5 Quick and Dirty Facts About Certificates of Deposit

1. FDIC Certificates of deposit are a safe type of investment

Some forms of investments carry more risk than others. For instance, some stocks fluctuate up and down, which could mean you make a lot or you lose a lot, and there is no way to absolutely predict which will happen. With FDIC certificates of deposit, there is a very low risk of loss, but a guaranteed rate of return, making it a stable investment option. Plus, the investment is insured by the FDIC.

2. Gains are taxable

After the security of deposit matures and the gains are paid to you, the amount you made over your original investment amount is considered taxable income. The exception is when the certificates are structured in a tax-differed or tax-free account, but those are not typical features and need to be discussed with the offering bank.

3. They are best for short term investments

FDIC certificates of deposit are best for set amounts of money to be invested for a short period of time, such as $5,000 for 5 years or $500 for 5 months. Because there is typically no access to the money, and because of the relatively lower return rates than other investment options, CDs are not generally considered for a long-term investment.

4. Withdrawing early will require penalties to be paid

For most certificates, if the money is needed before the time period has passed, then serious penalties for withdrawing early will be applied to the payoff amount. This investment environment is best for cash that can be applied and not touched for the few months or years of the contract.

5. A few specialty options are sometimes offered

Most FDIC certificates of deposit hold your money for a fixed time in return for a fixed rate. However, some allow you to raise the interest rate if the market improves or to make early withdrawals. Others don't pay out, but instead reinvest the funds into another CD for another term. The key to deciding if these specialty offers are worth your time is to compare the offered interest rates and time periods with the added benefits.

If you would like to learn more about FDIC certificates of deposit in Austin, visit Green Bank.

5 Tips for Save Online Banking

With the rise of computers and mobile devices has come a surge in the popularity of online banking. There are a number of conveniences and benefits, but it is always good to be wise with your online dealings. Thieves are just as happy to take advantage in the virtual world as they are in the real one.

1. Be careful with your password

Being password savvy means both protecting its secrecy and picking something complicated. An unusual word with symbols or numbers substituted for a few letters is perfect for online banking. The same goes for the PIN. 1-2-3-4 isn't very secure, but your high school locker combination might be more difficult for hackers to find.

2. Know the bank's URL

Some thieves go to great efforts and set up fake websites that look a lot like a real bank. To make sure you end up on the right page, type in the bank's actual website and always check the address bar for the proper information. Often, there will be a lock icon added, to indicate a secure site.

3. Set up alerts

One of the best new conveniences that comes with online banking is the ability to set up reminders and alerts. With only a few easy steps, you can set auto texts, emails, or calls to be sent to you if a charge over a certain amount is made or if your balance drops below a certain level.

4. Use encrypted data

Encrypted data means that the content sent and used on the website is put into a code by scrambling the data that only your secured login and the bank can read. This makes it difficult for hackers to simply pull your information.

5. If something looks fishy, it probably is

Banks take the security for their online banking customers seriously and spend a lot of money to prevent hackers and thieves. They wouldn't do anything that could cause you to be confused or to compromise your information. They would never ask for sensitive information in a call or email, especially one that wasn't initiated by you. If you receive an odd communication, it is best to not reply and contact your bank immediately to check the activity.

If you would like to learn more about online banking in Houston, visit Green Bank.

5 Benefits of Opening a Business Savings Account

A business savings account could provide your company with a number of benefits.

1. Can help you achieve business goals

Whether the goal is small (purchase a ping pong table for the staff break room) or large (expand the business through a new product line), having the cash available is preferable to taking out a loan. Through a business savings account, you have a built-in way to save money for the things that your business needs.

2. Access to the funds when you need them

While some types of investments are known for high returns, not all of them allow easy access to the invested funds. Often, the money must be left in its environment for a set time period and is otherwise subject to steep fees. Investments could be a part of the business portfolio, but a highly liquid savings option is essential.

3. Protection from loss

Typically for investments, the greater the return, the greater the risk. A business savings account can often offer competitive returns, but the biggest benefit is the FDIC protection if the bank or economy suffers greatly. Because the funds are being held in a bank, the funds are backed by the United States government. The same is not true for other types of investments, like mutual funds, stocks, or bonds.

4. Financial services held in one, convenient place

Chances are that at some point, the company will need some way to save money and make that money work for them. If they are invested in bonds or the stock market, then that is just one more website to visit or report to read. If the funds are in a business savings account, the funds can be on the same statement as the checking account, making it eaiser to keep track of everything in one place and monitor progress.

5. Why not?

Saving funds for a business is always a good idea. A reserve of funds makes the company less sensitive to economic downturns or industry issues. While fees are involved in the account, most institutions will offer reduced fees and increased benefits for bundling services or maintaining a certain balance. The benefits of a cash pool plus relatively unrestricted access to it certainly outweigh the costs.

If you would like to learn more about a business savings account in the Houston area, click here.

How to Have a Great Relationship With Your Commercial Banker

Commercial banking can be complicated. While it isn't necessary to be best friends with your banker, it could be beneficial to at least have a good working relationship, so they can help you understand the many delicate details involved in banking. As with any professional relationships, it is important to have respect for the professional knowledge of a colleague or vendor. More often than not, they can help you navigate the many pitfalls of business through their experience and industry know-how.

Simply scheduling quarterly meetings with your banker for a review and projection session could be all it takes to help. Some of those meetings could also include a tour of your facility to see your production levels, equipment, and meet your staff. Referrals is one of the best reasons to get to know each other. They have industry experience and could provide access to vendors and connections that could help you grow. In return, you probably have colleagues that could use commercial banking services they can trust. As you grow, you will likely need more services. That means that as you do more business with the bank, some fees could be bundled, making banking less expensive and more convenient. The banker knows you, what you need, and when an opportunity or issue arises.

The main ingredient to any relationship is trust. There is no exception for commercial banking. By getting to know each other and working together often, trust can be built on both sides. That means that when you are ready to ask about loans, they know the quality of business and the level of integrity you have. They will be more apt to help because they trust you and already know your financial history, with much of your information already on file. Likewise, you can trust them to suggest services that could help your company. Without that trust, you may think added products will simply be an unnecessary financial drain and could miss the benefits they offer. Through a trusting relationship, the banking experience has more benefits and less hastle.

If you would like to learn more about commercial banking in Dallas, visit Green Bank.

Do I Need a Business Checking Account If I'm Self Employeed?

If you are self employed, you may think that simply using your personal banking account is sufficient for all of your needs, but getting a business checking account could help. Even though you work for yourself, you are still running a business. In order to help keep budget and tax information separate and clear, it is helpful to have the cash flow in and out tracked through an account different than your personal accounts. While a business account may include different fees, it is also structured with tools that could help your business. 

 

If you have a hobby or startup business and it looses more than it brings in, you might be under the impression that it is easier to simply use your personal accounts to handle the financial transactions. However, by taking advantage of a business checking account, you help make the business more credible. Customers and banks can take the company more seriously if they make a payment to a business name, rather than your name. That could be the nudge your young company needs to make it viable. It can also help separate the losses of the business from affecting your household cash needs.

Especially for those businesses that are structured as a corporation, partnership, or LLC, it is important to be very careful about keeping personal and business transactions labeled correctly through a business checking account. If charges and income are confused between the two, there could be unfavorable legal repercussions. Both entities could be sued for liabilities. While you may think it easy to simply remember which transaction belongs to which entity, the hectic pace of life could easily cause a mistake. You may accidentally attribute a trip to an office supply store to the business, when it was actually for your children's school supplies.

Companies that are sole proprietorships are the least affected by using a two-for-one approach to banking. However, having separate accounts will make it easier to keep the books when the business is handled in its own accounts. Otherwise, you end up with situations such as worrying if the mortgage payment will bounce because a large business expense had to be made. It is important to speak with your accountant and banker to ask the important questions about your particular situation to make sure a business checking account is good for you.

If you would like to learn more about a business checking account in the Huston area, visit Green Bank.

Tips for Finding the Best Certificate of Deposit Rates

The point of any investment is to make money by using the money you already have. That is no different when trying to find the best certificate of deposit rates. While many factors can go into an investment option, one of the most important is trying to make the most you possibly can. Some formats offer bigger returns, but others offer less risk. In order to make a good investment decision, you need to know your situation, what goals the investment plan is being used to satisfy, and your risk tolerance. Typically poor investment options simply don't provide you with the most bang for your buck.

The conventional wisdom for certificate of deposit rates is that the longer the term, the better the rate. Typically it is true that the longer you leave your money in the hands of the issuer of the certificate, the higher the rate of return will be. However, be aware of several new products that can make that idea untrue. Some banks offer particularly competitive rates, for relatively low terms. Also, if interests rates are low and you are locked into a low rate for a long term, you don't have access to any possible higher rates being offered during that period.

The first step to getting the best certificate of deposit rates is to do your homework. Check what is available in your area. Find which banks are offering the best rates, have the best options, and if any are offering special deals. Sometimes, there are fancy CDs that allow you to adjust your interest rate during the term or provide a more liquid environment for your money that a traditional variety. Make sure the regulations are transparent and that you fully understand all penalties and benefits. Don't be afraid to shop around to locate the best deal for you. Know what products are available and choose wisely.

If you are interested in learning more about certificate of deposit rates in Austin, Texas, visit click here.

How to Choose the Best Private Bank for You

Private bankers looking to find a new institution should know that there is more to selecting a bank than simply driving down the street and picking one. The wise shopper will ask a few questions of the location, in order to select the best private bank. Although the process could take a little more time, the educated consumer is often more satisfied long-term with their purchase or business dealings.

Banking is about money, but it is also about a relationship between you and the banker. Meet with your potential banker. Make sure they show a genuine interest in you and your business with them. Too often, unnecessarily pompous suits fill the positions and private bankers gain nothing by doing business with them. Finding a banker with whom you have a solid connection can make a big difference down the road. In the initial meeting, they should ask pertinent questions about you and your business with them and should naturally be trustworthy. You should be the focus of the meeting, not them. A bonus to prove their ethics is asking how active they are in the communities they serve. Being philanthropic is always a good sign.

Private bankers should also ask whether the bank is actually a bank or simply a branch. The average customer may not know the difference, but when asked, the staff will be able to answer. A branch means that your money is not being held there, but in another location, at the actual bank. This may not be a problem, if it is a local bank, but if it is a large international institution, your money could be in a very different place than you reside, and perhaps subject to different rules.

Another thing to make note of is whether or not the bank is a super sized one, or a small local one. The untrained person may think that going with bigger is better. However, selecting a big bank means it is almost impossible to calculate your risk with them. The large ones have a vast and complicated network of dealings, often across the globe. If problems arise, the house of cards falls. With a small bank, the risk can often be calculated fairly accurately and any damage kept to a minimum. With banking, often smaller is better. However, even a small bank will typically be able to offer a robust variety of products and services, so you aren't being cheated.

If you would like to learn more about private bankers in the Austin area, click here!

5 Ways You Can Save Money Right Now

Financial sustainability does not have to be a mythical creature in your life. While money is one thing everyone could use more of, there are ways to cut back in your spending habits in order to reroute that money to an emergency fund, rainy day fund, or to simply improve your financial standing.

1. Budget

You have a greater chance of reaching your goals of financial sustainability if you make a budget and stick to it. Without a plan in place, you have no idea of knowing how you are doing in your savings quest and are likely to backslide into old, expensive habits. There are a number of tools available online to help make a budget and track your spending.

2. Entertainment

All things in moderation is the rule of thumb for spending on extras, especially for financial sustainability. Splurges and luxuries are okay, but make sure that you need them and that there isn't a less expensive alternative. For instance, instead of going to the movies, rent a video from a kiosk. Drop your health club membership if you never go and jog at home.

3. Automobile

By properly maintaining your vehicle, you can save on gas and auto expenses. That includes keeping your tires at the proper inflation amount and changing your air filter when needed. If you are in the market for another car, look into those that are a year or two old. Not only will the note be less expensive, but the insurance, too!

4. Energy

Rather than waste money on your monthly bills with inefficient energy options in your home, take a few moments to turn off lights in rooms that aren't occupied. Better yet, exchange traditional bulbs for energy efficient ones. The same goes for turning off appliances when they are not in use. Financial sustainability can be easy with a few small changes.

5. Food

You may not think that much about spending $5 a day for lunch, but do the math on that. By bringing your lunch and keeping snacks on hand rather than eating out, you will save a significant amount of money in a year's time. Also remember that generic food brands are just as safe and nutritious as their more expensive name brand counterparts.

If you would like to learn more about financial sustainability in the Houston area, click here!

5 Strategies for Better Checking Account Management

Checking accounts are one of the most used financial tools. Be a more effective manager of your own money with a few easy tips.

1. Keep your information private

Never give your banking information to anyone you don't know. Verify that a business is legitimate before you share information about your checking accounts and don't feel pressured by pushy sales people. It could be a phishing scam.

2. Inform your bank about problems

If something looks odd about your statement, your bank should be contacted immediately. The sooner they know about an issue, the sooner they can stop the situation. Simply knowing your bank's policies and procedures can prevent stress when you are already in a tricky situation. Do your checking accounts offer protection for theft or fraud? Perhaps you can enroll in a program for added security.

3. Keep it balanced

By keeping your checking accounts balanced, you know how much money you actually have. Use a simple excel spreadsheet, accounting software, or the check register that came when you ordered your checks. Some banks have their own tools to help you.

4. Spend only what you have

Only make purchases when you are sure you have the funds to cover them. “Floating” payments (overdrafting with the intent that your deposit will arrive before the check does) is dangerous these days, with the speed of online payments and bank processing. You might get a one-time forgiveness for overdrafting, but there can be fees involved.

5. Check your account often

By keeping an eye on your account and monthly statement, you can reduce or prevent damage due to theft, fraud, or simply over-spending. Checking accounts also have online access, allowing you to check activity any time that is convenient for you, and banks can provide apps to notify you when payments are being made.