Immigrant Millionaire » interest rates

Save through your Checking Accounts

srini — Mon, 14 Sep 2009 12:29:23 +0000

The high interest checking accounts offered by a lot of banking institutions can be a feasible option. This is particularly for all those investors who do not have the need to harbor a huge amount of on-demand cash. The point to be noted is that the amount you decide to keep in your checking account is not very high considering the status of your overall portfolio. The Federal Reserve has currently slashed off the interests rates, and this has resulted in modest interest rates as offered by the banks. There are a few aspects to be considered with regard to high interest checking:

You should consider investing your minimum balances in other investment options. If you have around $2,500 in your checking account you may not earn handsome interest on the funds. And, if you end up dropping below the minimum balance, there are fees to be met up with.

Your interest earnings can fall due to these fees. Prior to investing, one is required to understand every detail regarding the fees within the high interest checking account. If you find the fees higher than your current banking institution, opening a high interest checking account will not be a good option.

There may be other caveats along with your high interest checking accounts. One needs to check whether the interest you earn is indeed worth it.

The low interest rates are an impediment to high yield incomes and savings

srini — Sat, 29 Aug 2009 12:16:52 +0000

The investors and consumers usually target to attain the high yield earnings through their savings and CD instruments. As the interest rates are lowered by the bank, the savings and money markets are low on liquidity. Then, as the CD rates are so dependent on its erstwhile 4-5% yield, the investors are left wondering as to whether it would be better option to take on additional risk and wait for a higher yield or settle down with the lower yields.

Here are certain alternatives for the investor:

He can go in for the high yielding savings and CD accounts. When a bank is unable to compete with their competitors, they are apprehended as ‘bad’ by the investors due to their high interest rates. They are then compelled to cut their rates.

The high yield municipal bonds can also work pretty well. There are other investment instruments with a wide array of alternatives that presents tax-free income options. The risks also get aptly diversified with the superior performance of some of the municipal bond ETFs. They may not be as high as that of a healthy economy; still the 8% mark is appreciable during a financial recessionary period.

The high yield bonds ETFs are alternatively known as junk bond’ ETFs and they offer a handsome payout. The high yield stocks are also a great option. Income can be generated from selling puts and calls too.

Help your savings through some commonly uncommon factors

srini — Fri, 21 Aug 2009 11:33:21 +0000

We save in order to build wealth and our objective is to stay prepared for the future financial alterations. Here are a few uncommon factors that save your investment and help your wealth to grow.

Through Compound Interest, you get to earn interest on the interest that is already present in your account. This is a very simple option which is oft ignored. So, a savings plan can be a very effective method to make your money grow.

Use the Rule of 72. An amount deposited in an account gets doubled within a specified amount of time. This occurs through compounding. The Rule 72 helps us to ascertain the time period. This can be obtained by dividing the interest rate payable by the account in which your money is deposited by 72.

The risk and return factor. There are different methodologies to build wealth. Those that involve more risk are found to offer greater returns. Wealth is usually built through a savings account and through investment in stocks. There is no chance in the loss of money in the savings account but in stocks, there are many causes that can result in the loss of money. And, the interesting part is that, you get an opportunity to earn around 10-15% interest while in a savings plan the interest rate is just 1.5%. You can also diversify your investments, to obtain the maximum benefits.