Friday Reading: Reward Checking Still Useful?

By Harry Sit

More Banks Offering Reward Checking But Is It Still Useful for Savers? by Ken Tumin at Deposit Accounts

Ken sees a bad trend toward smaller balance caps on reward checking accounts. At a $10k cap for a 2-3% yield, I would say a reward checking account is no longer useful as a savings vehicle. You might as well use the "checking as a savings account" strategy I outlined on Monday. The effort is much less for the same reward.

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The Pervasive Effect Of Low Interest Rates On Financial Planning by Michael Kitces at Nerd’s Eye View

I finally realized the profound effect of low interest rates. I’m kicking off a series of counter-attacks starting next week.

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Investing in I Bonds: An Intro to I Bonds for Young Investors by Harry Campbell at Your Personal Finance Pro

I Bonds are a great deal for individual investors. For young investors, emergency fund and savings for a home down payment can be put into I Bonds if not needed within a year. For older investors who already max out the 401k and IRA, buy I Bonds before buying anything else. I Bonds are so good the government has to ration them. If you haven’t bought your $10,000 per person annual quota yet, buy them now.

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Romney suggests overall itemized tax deduction limit of $17,000 by Kay Bell at Don’t Mess With Taxes

Don’t get so hung up on the specific number. I think this is a great idea. Rather than fighting with special interests on whether each and every deduction is justified, just set an overall cap. Everything deductible today is still deductible; you just pick and choose which ones you want to include under the cap. I would happily trade deductions for a lower rate.

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Portfolio Help for Retirees by Rick Ferri at RickFerri.com

Investment advisor Rick Ferri tells where an advisor adds the most value: provide discipline.

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You Don’t Need To Know What a Coverdell Is at The White Coat Investor

OK. I won’t worry about it. :)

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Are ‘Mobile Wallets’ a Major Innovation or a Major Bore? by Christopher Mims at The Atlantic

Mobile Wallet is still in its early days but it is a major innovation. Think of all the cards in your wallet. Why do we need pieces of plastic to carry small bits of information? Why can’t they be consolidated in electronic format in the same way hundreds of books are carried on one Kindle device? If the size of one’s wallet isn’t a bottleneck any more, we will forever solve the "lost gift card" and "forgot coupon" problems.

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Launching: Automatic Location-and-Merchant-Based Prepaid-Card Reloading with Spending Controls by Jim Bruene at NetBanker

Watch unlimited number of movies at theatres near you! When you make a few clicks on your mobile phone near a movie theatre, enough money magically appears on a debit card for you to buy a ticket. If you don’t buy the ticket, the money disappears. Fascinating.

Blog Carnivals

A blog carnival is a collection of blog posts selected by a host from submissions, similar to "call for papers."

Tax Carnival #107 hosted by Kay Bell at Don’t Mess With Taxes included the guest post by Bob’s not my name about tax tips for college seniors and new graduates.

Carnival of Personal Finance #381 at Tie The Money Knot included my post about old and new habits in the low interest rate world.

Have a great weekend!

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Posted on October 5, 2012 under News. Keywords: , , , , .

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Comments

3 Comments on Friday Reading: Reward Checking Still Useful?

  1. KD on October 5, 2012
     

    “I finally realized the profound effect of low interest rates. I’m kicking off a series of counter-attacks starting next week.” TFB, could you please clarify counter-attacks on what and how? Few questions I had were: Will low interest rates eventually lead to an asset bubble in addition to the bond bubble we have? What if the Fed realizes that rate lowering for the long-term is not inviting risk taking but inviting more and more deleveraging?

  2. Harry on October 5, 2012
     

    KD – I don’t know about the macroeconomic implications. I will leave that to pundits on TV. In the tradition of this blog, I will look at what I as an individual saver/investor can do to mitigate its effect. I have the introduction post coming up on Monday. The title is “Double The Bond Yield: Maximize Your Advantages As An Individual Investor.” I’m planning a series documenting how I will work my money harder, picking up small edges I ignored when interest rates were higher, with the eventual goal to double the bond yield without taking more risk. Loan arbitrage could be one of the counter-attacks, as you suggested before.

  3. Harry @ PF Pro on October 7, 2012
     

    TFB, thanks for the mention! Liked the Romney article too!

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