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings.”

Many banks still charge this fee, however, so you’ll want to check with your financial institution about its policy.

Every saver can make the most of their savings account by staying on top of these five key numbers. They can help you minimize costs and maximize interest, so you can be well on your way to meeting your savings goals.

Margarette Burnette writes for NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article 5 Key Numbers to Know About Savings Accounts originally appeared on NerdWallet.

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4 Ways to Sustain Savings Habits From the Pandemic

Posted on by Margarette Burnette

Whether out of choice or necessity, many people spent less money in the last year and a half on things like entertainment, clothes and furniture. For some, that meant holding on to more of their income. If you were able to save some cash, you’ve set yourself up to withstand future financial crises, especially if you can continue saving.

Keep growing your bank balance with these four pandemic-driven saving habits.

1. Reevaluate spending

Consider whether some of the purchases you may have gone months without are necessary going forward. Or rethink how often you want to make them compared to before. For example, if you started to work from home, you might have saved money by making your lunch instead of eating out. If you return to the office, you could continue saving by bringing lunch from home at least a few times a week.

“Since we were all stuck at home, I didn’t have many opportunities to go shopping or dine out. So I saved the money,” says Vida DeOliver, a jewelry designer and owner of Vidart & Life Boutique, an online store based in Union, New Jersey. “I saved more during the pandemic than I had prior.”

DeOliver says these days, she has more in-person spending opportunities, but she’s keeping the saving habit. “When I go shopping, I ask myself if a purchase is really necessary, or if I could hold on to the money and save it for something I’d really like later,” she says.

2. Delay big-ticket purchases

Make yourself wait before committing to expensive purchases. At the beginning of the pandemic, out-of-stock inventory and supply challenges meant that some people didn’t have a choice about waiting before ordering big-ticket items such as kitchen appliances, furniture and electronics. But learning to wait before spending money can be a smart choice anytime, helping you avoid the kind of impulse that can upend savings plans.

“I always try to delay purchases for a few days to see if I really want something before I buy, but the pandemic shortages really helped me figure out what I needed and what could wait,” says Eric Chow, a podcaster and public relations professional in Union City, California. Today, he makes a point of waiting a few days before pressing the “buy” button on items large and small, from electronics to wallets. And then? “If I really want it, I’ll know it’s worth the wait, and if I don’t, I can forget about it and move on,” he says.

3. Keep saving easy with automation

If you were able to save during the early part of the pandemic, one reason may be that it didn’t require much effort. You stayed home. Voila — savings. You can keep saving a low-effort endeavor by using automatic transfers to move money into a savings account at regular intervals.

“Set up an automatic transfer so your savings funnels to a separate account each pay period. This way, your savings is the automatic priority. And it gets you accustomed to relying only on the remaining amount,” says Regan Ervin, an investment advisor and founder of Capital E Advisors in Leawood, Kansas.

4. Set clear emergency savings goals

The pandemic turned emergency savings from a hypothetical nice-to-have into a must-have. If you haven’t already, take a moment to seriously evaluate your essential expenses and set a clear emergency fund goal. Make it a habit to review your essential expenses regularly to see if you need to adjust your savings target.

A common guideline is to have three to six months’ worth of expenses saved for emergencies. If that seems daunting, start with a smaller goal — say, $500. Chip away at that goal as best you can, even if it’s in $5 increments.

You can grow your money in a high-yield savings account

You can grow your money with no extra effort if you put it in a high-yield savings account. The annual percentage yield on these accounts can be more than eight times higher than the national average of just 0.06% for savings accounts. At the low national rate, a deposit of $10,000 earns just $6 in interest after one year. But in a high-yield savings account that has a 0.50% APY rate, a deposit of $10,000 would grow by more than $50 in the same time period.

If you are fortunate enough to save money, adopting these habits can help you hold on to your funds and save even more, preparing you for whatever the future holds.

This article was written by NerdWallet and was originally published by The Associated Press.

Margarette Burnette writes for NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article 4 Ways to Sustain Savings Habits From the Pandemic originally appeared on NerdWallet.

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Savings Tips for Newbies, Experts and Everyone in Between

Posted on by Margarette Burnette

When it comes to saving money, this year may look a little different from years past. The savings rate is lower than its peak of about 34% in April 2020, but Americans are still saving more than they did before the pandemic. This is according to the U.S. Bureau of Economic Analysis, which defines savings as the amount left over after spending money and paying taxes.

Unemployment is still elevated, however, and those who have lost income may be finding it more difficult to save. Either way, it’s important to have a savings plan.

Whether you are flush with cash, not sure how to save money or somewhere in between, here are the actions you can take now to maximize your savings:

Unsure how to save

If you’ve found it difficult to save money lately, try these tips to strengthen your bottom line:

Cancel high bank fees and other unnecessary expenses. “Businesses conduct financial audits for their expenses. Why not conduct a personal audit for yourself to cut spending?” says Michael Foguth, founder of the financial advisory firm Foguth Financial Group in Brighton, Michigan.

If you have a bank account that charges a monthly fee of $5, that adds up to $60 every year. Consider switching to a free account. There are options at many top online banks.

Another example: Say you signed up for a streaming service at the start of the pandemic because you were mostly at home. But now, if you’re not watching TV as much, you could cut the service to save money, Foguth says.

Weigh options to increase cash. Consider taking on part-time work — job growth is increasing and there has been pressure on employers to increase wages — or sell unused belongings to raise cash. For help with major expenses, such as rent and medical bills, reach out to community organizations. The government website usa.gov/help-with-bills is a good place to find resources. Even temporary cash boosts could help you unload debt and give you room to create a savings plan.

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Saving a little at a time

Maybe you’re able to save occasionally but would like to save more. If you’re already putting the previous tips to use, try these action items:

Open a high-yield savings account. The average savings interest rate is a low 0.06% APY, but there are other accounts that pay many times more. With a high-rate savings account, your deposits earn more money while being safely parked in a federally backed bank account.

Set up auto transfers to savings. Move money from a checking account to savings before you get the chance to spend it — on each payday, for example. If you are able to transfer just $25 into savings every two weeks, you’d stash $650 by this time next year.

Bank bonus money. Decide now to save any extra money you receive, such as a cash birthday gift, tax refund or stimulus money that you don’t need immediately for expenses.

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Already saving, ready to maximize

Already have a savings plan and looking for ways to make the most of your money? If you’re using the previous tips, here’s how to make your money work harder:

Reevaluate spending goals. You may have some of your savings earmarked for a big ticket item. But for some people, the pandemic redefined what was important to them. Before you cash out, consider whether your previous goals match your current needs.

Economic conditions may also come into play. Alissa Johns, a real estate investor and small-business owner in Valparaiso, Indiana, and her husband originally set aside money to buy a new home in early 2021. But she says when they saw how tight housing inventory was and how construction prices were rising in the area, they chose to stay put.

Instead of moving, “we decided to refinance our current home loan and vacant land loan for lower interest rates,” Johns says. She adds that doing so allowed them to “decrease our monthly expenses and be able to put more money towards saving.”

Maximize your emergency fund. Experts recommend having at least three to six months of savings set aside for emergencies. If you have some savings but haven’t hit that mark, keep plugging away until you reach your goal. If your emergency fund is fully funded, you could focus on long-term financial goals.

Check out rewards accounts. Consider getting more value out of your spending by using checking accounts and credit cards that offer perks or promotional offers. The best rewards checking accounts, for example, earn interest, offer cash back on spending and may even offer a one-time sign-up bonus.

Top savings strategies may look different for people in different financial situations, but the most important step for anyone is to take action. Regardless of where you start, act now and you can put yourself in a position to increase savings this year and beyond.

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Margarette Burnette writes for NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article Savings Tips for Newbies, Experts and Everyone in Between originally appeared on NerdWallet.

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What to Do When You Can’t Open a Bank Account

Posted on by Margarette Burnette

Signing up for a bank account is usually easy. But just as an application for a credit card might not be approved, a bank or credit union could deny an account application.

If this happens to you, be aware that you have other options. However, it’s a good idea to try to learn why the bank made the decision. Of the 7 million U.S. households that don’t have a bank account, about 20% say one reason is because of ID verification, credit problems or issues with a former bank account, according to a 2019 Federal Deposit Insurance Corp. survey. Other reasons include customer concerns about keeping the minimum bank balance and inconvenient bank locations.

If you’re unable to open a bank account, here are some tips on what to do next.

Verify your details

When you apply for a bank account, you usually have to provide your name, address, Social Security number and other personal information. Errors in any of these items can affect your application.

Your bank will likely work with third-party companies to electronically verify your application information, says Sarah Hoisington of SentiLink, an identity verification company in San Francisco. If the data can’t be confirmed, the bank is notified, she says.

“Fraudsters sometimes mix real data with made-up data to create a fake identity,” she says. You may be asked to provide additional documentation to prove who you are, such as a copy of your driver’s license, or it may lead to a denial.

If you believe you may have listed incorrect data on your application by mistake, consider reapplying.

Review your consumer reporting files

It’s possible your bank may have confirmed who you are, but denied opening an account because of a record of unpaid bank fees or overdraft charges, for example. Banks rely on consumer reporting agencies such as ChexSystems or Early Warning Services for information on applicant banking histories. When this information causes a denial, you have the right to receive a copy of your file.

The file could list outstanding debts from old accounts, the status of those debts (paid or unpaid) and whether a past account was closed due to suspected fraud. You can use the information from the report to contact the previous bank and pay off any outstanding fees or dispute errors. You could also file a dispute directly with the reporting agency. To reach ChexSystems, call 800-428-9623. For Early Warning Services, call 800-745-1560.

Chip Kohlweiler, vice president of security at Navy Federal Credit Union, says it’s also a good idea to double-check your financial history and personal information with organizations that verification companies might contact, including “entities such as credit bureaus, government agencies and utilities.” For example, you could pull your credit report to confirm its accuracy.

It might seem like an extra step to take, but it actually helps speed up the application process when prospective member information is accurate, he says.

Consider other options

It’s likely difficult to have a bank account approved if you have a consumer reporting agency record. In addition, young adults and recent immigrants may not have a U.S. banking history for these agencies to verify. This may mean you can’t open a traditional account today, but it doesn’t have to stop you from accessing banking services. Here are some other options to consider.

Second chance checking

Some institutions offer second chance checking accounts specifically for customers who can’t qualify for a traditional option. The alternative account might lack some features, such as overdraft protection or the ability to avoid monthly fees, but it gives customers a chance to develop a solid banking history. (Note that this option generally doesn’t involve applying for loans, so it won’t help you build a credit history.)

If you keep a second chance account in good standing for 12 months, your bank may switch it to a regular checking account. Once you reach that milestone, you may be able to shop around for top-notch checking and savings accounts.

Free online checking

If you live far from a branch or are worried about monthly fees, know that you can access some accounts online, and they don’t require a minimum balance or monthly fee.

Prepaid debit cards

Many prepaid debit cards let you access important banking functions, such as direct deposit and electronic bank transfers to help you build an emergency savings fund. They are generally available to customers regardless of banking history. Some of the best choices have no or low monthly fees and access to thousands of ATMs.

Not being able to open a bank account shouldn’t mean not being able to access banking. Whether you resolve the account issue directly with the institution or choose to shop around, there are a number of solid financial service companies that would be happy to have your business.

Margarette Burnette writes for NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article What to Do When You Can’t Open a Bank Account originally appeared on NerdWallet.

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Savings Rates Are Staying Low. Here’s Why, and What to Do

Posted on by Margarette Burnette

If your bank has lowered rates on your savings account, don’t take it personally. It’s not you, it’s them. Interest rates have dropped across the board, and they’re likely to stay low for a while.

Yes, your savings may be earning smaller yields, but with a little time and attention, there are still ways to eke out growth.

Why are rates so low?

Banks tend to lower or raise interest rates in response to actions from the Federal Reserve. The Fed, in turn, makes decisions based on economic conditions. When the economy needs a boost, moves by the Fed generally cause rates to drop. Why? Interest rate decreases can encourage businesses and people to take out loans, increase spending and stimulate the economy. (Rate increases in a strong economy, on the other hand, can help slow inflation.)

With the ongoing pandemic, the Fed has taken actions to stimulate the economy.

“The Federal Reserve’s latest economic forecast suggests that they will keep interest rates near zero, at least through 2023,” says Daniel Lee, a chartered financial analyst and certified financial planner in San Francisco.

This means savings rates are likely to stay lower for a few years. But it doesn’t mean your savings goals should be on pause.

You can still make smart money moves

Interest rates are just one part of your personal finance picture. It is also important to put away money regularly, regardless of the rate, so your cash cushion can grow. Once you’ve started saving, here’s what you can do to make the most of what you have.

Compare savings rates from other banks
The national average savings account interest rate is 0.05% APY.  If your savings account earns more, you can consider it above average, even if it earns less than it did last year. But you may still benefit from seeing what other financial institutions are offering. And if your rate is lower than average, you should absolutely shop around. Some high-yield savings accounts and certificates of deposit, particularly those that are online-only, earn more than 10 times the average yield.

According to Lee, those are the accounts where you should be putting your money. “Not all savings yields are created equal,” he says. “You want to search for banks that are offering the best rates because every dollar counts.”

To see what other options are available, check out current high-interest savings accounts or high-yield CDs.

Whether you choose a savings account or CD likely depends on how often you plan to make withdrawals. You can generally transfer money out of savings accounts a few times a month without penalty. With CDs, you usually agree to keep your deposit in the account for a set time frame — say, six months or up to five years. In exchange, you might earn a slightly higher interest rate compared with savings accounts.

Eliminate existing bank fees
You can’t make your bank pay more interest, but you likely can stop it from charging you money. If your checking or savings account charges a monthly fee — often $5 or $10 a month — consider switching to an account that doesn’t.

You can also look for ways to get fees waived. For example, some banks let customers avoid maintenance charges if they sign up for direct deposit or maintain a certain minimum balance, typically around $500.

You can also keep tabs on your balance; this makes it easier to avoid overdrawing your account. Many institutions charge fees of $35 or more for each overdraft. If you have three in one day, your bank could slap a fee of more than $100 on your account.

By avoiding fees, you can probably keep more money than you would ever gain in interest, even if rates were higher.

Consider account sign-up bonuses
Some banks offer promotions to new customers who open an account and meet certain conditions.  Qualifying accounts could receive bonuses of $100 or more. The conditions might include signing up for direct deposit, making a certain number of debit card purchases or maintaining a minimum balance for a few weeks.

If you’re thinking about switching banks — because your bank is charging one of the fees mentioned above, for example — consider moving to one that offers a bonus. If you qualify, the extra cash could more than make up for a relatively low interest rate.

Interest rates on bank accounts are at historic lows, and chances are they’ll remain relatively low for the next few years. But if you find the best rates possible and avoid high fees — and possibly snag a promotional perk — you’ll still be boosting your bank balance and securing your financial future.

Margarette Burnette is a writer at NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article Savings Rates Are Staying Low. Here’s Why, and What to Do originally appeared on NerdWallet.

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How to Bank When You Can’t Go to the Bank

Posted on by Margarette Burnette

It’s a tough time to do your banking if you prefer going to a branch. Hours have been cut at many locations, and social distancing guidelines mean bank lobbies are limiting traffic — assuming they are open at all.

For customers who absolutely need to visit branches, banks are taking steps to prevent the spread of COVID-19. Sean Potter of Minneapolis, who blogs at My Money Wizard, saw these precautions during a recent meeting at his local bank. “It was awkward because I had an appointment with the relationship manager, and we still had to maintain 6 feet of distance even though we had to review the same documents together,” he says.

Potter appreciates that the branch was trying to ensure his safety, but says he’s now considering other ways to bank. “From now on, it’s online or on the phone,” he says.

Here are some ways you can bank without leaving home, along with safety tips if you do need to venture out to a brick-and-mortar branch.

Explore online options

“A lot of banking can be done with the click of a button,” says Brian Milton, head of retail banking at Union Bank. Union and most other banks and credit unions have robust websites and apps you can use for many banking tasks.

Deposit checks. With mobile check deposit, you can snap a photo of a paper check and submit it online, via app or your bank’s secure website.

Pay bills. With online bill pay, you can log in to your bank’s webpage and enter the name of the recipient and their contact information. Your bank handles the rest by making an electronic funds transfer or mailing a paper check.

Apply for an account. Opening a new checking or savings account can be as easy as going to a bank’s website and submitting an online application. To apply, have your driver’s license and Social Security number handy to prove your identity.

Sign documents. Some institutions use digital services such as DocuSign to prepare documents, including loan and account opening paperwork. They can be securely emailed to you, and you can sign them electronically by clicking highlighted prompts.

Request payment assistance. Need some leeway with loan payments? Some banks are allowing customers to request arrangements online, including delaying due dates for bills, temporarily reducing monthly payments or asking for fee waivers.

Or pick up the phone

Keep your bank’s customer service number nearby. You can use it to speak to a real person about account questions or issues.

For example, some banks have announced that customers can call and request to waive non-sufficient funds fees, overdraft fees and monthly service charges.

But keep this in mind: If you’re faced with steep fees, it may be better to simply switch to a cheaper bank. Online-only institutions, for example, tend to have low or no monthly service fees, and some offer toll-free customer service numbers staffed 24 hours a day, seven days a week. To learn more, read our primer on online banks.

Bank safely at a branch

If you still need to visit a bank branch, here are some ways to protect yourself.

Get it on the calendar. “Before you visit your local branch, it’s a good idea to call ahead and schedule an appointment,” Milton says. He adds that doing so helps branches manage occupancy and social distancing requirements.

Calling ahead can also help the bank make sure it has a staffer on hand who can help you with a specialized transaction or request, he says.

Consider drive-up services. Some banks have drive-up lanes where customers can receive the same services offered inside a branch, such as making cash deposits and withdrawals, and getting money orders, all at a safe distance from other people. You could also withdraw cash from an on-site ATM without the need to interact with a teller.

Bring your protective gear.  Since you’ll be touching screens, door handles and other public surfaces, consider bringing hand sanitizer or wearing gloves. If you do need to step inside a lobby, you may also be asked to wear a mask for everyone’s protection.

Accept the changes. Steve Turner, a publicist in Chesterfield, Missouri, says he visits his local branch a few times a month to make business deposits. “There are signs on the floor showing where people should stand to keep their distance,” he says. Turner has also noticed there’s less small talk with the tellers, and reasons it’s because everyone is wearing a mask. He believes these changes will remain for a while. “It was odd at first, but now it seems like a new normal,” he says.

Margarette Burnette is a writer at NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article How to Bank When You Can’t Go to the Bank originally appeared on NerdWallet.

How to Keep Your Spirits Up in the Long Game of Saving

Posted on by Margarette Burnette

Dreaming of a savings goal is almost always fun — a sunny vacation, the perfect home, a dazzling holiday gift. But think about how long it can take to get there, and all that fun might fade away.

Even if you’re doing the right things, such as cutting your expenses or taking a part-time job for extra income, it can be discouraging when the finish line is far away. Here’s how to stay motivated until you reach it.

Automate your savings

If you plan to save a little bit each month for the next year or so, you can simplify the process by setting up automatic transfers from your checking account to your savings. You’ll be making deposits without extra effort.

This tactic helped Marissa Ryan, co-founder of a Chicago-based digital marketing agency, when she wanted to save $25,000 for her wedding within 18 months. Using direct deposit, she split her paycheck between two different accounts, one for her wedding fund and the other for daily expenses.

She says automation helped, because there were months she didn’t feel like making the effort. “Setting up automatic deposits took ‘me’ of the equation, so I didn’t have to worry about skipping a month,” Ryan says.

To boost your savings even more with minimal effort, put your money into a high-yield savings account or certificate of deposit, which can earn 20 times more than a traditional savings account.

Celebrate small wins

Say you want to save $5,000, and you’ve set aside $500. That’s a reason to celebrate, says Joseph Polakovic, owner of Castle West Financial LLC, a financial advisory firm in San Diego.

He explains that when you have a large financial goal, it helps to see it as a series of smaller targets that are easier to meet. When you reach these milestones, celebrating them  — with an inexpensive treat, for example — can help you stay motivated.

“You don’t get just one reward at the end. You give yourself several rewards along the way,” he says.

Look at the big picture. Literally.

While you don’t want to be overwhelmed by how far away a goal seems, reminders of the goal itself can be helpful. Once Ryan picked her perfect wedding venue, she downloaded a picture of it and used it as the background image on her phone’s home screen. “It made me feel good just to anticipate the place, and that kept me going,” she says.

Polakovic agrees that this is a good strategy. You could print a photo that represents your goal and place it where you see it every day, such as on the refrigerator or bathroom mirror, he says.

Take setbacks in stride

There will probably be stumbling blocks along the way. For Ryan, it was an unexpected $3,000 car repair bill. She says she used some of her wedding fund to pay it, but was determined to rebuild the balance as quickly as possible.

If you do have a savings shortfall, there are options for getting back on track, including increasing your income. Ryan says she took on extra freelance work in order to replenish her fund.

Be accountable

Find a friend or family member who you can update on your progress. Scott Perry of Raleigh, North Carolina, says he and his wife held each other accountable when they decided to pay off $60,000 in student loans early. They made a plan to live below their means and earn extra income with side hustles. When surprise money came their way, say from a gift or job bonus, they’d use some of it to pay down loan principal, in addition to building up an emergency fund.

“There were times we would have rather gone out to eat on weekends instead of cooking at home to save money,” he says, but together, they resisted these urges. With a little time and patience, Perry says, they were able to cut their loan repayment period nearly in half, writing the last check a little more than five years after they started making payments.

Your savings goal can sometimes seem like a faraway dream. But keep plugging away, and it can eventually become a reality.

Margarette Burnette is a writer at NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article How to Keep Your Spirits Up in the Long Game of Saving originally appeared on NerdWallet.

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How ‘Free Money’ Bank Promotions Can Boost Your Savings

Posted on by Margarette Burnette

Bank interest rates are hardly considered a big perk — there are many Scrooge-like accounts out there that barely pay enough to offer loose change. But some people are getting $100, $200, even more than $300 from their banks. Their secret? Free money promotions. Banks are paying customers to open savings and checking accounts.

Bank account sign-up bonuses may not be as widespread as credit card perks, but they can be lucrative — and can come in handy if you want to build up an emergency fund. Consider:

  • Say you have $10,000 in a savings account that earns 0.20% annual percentage yield, or APY — that’s close to nothing, but still roughly double the national average for savings accounts. You’d end up with an extra $20 or so after a year.
  • If you move that nest egg to an account with a free money bonus, you could snag a perk of $150 or more, often within a couple of months of account opening. So you could earn more money in less time, compared with the first account.

Check the fine print

Before signing up for this type of promotional offer, take a good look at the terms. You probably need to be a new customer to qualify. If you’ve had an account at the same place since the days before online banking, don’t expect your trusty institution to roll out the red carpet with an offer.

That can work in your favor if you’re willing to switch, though. An old customer at Bank No. 1 is a desirable new customer at Bank No. 2, and the latter may indeed roll out that red carpet with a tempting promotional offer.

You’ll probably have to meet a few more requirements to qualify. Some banks require hefty deposits — think $10,000 or more — to score a bonus. Or they may require you to set up direct deposit. Or make a certain number of transactions within a few months. Or any combination of the above. In return, the bank offers to make a deposit of its own to you.

Look for a short-term deal, but long-term savings

Short-term perks are nice, but it pays to play the long game. Know how much an account will cost you over time. For example, many banks charge monthly fees that are waived only if you keep a minimum balance. If you’re paying a fee each month, a lucrative account quickly loses its luster.

In addition, institutions may charge overdraft fees that could set you back $100 or more if you have a few transactions in the red. Ouch. What’s the use of getting a bonus if you end up paying it back to the bank in fees?

That said, if you have the cash and think you can avoid penalties, a promotional offer can be worth going after.

Find the sweet spot

Found a bank offering a bonus? You can do even better. The real free-money sweet spot is an account that pays a bonus and offers a high interest rate, too. Forget about accounts with APYs of 1% or less. The best savings accounts have APYs north of 2%. Add in the magic of compound interest, and you’re looking at serious money. (Use an online compound interest calculator to see how fast your cash could grow.)

To increase your chances of finding a bonus plus a great rate, look at online banks. They tend to have higher rates and lower account fees than their brick-and-mortar counterparts, and some also offer cash bonuses to sweeten the deal.

Tie up loose ends

If you opened a new bank account recently and are thinking about switching again to score a promotional bonus, check with your current institution about early account closing fees. Some banks require that you keep your existing account open for a minimum amount of time, often around six months, to avoid a penalty. Also, know that your new bank may require you to keep your new account open for a while — typically also around six months — to avoid having to forfeit any perks.

A bank bonus can be a boost to your bottom line, as long as you play by the rules and can dodge account fees. And the compounding of that money is like icing on the cake.

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The article How ‘Free Money’ Bank Promotions Can Boost Your Savings originally appeared on NerdWallet.

Banking Has Changed, but Criminals Haven’t — Here’s How to Protect Your Money

Posted on by Margarette Burnette

This year marks a decade since the global financial crisis. Although the biggest financial institutions still dominate the landscape, banking has undergone some changes. The proliferation of smartphones means mobile banking now plays a significant role in how we manage our money. A 2016 Fed survey found that over half of smartphone users with bank accounts used their devices to access their money.

What hasn’t changed since 2008? Con artists.

Ten years ago, identity theft was the No. 1 complaint logged by the Federal Trade Commission. Today, the number of complaints is 20% higher than in 2008. The research-based advisory firm Javelin Strategy & Research identified a record high of nearly 17 million victims of identity fraud last year. And many of today’s fraud and identity theft breaches involve mobile devices. The rise of mobile banking in the past decade means it’s easier and more convenient to keep up with your bank accounts, but it could also make it easier to be scammed.

Financial institutions invest in technology and cybersecurity expertise to fight back, but your bank or credit union needs your help. Here are ways hackers try to access your bank information and how you can avoid swiping your money into a criminal’s trap.

How hackers work

Phishing. This happens when hackers use websites, emails or other means of contact to trick customers into submitting personal information. The practice isn’t new, but it has gotten more sophisticated.

“Ten years ago, phishing was rudimentary. Fake sites were not authentic looking. There were a lot of typos,” says Adam Levin, founder of Cyberscout, a Scottsdale, Arizona-based cybersecurity company. “Now, the criminals have gotten much more sophisticated and the sites look real.”

According to the not-for-profit Anti-Phishing Working Group, phishing attacks increased by a whopping 5,700% over the 12 years ended in 2016, and the latest data suggest attacks continue to increase.

Keylogger software. These programs may install on phones via apps that aren’t secure, such as one that’s not from your device’s approved app store. The software records keystrokes, such as when you enter a bank username or password on a website, then sends a record of what was typed to the hacker.

How to protect your accounts

Ask your bank or credit union about security. The safest banks for consumers use the latest cybersecurity protocols to protect your accounts from breaches and large-scale identity theft. “You’ll want to make sure your bank is up to par,” Levin says. If not, it may be time to switch to another institution. Make sure your bank provides the following — and use these services:

  • Two-factor authentication. When you attempt to log on to your bank’s secure online webpage, the bank or credit union will contact you through some other means — by sending a text, for example — to ask you to confirm the login request. Not every bank has two-factor authentication. But if you choose one that does, your accounts have an extra layer of protection, says Neal Stern, CPA and member of the American Institute of CPAs’ National Financial Literacy Commission.
  • Transaction alerts. Sign up for these alerts, which are generally text or email messages your bank sends to your mobile device when large purchases are made on your account or if your balance drops below a certain amount. (For a deeper look at transaction alerts, here are five mobile banking alerts that help fight fraud.)
  • Fraud monitoring. Many banks monitor transactions to detect unusual spending patterns. The bank might send you a confirmation text if it detects an odd purchase attempt, such as an online purchase worth thousands of dollars from a vendor you’ve never used before. You would have to reply before approval of the transaction.

Keep mobile device software up to date. Your device provider likely sends periodic updates. Some of them may help stop the latest hacker attempts, so it’s important to install updates.

Have a rock solid sign-on. When it comes to logging on to your bank’s website, use “long and strong passwords” that are hard to guess, Levin says. That way, even if you lose your phone, the next person who picks it up won’t be able to figure out how to log in to your bank accounts. In addition, lock your mobile device screen and use a different password to unlock it. (Read more about how to create passwords that are hard on others but easy on you.)

Be careful with other contacts. Fraudsters may try to trick a customer by calling and saying an account has been compromised, then asking for sensitive information, such as a password or Social Security number, to confirm their identity.

“Why would you need to authenticate yourself to someone who contacts you?” Levin says. If you’re unsure about whether a call is legit, hang up and try to reach the bank or credit union at a number you’re familiar with.

Today, customers can deposit checks, transfer money between accounts and pay bills from the convenience of their smartphones. But with convenience comes risk. Take steps to eliminate the risk of identity theft by partnering with your financial institution to protect your hard-earned money.