iShares 529 Plan: Save for College with ETFs

I have heard some time ago that exchange-traded funds (ETFs) will be available in 401(k) retirement accounts. Not sure whether plan participants can trade ETFs in their accounts already, but in general I think it’s a good news not only because it will gives investors more choices to save for their retirement, but also ETFs are usually cheaper than their mutual fund counterparts (most ETFs are passive, index-based funds, so the cost for managing the fund is low) that are the only choice for most plans. The down side of having ETFs available in retirement accounts is that, since you can trade ETFs at any time during market hours, it may encourage excessive trading in the accounts. In the long term that will hurt investors because trading ETFs involves commissions that are added to the overall cost. If I take payroll deductions and invest the money in ETFs every two weeks, then the costs would be too high. In that case, using ETFs to save for retirement doesn’t seem to be a good idea. If I can control the investment frequency, then I may consider trying it.

Then how about using ETFs in college savings plans such as 529 plans?

Since I can control how often and how much to make a contribution in a 529 plan, the total trading cost can be reduced (trade less with a larger amount each time). So maybe it won’t be a bad choice.

I recently noticed that Barclays Capital, the creator of iShares ETFs, has teamed up with UPromise to offer iShares 529 Plan, a college savings plan that invests in nothing but iShares ETFs. Currently, the plan uses the following iShares ETFs to build its 20 investment portfolios (PDF file):

• iShares Russell 1000 Index Fund
• iShares Russell 2000 Index Fund
• iShares MSCI EAFE Index Fund
• iShares MSCI Emerging Markets Index Fund
• iShares Cohen & Steers Realty Majors Index Fund
• iShares Lehman Aggregate Bond Fund
• iShares Lehman TIPS Bond Fund
• iShares Lehman 20+ Year Treasury Bond Fund
• iShares Lehman Short Treasury Bond Fund
• BGI Institutional Money Market Fund

Some of the portfolios are age based, with target year from 2009 to 2024, some are investment style based, such as aggressive, moderate, and conservative.

Of course, when choosing a 529 plan, the number one thing comes to my mind is the cost. How much do the investments cost? Is there any administrative fee? Any sale load? As far as the cost is concerned, the iShares 529 Plan seems to be quite competitive. For all of its 20 portfolios, the annual asset based fees range from 0.50% to 1.1%, with most of them in the middle of 0.60% (still higher than the Ohio CollegeAdvantage plan that I am using). In addition, the plan also charges $10 annual account maintenance fee.

While the plan seems to be nice, there’s one catch: the plan is only available through a financial advisor, even though the advisor doesn’t earn any commission.

From what I was told when I called them, the reason for having to go through an advisor is that since the plan invests in ETFs, which may be new to some people, the advisor is to help plan participants understand the product. And the advisor only signs the forms. That’s all they do, they don’t earn any commission or collect any fee. In addition, the CSR on the phone also said the $10 fee will be waived if the account has more than $20,000 in assets.

Will you be interested in this plan if you already have an advisor? Or you’d rather stay will traditional low-cost investment such as mutual funds?

Related posts:

1. Changes to Fidelity UNIQUE College Investing Plan
2. UPromise’s eCoupons Help You Save Money and Save for College
3. Vanguard Launched Four Bond ETFs
4. Shop and Save for College: UPromise vs. BabyMint
5. Model Portfolios Built with ETFs (I) — Couch Potato Portfolio

IGoChecking Has The Best Interest Checking Account Rate

I am IGoBanking Savings Account customer. Though the bank is no longer my everyday bank as it used to be, I still access my account there quite often. Somehow I still missed their big rate increase of the IGoChecking Checking Account that I mentioned before (I use only their Savings account, not Checking account).

If you are looking for a interest checking account that pays generous return, then IGoChecking could be the one because right now you can earn an very competitive 3.80% APY from IGoChecking! As far as I know that’s the highest rate for an interest checking account, much higher than what you can get from ING Direct’s Electric Orange, another popular interest checking account that pays 1.00% to 3.25% APY, depending on the account balance.

In addition to the checking account, their savings account also has a quite attractive rate at 3.28% APY (better than FNBO Diret, which was recently named the best online savings account by Kiplinger), though I don’t really understand the reason for offering a checking rate that’s better than the savings rate (I will be very happy if they swap the two rates). So if you have both savings and checking with IGoBanking, you end up have a very good package of banking products (their 9-month CD rate 4.15% with $1,000 minimum looks nice too), as long as they can keep their rates.

So are you interested? I probably won’t be using it any time soon because I just got a new account at Dollar Savings Direct (I am a rate chaser and I want to go after the highest rate, whether it’s a checking or savings account). But I am glad I didn’t close the IGoBanking Savings account, so I leave the door open for switching back if the bank has a better offer later.

BTW, if you open a new IGoChecking account now, you can get a $50 gas card. This promotion started in Auguest and it was supposed to last month. But it looks like it’s still ongoing. Not bad if you decide to give it a try.

Related posts:

1. IGoChecking, IGoBanking’s Checking Account, Offers 2.65% APY
2. Best Online Savings & Checking Accounts Interest Rates
3. Online Savings and Interest Checking Accounts: Where are the Good Deals?
4. Online Interest Checking Plus Savings Accounts: Who Offers the Best Deal?
5. FNBO Direct Followed Suit, Up Interest Rate

NCUA Insurance Is As Good As FDIC Insurance

I have never used a credit union before, therefore, I never paid any attention to how money is insured in a credit union. I just assume that there some some kind of measures to protect credit union customers again losses if a CU fails, like the way my deposits at banks are protected by the FDIC insurance.

Actually, that IS how things work at credit unions, federal and most state-chartered alike. Though not backed the same agency, deposits at credit unions are insured by the U.S. government to the same amount that deposits are guaranteed at banks.

Insured By National Credit Union Administration

The government agency that guarantees the safety of your deposits at a credit union is National Credit Union Administration (NCUA). NCUA was created by 1970 to oversee more than 10,000 federal credit unions across the country at that time. Currently, “there were 8,101 federally insured credit unions with nearly 87 million members and total assets of $753.5 billion and loans of $526.9 billion” (Wikipedia). NCUA is backed by the full faith and credit of the government of the United States.

Maximum Amount Insured by NCUA

NCUA operates the National Credit Union Share Insurance Fund (NCUSIF). Like the FDIC Deposit Insurance Fund, NCUSIF provides insurance for savings at its member credit unions (98% of credit unions across the country, including all federal credit unions, are members of NCUA) against failure of a member union (so far in 2008, 8 NCUA insured credit unions have failed). Like bank accounts, accounts at NCUA member credit union is insured to a maximum of $250,000 as of October 3, 2008. The insurance coverage will good till December 31, 2009. The standard insurance amount is $100,000 per individual account.

NCUA Insurance Estimator

NCUA provides a free insurance estimator, The Electronic Share Insurance Calculator (E-SIC) to let you estimate the amount you are insured, depending on the types of accounts you have at a credit union. This is more like the EDIE estimator from the FDIC. Both are good tools if you have multiple accounts at a credit union or a bank and are confused by the combined insurance limit of all your accounts.

Make Sure It’s NCUA Insured

Before you decide to use a credit union (some credit unions offer better products than banks do, such as better rates and services), make sure it is NCUA insured for your own safety. You can use NCUA’s credit union locator to find the member unions in your area. Also be sure to check whether the credit union displays the official NCUA insurance sign (above). If not, then just don’t use it even if it promises 20% return of your money. It’s just not worth it :)official NCUA insurance sign

Related posts:

1. Banks Taken Over by FDIC in 2008
2. FDIC Problem Banks List Grew to 117 Last Quarter
3. Protect Yourself and Your Money Against Bank Failures
4. What Are the Different Types of Insurance and How Can They Help You?
5. Auto Insurance: Should I Switch?

Recent Bank Findings: OnBank, ShoreBank Direct and Venture Bank

I have added a few more banks to the interest rates table the other day when I updated the list. There are three of them that I think worth mentioning because they all offer very attractive rates: 3.50% APY or more with very low minimum deposit requirement. None of them is big, well-known name. I guess that’s the reason why they can afford to give their customers a little more than the big banks do As an article on The WSJ said a couple of days ago, As Big Banks Converge, Depositors Find Deals At Smaller Institutions. All of them are members of the FDIC, which means that your deposits with the bank are insured up to $250,000. If a better rate is what you are looking for (I just opened a DollarSavingsDirect account for the 4.00% return), you may want to check out these accounts.

Venture Bank Direct Wise-Choice Savings

Wise-Choice Savings, like the name suggests, could make a good choice. With a $1 minimum, you can enjoy the 3.80% annual return. Here are some features from the bank’s FAQ page:

• No account maintenance fee;
• ACH fund transfer takes 2 to 3 business days;
• Trail deposits account verification, no paper check required;
• 5 business day hold period for deposits;
• Up to 3 linked external accounts;
• Maximum 6 withdraws per month; the first 3 are free, $1.00 fee each withdraw afterward (this is kind of weird);
• $10,000 daily ACH transfer out limit (FatWallet.com);
• Soft pull (more on hard pull and soft pull);
• Routing number 125107671;
• Bankrate.com Safe & Sound Rating: 2 Stars (out of 5) (more on Safe & Sound Rating).

Venture Bank, the parent company of Venture Bank Direct, has been insured by the FDIC since May 24, 1979 (FDIC Certificate number 22868).

OnBank Money Market Savings

OnBank is a division of M&T Bank (OK, this is a big bank).  The bank has a money market account with a rate of 3.60% APY and $1 minimum. In addition, this account also has features, including

• No monthly service fee;
• ACH fund transfer takes 2 to 3 business days;
• Trail deposits account verification;
• No check deposit; electronic only;
• Unlimited linked external accounts;
• $50,000 per transfer out limit, no monthly limit;
• Maximum 6 withdraws per month; 3 of them ACH transfers;
• Routing number 022306520;
• $5 fee for each paper statement;
• $10 fee if account closed within 90 days;
• Bankrate.com Safe & Sound Rating: 4 Stars (out of 5).

M&T Bank has been insured by the FDIC since October 2, 1995 (FDIC Certificate number 34069).

ShoreBank Direct Online Savings

ShoreBank Direct is the online division of ShoreBank, which headquarters in Chicago. With ShoreBank Direct Online Savings Account, you can earn 3.50% APY with as little as $1. This account’s features include:

• No monthly account fee;
• ACH fund transfer takes 3 to 4 business days;
• Trail deposits account verification;
• Up to 6 linked external accounts;
• Maximum 6 monthly withdraws without fee; $15 each withdraw afterward;
• Hard pull;
• Routing number 071004226;
• $10 fee for each paper statement;
• Bankrate.com Safe & Sound Rating: 2 Stars (out of 5).

ShoreBank has been insured by the FDIC since January 13, 1939 (FDIC Certificate number 15640).

Related posts:

1. New Bank Findings: WT Direct and Salem Five Direct
2. Dollar Savings Direct 4.00% APY and GMAC Bank 3.75% APY
3. FNBO Direct Review: An Online Bank Offers High-Yield Savings and Checking Account
4. Protect Yourself and Your Money Against Bank Failures
5. EverBank Reviews 2008: An Interview with EverBank Direct PresidentEverBank Direct President

WTDirect Lowered Savings Account Rate to 3.06% APY

Just received a note from WTDirect regarding their rate change. The bank has lowered its WTDirect Savings Account rate to 3.06% APY from the previous rate of 3.31%. Actually, I though 3.31% APY was a pretty decent rate, with the only drawback that it requires $10,000 minimum deposit which is pretty high (FYI, Capital One Online Savings Account also requires a minimum of $10,000, but you can earn 3.55% with them). Now the rate has been lowered, WTDirect won’t make a good choice for stashing away your cash.

After the Fed cut its benchmark lending rate to 1.0% last month, a few banks followed suit to lower their interest rates, even though I thought they would make their rates a little sweeter to attract new customers while retaining existing customers. But I guess that assumption may be applied to cash-stressed banks. Anyway, I am happy with my new account at Dollar Savings Direct, though I have no idea how long I can enjoy the 4.0% yield.

BTW, I have updated my online savings and checking account interest rates list the other day, including a few new banks such as OnBank and Shore Bank Direct. Since the last update a couple of months ago, there are a lot of changes in the ranking Maybe you can find one for you, whether there’s a bonus or not.

Related posts:

1. ING Direct Lowered Orange Savings Account Rate to 2.75% APY
2. HSBC Dropped Rate for Online Savings Account
3. Fed Lowered Interest Rate in an Attempt to Halt Stock Market Free-fall
4. ING Direct Lowered Interest Rates
5. E-Trade Complete Savings Account $25 Bonus When Opening an Account

USPS to Increase Shipping Costs Next Year

Expect to pay more when you ship a package next year, even though the gas price has come down sharply in recent months.

USPS announced today that it will increase shipping prices for Express Mail, Priority Mail, Parcel Select, Parcel Return Service and some international shipping products starting January 18, 2009. On average, shipping costs will increase about 5%. Detailed price increases are as follows:

This round of price changes don’t include standard first class mail. According to the announcement, prices changes for other mailing services such as stamp prices will be announced in February 2009. Last time when USPS adjusted stamp prices, the price for one-ounce first class mail went up 1 cent from 41 cents to 42 cents. The price will definitely go up at least one cent in May 2009.

Now it’s really the time to stock up Forever Stamps

Related posts:

1. Postage Increase 2008, Actively Managed ETFs, and Dow Reshuffle
2. Social Security Exhaustion Date, USPS Free Recycling Through Mail, and First Ever Actively Managed ETF
3. Local Gas Price Watch: First Increase in Months
4. A Better Deal: 1GB Flash Drive for $2.20 + Shipping
5. Request a Credit Limit Increase on AMEX Cards: It’s Easy

Virtual Bank eMoney Market Account $20 Referral Bonus

I thought I closed my Virtual Bank account more than a year ago (that is, I can no longer log in). But apparently my account seems to be still alive, except that there’s no money in it.

Anyway, I successfully logged into my account at Virtual Bank tonight and saw their Refer a Friend program they are having now for the eMoney Market account. Since I don’t use this account any more, I don’t know too much about it, but here’s a quick look at what’s being offered (the first thing I look at a bank is their interest rate, assuming the bank is FDIC insured). The account has a tiered rate structure depending on the account balance:

• Under $10,000.00: 2.28% APY
• $10,000.00 - $24,999.99: 3.05% APY
• $25,000.00 - $49,999.99: 3.25% APY
• $50,000.00 - $99,999.99: 3.30%  APY
• $100,000.00 and up: 3.51% APY

Though the minimum balance required to open an account is only $100, that amount of money won’t earn you too much return. You have to have at least $10,001 to get the 3.05% APY. Well, if you ask me, then your money can be better served at other banks that offer better rates and require lower minimums (FNBO Direct 3.25%, E*Trade 3.20%, EverBank 3.93%, and DollarSavingsDirect 4.00%, to name a few).

If you are interested in getting a Virtual Bank eMoney Market Account, you can use the Contact form to request a referral link and get $20 bonus.

BTW, Virtual Bank is a division of Lydian Private Bank, which has been insured by the FDIC since April 6, 2000 (FDIC Certificate number 35356).

Related posts:

1. Closing a Virtual Bank
2. $50 Bonus for Opening a HSBC Premium Money Market Account
3. $100 OptionsXpress Bonus Received, Zecco Referral Bonuses Distributed, and Account Transfer to TradeKing Completed
4. Firstrade Referral Promotion: $50 Referral Bonus Sharing Program
5. Bank Deal: Flagstar 5.30% Money Market

ING Posted First Ever Quarterly Loss

Dutch financial service giant ING, which operates ING Direct in the U.S., posted its first ever quarterly loss since the establishment of the company 17 years ago. In the third quarter, ING said it lost 478 million euros or $602 million, after the company took 1.5 billion euros in pretax write-downs on equities and debt securities (NYT). ING made a profit of 1.1 billion euros during the same period last year.

In the above Bloomberg TV video, ING Financial Markets analyst says the bank needs to raise capital to go through the crisis in the financial market. Well, ING Direct’s latest rate cut certainly won’t help their effort to raise capital.

Speaking of ING Direct, here’s another piece of news (maybe old). I haven’t checked my ING Direct Orange Savings account for a while because their rate, currently at 2.75% APY, is much less attractive than other banks I am using. So I moved all my money to Capital One. When I did log in my account the other day, I saw that they are currently running a Magnify Your Savings Sweepstakes.

If you don’t want to use direct deposit, you can simply set up a plan to automatically transfer $100 every month from other banks to ING Direct to qualify for the sweepstakes (Don’t have an ING Direct account? Open one and get $25 bonus). Though I don’t use ING Direct any more, I do use a same method, I call it savings on autopilot, to move money from my checking account at Bank of America, to savings account at Capital One on every payday (every two weeks). It has been quite effective for us over the years to increase our savings.

Do you put your savings on autopilot?

Related posts:

1. FNBO Direct Followed Suit, Up Interest Rate
2. HSBC Direct 3.50% APY Promotion Extended
3. Best Online Savings & Checking Accounts Interest Rates
4. Savings on Autopilot: Increasing the Auto-Transfer Amount
5. E*Trade Complete Savings Account now 3.30% APY

DollarSavingsDirect Reviews

Dollar Savings Direct is a division of Emigrant Bank, which also owns Emigrant Direct. The account currently has a 4.00% yield with a $1,000 minimum deposit requirement.

I have been mulling the idea of getting another savings account with a better return for several months because I am not very happy with the rates from banks I am currently using (Capital One is quite steady, but not FNBO Direct and IGoBanking). Since this round of rate reduction campaign started last summer, interest rates from popular online banks have been steadily declining. After the Fed’s latest rate cut, ING Direct even dropped its rate to 2.75%, the lowest among the banks I track regularly. While most banks followed the Fed’s action to lower their rates, this is not what’s happening everywhere. There are a few banks buck the trend to raise their rates, such as DollarSavingsDirect and GMAC Bank as I mentioned early. Why? As there’s no sign of improvement in the credit market, banks would love to keep their customers, and their cash, by offering an attractive rates.

For the new account, I have mentioned a few times before that there are a few candidates on my mind, including EverBank and DollarSavingDirect. The reason I was waiting for the right time is that I want to see which bank can maintain its rate after the Federal Reserve cut the fed fund rate to 1.00% late last month. EverBank was removed from the list when the bank reduced its rate last week, leaving DollarSavingsDirect, with a 4.00% yield as of now, as the only choice. Even though UFB Direct also offers the same return, I am more comfortable with DollarSavingsDirect because I have dealt with another bank, Emigrant Direct, from the same parent company before.

Opening Process

So last night, I finally pulled the trigger. Opening an account at DollarSavingDirect is straightforward, requiring only about 10 minutes (for single account, it is even less) in four steps:

1. Enter personal information: Personal information and driver’s license are needed when opening an account.
2. Fund account: Link my existing checking account (bank’s routing number and account number are needed) to DollarSavingsDirect to fund the new account electronically.
3. Read the disclosures.
4. Review and submit application.

Because the bank requires a minimum of $1,000 balance to earn the 4.00% APY, it asked to make at least $1,000 deposit when the account is opened. The checking account linked to DollarSavingsDirect during the application process will be the external bank I will do all transactions later. Before the linked bank becomes active, DollarSavingsDirect will use two small trial deposits to verify the ownership of the external account. I expect to see those deposits to show up tomorrow in my Bank of America account, so hopefully the application can be completed by then.

Availability of Funds

Since DollarSavingsDirect uses ACH to transfer funds to and from an external account, it takes a few days before the fund becomes available. According to DollarSavingsDirect, fund transfers via ACH usually takes 2 to 4 business days, but the deposit will be credited to the account and begin accruing interest on the business day of deposit. For each electronic deposit, there’s a five business day hold period before the fund can be withdrawn.

External Bank Links

After quickly going through their website, I wasn’t able to find out how many external accounts I can link to DollarSavingsDirect. I need to link more than one bank account to it since I want to move money around among my savings accounts with the best rate. It, however, shoudn’t be a problem if DollarSavingsDirect allows only one external link because I can always link to it from other online banks which do allow more than one external links (for example, Capital One allows multiple external links). Dollar Savings Direct routing number is 226070403.

A Little More

Nowadays, one of the most important thing to look at when getting a new bank account is whether the bank is insured by the FDIC. You don’t want to see your hard-earned money disappear by using a non-FDIC insured, regardless how much return it promises. Emigrant Bank, which owns DollarSavingsDirect, has been insured by the FDIC since 1934 (FDIC Certificate: 12054) (use the Find Bank function at FDIC and enter the bank’s name). With DollarSavingsDirect, deposits are insured up to $250,000 as currently allowed by the law. Bankrate.com has a Safe & Sound Rating of DollarSavingsDirect’s parent Emigrant Bank at 2 stars. Not very impressive (more discussions on Safe & Sound Rating).

After the account is set up, I logged into my account and above is how it looks like. Before accessing my account, I had to provide answers to five security questions. Since I had the experience in the past that I had to call the bank to reset my password because I forgot my account password and couldn’t remember all the answers to the security questions either. To avoid that, I use KeePass together with TrueCrypt (both are free) to manage all my account passwords.

Related posts:

1. DollarSavingsDirect: A High Yield Version of Emigrant Direct
2. Reviews
3. EverBank Reviews 2008: An Interview with EverBank Direct PresidentEverBank Direct President
4. Recent Bank Findings: OnBank, ShoreBank Direct and Venture Bank
5. Dollar Savings Direct 4.00% APY and GMAC Bank 3.75% APY

Chase Freedom Card: No More 3% Rewards?

Credit card companies are downgrading their rewards programs. Chase Freedom Card is the latest card reducing its cash back rewards.

Nowadays, good credit cards with generous rewards (relatively speaking of course) are rare. And good cards can go bad, as the Citi Dividend Platinum Card did a while ago.

That’s what happened to Chase Freedom Card, one of my favorite credit cards that I have been using for more than a year to earn 3% cash back at grocery stores and gas stations. Now, it seems that the card’s rewards program just got downgraded to a program that’s like just any other rewards program: 1 points for every dollar! No more triple points! No more top 3 categories! If you go to the card’s rewards page, you will find the following:

When I first noticed that Freedom card switched from cash bonus to rewards points in July, it was still offering triple points for every dollar spent in the top 3 out of 15 categories every month. But now there’s no such thing as triple points. You earn 1 point for every dollar, no matter where you use your card, like how most other credit cards reward its card members. In addition, the new program allows you to earn”3x points with new bonus offers throughout the year. Plus earn up to an additional 10 points per $1 spent when you shop through our online mall at Chase Rewards Plus.” While the card still offers a $50 bonus for new card holders after the first purchase, the overall benefits of this card are not as good as they used to be.

However, for existing cardholders, things may be a little bit different. When I first got the Freedom card early last year, the rewards were given as cash back rewards, not rewards points. When the program switched to rewards points this summer, I didn’t make the change to my card (there’s a link in my account that I can use to switch how I earn rewards). So I am still getting cash back rewards, as the following screenshot of my October statement shows:

If you are interested in getting this card, you can use this link to apply for it. The application page still show 3% bonus cash back rewards, but only for the first 6 months:

Cash Back Rewards described in this offer is a form of rebates subject to the Rewards Program Rules and Regulations; see Earning Rewards section. Restrictions and limitations apply. You will earn a 1% base rebate for each $1 of net purchases. For the first 6 billing cycles from your Enrollment Date in the program, you will also earn an additional 2% bonus rebate for each $1 of eligible net purchases made at retail establishments that classify their merchant location for Visa/MasterCard in one of the following bonus categories: gas station, grocery store, quick service payment/fast food restaurant. (”Enrollment Date” is the day on which we approve you as a program member.)

Alternative Cards

I am glad that I didn’t make the switch so I can still earn 3% cash back on gas and grocery purchases. How long can I still enjoy the 3% rewards? I don’t know. I wouldn’t be surprised if one day my card earns me the same level of rewards. If they eventually decide to downgrade my card as well, then I will just give it all up, like I did with the Citi Dividend card. In that case, I will abandon this card and use the following instead:

• American Express Costco TrueEarnings Card: This card allows cardholders to earn 3% cash back on all gas purchases. The problem is not every station accept AMEX. The TrueEarnings card also gives back 3% bonus for restaurants, 2% for travel, and 1% everywhere else including at Costco.
• Fidelity 529 College Rewards Card: I can earn 2% cash back on everything with this card. The new version of this card (from AMEX) only offers 1.5% instead (I am glad I didn’t switch). Cash rebates will be invested in a Fidelity 529 plan.

American Express SimplyCash Business Card also offers 5% cash back on gas, but I don’t have that card.  I could consider switching to the TureEarnings Business Card bacause it gives 5% cash back on gas purchases as well.

Related posts:

1. Chase Freedom Card Switches to Rewards Points
2. Chase Freedom Card Rewards Program Updates
3. Chase Freedom Card $100 Bonus
4. Chase Freedom Card $200 Bonus: It IS Real
5. Chase Freedom Card $250 Bonus Offer

Discover Card Holiday Promotion: $50 Bonus and More

Are you using Discover cards?

If you are, then you can get up to $50 bonus when you shop with your Discover More card this holiday season if you spend $500 or more in the first three months(if you don’t have one, you can use this link to get one). I have discussed this card in my best cashback credit cards post before (check out the post for details). When the spending limit is met, the $50 cashback bonus will be credited within 8 weeks.

If you don’t have More card, but own other Discover cards (I have a Discover Miles card), you can still earn some bonus, up to $100. From now till January 4, 2009, you can receive a $20 Discover Gift Card for every $200 you spend on your Discover Card at over 160 participating malls nationwide (details). Simply bring your receipts of $200 or more to the mall customer service and get a $20 gift card. You can earn up to 5 gift cards ($100 value) throughout the promotion period.

Elsewhere, Chase Freedom card is also having a promotion which offers a $50 gift card after the first purchase. I have been using the card for more than one year (more discussions here and here) and I really like it. I use the card mostly at gas stations and grocery stores to earn 3% cashback, which is pretty nice these days. Check it out see if you like it.

Related posts:

1. Discover More Card $50 Bonus Promotion
2. Discover More Card $100 Bonus Offer
3. New Promotion From Discover Card
4. $20 Bonus From Discover Card
5. Ebates Promotion: Get $10 Bonus This Holiday Season

Kiplinger’s 2008 Best List

It’s November and it’s time for Kiplinger’s Best List.

In the November issue of Kiplinger’s Personal Finance, the magazine published its annual list of what it considers the best items related to personal finance, such as best savings account, student loan, retirement tool, and cashback credit card, etc. After going through the entire list, I saw some familiar names from last year’s list. And of course, there are new comers. For example, the magazine chose Schwab Bank’s High Yield Investor Checking as the best checking account for “no minimum and not ATM or other fees” and 2.2% return, which is now down to 1.75% APY. I don’t know that account until I read the magazine, so in my opinion, there are better choice out there, such as last year’s best ING Electric Orange, unless rate is the decisive factor.

The reason I post the entire list here is to share it with you. For your convenience, I also added links and some related information.

Best Financial Service

• Online Savings Account: FNBO Direct (3.25% APY, $1 minimum, more at FNBO review)
• Money-Market Account: Flagstar Bank Express Money Market (3.65% APY, $1 minimum, free check for life)
• Checking Account: Schwab Bank High Yield Investor Checking (1.75% APY, no ATM fee, overdraft protection)
• Money-Market Mutual Fund: Fidelity Cash Reserves (FDRXX, 2.94% 7-day yield, $2,500 minimum)
• College-Savings Fund: State 529 Plans
• Student Loans: Federal Stafford Loan
• Loans for Parents: Parent Loans for Undergraduate Students (PLUS)

Tools to Help You Retire

• All-around Retirement Account: Roth IRA
• Target-Date Retirement Funds: T. Rowe Price
• IRA for Kids: Schwab
• New Online Retirement Tool: TD Ameritrade’s Wealthruler
• Annuity Income Tool: Metlife
• Online Tool for 401(k) Participants: Fidelity

Stocks and Funds

• Aggressive Fund: CGM Focus (CGMFX, 1.27% ER, 0.15% yield, $2,500 minimum, 12.98% 5-yr return)
• Online Broker: Fidelity
• Bear-Market Fund: Grizzly Short (GRZZX, 2.86% ER, 1.35% yield, $10,000 minimum, 4.84% 5-yr return)
• Low-Minimum Fund: Amana Growth (AMAGX, 1.28% ER, $250 minimum, 8.02% 5-yr return)
• Stock to Put Away and Forget: Procter & Gamble (PG)
• Stock Fund to Weather A Turbulent Market: T. Rowe Price Capital Appreciation (PRWCX, 0.70% ER, 3.33% yield, $2,500 minimum, 3.25% 5-yr return)
• Value Fund: Fairholme (FAIRX, 1.00% ER, 0.86% yield, $2,500 minimum, 8.69% 5-yr return)
• Way to Bet Against Bonds: ProShares Ultrashort Lehman 7-10 Year Treasury (PST,0.95% ER)

Credit Cards

• You Want Cash Rebates: American Express Blue Cash
• You want a Break on Gas: BP Visa
• You Want Travel Perks: Simmons First Visa Platinum Travel Rewards
• You Want A Low Rate: Wells Fargo Prime Rate

Web Sites

• Bonds: Investinginbonds.com
• Stocks and Funds: Morningstar.com
• Credit Reports: AnnualCreditReport.com
• Credit Score: myFICO.com
• Tax Calculator: Kiplinger.com
• Social Security Calculator: www.ssa.gov/estimator
• Health Insurance: eHealthInsurance.com, Coverageforall.org
• Medicare: Medicare.gov
• Life Insurance: AccuQuote.com, Insure.com
• Auto Insurance: AccuCoverage.com
• Customer Service: Naic.org/cis, Gethuman.com
• Energy-Saving Tips: Energystar.gov
• Online Bargains: Dodtracker.com
• Cheap Gas: Gasprices.Mapquest.com
• Charity Watchdog: Charitynavigator.org
• Textbooks: Bigwords.com
• Online Coupons: RetailMeNot.com
• Cell-Phone Service: BillShrink.com
• Pet Care: PetInsuranceReview.com
• Pet Medication: 1800PetMeds.com
• Travel Booking: Kayak.com
• Last-Minute Travel: US.LastMinute.com

Travel, Cars, Home, Fun

• Airline: Southwest
• Frequent-Flier Program: Southwest Rapid Rewards
• Low-Cost Destination: Panama
• Used Cars: Compact, Small Wagon and Sedans
• Hybrid: Honda Civic Hybrid
• Nonhybrid Fuel Sippers: Honda Fit, Volkswagen Jetta, Chevy Malibult, Mercedes-Benz GL320
• Low-Cost Drugs: Wal-Mart
• Solar-Powered Gizmos: Shed Light, Flashlight
• Computer Security Software: AVG Anti-Virus Free Edition
• Mail-Order Barbecue: Maurice’s Gourmet BBQ

Related posts:

1. Kiplinger’s Best List
2. The Best of 2006 from Kiplinger
3. FDIC Problem Banks List Grew to 117 Last Quarter
4. How to be Successful in Investing from Kiplinger — Part I
5. How to be Successful in Investing from Kiplinger — Part V

E-Loan Savings Plus Account $25 Bonus Offer

Banks want your money and in order to get your money, they will pay you!

E-Loan just launched its own version of high-yield online savings account call E-Loan Savings Plus . To promote the new product, E-Loan is offering a $25 bonus for a new account from now till December 18th. The Savings Plus has tiered rates depending on the amount of deposit. The highest yield is 3.85% APY, but to get that kind of return, you will need $100,000 or more in your account:

• $5,000 to $9,999.99: 2.76%
• $10,000 to $24,999.99: 3.35%
• $25,000 to $49,999.99: 3.51%
• $50,000 to $99,999.99: 3.75%
• $100,000 or Greater: 3.85%

Details of this bonus offer are:

Promotion valid for one new Savings Plus account for each new customer. To qualify for the $25 bonus the promotion code “plus25” must be entered on the application and submitted prior to December 18th, 2008. The account must maintain at least the original balance for sixty (60) days to qualify for the promotion. The $25 bonus will be posted as an interest credit to the account within 90 days of account opening.

To qualify for a Savings Plus account, customers must make regular monthly deposits into their savings account of at least $100. Any Savings Plus account that does not have a minimum of $100 per month deposit for over 60 days will be converted back to a standard savings account and the rates in effect for a standard savings account will apply. Savings Plus is a Money Market Deposit Account that allows up to six withdrawals per month.

The Savings Plus Account, which is offered by E-Loan, will be opened through Banco Popular North America (BPNA), a member of FDIC (FDIC Cert: 34967). Now this is important.

A good deal?

Not really. I’d rather have a bank account that pays me 4.0% yield with much lower minimum requirement. BTW, here are some other bonus offers for up to $100 that are currently available.

Related posts:

1. Citibank Ultimate Savings Account $50 Bonus Offer
2. $100 Bonus for Opening a Citi E-Savings Account with Offer Code
3. Another $25 Citibank e-Savings Account Offer Code
4. E-Trade Complete Savings Account $25 Bonus When Opening an Account
5. BoA Sweetens Its Offer For Savings Account

Earn 4% or More Return for Your Money

If you have most of your savings in the stock markets, you won’t be happy with what’s going on now on the Wall Street. Nobody will. Somehow, I become numb to the daily closing numbers because what happened today isn’t much different from yesterday, last week, or even a month ago, and try not to look my brokerage accounts unless I have to (I know what’s happening even without looking at the numbers). To get an idea on how bad things have gone so far, take a look at the following Year-To-Date performance chart of the Dow, the Nasdaq, and the S&P 500 index, losing between 30% to 35% as of October 28th. Even if you diversify your portfolio by investing in different sectors, your situation won’t be too much better because, according to Morningstar, none of the 12 sectors has positive return this year.

It’s really ugly.

On the other hand, for those who are conservative with their money by putting them into high-yield savings accounts or CDs, I guess they are pretty happy now because, comparing to stocks, the returns from the safe investments are much higher. Even after the Fed has cut its benchmark lending rate to 1%, the lowest level since June 2004, there are still plenty of places where you can earn 4.0% or more returns (at least now).

Yesterday, there was an article on SmartMoney.com talking about deals that earn 4% on cash. Some of the deals, both savings accounts and CDs, have already been mentioned in my Keep My Money Safe and Let It Grow post some time ago. One surprise to me is UFB Direct, which also offers 4.0% APY for its Traveler Savings Account. Before I only know Dollar Savings Direct (4.0% APY) and EverBank (4.76% 3-month bonus rate) have offers at similar level. Of course, the problem with these deals is whether they can keep the rates from now on given that the Fed just reduced its rate to 1% two days ago. So if you want to get a bank account with better yield than what you currently get, it’s probably better to wait a couple of weeks to see where these deals go. In my opinion, it’s unlikely the benchmark rate will be lowered even further (the last time when the Fed funds rate was lowered to 1.0%, it remained at that level for one year), so what you get now could last for a while.

Related posts:

1. Total Return and Investor Return Explained
2. Bank Deal: Flagstar 5.30% Money Market
3. A Better Way to Invest in 401(k) and Get Better Return?
4. Lower Cost at CollegeAdvantage, Earn Free Trades at TradeKing Community, and Win a Share of Google at Cake Financial
5. Year-to-Date 401(k) Return

CollegeAdvantage $25 Referral Bonus

I opened a 529 account for our second daughter last year four months after she was born. After some research, I decided to use Ohio CollegeAdvantage 529 Savings Plan because of the selections of investments (mostly Vanguard index funds) and the plan’s low cost. Since then I have been making  contributions to the account every month as part of our effort to help our children prepare for their future higher education.

Anyway, if you want to save for your child’s education by opening a 529 plan and decide to go with CollegeAdvantage plan as I did, then for a limited time, you can earn $25 bonus to jump start your savings. CollegeAdvantage is now running a promotion that gives $25 to every new account opened through a referral. If you are interested in getting a CollegeAdvantage account and receiving the bonus, please use the Contact form to request a referral. The bonus offer will end on December 15, 2008.

Related posts:

1. Firstrade Referral Promotion: $50 Referral Bonus Sharing Program
2. Zecco Referral Bonus Sharing Program Reopened
3. ING Direct Promotion: $25 Referral Bonus
4. $100 OptionsXpress Bonus Received, Zecco Referral Bonuses Distributed, and Account Transfer to TradeKing Completed
5. Ebates $10 Referral Bonus

Best Travel Rewards Credit Cards

So far I have talked about best cashback credit cards and credit cards with good gas rewards. Another category that I haven’t touched is cards with travel rewards. The reason for leaving out travel cards is that I don’t travel much, so there’s little chance I can get the maximum benefits from using travel cards to make everyday purchases at grocery stores and gas stations. I basically stick with three cards, Chase Freedom,  AMEX TrueEarning and Fidelity 529 for everyday purchases.

As my vacation in China comes to an end, I want to take this opportunity to review some cards that are good for travel. Though I have two travel cards (a Discover Miles card and a Citi PremierPass Elite Level card), I used neither to purchase my ticket because: 1) The rewards these two cards offer for ticket purchases are no better than what I get from American Express TrueEarnings card or Fidelity 529 College Rewards card, which gives me 2% cashback; 2) I’d rather receive cashbacks than rewards points redeemable for flights or hotels.

But that’s just me. If you travel a lot, then you can still find cards dedicated to travel which can help you rack up travel rewards faster. Following are some travel cards offering generous travel related rewards.

CapitalOne No Hassle Miles Card

• Program Highlight: Capital One No Hassle Miles lets you earn 1.25 miles per dollar on all purchases, which is higher than most of other travel cards. The card has no annual fee and there’s no limit on the miles you can earn. In addition, the reward miles never expire.
• Introductory rate: 0% APR for 12 months.
• Balance transfer rate and fee: 0% APR for 12 months with no balance transfer fee.

Citi PremierPass Card Elite

• Program Highlight: With Citi PremierPass Elite Level card you can earn 2 ThankYou points on every dollar spent at gas stations, supermarkets, drug stores and commuter transportation and parking and earn 1 point per dollar on other purchases. Points can be redeemed for flights, hotels, vacation packages, or gift cards through ThankYou network. This card doesn’t have pre-set credit limit, which may not be a good thing. There’s a $75 annual membership fee.
• Introductory rate: N/A.
• Balance transfer rate and fee: N/A.
• Special promotion: Get a round-trip ticket (up to $400) with 20,000 bonus points after $600 in purchases within 3 months.

Blue Sky from American Express

• Program Highlight: With Blue Sky card, you can earn 1 point for every dollar you spend. The card doesn’t have blackout date and there’s no restrictions on travel with the Blue Sky card. This card has no annual fee.
• Introductory rate: 0% APR for 12 months.
• Balance transfer rate and fee: 0% APR for 12 months with 3.0% balance transfer fee, but no less than $5 and no more than $99.

JetBlue Card from American Express