Breakeven.

After the Fall: High Yield Checking Accounts

Another week, and more pain for savers.  Dollar Savings Direct continued their rate chopping from 3.20% APY to 3.05% APY on their online savings accounts.  While still offering one of the highest rates available, their margin is no longer much more than competitors.  Here's a roundup of some other rates we here at the LookBlog follow:

• FNBO Direct  2.60%
  
• HSBC Direct 2.45%
• Emigrant Direct 2.40%
• ING Direct 2.20%

So what's a saver to do?  We mentioned a while back about High Yield checking accounts and the relatively high rates they are still offering as long as you are willing to jump through a few hoops.  The guys over at http://www.highyieldcheckingdeals.com/  have some great resources on what is available in your area, as well as a primer on how these checking accounts can still offer up these rates.  Long story short, by making you use your debit card they earn more on fees allowing them to keep a nice little spread while still offering you a high rate.  Check the site, its definitely worth a read.

As a NJ resident, I'm leaning more and more towards pulling the trigger and opening an account at The Provident bank.  Currently they are offering 5.01% APY on up to 25K and a $123 sign up bonus.  O how I salivate when looking at this compared to the meager online savings yields.  A couple more drops and I'm all but forced to open this up! 

Lets hope things start turning around soon!

One Love,

Look

So much for saving... VFINX in the dumps

A dollar saved is a dollar earned?  Not so much.  So I've been investing in Vanguard's 500 Index (VFINX) for quite some time now.  The graphic above shows the 10 year performance of the fund.  The end of 2007 to now has hit the fund hard erasing gains and causing negative performance.  Bah.  So... what's an investor to do?  Is it a fire sale? Time to buy some new shares? Dollar Cost Average?  Mmm with "experts" prediciting further struggles and the abysmal performance in January causing the year outlook to be just as bad (As January goes, so goes the year...)  its a hard call.  Wait and you could miss those huge upside days.  Invest now and you could see further losses.

They say this recession is worse and more far reaching than any before and that the boost in the stock market post-recession can be a long time away and isn't guaranteed.  Is it the end of an era?  I'm in it for the long haul so I'll stay put for now.  Invest in some more shares slowly and hope things start to turn around.  Hope Warren is right... be fearful when others are greedy, be greedy when others are fearful.  

Steelers just won the Super Bowl. Super.

One Love, 

Look

Interest Rates: Dropping like they're hot.

Another couple weeks, another drop in interest rates.  The honeymoon with Dollar Savings Direct is over as they finally caved in and dropped the savings account APY from 4% to 3.5%.  Sadly, this was expected as they had already dropped the rate on their CDs weeks earlier to 3.5%.  Along with the drop in savings, they followed up with another drop in CDs to 3.25%.  So probably only a month or so before more cuts are coming.

DSD had stood out above the rest, but the pack is getting tight at the bottom.  Seems like its the cool thing for all banks to offer basically nothing on savings account.  What infuriates me is seeing ads like Citibank's "Earn More in Less Time with a Citibank 12-Month CD: You can feel confident with a short-term CD at a great rate. All from a bank you can trust."  Really? 2.40% is a great rate? Please don't patronize me.  And a bank you can trust?  Actually... Big Vik hasn't done much to salvage C from the ginormous death spiral its been on.  The government bailout wasn't enough and the rumors of nationalization persist.  So can I really trust you Citibank?  FDIC insurance my friend.  Thats what I trust (even then where is the FDIC getting all this money... something has to give).

Not many options out there.  You can still grab some great rates if you get into the whole High Yield Checking account thing, but that doesn't come without some effort.  They usually require auto-deposits, a # of debit card transactions, etc.  Is the hassle worth the rate?  Yes if you usually use your debit and are set up to auto-deposit in that bank already.  Since my banks don't offer that and I never use a debit card, I'll just grin and bear the low rates for now.  When I get desperate I might just have to take the plunge though... 5.01% at Provident.  So tempting....!  Good luck out there :) 

What an up-beat post.  Sorry!

BTW, my netbook rocks my socks.

One Love,
Look

Samsung Netbook!

Hullo there!

I'm writing this entry on my spiffy new Samsung NC10 netbook, a gift courtesy of my girlfriend!

After taking about a half hour or so to get it up and running and another half hour going through the hassle of bypassing the Windows Logo test to install Symantec Corporate Edition I'm on my way.  

Quick rundown of the specs: 1GB Ram, Intel Atom Processor, 160GB HDD, 10.x size screen, 6-cell battery.  The gf did the research for the purchase and came to the conclusion that this sucker was better than those Dell/Lenovo/Esus/Acer other netbookers.  So far so good!  Keyboard is almost full sized, weight is great, battery awesome, screen lovely.  Very satisfied! What a great gift :)

Well thats the quick hits for now.  Probably more posts in the future seeing that I have an awesome mobile computing station now.  Till next time!

Happy 09'! :)

One Love,

Look

Time to throw in the towel on WaMu?

The beleaguered bank just can't catch a break. Today Standard & Poor's Rating Services downgraded WaMu's counterparty credit rating to "CCC" from "BB-" further miring it in junk status. The reasoning being a split of the bank on any sale, as vultures are keen on snatching the strong deposit base while staying as far away as possible from the toxic mortgage assets.

As seen in the chart, WaMu's stock price (NYSE: WM) has fallen along with the confidence in the bank, dropping another $0.94 to a 52-week low of $2.26. Uncoincentally, this battering has led them to increase interest rates on online savings to 4.00% and on 12 month CDs to 5.00% in attempts to shore up capital.



While these are GREAT rates given current market conditions (who wouldn't want guaranteed returns in this financial crisis!) how safe is your money? Sure its FDIC insured on deposits up to $100,000 but with all these bailouts and government takeovers, but how long will the FDIC's printing press be available until it breaks down? Here's a great article on reasons to stay with WaMu from MyMoneyBlog, but seeing that nearly 60% of my cash is sitting with WaMu, I still am pretty uneasy with leaving my money in there.

I have an online savings account and an 8-Month CD (which I opened for 4.25% APY) and the trigger is itchin for me to withdraw the money. IndyMac is the closest example to what would happen should WaMu fail and after reading some stories from those customers (via SlickDeals) seems like it took 4-5 weeks for money to be returned. So seeing that a bailout of WaMu would be greater than IndyMac, I can't imagine how long my money would be locked away NOT earning interest.

So do I forgo the attractive interest rates and settle for a lower rate but more security? I'm leaning towards a move back to EmigrantDirect at 3.00%. So far I'm undecided, but I'll wait for this month's interest to be deposited and then I'll make a decision.

Happy rate hunting!

One Love,

Look

Interest Rate Roundup

Rates have come up a tad bit in the last month. Here's the current roundup:

WaMu Online Savings: 3.75%

WaMu 8 month CD: 4.25%

WaMu 12 month CD: 4.50%

Emigrant Direct: 3.00%

ING Direct 3.00%

HSBC Direct: 3.50%

E-Loan Savings: 3.01%

E-Loan 6 month CD: 4.06%

So my in my rate chasing, I moved my matured E-Loan CD into WaMu and dumped it into an 8 month CD. I've been socking most of my savings into the online savings account as well. Due to the turbulence in the market I'm reluctant to move everything into WaMu, so I still maintain my other account at Emigrant Direct. While these rates are better than what we've been seeing, the forecast looks bleak. About a week or two after I opened the 8 month CD, WaMu was offering a 12 month, 5.00% CD which I would have definitely jumped on. I jumped the gun too early, then waited to late and now they've dropped the 12 month rate to 4.50%. So unfortunately looks like there won't be another uptick in savings rates anytime soon :(

One Love,

Look