Account Interest Rates
Understanding the various types of account interest rates available to Christian investors can get a little confusing, but a post-graduate degree in economics isn't required to make sound financial decisions. However, a short primer course in how the money interest system works is helpful. But, when in doubt about any investment, consult a good advisor. Basically, there are three types of interest earning accounts. First, there are the Federal Deposit Insurance Corporation-insured savings or money market accounts. Then, there are FDIC-Insured checking accounts. Finally, there are money market funds and other accounts which often have check-writing privileges but are not insured by the FDIC. A variety of money market accounts are available to investors. In fact, they are too numerous to list in a short article. The amount of money required to open a money market account varies. It can be less than $100 or more than $5,000. Account interest rates for the three types of accounts were about the same. Annual percentage yield (APY) for 2008 ranged from as low as 0.50 percent to 4.00 percent. The FDIC is an independent agency of the United States Government and protects against the loss of deposits if an FDIC-insured bank or savings association fails.
Investors, brokers, advisors, and other financial planners use the APY as a tool to evaluate how much a deposit earns. APY is a standardized way of comparing investments. And yield is a term to describe the earnings on a deposit over the course of a year. When comparing account interest rates for the best yield, always check to see if compounding is used in determining yield. Compounding means that earnings are earned on account earnings. And, the APY is generally greater with more frequent compounding periods. Therefore, daily compounding is better than quarterly compounding. Calculating an investment's APY can be complicated and tricky, so consult a banker or investment advisor for an explanation of APY formulas and methods. When searching for and reviewing account interest rates in an effort to determine which are best and worthy of investing in, try to keep in mind a goal. Also try to keep money markets in perspective. For help with this read the book of Matthew and the Parable of the Talents. Two of the three servants invested their master's money wisely and gained returns. As a result they also gained the trust, admiration, and additional responsibilities from their master. But the third servant buried his money and gained nothing. He was rebuked and cast out into the darkness. So, wise investments will be returned. Lazy and thoughtless decisions can be detrimental. "His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received my own with usury." (Matthew 25:26-27) Each person has been given a gift or talent and is charged with investing it wisely in service to the Lord so as to bring the best return.
Typical bank checking and passbook saving account interest rates are fairly common and easier to understand. They are safer than some other types of accounts but they usually draw lower rates, also. However, money market accounts and money market funds require more explanation. A money-market account, or MMA, is an interest-earning savings account offered by a FDIC-insured financial institution with limited transaction privileges. Money market accounts are offered by banks and credit unions and savings and loan associations that give competitive rates on minimum deposits. These types of accounts are more formally known as money market deposits and the account interest rates vary. But MMA are usually limited to a specific number of transfers or withdrawals per month. Also, regulations applied to these types of accounts restrict the number of check transactions written against the account.
Unlike an MMA, a money market mutual fund, or money fund, will carry no FDIC insurance and is really a collection of short-term debt investments held by the mutual fund. Although account interest rates and maturity periods for different money market investments vary, these types of accounts usually mature in 13 months or less. Sometimes, money market investments are referred to as cash investments because of their short maturity periods. A mutual fund is a professionally managed, and registered, trust company that pools investor's money for investing in securities, stocks, and bonds. On the other hand, money market funds are mutual funds that are invested in short term instruments such as treasury bills, high yielding securities, and negotiable certificates of deposit, usually with maturity dates of 60 days or less. Map out a plan and set goals. Then research each type of account thoroughly and understand the strengths and risks of each. If after the initial research questions persist, consult a qualified advisor before making any investment.
While shopping around for the best account interest rates, try learning as much as possible about the Federal Deposit Insurance Corporation and how it works. This is a prudent part of the investment process that can possibly prevent heartache later on down the road. The FDIC was created in 1933. Most people who have ever walked into a bank or credit union have probably seen a little placard or window sign indicating that their deposits are insured in the event the bank collapses. Being FDIC insured is an indication that federal and state regulatory agencies have reviewed the financial institution and evaluated its fiscal strength and stability. If the bank meets the required standards, the FDIC then insures most accounts at the institution: checking, savings, money market, and certificates of deposit. There is a limit of $250,000 per depositor. Money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities are not insured even if they are purchased from an insured financial institution.
Best Personal Loan Interest RatesComparing personal loan interest rates will help those in need of extra cash or a line of credit find the competitive loans that are available throughout the finance market. Everyone experiences times of financial hardships. There can be unexpected expenses, unexpected loss of income, or simple additional costs involved with day to day living. For reasons like these, the personal finance loan was created. These types of liens have become very popular with the consumer, and make up about one-fifth of installment liens, that are not mortgages, across the nation. Many financial institutions have taken notice of the market demand and are putting together creative finance packages to offer consumers. Competition allows consumers to comparison-shop and find the best personal loan interest rates offered by several different sources.
A personal loan is generally a short-term, small cash loan or credit advancement from a banking institution. This financial transaction is unsecured, meaning that there is no collateral placed as a guarantee of payment. The cash or credit is extended based on customer's credit history. These loans can cost consumers much less in interest rates than the alternative, the credit card. Banks do not increase profit margins by much when extending the personal lien, and have come up with several creative credit card solutions. However, consumers are savvy, and this type of lien continues to be the choice when it comes to borrowing quick cash. Historically, consumers view credit cards as open, constant availability. But when specifically borrowing for a certain amount, the consumers sees this as a short term pay-off. There are two completely different thoughts associated with the two types of credit. And, credit cards do not usually offer fixed terms, but fluctuate with the market. But, the biggest advantage with individual short term extensions of cash is without a doubt, the great personal loan interest rates received.
Although there is a national credit crisis in America today, consumers still view lines of credit and cash extensions from banking institutions as the solution for cash shortages. Perhaps there is a new college student needing books or boarding fees. A much needed income for the family may have been terminated. There could be illness, disability, or past medical bills that need to be paid off. Or, perhaps for some, this is a good time to purchase an item that will bring the family pleasure, such as a boat or vacation home. Whatever the reason, Americans tend to continue the thought of buy now, pay later, and many of them are drowning in debt. So, before taking on additional debt, consumers should seriously consider what the money extended will be used for and what the lowest sum possible could be.
There are a few steps to consider before securing an unsecured lien. First and foremost, predetermine what the bottom line is. How little cash will it take to achieve the purpose of the loan? Often, bankers and financial officers are paid on commission, so the larger the transaction, the more income that is generated for them, personally. Also, banks do not make much profit on small, short-term financial transactions, so it increases their profits to give consumers larger sums. Next, consumers will want to let the bank or financial institution working with know that they are comparison-shopping for the best personal loan interest rates available. There is great competition in financial markets today. The Internet has opened the doors of competitive rates and now, more than ever before, the consumer is actually treated like a valued customer. Consumers need to use this new competitive environment to their best advantage.
Credit unions will often have the best personal loan interest rates and also extend smaller sums of cash. Checking out the local credit union will be worth the time. Also, there are many banks that have customers services online through a website. Using the Internet will afford consumers easy access to personal loan interest rates and a variety of terms and conditions. Once consumers reach the point of a final decisions and have found the best personal loan interest rates for their specific needs, it will be time to read the fine print and to look for any hidden charges. Understanding the complete terms and costs of any financial agreement is crucial.
Consumers will want to make sure that they truly are making a wise choice when it comes to borrowing money. Borrowing cash is very easy in this society, and it is big business for banks and other financial agencies. But, staying in a state of debt is staying in a state of financial imprisonment, and this is not God's desire for the lives of His children. His Word tells us that, "The rich ruleth over the poor, and the borrower is servant to the lender." (Proverbs 22:7) These are the practical consequences associated with borrowing money. It simply ties us to those that are lenders. Even when there are great personal loan interest rates on the market, carefully consider the over-all costs involved with borrowing. Will a monthly payment take away the ability to be spontaneous, or give generously when the need arises? When shopping for the best personal loan interest rates, keep a future financial freedom dream in mind!