Share Certificates Deliver Predictably Strong Returns

A share certificate is usually more rewarding in returns than a traditional savings account, and less risky than other investment options. Share certificates may be a good fit for investors seeking strong returns without the potential for loss that comes with stocks and bonds. For those new to share certificates, here is a primer on what they are and who might consider one.

Share certificates 101

Unlike a regular savings account, which allows penalty-free withdrawals, a share certificate requires that the money goes untouched until the certificate matures or reaches the end of its term – often from six months to five years. A key advantage of certificates compared with regular savings accounts is that certificates accumulate a predictable, locked-in return in exchange for leaving the funds alone, whereas the interest paid on regular savings can vary.

Like savings accounts, the National Credit Union Administration (NCUA) insures share certificates for up to $250,000. As long as you have more than $500 to invest and are comfortable not having access to the funds for a period of time (or paying penalty fees if you withdraw funds early), a share certificate can be a good way to put money to work.

Who should use share certificates

Share certificates are among the highest-yielding government-backed investment options available. Longer-term investments with larger sums typically provide the most advantageous ways to use share certificates. If an investor needs to withdraw money before the maturity date, penalty fees may apply. If you do not have an emergency fund, investing too much in a share certificate can be risky. For those with only a little cash tucked away, a regular savings account may be a better choice. While these pay lower interest rates, there are generally no withdrawal penalties.

The limited risk makes share certificates an appealing option for financially comfortable and retired investors. For those with the ability to allocate assets across a variety of investments, share certificates provide a high-yield savings product. As investors age, experts advise reducing risk to protect accumulated wealth.

Making the most of your money

Retired and wealthy investors who have more flexibility with funds may consider spreading assets across several share certificates with different maturities, employing a strategy called laddering. As each share certificate comes to term, reinvest the funds in another certificate to maintain a steady stream of interest income.

If commitment to a long-term share certificate is a concern, especially with prospects of interest rates rising in the not-too-distant future, consider a bump-up account, which allows the investor a penalty-free opportunity to raise the interest rate once during an 18-month term, or twice in a 30-month term certificate.

If market conditions make you nervous, relatively risk-free share certificates may make it easier to relax as your savings earn interest.

Visit altaone.org for more information on our term share certificates.

Cait Klein, NerdWallet

Read More

Get Rich Quick

Want to become stinking rich? Of course, you can save your money in an AltaOne account and invest wisely with our various products. Or -- you can try to emulate the habits of the rich. We explored the World Wide Web to find data on what differentiates the wealthy from the not-so-wealthy. Here are some of the more interesting findings:

• The wealthy eat healthy — 70% eat less than 300 junk food calories per day.
• The wealthy set goals — 80% focus on accomplishing some single goal.
• The wealthy stay in shape — 76% exercise aerobically four days a week and 57% pay close attention to their calorie intake.
• The wealthy like to learn — 63% listen to audio books during their commute.
• The wealthy are thoughtful — 80% call their family and friends to wish them a happy birthday.
• The wealthy are goal-oriented — 67% have written goals.
• The wealthy avoid the television — 67% watch one hour or less of TV per day ...

... and they really avoid mindless television — just 6% watch reality TV.

• The wealthy pass on their habit to their offspring — 74% teach their success habits to their children.
• The wealthy are always learning — 86% believe in lifelong educational.
• The wealthy are readers — 86% enjoy a good book on a regular basis.
• The wealthy write down their plans — 81% keep a daily to-do list
• The wealthy like their jobs — only 6% are unhappy because of work.
• The wealthy are realistic — just 6% play the lottery on a regular basis.
• The wealthy floss regularly — 62% do so every day.
• The wealthy are optimistic — 98% believe the American dream is still possible.
• The wealthy are into people — 68% love meeting new people.

Here are a few more ...

• Most wealthy folks do not carry high credit card balances.
• The wealthy save for their seniority, and they usually start saving for retirement when they are young.
• Wealthy people set up automatic savings programs so they do not have to think about plopping money into a savings account.
• Many wealthy folks are early risers, with a high percentage accomplishing more before 8:00 a.m. than many people do all day.

We hope this blog helps to put all our members on a path to their own pot of gold. A good investment advisor may help, as well.

Read More

High Tech Products of the Not-so-Distant Future

AltaOne members can now access some of the most cutting-edge technological tools to help manage their finances -- MSC Online, mobile apps, BudgetPro, BillPayer, Popmoney, etc. Outside the AltaOne world, technology continues to explode. Products such as Google Glass -- the amazing eyewear that conducts Google searches, snaps photos and videos and tracks trending news -- are already here. 

Let us take a gander at what other items are on the horizon that are destined to "wow" the world.

The "Eye-Witness"

A portable retina scanner may soon be available to help fight identity theft and protect your personal security. The tiny device is only 5" long x 3.5" wide. The scanners can be used by financial institutions to identity members conducting transactions in an efficient and unassuming manner. Look for these devices to really take off when the technology is incorporated into a smartphone.

The Six-Million-Dollar ... Finger?

How annoyed do you get when you realize the beer bottle is not a twist-off and you cannot find a bottle opener? Introducing "bionic fingers."

These robotic devices, which are still just prototypes, simplify such tasks as peeling a banana and unscrewing bottle caps. Developed by MIT researchers, users wear the "supernumerary robotic fingers" on the wrist. The device is equipped with two "fingers" that move in-sync with the real fingers.

Too Much Scale?

As if stepping on a scale is not difficult enough for some folks. Now there is a scale that not only displays your weight -- it also discloses your body mass index, heart rate and fat mass.

The Withings Smart Body Analyzer is quite the know-it-all. The $150 device also knows the indoor air quality and room temperature.

We will be far more impressed if the scale can tactfully recommend the right diet for users, as well.

Holographic Telepresence

Just when we learned how to use video conferencing tools, the next incarnation has already arrived -- holographic video conferencing.

"Holographic telepresence" transmits a 3-D moving image to each destination – giving the appearance that you are actually in the room with your associates.

The technology already exists for other purposes. For example, it has recreated deceased rapper Tupac Shakur's image for a music festival.

The Polish company Leia (named after the Star Wars' Princess Leia), has produced the Leia Display XL, which projects images onto a cloud of water vapor. This technology is destined to achieve widespread popularity. Expect to see it marketed within about a year.

We live in such intriguing times.

Read More

Late Summer Vacation Savings Tips

So— you planned to take a summer vacation, but the weeks are zooming by and your children are already preparing to return to school in a few weeks. Yikes! Summers seem to get shorter every year.

It is not too late to plan for an inexpensive, last-minute vacation. During the final weeks of the season, when most people are heading back to school or work, hotels and airlines often scramble to fill spaces, making it easier to find low-cost lodging and fares.

Here are some affordable destinations that can be fun for the whole family from mid-August into September.

Hiking and Camping

Visitors to the Grand Canyon or Yellowstone National Park at this time of year can still enjoy peak season weather and lighter than normal crowds. Want to save some extra cash on accommodations and do not mind the elements or hob-nodding with nature? Book a campsite. But do it soon: even in quieter periods, campgrounds in popular areas fill quickly.

Theme Parks

The cheapest time to go to Disneyworld is the last week of August, right before Labor Day, according to travel website Priceline. For those looking for California destinations, theme parks such as Disneyland, Knott’s Berry Farm, Universal Studios and Six Flags are also a bit quieter this time of year, making it easy to avoid long lines and enjoy more rides.

Urban Sightseeing

Pre- Labor Day visitors to New York City may be able to cut costs by participating in Restaurant Week and taking in free outdoor concerts. For those seeking a west coast destination, consider Seattle in September, when the hotel rates may be more affordable.

Remember to research a trip before booking arrangements. While hotels in Italy offer rock-bottom prices in August, many stores and tourist attractions are closed at this time of year because of the typically steamy weather. Caribbean cruises cost less too, but August and September tend to be peak season for Atlantic hurricanes. Worried about risks? Buy travel insurance for some peace of mind.

Spending Strategies

Watching airline ticket prices rise and dip can make you feel like a nervous investor glued to stock market. Unlike equities, applying a little strategy can lower costs. For instance, off-season fares to popular vacation spots are often cheaper in August and September compared with peak season, especially for flights on Tuesdays and Wednesdays.

If you have a big family and are flying on an airline with assigned seating, consider splitting into smaller groups and sitting in different sections. Some flights have only a few low-priced seats and a search for a large block of seats at once may exclude a few that are discounted. Try searching for one or two seat blocks, instead. On arrival, take public transportation instead of a taxi or a rental car to save more money.

Being more deliberate about culinary affairs (i.e., food) can help keep a budget intact while still providing chances to enjoy local flavors. To cut back on food costs, consider packing some meals and dining out only once a day. Stay aware of your spending so you have plenty of funds for your vacation activities.

The upside of off-season

Taking a late-season vacation and spending carefully can reduce costs and relieve concerns about mounting credit card balances that await you when the excursion ends. To take the edge off of next year’s summer fun, put whatever has been saved by not going at a peak time into a savings account. That can also enhance feelings of financial security, especially with regular contributions for the rest of the year.

If you do need some extra funds for your late-summer trip, consider an AltaOne Getaway Loan. The interest rate is significantly more attractive than most credit cards for those who would like to borrow money for their summer vacation.

Claire Davidson, NerdWallet

Read More

The Credit Union Advantage

Nearly one-third of all Americans belong to a credit union. Frankly, we were interested to find out why that figure is not significantly higher. After all, credit unions seem to offer significant advantages over many banks: lower interest rates on loans; higher yield on deposits; low or no service fees; active participation in the community. The list is lengthy.

Probably the only advantage national banks continue to have over credit unions is accessibility. The major bank brands simply have more branches. However, credit unions have made great strides with their online services such as BillPayer, mobile apps, e-statements and personal financial managers. With all these online options, the need for face-to-face banking has diminished. Financial institutions that offer a solid combination of online and person-to-person should be equipped to handle the vast majority of member needs.

Let us dig a little deeper. 

Account fees

This may be the biggest knock on banks. They tack on whopping fees for items such as overdrafts and monthly maintenance. In fact, the average monthly account maintenance fee has leaped by 18 cents to $12.26.  That adds up to about $150 a year. Bank overdraft fees average more than $30.  Another fee that generates a ton of income for banks is out-of-network ATM charges, which average close to $3 per transaction.

Conversely, over 70% of the largest credit unions provide free checking. Some credit unions charge overdraft fees that cost $20 to $30 per incident. The average monthly credit union maintenance fee is between $2 and $5. However, credit unions typically do not charge the fee unless the account dips below $30 or less.

Clearly, consumers seeking to avoid high bank fees should consider moving their money to a credit union.

Interest Rates

With interest rates hovering around the puny to sub-puny level for quite some time now, it is difficult to find any institution that offers a high-yield rate that will help your money flourish. That said, credit unions clearly hold an advantage over national banks. You are far more likely to find higher yields on products such as CDs, money markets and savings accounts from credit unions. The low interest rates are good news for those shopping for cars, homes and credit cards. Loan products remain at amazingly low rates across the board. Once again, credit unions usually hold an edge over banks when it comes to loan rates.  

Customer Service

According to the most recent American Customer Satisfaction Index (ACSI), the overall customer satisfaction level for banks is 78 - a one-point jump over the prior year. Banks score the highest on "courtesy and helpfulness of staff," with a 91; and they score the lowest on "competitiveness of interest rates," with a 73.

Credit unions score another victory over banks in this category. The most recent ACSI report rates credit union customer satisfaction at an 85 -- a 3.7% rise over the prior report. Like banks, credit unions score the highest on "courtesy and helpfulness of staff," with a 93; and the lowest on "number and location of branches," with a 71.

With all this evidence in favor of credit unions, one has to wonder how banks have been able to maintain such a market share advantage. 

If you are reading this blog, you are most likely an AltaOne member. Here is your call to action: spread the word. Tell your friends, family members, co-workers and neighbors about the credit union advantage.  You do not have to pester them. Nevertheless, when the topic arises about a car loan, or mortgage or credit card ... or anything that pertains to the banking world ... put in a good word or two for credit unions and AltaOne. We appreciate the plug.

Read More

Summer Financial Training School

Are the little entrepreneurs in your home working extra hard this summer to earn money with their lemonade stands and summer jobs? No matter what their ages, this may be the perfect time to teach your children about budgeting. Below are some valuable money management lessons you can provide your youngsters.

For younger children

Money As You Grow suggests children split their allowance into three labeled jars: one for savings, another for sharing and one for spending. If your youngster has not yet learned to read, try differentiating the jars with colored lids or have your child draw pictures that represent each jar. For example, if your daughter wants ice cream sometime this week, label the spending jar with an ice cream cone. The savings jar could have a picture of a more expensive toy or book. The sharing jar could have a picture of a gift she would like to give to a friend.  

When the ice cream truck rolls around, you can help them count their spending money and select a treat they can afford. Once your children have saved enough money for their more expensive item, you can take them to the store.

For preteens

Preteens should have their own savings accounts and make regular deposits. They should start planning long-term savings goals. Instead of saving for the next toy, they could set their sights on a tablet or a new outfit. To save effectively, you may need to help determine how much money must set aside to reach their financial goals in a reasonable timeframe.

Help your preteens set up a spending and saving journal. They may be tech-savvy enough to use some features of an online personal financial manager such as AltaOne's BudgetPro. If they feel they are not reaching their goals fast enough, this will help identify ways to trim expenses.

For teens

Teens will have more income and expenses to track. They will likely earn and save more money from part-time jobs or bigger allowances. They also have greater responsibilities and expenses -- gas for the car, movie tickets, beach trips or summer swimsuits. A detailed budget can help teens avoid over-spending and fail to reach their savings goals.

As parents, clearly communicate which expenses you will cover and stick to the plan. If you bail out your children every time they whine for cash, they will not learn to decide between "wants" and "needs" as they get older and must make crucial financial decisions. Encourage your teens to closely track their income, expenses and savings in a journal or online financial manager.

Your teens' saving goals should increase as college approaches. Spend some time researching the cost of attending college. Be transparent about what expenses you can cover, factor in any financial aid available and help them to come up with savings strategies for the rest of the costs.   

Cherise Fantus, NerdWallet

Read More

Don't Let Student Debt Hamper Your Home-Buying Experience

We have all read the harrowing statistics about student loan debt. College grads enter the real world with an average of $34,000 in student loan debt. According to the Economic Policy Institute, the unemployment rate for recent graduates is 8.5%, and 16.8% are underemployed. With all these gloomy statistics, how can a debt-riddled Gen Y consumer even consider buying a home?

Cheer up, Millennials! There is hope. Check out these tips to help you to qualify for a home loan:

1)  Grow Your Credit Score
The best way to build a strong credit score is to pay your bills on time. If you have credit cards, keep a low balance. Try not to exceed 30% of your limit. It actually helps to maintain some credit card debt, if you want to improve your credit rating. Therefore, you may not want to pay off all your cards at once. Instead, keep an affordable balance, with manageable payments. Lenders often view this as "healthy debt."

You should also beef up your credit file. Having no credit score is sometimes worse than having a weak score. Avoid the "thin file" -- someone with no or very few items on their credit record. Some lenders offer "credit builder" loans specifically designed to help young consumers to build credit. Whatever lending options you choose, make sure you maintain a reasonable, affordable balance.  Also remember to check your score. Several agencies provide free credit reports. It helps to know how you rank with the credit bureaus. 

2)  The Debt-to-Income(DTI) Balancing Act
Lenders not only look at credit score — they pay close attention to the debt-to-income ratio, which compares your overall debt to your income. You should shoot for the lowest possible DTI ratio. If it is over 50%, you are carrying too much debt. If you have a high DTI ratio and can only make minimum payments, then lenders will hesitate to approve a loan that you may not be able to afford.

The best way to improve your DTI ratio is obvious— increase your income. Easier said than done, right? If you have a tough time making ends meet with your current salary, put in some overtime, take a part-time job or try to put your hobby to good use. Can you play an instrument? Maybe you can give guitar lessons. Of course, you can also ask for a raise, depending on your standing with the company.

The next best way to reduce the DTI ratio is to pay down your debt. If you apply a larger chunk of your income toward your debt, your credit rating will take a temporary hit. However, once your DTI ratio improves, your rating will sparkle, as well.

3) Consider Student Loan Payment Options
If your student loan payment still weighs you down, you may consider some alternatives. It may be possible refinance or consolidate your student loans. In addition, if you have federal student loans you may qualify for an income based repayment program. 

4) Pay Yourself
As you begin to control your debt, you will see your financial cushion grow. Start paying yourself. Determine how much you can reasonably save out of every paycheck -- and do not touch that money. As your savings grows, you might consider plunking it into Certificate of Deposit, which earn a greater return than a standard savings account.

5) Get Pre-Approved
As your savings account flourishes, visit your local AltaOne location and ask about a pre-approval. Pre-approvals help in several ways. You learn how much the financial institution is willing to lend, and you educate yourself on closing costs, down payments and other aspects of the home-buying process.

6) Patience, Patience, Patience
Life is a marathon, not a sprint. A house is likely the most significant purchase you make throughout your life. The responsibility of mortgage payments requires financial preparation and maturity. 

Good luck—and happy house hunting.

Read More