Are you looking to start a savings account with a good yield? Perhaps the best place to get started is with an online bank. They are better able to offer the best certificate of deposit rates since they operate primarily online and don’t have physical branches to finance. CDs are often considered to be the “next level” up after a savings account. However, you will be required to keep your funds locked up for a set period of time. Depending on the bank, there might or might not be a penalty for an early-withdrawal.
Some banks offer a few different types of CD accounts, including Term CDs, in which the interest rate is locked without having to worry about the drama of market volatility, as well as a “no-penalty” CD, which allows you to still maintain access to your funds while still having the security of a certificate of a deposit. Some other CD types are designed to balance your investments and help maximum your return.
With a traditional CD, you might not be able to make additional deposits. If you want to add money later on down the road, the bank should provide the option to upgrade an existing account.
Best Certificate of Deposit Rates in Online Banks
The good thing about online banks is that they really do offer the best certificate of deposit rates, which can exceed 2.0% APY. It’s ideal to choose a bank that automatically renews the accounts at maturity. The more mature the account becomes, the higher the APY percentage. Ideally, there should be no fees for opening an account.
Consider your certificate of deposit term before starting an account. How long will you be able to afford to keep that money locked into the account? If you think you might need it in less than a year, look for a bank that offers a six or twelve month term, and won’t charge you a penalty for taking it out. On the other hand, if you are interested in saving for the long-term, such as for retirement or your child’s college tuition, then choose a bank that will keep increasing the APY % the longer the account matures.
Confirm that the CD will be insured. Avoid any bank that isn’t backed by the FDIC. Also, check a bank’s background to make sure that hasn’t experienced any financial problems in the past.
For the majority of us, managing finances and the proper management of these finances for our future and our family’s future are a top priority. However, many of us aren’t sure where to start. In the back of our heads, we assume there will be more time or that we will begin in a few years, but the truth of the matter is, a few years may just be around the corner. It is crucial to be aware that when saving for your future the earlier you start, the better off you will be in setting and reaching realistic financial goals. It’s time we realize; there is more to planning than just saving money.
When we think financial planning, we think well of well-off individuals being able to hire someone to handle their bills. You may think, that is not for me, I do not have the kind of money to hire someone to manage my money. How can I trust them? However, hiring a certified financial advisor may be more affordable and credible than you think.
A good advisor can often provide you with the discipline we may lack when managing our finances and can be viewed as an impartial, unemotional third party who will apply steady fact-based advice and reassurance when the market may fluctuate. Typically, consumers using an advisor may see an estimated 3% increase in return when using strategies put forth by their financial investor. Additionally, hiring a planner may pay for itself over time with increased income for yourself and your future.
Advisors will also assist in increasing annual returns by using strategies for investments; such as asset allocation, minimizing taxes, rebalancing, and structuring timely withdrawals from your retirement. A good financial plan will typically include savings, investments, planning for retirement, education, emergencies, major purchases, financial goals, and insurance needs.
Do you have a plan in the event of an unforeseen emergency? Do you know where you would obtain funding? These are questions you may find you asking yourself when setting goals towards your future. An added benefit of making a financial plan is planning for life’s unexpected events; emergencies, large purchases, or insurance needs. Having a plan gives you the peace of mind you need when a troublesome situation may arise.
Whether you feel lost in your finances, or want a professional opinion, the judgment on hiring a financial planner can help secure your future and your future happiness. These professional planners can be extremely helpful in assisting you in making the best financial decisions, and ultimately seeing the best outcomes out of your money. Give yourself the peace of mind you deserve while securing your future for you and your family.
Fascinating, aren’t they, these security markets of ours, with their unpredictability, promise, and unscripted daily drama. But individual investors themselves are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that “four-letter” word, certainty.
We are becoming a culture of speculators, where hindsight is replacing the reality-based foresight that once was flowing in our now real-time veins. Still, the markets have always been dynamic places where investors can consistently make reasonable returns on their capital. If one complies with the basic principles of the endeavor and doesn’t measure progress too frequently with irrelevant measuring devices, growth in working capital, market value, and spendable income are quite likely to happen… without undue risk taking.
The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices. This is mythology, not investing.
Investors who grasp the realities of these wonderful (speculation driven) marketplaces recognize the opportunities and relish them with an understanding that goes beyond the media hype and side show “performance enhancement” barkers. They have no problem with the “uncertainty”; they embrace it.
Simply put, in rising markets:
• When investment grade equity securities approach the “reasonable” target prices you have set for them, realize your profits, because that’s the “growth” purpose of investing in the stock market.
• When your income purpose securities rise in market value the equivalent of one-year’s-interest-in-advance, take your profits and reinvest it in similar securities; because compound interest is the safest and most powerful weapon we investors have in our arsenals.
On the flip side, and there has always been a flip side (more commonly dreaded as a “correction”), replenish your equity portfolio with now lower priced investment grade securities. Yes, even some that you may have just sold weeks or even months ago.
And, if the correction is occurring in the income purpose allocation of your portfolio, take advantage of the opportunity by adding to positions, increasing yield and reducing cost basis in one magical transaction.
• Some of you may not know how to add to those somewhat illiquid bond, mortgage, loan, and preferred stock portfolios quite so easily. It’s time you learned about closed end funds (CEFs), the great “liquidators” of the bond market. Many high quality CEFs have 20 year dividend histories for you to salivate over.
This is much more than a “buy low, sell high” oversimplification. It is a long-term strategy that succeeds… cycle, after cycle, after cycle. Do you wonder why Wall Street doesn’t spend more time pushing its managed tax free income, taxable income, and equity CEFs?
• Unlike mutual funds, CEFs are actually separate
investment companies with a fixed number of shares traded on the stock
exchanges. The stock can trade (real time) above or below the net asset
value of the fund. Both the fees and the net/net dividends are higher
than any comparable mutual fund, but your advisor will probably tell you
they are more risky due to “leverage”.
• The leverage is short term borrowing and is absolutely not the same as a margin loan on the portfolio. It’s more like a business line of credit or a receivables financing tool. A full explanation can be found here: https://www.cefconnect.com/closed-end-funds-what-is-leverage
I’m sure that most of you understand why your portfolio market values rise and fall throughout time… the very nature of the securities markets. The day to day volatility will vary, but is generally most noticeable surrounding changes in the longer term direction of either market, income purpose or growth purpose.
• Neither your “working capital” nor your realized income need be affected by the gyrations of your market value; if they are, you are not building a “retirement ready” portfolio.
So rather than rejoicing through each new stock market rally or lamenting each inevitable correction, you should be taking actions that enhance both your working capital and its income productivity, while at the same time, pushing you forward toward long term goals and objectives.
Through the application of a few easy to assimilate processes, you can plot a course to an investment portfolio that regularly achieves higher market value highs and (much more importantly), higher market value lows while consistently growing both working capital and income… regardless of what is happening in the financial markets.
Left to its own devices, an unmanaged portfolio (think NASDAQ, DJIA, or S & P 500) is likely to have long periods of unproductive sideways motion. You can ill afford to travel eleven years at a break even pace (the Dow, from December 1999 through November 2010, for example), and it is foolish, even irresponsible, to expect any unmanaged approach to be in sync with your personal financial objectives.
The Investor’s Creed
NOTE: The original “Investor’s Creed” was written at a time when money market funds were paying above 4%, so holding uninvested equity bucket “smart cash” was, in effect, a compounding of profits while waiting for lower equity prices. Income bucket cash is always reinvested ASAP. Since money market rates have become minimal, equity “smart cash” has been placed in tradeable equity CEFs with yields averaging over 6% as a replacement… not as safe, but the compounding makes up for the increased risk over money funds.
The “Investor’s Creed” sums up several basic asset allocation, investment strategy, and investment psychology principles into a fairly clear, personal portfolio management direction statement:
• My intention is to be fully invested in accordance with my planned equity/fixed income, cost based, asset allocation.
• Every security I own is for sale at a reasonable target price, while generating some form of cash flow for reinvestment.
• I am pleased when my equity bucket cash position is low, signaling that my assets are working hard to meet my objectives.
• I am more pleased when my equity bucket cash is growing steadily, showing that I’ve been capitalizing all reasonable profits.
• I am confident that I’m always in position to take advantage of new equity opportunities that fit my disciplined selection criteria.
If you’re managing your portfolio properly, your cash + equity CEF position (the “smart cash”) should be rising during rallies, as you take profits on the securities you confidently purchased when prices were falling. And, you could be chock full of this “smart cash” well before the investment gods blow the whistle on the stock market advance.
Yes, if you are going about the investment process with an understanding of market cycles, you will be building liquidity while Wall Street is encouraging higher equity weightings, while numerous IPOs are taking advantage of euphoric speculative greed, and while morning drive radio hosts and personal friends are boasting about their ETF and Mutual Fund successes.
While they grow their hat sizes, you will be growing your income production by holding your income purpose allocation on target and salting away the growth purpose portion of your profits, dividends, and interest in an equity based alternative to “de minimis” money fund rates.
This “smart cash”, comprised of realized profits, interest, and dividends, is just taking a breather on the bench after a scoring drive. As the gains compound at equity CEF rates, the disciplined coach looks for sure signs of investor greed in the market place:
• Fixed income prices falling as speculators abandon
their long term goals and reach for the new investment stars that are
sure to propel equity prices forever higher.
• Boring investment grade equities falling in price as well because it is now clear that the market will never fall sharply again… particularly NASDAQ, simply ignoring the fact that it is still less than 25% above where it was nearly twenty years ago (FANG included).
And the beat goes on, cycle after cycle, generation after generation. Will today’s managers and gurus be any smarter than those of the late nineties? Will they ever learn that it is the very strength of rising markets that, eventually, proves to be their greatest weakness.
Isn’t it great to be able to say: “Frankly Scarlett, I just don’t care about market directional changes. My working capital and income will continue to grow regardless, possibly even better when income purpose security prices are falling.”
Five top rated financial investment firms that are growing faster than their peers are FXCATCHER, Schwab, Ally Invest, Scottrade, and TD Ameritrade. This article will make a detailed analysis of each company and try to determine what exactly investors like about these companies that cause them to expand.
FXCATCHER LTD – www.fxcatcher.com
A personal favorite, FXCATCHER (LTD) was formed in Kemp House, 152 – 160 City Road, London EC1V 2NX, United Kingdom.
FXCATCHER is a one of a kind investing community. A group of successful
financial investors who’ve decided to share their investing knowledge
with everyone interested in grabbing the endless opportunities which the
investing market has to offer.
Up to 5% Monthly return. Minimum investment amount: $100
Another brokerage firm showing strong potential is Charles Schwab. Founded in California in 1971, the company went public as The Charles Schwab Corporation in 1987. In 1997, the company had a million online accounts, and just one year later, it had double that amount. In 2003, the company launched an FDIC-insured bank, and by 2012, it had more than $2 trillion in client assets. Today, it has offices around the world and services around 10 million accounts.
What has fueled such consistent growth is attention to the customer. The broker offers 24/7 customer service in the United States, with 325 branch locations for clients who want in-person service. An on-line chat function is available on the broker’s website, and Chinese speakers can reach an associate over the phone who speak Mandarin or Cantonese.
A third brokerage firm that is showing signs of strong growth is Ally Invest (also known as TradeKing). Founded in 2005, the company has steadily grown in size. In 2012, the company merged with low-cost broker Zecco.com. This was followed in 2014 by the creation of TradeKing Advisors, an on-line portfolio management firm. It was announced that Ally Financial, a company with more than $150 billion in client assets, has agreed to acquire the TradeKing Group. In its eleven-year history, Ally Invest has grown from an unknown broker to one with 260,000 accounts. Remarkably, it has done this with little advertising. It currently has $4.5 billion in customer assets.
What has attracted so many investors to Ally Invest is the broker’s emphasis on low fees and commissions. Charging just $4.95 for stock and ETF trades, the brokerage house is one of the lowest-cost firms in the business. Ally has said it has no plans to change the Ally Invest commission schedule. This includes option contracts at just 65¢ each. While the firm does not offer mutual funds that are both no load and no transaction fee, it does offer all loads funds free to trade, while no-load funds cost just $9.95 per transaction.
Scottrade recently has been acquired by TD Ameritrade – read about it in the next section.
Scottrade has also been expanding its footprint in the securities world in recent years. The company was founded in 1980 in Scottsdale, Arizona as Scottsdale Securities. One year later, the firm opened its second branch location in St. Louis, Missouri. Within ten years, the company had 15 locations across the country. In 1994, Inc. magazine named the firm one of the fastest growing private companies in the United States. In 2000, the company changed its name to Scottrade, and by 2007, it had reached over 300 brick-and-mortar locations. In 2008, Scottrade hired nearly 1,000 financial advisors and opened Scottrade Bank. Today, the company has more than 500 offices throughout the country, an investment advisory division, and over a $1 billion in annual revenue.
Scottrade’s growth did not go unnoticed, which is probably why TD Ameritrade purchased it last year. Without Scottrade, TD Ameritrade today has more than $600 billion in client assets, with customers placing around 400,000 trades per day. The company began in Omaha, Nebraska in 1975 with much smaller operations. Starting in the early 2000’s, the firm began buying other companies, fueling its growth. In 2009, TD Ameritrade purchased thinkorswim, which at that time was the fastest growing broker.
The recent acquisition of Scottrade will give TD Ameritrade almost overnight a much larger presence in the brokerage world. Assuming regulators approve the sale, the new TD Ameritrade will have more than 600 brick-and-mortar locations across the United States. This network will be the largest of any on-line discount broker.
While some top financial investment firms are shrinking in size, these five have expanded, sometimes from nothing. The fact that investors trust them with enormous sums of money is a good sign that these companies have excellent financial services.