Banking Column

This column focuses on all matters banking from reviews of the best high yield savings accounts to whether your funds are adequately protected by FDIC insurance. The bank, and not your mattress, should be where you’re putting your savings and anytime we discuss banks, it’ll appear in this column.

Popular Resources in Banking:

- Best Online Banks
- High Yield Savings Account Rates
- Best CD Rates (12-18 months)
- Highest CD Rates (< 12 months)


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 Banking 
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What FDIC Insurance Does Not Insure

FDIC Logo LobbyWe all know that the Federal Deposit Insurance Corporation insures each depositor up to $250,000 per insured bank and it’s an insurance policy that is as good as gold (OK, technically not as good… but pretty solid). Sometimes we forget, as we saw the run on IndyMac a few years ago (it was actually most 4 years ago to the day), but the FDIC insurance has always covered every depositor and no depositor has ever lost an insured penny.

That said, not everything you keep with your bank is covered by FDIC insurance. Many people learned that recently with Hurricane Sandy but also back in previous hurricanes, as high water flooded many bank vaults. Here are a few of the things the FDIC does not insure at the bank.

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 Banking 
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How to Cash a Check Without a Bank Account

Bank Vault DoorWhen I first started working, I had just moved from Pittsburgh to Baltimore and was without a local bank. I had a bank account, it was just for a local Pittsburgh bank (and a credit union back home in New York) and so when I learned that my first check was going to be paper, I needed a solution.

For me, the simplest solution presented itself in the cafeteria of my new workplace – my company, Northrop Grumman, had it’s own credit union and so I opened an account there. Nowadays, if you have an online savings account with the likes of Ally Bank or ING Direct (now CapitalOne360), you can deposit the check with your phone (assuming it’s not over $3,000). Back then, you actually had to find an ATM or a teller!

So what if you don’t have a bank account or you can’t or don’t want to open a new bank account? We have some options.

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 Banking 
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CapitalOne360 Review: ING Direct is Now Capital One 360

Capital One 360Last year, one of the big stories was that Capital One bought ING Direct. Since the announcement, Capital One has been gradually changing up the branding. Now, though, the transition is complete, and ING Direct is now Capital One 360.

So, is anything different? And what does Capital One 360 have to offer?

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 Banking 
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Why Are Savings Account Rates So Low?

US Federal Reserve SealHave you seen the interest rates on savings accounts lately? Our list of high yield savings accounts basically peaks at 1%. (As of this writing, we have just three banks with “high yield” interest rates above 1%… but barely above 1%) I can barely type high yield because when I see a single percent, I don’t think high yield. I barely even think “yield” because you’ll get exactly one dollar for every hundred dollars you save in the bank. That’s it!

You might be wondering why rates are so low. I’ll explain.

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 Banking 
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3 Reasons to Dump Your Checkbook

CheckbookI don’t write personal checks unless I have no choice (or the alternative is expensive). Whenever possible, I use something electronic, like bill pay, so that I can reduce the amount of paper I’m mailing around in the postal system. While I’ve been fortunate never to have been confronted with a problem using checks, I don’t want to tempt fate by continuing to use them. The reality is that personal checks are simply too insecure to be used.

I’ve talked about using the “internet safety test” and the personal check basically fails. Here are three big reasons why I avoid checks:

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 Banking 
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Coin Counting: Where to Turn in Your Change for Free

CoinsDo you have a jar somewhere in your room filled with spare coins? Most of us do.

While it can be a painless way to let cash accrue and save for things like a vacation or debt snowflaking, turning that change in can be a real pain, especially if you are hit with fees. However, there are ways to avoid the fees and the inconvenience of counting and rolling your own change.

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 Banking 
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American Express To Pay Consumers Back Millions

Processing PaymentsDo you have an account with American Express Centurion Bank or American Express Bank?

If so, you may soon be one of the estimated 250,000 customers who will receive part of an $85 million  refund from the bank as repayment for their deceptive practices from 2003 to 2012. In addition to the refund, American Express will also pay a $27.5 million penalty.

American Express’ Misdeeds

American Express has recently found itself under the scrutiny of the Consumer Financial Protection Bureau for some of its subsidiaries’ deceptive acts and illegal fees. Some of the offenses include:

  • Telemarketers telling potential customer that if they signed up for the Blue Sky credit card offered through American Express Centurion Bank that they would receive a $300 sign up bonus, which new customers never received;
  • Charging late fees that were higher than those set by law. This occurred at both American Express Centurion Bank and American Express Bank;
  • Discriminating against older customers (those 35 and older) by using a discriminatory credit scoring system at American Express Centurion Bank for those applying for new accounts;
  • Telling customers that by paying off old debt they would improve their credit score. The problem? The three subsidiaries didn’t notify the credit bureaus of the changes, and in some cases, the debt that was being paid off was over 7 years old and would have no impact on credit scores even if it was reported.


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 Banking 
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Best Debit Card Reward Programs

A few years ago, debit card rewards were very popular. Whether they were straight up rewards or part of a reward checking account, banks were going crazy offering them. Then, as interchange fee caps came into effect, one by one they started dropping off. Many of the programs were funded by these interchange fees, the fees banks charge merchants for accepting cards, and so when the revenue dried up, the incentive to push those programs and the ability to pay for those programs also dried up.

Nowadays, the rewards are smaller but they’re still there. Here are the best of the debit card reward programs:

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