Part 5 (1/2)

FDIC Rules: Is My Money Safe?

It's unusual, but banks can fail, asall too well after the financial crisis However, if the bank is FDIC insured, your money is safe up to 100,0001 per person on the account at a single institution If an account is held jointly by a husband and a wife, they each are insured for 100,000, for a total of 200,000

If you have a lot of y is to deposit about 90,000 per person per bank That way, your principal of 90,000 plus its interest will be insured Certain retirement accounts are insured up to 250,000 per owner, per insured bank

For ov/consu banks, there's no reason to get an account without FDIC deposit insurance

3 Join a Credit Union

Credit unions ht be the perfect mix of favorable rates and personal service Credit unions, which are not for-profit, can offer good rates because custoroups of people who pool their money and lend it to each other Unlike banks, they don't have divided loyalties-trying to serve a custo profits and the stock price for shareholders

Credit unions are exe federal income taxes, which allows the abanks Of course, that rue credit unions to coes can be a boon for consu for h your employer, for example But nowadays, more people than ever are likely to qualify to join at least one credit union-and probably qualify for several A 1998 law loosened ht qualify just because you live in a certain county or are a member of a certain church To find out whether you qualify to join a credit union, ask your eo online to credit union search sites, such as FindACreditUnioncoov/index-datahts-account deposit-not a fee-to join It could be as low as 5 for a lifetime membershi+p That means you retain ion, or association that qualified you to be aAuto loans tend to be a great deal, and credit unions et a personal loan But youand savings, too Credit union deposits are protected by the National Credit Union Administration with the same protections as FDIC-insured deposits at banks

Bill Paying

Now that we've gotten so-picture stuff out of the way, let's drill down to the daily logistics of handlingthe bills The first rule of bill paying should go without saying It is, well, to pay your bills If you've ever been slapped with a late fee, you kno punitive they can be And nowadays, , which can make life more expensive in a wide host of ways So, pay your bills on time, every time

That said, we canprocess-waiting for a bill to arrive, writing a check, andbills today The old method is more expensive, more hassle, and more susceptible to fraud and identity theft

In short, efficient bill payingfro, 1-2-3

1 Use direct deposit

2 Auto

3 Prioritize in a crisis

1 Use Direct Deposit

If you autoular income, such as Social Security payments, deposited automatically into a bank account It cuts down on the ti to a bank or tellerthe check Most iets money into your account quickly, which could help you avoid fees for overdrafts

If you work for an employer, your huet signed up for direct deposit You'll need the bank-routing number for the account you want

You can use three main ways to pay bills automatically Not only will you ensure bills are paid on time, you avoid the hassle and expense of checks, envelopes, and postage The average consu to a survey by Harris Interactive and the Marketing Workshop And we A to the US Bureau of Labor Statistics

The first way to pay autoe company And you don't even have to use the Internet Set up an auto account You supply the checking-account number and the payee automatically withdraws money when the bill is due

You'll have peace of hts won't go dark because you lost the electric bill If you're wary of direct debit, dip your toe in the water by putting one bill on auto-debit-your e or cable TV bill, for example Once you see how easy and safe it is, you'll want to put aspayments on automatic debit as you can Of course, you h money in the account when this withdrawal is made or face insufficient funds penalties Maintain a cash cushi+on in your checking account and sign up for overdraft protection That's where a bank links your checking account to a savings account, line of credit, or credit card Overdrafts, if they occur, are auto a costly overdraft penalty

The second way to pay a recurring bill is with a credit card, if the vendor will let you This can be especially good when bills are charged to a rewards credit card, which pays you back a se of your purchases in the form of cash, airline miles, merchandise, or other perks See Chapter 6 for details Autoood for merchants you don't fully trust That's because credit cards offer more robust consumer protections than direct-bank debits do if a dispute arises

A big caveat with this method, however, is this: If you don't use credit cards wisely,you pay off the balance every month with no exceptions, don't use this es than the convenience is worth

Auto your financial life is the curse of recurring payes for products and services you don't want or need anyym membershi+p, video-rental club, wine-of-the-month club, satellite-radio subscription, and premium TV channels Because those pay and be needlessly charged month after month for services you don't use Even if the payment is automatic, continue to review your bills monthly and evaluate whether discretionary expenses are hile

Siaccounts, you'll have to reset autoht mean you need to provide a biller with a new expiration date, although card co et new expiration dates

The third way of auto the Internet to proactively pay a bill Online bill paying takes a couple of different for money transfers to a merchant Some people like it more than automatic debit because they feel like they have oodon to your own bank's Web site and direct the bank to make an electronic payment to a vendor, such as your power company You would have to repeat this eachpayments for fixed-a as a free service