The Certificates of Deposit Zoo

ZooFor the longest time I thought a certificate of deposit came in one flavor – vanilla. I deposit some money into a CD, I wait until it matures, and then I decide whether I want to put it back in or do something else. Online banks offer better rates than traditional and you can get fancy by creating a CD ladder, but at the core a CD was a CD was a CD. Then I learned about Ally Bank’s no-penalty CD that lets you close a CD before its maturity without losing interest. OK, that was interesting, but it wasn’t all that exciting.

Then today, I read this Bankrate article about the different types of CDs and was surprised at all the options. I guess I had heard about several of them in the past but dismissed them as hokey (callable CDs? I’ve heard of callable bonds but never CDs). I think some of them are clever just to be clever (and so they can list more rates?) but overall it’s kind of a dry read… so I tried to make it a little more interesting.

How about we take a visit to the Certificate of Deposit Zoo?

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 Personal Finance 

Liz Pulliam Weston on the Personal Finance Hour

Please join us Monday night (6PM Eastern, 3PM Pacific) on the Personal Finance Hour as JD and I discuss your credit history and credit score with none other than Liz Pulliam Weston! Liz Weston is the most-read personal finance columnist on the Internet according to Nielsen/Netratings and has written several credit and debt related books, so we’re very happy to have her on the program. We’ll talk about everything from the importance of checking your history to the various components that make up your credit score.

At 6PM Eastern, 3PM Pacific, the show will be broadcast online at this page (there’s also a chat room on that page where lots of listeners chat with one another, I’ve heard it’s a fun time!). You can also listen to the show on your telephone by calling calling (347) 327-9144. If you want to get on the air, hit “1” and we’ll get the notification and get you try to get to you as soon as we can.

If you would like to ask a question, you have three options. First, you can leave it as a comment here and I’ll try to ask Liz during the program. Or, you can call in to get on the air or leave the question in the show’s chat room. We hope you join us with this great opportunity to chat with Liz!


 Your Take 

Your Take: Isakson’s $15,000 Homebuyer’s Credit

Colorful Houses along the White Oak Bayou in HoustonIf you’re signed up for the Bargaineering newsletter, I included a mention of a potential $15,000 homebuyer credit in the latest Thursday email. The $15,000 homebuyer’s credit was introduced by Senator Johnny Isakson (GA-R) that would increase the current $8,000 first-time homebuyer credit to $15,000 and could be used by anyone who bought a primary residence, not just first-timers. Another crucial change would be the removal of the current income limits. Isakson played a big role in getting the first $8,000 homebuyer credit into law. The logic behind this increase is in stimulating the “move-up market.” That is, those going from their first home to their second home. This US News article has more “expert” opinion on the subject if you’re interested, but I wanted your opinion.

My feelings about this potentially new credit are mixed. On one hand, I recognize the importance of stimulating the housing market. On the other, it’s another $32 billion of spending. What’s $32 billion in a budget of trillions? 🙂

I don’t like the slippery slope we’re going down. First we had the first-time homebuyer loan, then the $8,000 homebuyer credit, and now potentially a $15,000 homebuyer’s credit – all benefiting the housing industry. We have the cash for clunkers program, which recently passed both chambers of Congress and will likely be signed into law soon, which benefits the auto industry. All these programs to spur spending, which is important during a recession, but is it the right thing to do?

What do you think?

(Photo: billtex48)


Fortune’s Top 25 Top-Paying Companies (2009)

Fat Stack of BenjaminsI always enjoy looking at these lists because they give a little glimpse into some of our nation’s most storied firms. I think these are more for entertainment purposes, much like the top paying undergraduate degrees, because the average total pay isn’t something you’ll get right out of the gate.

It’s fun to read are the various perks employees get because often times the companies that compensate the best tend to have great benefits as well. A popular company to talk about when you list slick benefits is always Google’s plethora of employee benefits.

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Beware Broker Transfer Out Fees

My wife’s Roth IRA currently sits at a TD Ameritrade account, where it’s been sitting for the last three or four years. With the majority of it in cash, mostly because we lost track of the account, we want to invest it in our retirement investment of choice, an index fund. Our index fund of choice happens to be the Vanguard 500 Index Fund because most of our retirement funds are with Vanguard. Vanguard does not have the cheapest index fund, I believe that title now resides with Fidelity’s Spartan 500 index. Paying the extra 0.08% seems reasonable considering we can manage it all in one place.

The only downside about this entire process is that TD Ameritrade has a $75 outbound full account transfer fee. 🙁 Fortunately Vanguard does not charge you to transfer in an IRA (to my knowledge, no one does).

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 Frugal Living 

BVC #15: Repair or Replace Rule of Thumb [VIDEO]

Don’t you hate it when something breaks before it’s “supposed” to? You spent hours researching the best product for the job, the one with the best features, the longest life, and it has the nerve to break down before it’s supposed to? Well, it happens to us all and the hardest decision to make is whether it’s worth fixing or whether you should just pitch it.

What’s the rule of thumb you usually use in determining whether you should repair or replace something that’s broken before its expected “useful” life?

 The Home 

Don’t Want To Sell Your House? Do These Things

Home For SaleWe bought our first and only home four years ago, about a year away from the peak of the market in our area, and we saw some atrocious houses along the way. It was a hot housing market back then, so perhaps some of the horribleness we saw is excusable, but with the market today there’s no excuse for being lazy.

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Credit Report Card

In the past I’ve joked about how your FICO credit score has become the new report card for your life. Instead of letter grades, we now get a three digit grade in the form of a credit score. As much as you may hate it, that’s how life works and your credit score has become just that, a grade.

I don’t know if Credit Karma heard me or it’s just a strange coincidence, but they put out a credit report card tool that takes your TransUnion data (all of Credit Karma’s information is based on TransUnion data) and gives you grades on a litany of factors (seven to be exact):

  • Credit Card Utilization
  • Percent of On-Time Payments
  • Average Age of Open Credit Lines
  • Total Accounts
  • Credit Inquiries
  • Total Debt
  • Debt to Income Ratio

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