Breaking News: Bank of America to End to Overdraft Fees!

I don't know a single person who LIKES overdraft fees but we've almost all dealt with them when we've accidentally spent more money than we actually have in our account. I admit, I'm guilty of spending too much and paying an overdraft fee here and there. My guess is that most of you have been victim of an overdraft fees at least once in your life.

What are overdraft fees?

Overdraft fees are fees that you incur if you accidentally withdraw or make a purchase that you don't have enough money to pay for. Often when this happens, your bank will charge you a fee for spending more money than you have in your account. You must then pay this fee when more money is added to your account. Note that if you have a nice cushion in your checking account, you may never have to deal with overdraft fees. All the more reason to save money to cover unexpected expenses!

The New York Times just reported that Bank of America is planning to end overdraft fees! Now instead of being able to spend more money than you actually have, if you do not have enough money in your account, your card will simply be declined.

You will also have the option to opt in for overdraft protection in case you have re-occurring bills that you want to make sure are paid BUT you'll be paying a premium of anywhere from $10 or more for the convenience of withdrawing too much money from your account.

The article quotes that, "last year alone, banks generated about $20 billion from overdraft fees on debit purchases and A.T.M. transactions, and $12 billion more by covering checks and recurring bills, according to Moebs Services, an economic research firm."

Why is Bank of America giving up tens of millions or even billions by doing away with overdraft fees? They want to win you back as a customer, regain your confidence and trust in them as well as continuing to build their reputation.

Will other banks follow? Only time can tell but let's hope so!

Click here to read full article

Again, make your bank WORK FOR YOU! Find out what your bank's overdraft policies are and if you don't like what they tell you, it might be worth looking around for another bank.

We all hope that we have enough money in our accounts and that spending too much will never happen. But if you're living paycheck to paycheck you might be spending more than you'd like on overdraft fees simply because you don't know the rules and regulations.

It's true that overdraft fees may be eliminated but be sure to read your statements for any new changes and charges that might apply to your account!

Breaking News: Sallie Mae Enters Online Banking!

Yesterday Sallie Mae launched the newest division of their company, online banking! Better known for their student and education loans, they're branching out a bit. I haven't tried their services but I'm all about options so here's the run down on Sallie Mae's online bank.

They're focusing on two types of online banking:

1. Savings Account

2. Certificates of Deposit or CD's

Savings Account also known as "Online High-Yield Savings Account"

- 1.35% Annual Percentage Yield (Claim that rates are 5 times the National average)

- No Minimum Balance

- No Monthly Fees

- Daily Compound Interest

- FDIC Insured

- Pairs with Upromise program - The New York Times has a great section about the benefits of Upromise as linked to the high-yield savings account. Click here to read article

Click here to get more information

Certificates of Deposit

CD's are a GREAT way to "make your money work harder for you" by allowing you to get a higher interest rate on your investment pending on the fact that your money will be tied up in the CD for a fixed period of time (can range anywhere from 2 months to 20+ years)

Sallie Mae's Certificates of Deposit

- No Minimum Deposit

- No Monthly Fees

- Guaranteed Return

- FDIC Insured

- Option of automatic renewals at maturity

Three options - the longer the fixed period of time, the higher the interest rate

1. 12 Month CD at 1.50% APY

2. 36 Month CD at 2.20% APY

3. 60 Month CD at 3.00% APY

Click here to get more information

I LOVE certificates of deposit! I've gotten in the habit of trying to "put away" $2,000 or so in a CD if/when I can find a good rate. (1.50% APY is definitely a competitive rate given the current economy) There are a TON of options so be sure to do your research. I have yet to do some real digging into the best CD rates out there but I'll be sure to report back as that's next on my financial "to-do" list.

Sallie Mae is just ONE option and there's no PERFECT bank. Many people fall into the trap of assuming one bank can do everything for them.

When looking for a bank, shop around and do your homework by looking for the highest annual percentage yield for checking and savings accounts, making sure your credit cards and the perks that come with them fit your lifestyle, and by knowing their customer service policies and hours. (What happens you lose your credit card or have an issue? Is there a live person to help you or are you stuck with a machine?)

Under no circumstances should you get pressured into opening a bank account. You want to make sure you're comfortable with whatever bank you go with, they're working for YOU...not the other way around! Get to know their online interface and your local branch, if they have one and don't be afraid to ask questions, they're there to help you!