Thrifty Spending Issue 52

FEATURE ARTICLE:  Over 4.0% APR on my Checking Account? No way!

Consumers frequently search through the newspapers and surf the web searching for a place to park their money and get that higher APR. Not wanting to tie their money up in a CD for 5 years to get 2.9%, or put it in a money market account for a whopping 2.0%, and consumers definitely have no problem finding that .5% APR at their local bank or even from some of the large national banks. But here’s a little secret, Credit Unions and High Yield Reward Checking Accounts. These accounts are usually found at local community banks or credit unions. They offer a great rate of return in exchange for maintaining a minimum balance, with a few exceptions. These exceptions include doing a certain number of online or debit transactions or using direct deposit.

As of 5/4/2010, the Royal Bank of Missouri is offering a 4.3%APR for up to $25,000 on their checking account, and First New England Credit Union is offering 4.1% up to $15,000. As of the printing of this article, there are 9 institutions offering 4.0% APR or better. Consumers can read more about the best cd and savings rates plans and the name of the institution by going to . Some institutions require you to live in their state and others open accounts nationwide, so take the time, read up and start making some money.

But is your money safe? High Reward Checking Accounts opened at your local community bank are FDIC Insured, while your funds in a Credit Union are insured by the National Credit Union Administration. Go to and read the regulations.

Most local banks and credit unions are doing well in these tough economic times, which is great news if you are looking for a High Yield Reward Checking Account.

MONEY SAVING TIP:  Do you know if you are banking smart?

Request that the bank provide you with a complete list of fees that are charged on these accounts. Also, inquire about getting free banking if you choose to do direct deposit or agreeing to ATM use only. However, keep in mind charges may still apply for using an ATM that is not associated with your financial institution. You can save more than $100 a year in fees by choosing a free checking or savings account that requires no minimum balance requirements. For example: $12 monthly maintenance fee = $144 per year!

DID YOU KNOW…that the perfect credit does exist?

Pursuit of excellence is often wise, but does “perfect” exist? Yes, says Craig Watts, the public affairs director for Fair Isaac “Several thousand consumers do, in fact, have the highest possible FICO score.”

Though most people won’t reach the credit score apex (850), you can get close by consistently following three simple guidelines:

  • Pay all bills on time.
  • Keep credit card balances low.
  • Take on new credit only when you really need it.

Don’t obsess over small credit score variations. “Lenders decide what score they will accept for

their best-interest-rate product,” assures Watts. “They genuinely don’t care if your score is 50 or 100 points higher than that.”

Clearly, A-plus credit has its advantages, but there is no reason to go overboard. Find a balance between attentiveness and fixation by understanding what those numbers can do for you and knowing how you can improve them. And remember: Credit scores gauge your borrowing history, not your value as a person.