The Penny Hoarder |
- Do This Instead of Gambling on Stocks like GameStop
- Know How to Fill Out FAFSA Form for Better Chance at Aid
- 8 Hispanic Financial Influencers You Ought to Know
- 5 Tips to Celebrate Halloween on a Budget
- Best Savings Accounts for October 2021
- 5 Ways to Splurge On Something Without the Guilt
| Do This Instead of Gambling on Stocks like GameStop Posted: 30 Sep 2021 01:45 PM PDT Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. The stock market can be a wild ride, and super confusing. Just for an example, what are we supposed to learn from the recent case involving GameStop? The chain of video game stores has been struggling for a long time. But in January 2021, the company's stock price skyrocketed up by 1,500%. Then it plunged back down to earth. Some investors made a fortune. Others lost a fortune. And it all happened thanks to a weird mix of Reddit stock traders, hedge funds, short sellers and thousands of individual investors — people like you. What should we take away from this? We asked Robin Hartill, a certified financial planner and a senior writer at The Penny Hoarder. Here's what she says: 1. Don't Invest Based on Emotion or FOMOThe GameStop stock mania was partially fueled by investors' FOMO — fear of missing out. Thousands of investors didn't want to miss out on the possibility of huge profits, and a lot of those same people ended up losing money in the end. "Ask anyone who's built wealth and wasn't born rich how they did it. They probably won't tell you a story about taking short positions or buying $2 stocks," Hartill says. "No matter how they feel about Wall Street, they'd no doubt tell you not to make investing decisions based on emotion." 2. Start Early — Buy and HoldSo how did those investors build wealth? "Most likely, they'll tell you that they started investing early," Hartill says. "They'll stress consistency and long-term investing over day trading." In other words, don't try to "time the market." Just start investing and keep investing over the long term. That's how you build wealth. Over the long term, investing in the stock market will get you an average annual return of 7%, adjusted for inflation, according to authorities such as the U.S. Securities & Exchange Commission. Don't know where to start? With an app called Stash, you can get started with as little as $1.* You can invest in pieces of well-known companies, such as Amazon, Google, Apple and more. You're able to invest in fractions of shares, which means you can invest in funds you wouldn't normally be able to afford. 3. Learn to Do Your Own Research on Picking StocksHartill recommends budgeting a certain amount of money to invest each month, no matter what. We like Stash because it lets you choose from hundreds of stocks and funds to build your own investment portfolio. But it makes it simple by breaking them down into categories based on your personal goals. Want to invest conservatively right now? Totally get it! Want to dip in with moderate or aggressive risk? Do what you feel. It takes two minutes to sign up, and it's totally secure. Subscription plans start at $1 a month.** Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account. Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He's a long-term investor who's never owned any GameStop stock. *For Securities priced over $1,000, purchase of fractional shares starts at $0.05. **You'll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.  This posting includes an audio/video/photo media file: Download Now | ||||||||
| Know How to Fill Out FAFSA Form for Better Chance at Aid Posted: 30 Sep 2021 11:00 AM PDT Filling out the Free Application for Federal Student Aid, better known as the FAFSA, is a rite of passage for prospective or current college students, whether they're attending a trade school near home or heading across the country to work on a bachelor's degree. The newest FAFSA form is available Oct. 1. Even though the deadline to apply is months away — and the exact deadlines vary by state — it's best to turn the form in as quickly as possible. Early applicants have better chances for more money. It's become easier to fill out in recent years — mostly by allowing you to use older tax data instead of making estimations and corrections — but filling out a financial aid application still isn't anyone's idea of a fun evening at home. But that's why we're here. Behold: Your ultimate guide to filling out the FAFSA form. We'll cover what exactly the FAFSA is, why every student and student-to-be seeking higher education should consider filling it out, how to complete the (dreaded) application itself and tips to get through the paperwork quickly. Table of ContentsIn this guide to filling out the FAFSA form, we'll cover:
What Is the FAFSA and Why Should I Fill it Out?The FAFSA (again, short for Free Application for Federal Student Aid) is a form administered by the U.S. Department of Education's office for Federal Student Aid. Current and prospective college students can submit the FAFSA form to determine what federal aid — in the form of grants, scholarships, loans or work-study jobs — is available to them each academic year. Colleges and universities frequently use data from the FAFSA to determine eligibility for their own scholarships and student assistance programs, too. What that effectively means is that the FAFSA isn't only for need-based aid or federal aid, so you should complete the FAFSA annually — even if you think your parents make too much money. New FAFSA Rules: FAFSA Simplification ActDue to new legislation known as the FAFSA Simplification Act, which passed in December 2020, some FAFSA rules are changing. The law aims to drastically simplify the FAFSA form, cutting it from more than 100 questions to 36 — eventually. The timing of the new law was too late, according to the Education Department, and the October 2021 form is largely unchanged from the previous year. Subsequent versions of the form will look much different. Two big changes that are already in effect: Previous drug convictions are no longer a barrier to receiving federal student aid. And male applicants no longer need to register for the Selective Service System (SSS) aka the draft or military conscription to be considered. Questions regarding drug convictions and the selective service still appear on the latest version of the FAFSA, but your answers will not be used against you. Key FAFSA Deadlines and DatesThe newest FAFSA form is available starting Oct. 1, 2021. Instead of hurrying to do your taxes in January 2022 to be able to submit an accurate FAFSA for the next academic year, the format allows you to use last year's tax data. So, if you're filling out your FAFSA this fall, you'll use your 2021 tax return — or your parents' tax return if you're a dependent student and/or didn't have to file taxes in 2021. Since the FAFSA uses older data, you'll be able to automatically import the required tax information using the IRS Data Retrieval Tool. Thanks to the new FAFSA simplification law, you won't need to use this tool in subsequent years because the agency will automatically pull your tax data for you. However, for this year, you'll still need to use the IRS tool to import your tax data. One caveat or limitation to using the IRS Data Retrieval tool: Since you're using older tax data to fill out your financial aid form, there's a chance your family's financial situation could have changed since you filed your 2021 taxes. If that's the case, contact your school's financial aid office to discuss your options. You'll still need to fill out your FAFSA form using the data you already reported. The deadline for submitting a FAFSA is still June 30 for the previous academic year beginning July 1. If you plan to take a class next summer instead of waiting for the fall semester, be sure to keep this FAFSA deadline in mind. Important FAFSA Dates
Preparing to Fill Out the FAFSA FormGetting your financial aid squared away might seem like a lot, but we've broken down each step so it's as manageable and non-threatening as possible. Here's what you should familiarize yourself with before filling out the FAFSA form. 1. Find Your State's DeadlineWhen is the FAFSA due? While the federal deadline for submitting your FAFSA is June 30, states have their own aid deadlines. For example, Florida's deadline for FAFSA processing is May 15 — a month and a half earlier than you might have expected. Check the deadline for your state of residence and note any special rules for award programs. Pro Tip Not all states have separate deadlines, but many administer funds on a first-come-first-served basis. So earlier is always better. 2. Gather Your Documents and MaterialsThis is not a time to leisurely go through the process of applying for aid. You need to know all the FAFSA requirements and have them at hand before you start. For example, let's say you wait till actually applying to gather your documents. If you idle too long on the FAFSA webpage while you're trying to hunt down your parent's Social Security number, you may get booted out for inactivity and have to reload and start again. Gather your materials before you log in to avoid that stress. Bits of info you may want to have handy include:
3. Brace Yourself With the Federal Student Aid Estimator ToolUse the Federal Student Aid Estimator tool to get an early estimate of your federal financial aid. The calculator doesn't reflect your actual aid eligibility — you have to go through the full process for that — but you'll answer the same types of questions as you will when you sit down to fill out the real deal. If you or your parents are unfamiliar with the FAFSA, this is an easy way to get your feet wet without being afraid you're going to mess something up. The process takes about 10 minutes to complete, and you'll need your basic tax and income information to get the best estimation. 4. First Timers, Do the FAFSA on the Web WorksheetIf this is your first FAFSA rodeo, the FAFSA on the Web Worksheet gives you a preview of the questions you'll need to answer when you fill out the online form. We recommend printing it out and doing the practice form in pencil. Then, have it handy when you do your online application, as the "notes" sections may help you navigate any tricky questions. Completing — or at least previewing — this form can help you determine exactly what tax documentation you'll be expected to provide for yourself, your spouse or your parents. 5. Sign Up for Your FSA IDIf this is your first time filling out a FAFSA form, you'll need to sign up for a Federal Student AID (FSA) ID, which helps you access and submit your financial aid information online. Back in the day, circa 2015, you used your Social Security number and a PIN to sign in. Now you create a username and password. An FSA ID allows you to log into the federal student aid website, apply for aid, save your progress — and it allows you to sign your FAFSA form electronically. To create a FSA ID, you'll need your Social Security number, a mobile phone and an email address. If your parents' or spouse's information will be included on your FAFSA, they'll need to individually sign up for a FSA ID too. The Social Security Administration verifies the information provided for FSA IDs. If your parents or spouse do not have an SSN, they can't create an FSA ID or electronically sign documents. Instead, they'll need to print out the relevant sections of the FAFSA document and physically sign them. In the portions of the form that request an SSN, they should use the number 000-00-0000. Don't toss your FSA ID login info aside once you complete the process this year; you'll log in next year to autofill your previous year's data and prompt you through the renewal process. 6. Set Expectations About Your Estimated Family Contribution (EFC)Later on, after you submit your application, you'll be able to review something called your Estimated Family Contribution (EFC). Basically, your FAFSA data is run through an algorithm, and it spits out an estimated amount of money it thinks your family can afford to pay for college. Knowing what the EFC is upfront can save you and your family a major headache. Your EFC number will probably be some astronomical amount that makes you sweat. But don't panic. That's probably not the amount you'll actually have to pay. It is purely an estimation — and the EFC is long known to confuse applicants. The good news is this is one of the last times you'll have to deal with the EFC. The FAFSA Simplification Act created a new system and renamed it to the Student Aid Index to avoid confusion, and it will be rolling out later. When you see the EFC number, remember that along with Pell Grants, work-study jobs and federal student loans, you may be eligible for merit awards or other scholarships (or even some really unusual scholarships) to help you pay the remaining portion. It is not a definitive number of what you will owe. We repeat: Do not panic.     How to Fill Out the FAFSA Form, Step by StepIf you've completed the preparation steps above, the FAFSA form itself will be manageable. Still, it's good to know what to expect. Here, we'll break down the infamous FAFSA application form itself — and, hopefully, you'll find that it's not so intimidating afterall. The FAFSA Web Worksheet and last year's FAFSA application will drastically help you set expectations. The FAFSA application is about 10 pages long and contains more than 100 questions. But once you have it in front of you, you'll notice that several pages are dedicated to instructions and definitions. Only about six pages contain questions. Even better, you won't need to answer every single question. There are separate sections for parental information that won't be required for everyone. Overview of FAFSA StepsHere is a basic overview of the seven application steps. We'll dive even deeper into how the subsections breakdown below.
The form is color-coded and the seven steps are divided in two main categories: student (you) info and parental information. Here's a closer look. Student (That's You) Information QuestionsQuestions related to you and the schools you want to attend are non-linear and scattered throughout the FAFSA form. That's because, depending on how you answer the first batch of questions, you may be able to skip over several other questions and sections. Here's what you, as a student, may be required to answer. Steps one through three of the FAFSA ask about your financial situation, basic demographics and marital status. Based on your answers here, you'll be able to determine if additional information is needed from a spouse (if you're legally married) or your parents (if you're younger than 24 and financially dependent on them). If you are considered a dependent student, you'll need to provide demographic and tax details on your parents, next. If you're independent, you can proceed to step five to input your own tax and income info. Step six is also for students. In this section, you'll list the top colleges that you want to attend and receive financial aid for. You can use the college's institution code, which is indexed in an easily searchable database. In lieu of a code, you can list the college's full name and address. Key documents you'll need to answer questions for the student section include:
If you've compiled these documents beforehand, you can probably blast through the student questions in 15 minutes or fewer.  Parental QuestionsDepending on how you answered the student questions in step three, you may be considered a dependent student, i.e. you rely on your parents for some form of support. If you answered no to any questions in step three, you and your parent(s) will need to complete step four. This step requests parental information related to taxes, income, demographics and more. Given the nature of these questions, it's best you fill these out together (even though the FAFSA form poses them to you — e.g. "What is your parents' state of legal residence?") At the end, step seven will require them to separately sign anyway — either electronically through their own separate FSA account or physically if they don't have a Social Security number. So it's best to have them nearby. Key documents you'll need to answer questions for the parental section include:
After You Submit Your FAFSA FormCongratulations! You did it. In a few days, you'll receive a Student Aid Report (SAR) that summarizes your FAFSA data and confirms you've completed your application correctly. You'll see your EFC, that we mentioned above, listed on your SAR. Again, don't panic at this number. It's an estimation. You'll also be able to review your Student Aid Report for any mistakes and correct them online through your FSA account. When the colleges you've applied to send your acceptance notices (fingers crossed!), you'll also get a financial aid award notice, either in the same package/email or a few days afterward. Your school of choice may have additional questions about your FAFSA responses, but in that case, it will contact you directly. Some schools may ask you to independently verify some of the information you provided on your FAFSA, so it's a good idea to keep the documents you used to answer the FAFSA questions handy. Fill Out the FAFSA Fast With These TipsHere's how to cut down on the time it takes to fill out the FAFSA.
If you're properly prepared and take these steps, you should be able to knock out the entire FAFSA process in as little as an hour. Frequently Asked Questions (FAQs) About the FAFSAHere are the answers to your frequently asked questions about the FAFSA. Who Should Apply for the FAFSA?Any current and prospective college students should fill out the FAFSA, even if they don't think they'll qualify. Many colleges use the information from the FAFSA to determine eligibility for merit-based scholarships and other financial aid. Currently enrolled college students should fill out the FAFSA each year to account for any changes in income, dependency or marital status. After you fill out the FAFSA the first time, it becomes much easier to do so subsequently. What are the FAFSA Deadlines?The FAFSA becomes available on Oct. 1, 2021 for the upcoming 2022-2023 academic school year. The federal deadline to submit the FAFSA for that academic year is June 30, 2023. However, many states set their own deadlines, which could be much sooner. And federal aid is earmarked on a first-come-first-served basis. So applying earlier is always better. How Long Does it Take to Fill Out the FAFSA?How long it will take you and your family to complete the FAFSA entirely depends on how much preparation you've put in. There are several key things you can do before you sit down to fill out the form itself, which we've outlined above. These steps — like gathering your demographic, tax and income documentation early — will drastically cut down on the time it takes to complete the FAFSA. If you are well prepared with the information requested on the FAFSA form, it can take as little as one hour to complete and submit. What Did the FAFSA Simplification Act change?The FAFSA Simplification Act changed a lot, and it's key goal was to make the FAFSA quicker and easier to submit. The new law, which passed in December 2020, will ultimately cut the FAFSA form down to 36 questions, expand eligibility for need-based grants, reduce the burden for supplying tax documentation from the IRS and more. However, the FAFSA form released on Oct. 1, 2021, will not reflect most of the changes outlined in the new law because, as the Department of Education said, there was not enough time to implement many of the new rules. Adam Hardy is a personal finance reporter and editor based in St. Petersburg, Florida. Lisa Rowan is a former senior writer and on-air journalist for The Penny Hoarder. She would like to warn you that you need to fill out the FAFSA for graduate school, too. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.  This posting includes an audio/video/photo media file: Download Now | ||||||||
| 8 Hispanic Financial Influencers You Ought to Know Posted: 30 Sep 2021 09:00 AM PDT Our cultural background and upbringing often shapes how we navigate our lives — including our financial lives. In honor of Hispanic Heritage Month, we'd like to shine a spotlight on several personal finance experts from the Latinx community who are championing for more inclusivity within the financial industry and are doing their part to raise financial literacy in their communities and beyond. 8 Hispanic Personal Finance Influencers to FollowFrom podcasters and bloggers to Certified Financial Planners and Accredited Financial Counselors, the money gurus on this list help both English and Spanish speakers alike learn to better their financial lives. 1. Jannese Torres-Rodriguez of Yo Quiero DineroJannese Torres-Rodriguez is a Puerto Rican side hustle queen who runs the podcast "Yo Quiero Dinero." With the success of her food blog, Delish D'Lites, and other entrepreneurial pursuits, Torres-Rodriguez was able to quit her day job in May 2021 at age 36. On her podcast, she shares money stories from other Latinas and people of color. She educates and inspires others to gain control of their financial lives, build generational wealth and become financially independent. 2. Jen Hemphill of Her Dinero MattersHailing from humble beginnings in Colombia, Jen Hemphill is an Accredited Financial Counselor and author of the book Her Money Matters. On her podcast, Her Dinero Matters, Hemphill chats with other members of the Latinx community about various personal finance topics from budgeting and goal setting to entrepreneurship and investing. She also discusses matters that specifically affect the Hispanic community, like how to overcome financial barriers as an immigrant and what Latinos need to know about retirement. 3. Luis F. Rosa of On My Way to WealthLuis F. Rosa moved to the United States from the Dominican Republic at age 11. Despite not learning much about money at home, Rosa grew up to become a Certified Financial Planner and runs the financial planning firm Build a Better Financial Future. His podcast, On My Way to Wealth, offers financial tips to busy Gen X-ers — covering topics like buying a home in a hot real estate market and using a health savings account. Investopedia named Rosa among one of the top financial advisers of 2021. 4. Athena Valentine Lent of Money Smart LatinaAthena Valentine Lent has a mission to bring financial education to those in her community. Her blog, Money Smart Latina, strives to do just that. In 2020, Money Smart Latina earned a Plutus Award for Best Personal Finance Content for Underserved Communities. Valentine Lent is also a public speaker and personal finance writer. She is Slate's Pay Dirt columnist. Check out her inspirational money quotes on Instagram.    5. Beatriz Acevedo of SUMA WealthBeatriz Acevedo is an Emmy-award winning Latina media maven and entrepreneur. Her platform SUMA Wealth (which can be accessed completely in Spanish) is a financial inclusion company that aims to educate and empower the Latinx community. SUMA features engaging personal finance advice and offers a "dinero toolkit" to help people tackle credit card debt, grow their savings and consider homeownership. 6. Rita-Soledad Fernández Paulino of Wealth Para TodosRita-Soledad Fernández Paulino is a former math teacher turned personal finance educator. Her platform, Wealth Para Todos, is dedicated to teaching those in underserved communities how to build wealth. In addition to sharing financial advice on Instagram, Paulino has a bimonthly newsletter where she discusses money mindsets, financial goal setting and budgeting. She and her husband are on a path to retire before 50, and Paulino is studying to become a Certified Financial Planner. 7. Jully-Alma Taveras of Investing LatinaBorn in the Dominican Republic, Jully-Alma Taveras is the woman behind Investing Latina, a platform that encourages others to grow their wealth through investing. She teaches investing workshops and has a YouTube channel where she explores topics such as getting started with investing and saving money with minimalism. In 2020, Taveras earned a Plutus People's Choice Award for Investing Latina. 8. Anna N'Jie-Konte of First-Gen RealnessAnna N'Jie-Konte is an Afro-Latina with Puerto Rican and West African roots who aims to help women of color build generational wealth. Her First-Gen Realness podcast explores culture, entrepreneurship and finance. N'Jie-Konte is also a Certified Financial Planner and founder of Dare to Dream Financial Planning, where she consults with clients virtually. Investopedia named her among one of the top financial advisers of 2021. Nicole Dow is a senior writer at The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.  This posting includes an audio/video/photo media file: Download Now | ||||||||
| 5 Tips to Celebrate Halloween on a Budget Posted: 30 Sep 2021 07:00 AM PDT The creepy, animatronic witch drew you in with her cackling laugh. That would be perfect for the front porch, you decide. You meander through the Halloween displays at your favorite big-box store and spot the perfect sinister costume to wear to your co-worker's annual holiday bash. Everyone will get a kick out of this. You add a couple bags of candy to your cart, because you can't disappoint the trick-or-treaters. And right before you get to the register, you see an arrangement of pumpkins. What's Halloween without a spooky jack-o'-lantern? But when the cashier rings everything up, it's your turn to get scared… by the total. It's easy to get swept up in overspending to celebrate Halloween. But with some creative thinking, you can avoid the festive money traps. 5 Ways to Celebrate Halloween on a BudgetKeep spending under control this year with these money-saving suggestions. 1. Skip the Store-Bought CostumeSave a trip to the store and search the corners of your closet for something you can turn into a last-minute Halloween costume. Throw on a brightly colored shirt and add shorts, sandals, shades and a sunscreened nose for a tourist look. Or go as a new-age witch with some drapey, black layers along with dark jewelry and goth makeup. Speaking of makeup, check beauty stores and drug stores instead of party stores for better quality, selection and prices. 2. Shop at Dollar Stores for DecorSure, those motion-sensored decorations that make all the kids jump are neat. But we'll pass on those prices. Discount stores like Dollar Tree, Family Dollar and Five Below sell seasonal decor for just a few bucks. And don't forget the ones you can make yourself. Here's a huge list of cheap Halloween decorations to get you inspired. 3. Nix the CandyYou don't have to be a Scrooge (wrong holiday, we know) and ignore the knocks from trick-or-treaters come Oct. 31. But you don't have to waste money buying what you hope is enough bags of fun-sized chocolate either. Swap the sweets out for Halloween candy alternatives like stickers, spider rings or glow-in-the-dark bracelets. The cost of those trinkets may be comparable to candy, but the advantage is you can save leftovers for next year. We're not doubting you couldn't eat your way through half a bag of Reese's peanut butter cups, but who wants all those extra calories — or the guilt trip from the dentist. 4. Make the Most Out of Your PumpkinThere's so much more you can do with that orange gourd than propping it in a window for decor. You can add pumpkin puree to a pasta dish, roast pumpkin seeds, make a planter or whip up a pumpkin face mask. Check out this story for more ideas on what to do with pumpkins after Halloween. Sidenote: If you can't get enough of pumpkin spice lattes, here's how you can get them for less. 5. Bring the Kids to a Free EventHaunted hayrides, ghost tours and trips to amusement parks include admission fees. Entertain the kids with free Halloween events instead. Local fall festivals, costume parades, trunk-or-treat events and outdoor movie screenings are great options to get in the Halloween spirit without spending a dime. Check your city's events calendar or your local newspaper to see if your town is putting on any free Halloween events. Or let the kids invite their friends over for pumpkin carving, a Halloween-themed arts-and-crafts session or a spooky movie marathon at home. You don't have to be out and about, spending money, to have a ghoulishly good time. Nicole Dow is a senior writer at The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.  This posting includes an audio/video/photo media file: Download Now | ||||||||
| Best Savings Accounts for October 2021 Posted: 30 Sep 2021 05:25 AM PDT When it comes to savings accounts, where do you even begin? Do a quick search, and you'll find many different options with varying percentages and minimum requirements. It can get overwhelming, fast. Keeping this in mind, we've rounded up the best savings accounts — including ones at online banks and traditional brick and mortar — of 2021. We've included top information you need to know before opening or switching an account. And before we move on, yes, we recommend that Penny Hoarders have a savings account — keeping your cash in a box under your bed is not a solid, or safe, financial plan. We want you to feel empowered so you can get the best proverbial bang for your buck. We've ranked the very best savings accounts available today to help get you started. But first, here's some background on key terms. What is a Savings Account?A savings account is a bank account where you store your money. Typically, you keep it here for long-term goals instead of using it for everyday expenses. To see a detailed explanation of how it differs from a traditional checking account, visit our checking vs. savings account comparison. The best savings accounts are secured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. That means if you store your money with a bank and it goes under, you won't lose your money. Savings accounts are perfect for achieving your savings goals — for a car, a house, a wedding, vacations, you name it. More importantly, they are the best tool to build your emergency fund. Most experts agree your emergency savings should total six months' worth of necessary expenses in the case of job loss or another unpredictable emergency. Necessary expenses might include rent/mortgage, car payments, insurance, medical bills, utilities and groceries. However, don't sweat it if you don't have six months' worth saved up. It takes time to build up your savings. Even if you can consistently deposit $50 a month, that's a good start. One thing a savings account is not is an investment account. Savings accounts have historically low interest rates (or APY — annual percentage yield), but they are inherently low risk. Pro Tip After you have padded your savings account with enough cash to cover emergency expenses and your other savings goals, you'd be better off opening an IRA or 401(k) or investing in stocks. Common alternatives to savings accounts include certificates of deposit (CDs), where you store your money for a fixed term for a slightly higher interest rate, and money market accounts, which typically offer a higher APY but have significantly higher minimum balance requirements. So just how much interest will you earn in a savings account? That depends on the amount you've saved and your APY. Online Banks vs. Brick-and-Mortar BanksBefore the advent of the internet, brick-and-mortar banks (and credit unions) were the only place to store your money, if not in your duffel bag. But over the last couple decades, online banks have transformed the way we think of safely storing our money, and because of their low overhead (fewer staff and few or no physical locations), they can offer much better interest rates on savings accounts. Pros of Online Savings AccountsWhen online savings accounts first surfaced, bank customers were hesitant to store their money with companies they had never heard of and were fearful of internet security issues. Today, many of these same customers now see far more pros to online savings accounts than their traditional physical banks. Higher Interest RatesThis is easily the most important distinction between brick-and-mortar banks and online banks. The national average APY for a savings account is 0.06%, according to the FDIC. But many brick-and-mortar banks offer less than that. Online banks, on the other hand, tend to offer savings rates that are better — sometimes a lot better AvailabilityOnline banks are always open. The most competitive online banks offer around-the-clock service over the phone or online, and typically have more user-friendly apps and websites. Some national banks and credit unions may offer 24/7 service, but their physical locations are typically limited to the 9-to-5 business hours. Pros of Brick-and-Mortar Savings AccountsThere are advantages to brick-and-mortar banks. However, if these benefits do not hold massive weight for you, we highly recommend an online savings account. Easy Access to Account FundsEmergencies wait for no one. If you have an unexpected need for $10,000, it would be nice to be able to immediately access that. Many online savings accounts take several days to get you your funds via ACH deposit or a written check, though wait times for ACH deposits have dramatically decreased in recent years. (You can also speed up the process by opening a checking account with your online bank or choosing an online savings account with ATM benefits. Prioritize online banks that offer free checking accounts or ATM convenience cards.) Brick-and-mortar banks, however, can allow major withdrawals at any of their locations. No waiting necessary. In-Person SupportSome people prefer to resolve their issues over the phone or online, but many others find comfort in face-to-face communication. By opening a savings account with a bank that offers physical locations, you'll be able to get in-person help from financial experts during regular business hours. … And a Toss-UpWhen it comes to access to ATMs, there is no clear winner. Obviously, brick-and-mortar banks and credit unions offer ATMs at all their locations, where you can easily withdraw your money. Many online banks, however, offer fee-free withdrawals at select ATMs, and the best online banks will reimburse you for fees incurred out of network.   Best Savings Accounts of October 2021, RankedSo what are the best savings accounts of october 2021? That depends on what you value most. In determining our top nine, we reviewed more than 20 popular savings accounts and considered what elements seem to be most universally important:
We considered only savings accounts that were FDIC-insured or NCUA-insured and had no monthly fees. Because physical branch access is becoming increasingly less important, all accounts on our list are online or hybrid (online with some brick-and-mortar bank locations). So what didn't we consider when making our list that you might also want to look for? Bonuses: Because banks regularly add, remove or replace their bonuses, we did not include them in our criteria. If you're stuck between two or three comparable savings accounts, see which one offers the best sign-on bonus. We highly recommend checking out our current bank promotions list to help earn bonus cash or incentives when signing up for a new savings account. Customer service: Quality of customer service is subjective. Read reviews and ask friends and family about their experiences when considering banks. To truly determine how you feel about the level and quality of customer service, give the bank a call and ask some questions about the account. From that interaction, you should be able to feel out how much each bank values customers and prospects. Here are our picks for best savings accounts: 1. Synchrony Bank High-Yield Savings AccountWe ranked Synchrony's account as the best savings account of October 2021 because it has the perfect combination of the most important elements of a bank. APY: 0.50%. Monthly fees: None. Minimum balance requirement: None. Additional fee for withdrawals: None. ATM card: No fee for in-network ATMs, $5 monthly reimbursement for out-of-network ATM fees Access to funds: ATM, electronic transfer to an external account, wire transfer or a paper check in the mail. Mobile app: Yes. At the time of this writing, the app has a 4.7 rating on the App Store and 4.7 on Google Play. Details: Synchrony Bank High-Yield Savings account. 2. CIT Savings Builder AccountCIT Savings Builder is another solid account option, but you have to meet certain conditions to earn it: APY: To earn up to 0.40% APY, either your account needs $25,000 in it, or you must make a monthly minimum deposit of $100 to the account. The latter option should be more feasible and is a good incentive to save each month. Minimum balance requirement: $100. Additional fee for withdrawals: None. ATM card: None. Access to funds: Electronic transfer, wire transfer (free if you have $25,000 or more in the account) or paper check. Mobile app: Yes. At the time of writing, the app has a 4.6 rating on the App Store and 4.2 on Google Play. Details: CIT Savings Builder. 3. Ally Online Savings AccountThough savings accounts are different from checking accounts — and thus should not be thought of as a place to quickly and easily get money — Ally does make it easier than most to access your funds when you need them. Just open a free checking account (ranked 5th in the best online checking accounts of 2020), and you can easily transfer your money over. APY: 0.50%. Minimum balance requirement: None. Additional fee for withdrawals: After the six permitted withdrawals a month, you'll pay $10 per transfer with Ally. ATM card: None. Access to funds: You can transfer money via direct deposit, electronic transfer, wire transfer or paper check. Mobile app: Ally's mobile app is highly rated at 4.7 stars on the App Store and 4.2 on Google Play. Details: Ally Online Savings account.  4. Alliant High-Rate Savings AccountThe Alliant High-Rate Savings account is offered via the 100% Alliant Credit Union, so instead of FDIC insurance, it carries insurance through the National Credit Union Administration, but the benefits are the same. Because it is a credit union, joining Alliant can be a little more challenging. You need to fulfill one of these four requirements:
APY: 0.55%. You need an average daily balance of $100 for the APY to kick in. Minimum balance requirement: $5. Additional fee for withdrawals: Hard limit on six federally regulated withdrawals. ATM card: Money access is super convenient with a free ATM convenience card that qualifies at more than 80,000 ATMs nationwide. Access to funds: You can get a savings ATM card if you don't have a checking plan and card with Alliant. More details. Mobile app: It's got a solid app (4.3 on the App Store and 4.6 on Google Play) Details: Alliant High-Rate Savings account 5. Discover Savings AccountThe Discover Savings account offers a substantial APY and easy access to funds via a rewards checking account. APY: 0.40%. Minimum balance requirement: None. Additional fee for withdrawals: The bank may refuse to pay transactions that exceed the six monthly permitted withdrawals. ATM card: While Discover doesn't offer an ATM card for its FDIC-insured savings account, you can sign up for the Discover Cashback Debit (it's free!), which earns up to 1% cash back on up to $3,000 a month. Access to funds: The linked debit account provides an easy way to transfer funds; otherwise, you can rely on electronic transfers, wire transfers and paper checks. Mobile app: Discover's app has a 4.9 rating on the App Store and a 4.6 rating on Google Play. Details: Discover Savings account Learn more: Discover Bank review 6. Capital One 360 Performance Savings AccountThis big-name account boasts no monthly fees, easy integration with other Capital One 360 accounts (including a checking account for easy funds transfer) and a killer app. APY: 0.40%. Minimum balance requirement: None. Additional fee for withdrawals: Hard limit on six federally regulated withdrawals. ATM card: None. Access to funds: If you don't open a linked checking account for the easy ATM access, you can still access your funds via the traditional (but slower) means. Mobile app: In 2018, the Capital One 360 mobile app was ranked No. 1 in customer satisfaction in the banking category for the second year in a row in J.D. Power's U.S. Banking App Satisfaction Study. The app has a 4.8 rating on the App Store and a 4.7 rating on Google Play. Details: Capital One 360 Savings account 7. Barclays Online Savings AccountBarclays has its cons, like challenging access to funds, but its high APY and strong mobile app earned it a spot on this list. APY: Barclays is one of three banks on this list to offer the competitive 0.40% APY. Minimum balance requirement: None. Additional fee for withdrawals: Withdrawals that exceed the monthly limit will result in a fee. ATM card: None. Access to funds: You can deposit and withdraw funds in a number of ways, through direct deposit, an electronic transfer, paper check and more. Mobile app: Yes — it has a 3.7 on the App Store and a 1.8 on Google Play. Details: Barclays Online Savings account Learn more: Barclay's Bank review 8. American Express Personal Savings AccountYou might rely on American Express for your credit card, but the bank offers an online savings account worth your consideration as well. APY: 0.40%. Minimum balance requirement: $1. Additional fee for withdrawals: Hard limit on nine withdrawals, though this is more than most of its competitors. ATM card: A major drawback of the American Express account is the lack of an ATM card. Access to funds: Electronic transfer, wire transfer and paper check are the only ways to access your money. Mobile app: It currently has a 4.9 rating on the App Store and a 4.2 rating on Google Play. Details: American Express Personal savings account 9. Marcus Online Savings Account by Goldman Sachs AccountOur final online savings account is by Goldman Sachs. It offers a competitive APY and fairly new mobile app. APY: 0.50%. Minimum balance requirement: None. Additional fee for withdrawals: Due to a change in federal law, Goldman Sachs currently doesn't impose a limit on withdrawals. ATM card: None. Access to funds: Withdrawals are limited to electronic transfer and wire transfer (you also cannot deposit checks via the app). Mobile app: Yes. It has a 4.9 rating on the App Store and a 3.7 rating on Google Play. Details: Marcus Online Savings Account  6 Tips for Choosing a Savings AccountYou should be aware that banks can change interest rates, develop better apps and update their bonuses, so it is important to understand how to determine the best savings account for yourself. Here are a few tips: 1. Consider Your NeedsWe prioritized high savings rates, ease of funds transfer and mobile apps in our rankings, but maybe for you, two-factor authentication and customer service are top considerations. Build your own ranking system based on your top two or three criteria. You won't find a perfect bank that offers everything, but at the very least, you'll find banks that can meet all of your top needs. 2. Stick With OnlinePut your money in an online savings account, unless you have a good reason not to, such as a high interest savings account at a brick-and-mortar credit union or a regular need to get in-person help. 3. Save Only With Insured BanksDo not put your money into any bank that is not insured by the FDIC. Or, if you go the credit union route, make sure it is insured by the NCUA. We did not include any banks on our list that were not insured. 4. Don't Be Tempted by Sign-on Bonuses AloneEarning cash for starting an account with a bank feels awesome, but don't let the appeal of $100 now prevent you from putting your savings into an account that will earn you $500 over a couple years. 5. Find a No-fee AccountBe wary of accounts with monthly maintenance fees, statement fees or any other miscellaneous charges. You're more likely to find these fees with a brick-and-mortar bank. Ideally, find a bank that has an associated free checking account for easy and fast funds transfers. 6. Read the Fine PrintKnow what you are signing before you sign it. If an APY sounds too good to be true, it's possible there are strings attached — or that the rate is only temporary. Ask questions and do research when you are confused by any of the terms and conditions, and don't deposit your savings until you are satisfied with the agreement.
Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.  This posting includes an audio/video/photo media file: Download Now | ||||||||
| 5 Ways to Splurge On Something Without the Guilt Posted: 29 Sep 2021 02:55 PM PDT Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. What do you covet? C'mon, admit it. There must be something. Something you really want. Something you could theoretically buy at some point, but you probably shouldn't. Not yet, at least. Because it's probably just a little too expensive, right? What's your next splurge? Is it a pair of shoes? A bag? A phone? A bottle of really good wine? A bathroom remodeling? A muscle car? Whatever it is, we've got five suggestions for how to make up the difference in your pocketbook: 1. Get $50 in Gift Cards Just for Buying GroceriesWe bet $50 would make a difference toward your next splurge, right? Well, a free app called Fetch Rewards will reward you with gift cards just for buying toilet paper and more than 250 other items at the grocery store. Right now, it's even offering shoppers a $10 gift card when they spend $30 on dozens of Unilever products at the grocery store. You can do this five times, or up to $50. Here's how it works: After you've downloaded the app, just look for products branded with the Unilever "U." Then take a picture of your receipt showing you purchased an item from one of the participating brands. For your efforts, you'll earn gift cards to places like Amazon or Walmart. You can download the free Fetch Rewards app here to start getting free gift cards. Over a million people already have, so they must be onto something. 2. Make a Little Savings Account Just for SplurgesThis way, you can steadily save up money for your guilty pleasure, your heart's true desire. Create a category just for splurges and let it build up over time. Maybe you're just looking for a place to safely stash your money away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won't do you much better. (Ahem, 0.05% is nothing these days.) But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account. Not too shabby! Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption, which is nerd talk for "this is totally safe." 3. How You Could Hit a $25K Jackpot — Just for Saving Your Own MoneyHere's another way to look at saving for a splurge: If you combine the excitement of potentially swimming in money like Scrooge McDuck with your seriousness about saving, you end up with a PrizePool banking account. So how does PrizePool work, exactly? When you download the free app, you'll connect your existing bank account and make a deposit. It uses Plaid, a Visa company, to ensure your information is safe and secure. Here's the fun part: Each day, Prize Pool gives you an entry ticket for every dollar you have in your account. So if you have $100 in your account every day in October, you'll have 3,100 tickets. Then, on the first of every month, PrizePool enters your tickets into its monthly drawing. (The more tickets you have, the better your chances of winning!) You could win any amount — from $2 to $25,000. It gives away a combined total of $50,000 in cash prizes. Every. Single. Month. Unlike the Powerball tickets you keep trying your luck on, there's no buy-in or fees. If you're 18 or older and live in the U.S., this is just a safe place to potentially grow your money for free. If you download the app and make a deposit today, you can increase your odds of winning this month's $25,000 grand prize immediately. 4. Make Sure You're Not Overpaying for Something ElseTo get closer to your splurge, it's best if you don't overpay for some other purchase — no matter what it is. Wouldn't it be nice if you got an alert when you're shopping online at Target and are about to overpay? That's exactly what this free service does. Just add it to your browser for free, and before you check out, it'll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item's price history. Let's say you're shopping for a new TV, and you assume you've found the best price. Here's when you'll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they'll also automatically be applied to your order. In the last year, this has saved people $160 million. You can get started in just a few clicks to see if you're overpaying online. 5. Knock $540/Year From Your Car Insurance in MinutesSpeaking of overpaying for things, when's the last time you checked car insurance prices? Paying less for mandatory bills like that will get you closer to your splurge. You should shop your options every six months or so — it could save you some serious money. Let's be real, though. It's probably not the first thing you think about when you wake up. But it doesn't have to be. A website called Insure makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it'll show you your options — and even discounts in your area. Using Insure, people have saved an average of $540 a year. Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options. C'mon, what's your next splurge? What do you covet? There must be something. Whatever it is, following these five tips will get you closer to it. Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He covets. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.  This posting includes an audio/video/photo media file: Download Now |
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