Why Is ACH Slower At Some Places Than Others?
ACH stands for Automated Clearing House. It’s low-cost method to move money from one account to another. When you have payroll direct deposit, it’s done by ACH. When you give your bank account to an insurance company for automatic monthly payments, it’s done by ACH. When you transfer money from a checking account to an online savings account or to a brokerage account, it’s done by ACH. ACH is everywhere.
ACH transfers take longer at some places than others. When I transfer money from Fidelity to my checking account, I see the money the next day. When I do the same from Vanguard, it takes two days. When I do it from E*Trade, it sometimes takes three days. Why is that?
ACH supports both credits and debits. You can ask one institution to move money to another institution (credit, or "push") or you can ask it to get money from another institution (debit, or "pull").
Schwab Invest First Visa: Get In Before The Door Closes
I have been using the Schwab Invest First Visa credit card for several months now. It replaces the Fidelity Investment Rewards Visa I used before.
Both cards are issued by FIA Card Services, a subsidiary of Bank of America. The Schwab card pays 2% cash back to a Schwab brokerage account. The Fidelity Visa card pays 2% cash back only after you spend $15,000 in a year (1.5% cash back for the first $15,000). Fidelity also has a 2% cash back card — Fidelity Rewards American Express Card — which is also issued by FIA. More merchants accept Visa than American Express cards.
2% cash back is on everything. No tiers. No special categories. It can’t be any simpler. You also get ShopSafe, the one-time credit card number generator. ShopSafe is not available for the Fidelity American Express card.
Grace Period and Double-Cycle Billing
Twitter brought my attention to this article on SmartMoney:
It’s another "banks are out there to get you" article. It alleges that some banks are exploiting a loophole in the Credit Card Accountability Responsibility and Disclosure Act of 2009 ("CARD Act") for double-cycle billing.
Alliant Credit Union: Bumpy Ride to High Yield
I wanted to have my money earn more interest than what it does in a money market account. So I joined Alliant Credit Union.
Alliant Credit Union is the 7th largest U.S. credit union based on asset size, with more than 250,000 members. It was originally United Airlines Employees’ Credit Union. Now anybody can join if they live or work near some northwest suburbs of Chicago or become a member of a PTA for a one-time fee as low as $3.
Credit unions are not for profit. They benefit the members in the form of higher interest rates on deposits and lower interest rates on loans. They don’t buy full-page ads in Wall Street Journal. They don’t sponsor NPR podcasts. They don’t pay bloggers referral money for new customers. That’s why you don’t hear as much about them.
If It’s Too Expensive, Don’t Buy
In the aftermath of the financial crisis, after reading so many reports in the media about evil banks, this nugget of wisdom dawned on me:
If it’s too expensive, don’t buy.
You must be saying “Duh!” but let me explain. No, I’m not referring to people buying homes they can’t afford, although that would apply too. I’m talking about the credit card interest rate hikes, late fees, bank overdraft fees, ATM surcharges and so on.
Treasure Hunting in Secondary CDs
I mentioned in a previous post Short-Term Fixed Income: CDs vs Bond Funds that I would buy CDs as short-term fixed income investment for my solo 401(k) account.
Because Fidelity administers my solo 401(k) plan, I can buy only what’s available through Fidelity. I looked at new-issue brokered CDs. The yields are lower than the best rates available from other banks and credit unions.
Then I looked at secondary CDs. Secondary CDs are like "pre-owned" cars. They are being sold by bond dealers. The dealers bought the CDs from the previous owners, who for one reason or another decided not to hold the CDs to maturity.
I Bonds: Hold Or Sell?
Savings Bond Advisor reported that the next inflation adjustment on I Bonds will be 3.07%. I bought some I Bonds in April 2008 when the base rate was 1.2%. They will earn 0% starting this month through March 2010. Based on the 3.07% inflation adjustment, these I Bonds will earn 4.28% between April and September 2010.
I had planned to sell them in January 2010 after they earn nothing for three months. Now it looks like I will hold them one more year until January 2011.
If I redeem them in January 2011 instead of January 2010, these April 2008 I Bonds will earn
Chase Blueprint: Suggested Payment Calculator
By way of a post on the Payments Views blog, The Era of Responsible Credit Card Borrowing Begins Today, I heard that Chase recently launched a new Blueprint service for their credit cards.
In a nutshell, Blueprint is a fancy suggested payment calculator. For customers who carry a balance, Blueprint lets them set up some rules and helps them calculate how much they should pay based on those rules.
In an ideal world, nobody carries a balance on their credit cards and everybody always pays in full. Because we are not in an ideal world, Blueprint has its place.
Will Reward Checking Last In the Long Run?
You have probably heard of these checking accounts offered by smaller ("community") banks and credit unions. They are branded different names but they work very similarly. The concept is called reward checking. A typical reward checking account offers
- no minimum balance
- no monthly fee
- high yield up to a point (4% up to $25,000 is about average these days)
- ATM fee refund up to a point ($15-20 a month)
In exchange, it requires
It’s a Two-Way Street
Bob Sullivan is the author of the book Gotcha Capitalism in which he wrote about the many ways businesses trip up the consumers with small-print fees. He also writes a very popular blog The Red Tape Chronicles hosted by MSNBC.
I like Bob Sullivan. I reviewed and recommended his book. His blog posts are usually in depth, which I like. I linked to some of them in the past. But sometimes, his consumer advocacy also becomes much ado about nothing. A recent example is his post Chase dumping former WaMu card holders.
Chase took over Washington Mutual (WaMu) last year. Customers who had bank accounts and/or credit cards with WaMu became Chase customers. Chase had a review of the accounts they took over. They decided to close some of the credit card accounts they inherited from the WaMu portfolio. What’s wrong with that?
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Investor's Manifesto by William Bernstein -
