Bank Runs Resemble The 1930's

Today's "Bank Runs" resemble the US in the 1930's.

Depositors, frightened that their money will not be "there", rush to transfer their funds to cash - despite years of indoctrination that their money is "safe" as long as their account is FDIC insured and under $100,000 per account.

But in the midst of a nationwide credit crunch, there is still the fear that even "safe" money will be unavailable or only made available in inefficient quantities for the transaction of business or paying of bills. If people fear falling behind on their mortgage already just because rising fuel prices have strained their budget to the limit, there's no margin for error in paying bills in a timely fashion.

People want to eat on time and they don't want to be thrown out of their home because a Federal Regulator tells them "as soon as we figure out what's going on in a few weeks you'll get your money - but don't worry, it's SAFE!"

That's why for the first time in over a generation, we're seeing bank runs that resemble the 1930's.

Experts suggest that to avoid these problems, depositors should transfer their accounts at the first hint of problems... not after the problem has become front page news. This usually means consulting lists of under capitalized banks and requires more effort than individuals apply to their financial lives. Here is such a list of risky banks in Georgia but finding one for your particular community may be challenging, though worthwhile if you wind up avoiding trouble due to a "Bank Run".

The Best Savings Account May Not Require Internet Access

UK Banks apparently were saving the best deals for internet only bank customers and ignoring those most likely to save: pensioners who may not want or be able to access internet banking accounts.

Their pleas have been heard...
From ThisIsMoney.co.uk

Pensioners can earn more than 5.8% before tax from next week on their saving in the High Street and still have easy access to their money.

Nationwide will increase the rate on its Monthly Income 60+ account to 4.57% after 20% savings tax (5.71% before tax) from August 1. Interest is paid out each month, giving an annual equivalent rate of 4.49% (5.86%).

Skipton's rate goes up to 4.68% (5.85%) on July 31, a rise of 0.5% following the 0.25% rise in base rate to 5.75% earlier this month.

Money Mail campaigned for better deals in the High Street for pensioners. Banks and building societies kept their top rates for internet customers, ignoring the need of those pensioners who wanted a branch-based account with a passbook.

Within weeks Nationwide, the largest building society, launched its Monthly Income 60+, joining the ranks of building societies offering special accounts.

Best Savings Accounts Protect From Overdrafts

As noted before, the best savings account for you may be the one that let's you have overdraft protection.

One reader contacted us to say that after following up with her bank, she could do the following:

1. Pay $35 per overdrawn check OR
2. Pay $10 for a transfer from her savings account in the event of an over draft

She noted that the bank requires a that transfers be in $100 increments. A $1 overdraft requires a $100 transfer. That still saves $25 after the $10 transfer fee.

The sad thing is that this service could be offered automatically and promoted better by the banks. This customer had to inquire.

As do you!

So check out your savings account options now to see if you can save money by savings account transfers in the event of an overdraft. That may be your best strategy for saving money in the event you're over drawn.

Northwest Bank Launches HSAGeorgia Health Savings Account

What HSA or "Health Savings Account" is your best health savings account?

If the HSA is offered in an "inseparable" package with the medical insurance provider doing the "stop gap policy" they may pay you less than competitive interest to protect their profits.

A stand alone HSA savings vehicle may give you better results.

Of course the only way to know is to shop around to see what's best for your Health Savings Account.

Here's a good resource for that.

From PRWeb

Northwest Bank announced today they have launched HSAGeorgia.com, adding more educational materials to their already successful Health Savings Account program.

"Since more and more of our customers are switching to the new consumer directed health plans, we know it is essential to offer an educational website where they will find answers to their questions as well as tips on using Health Savings Accounts to their fullest advantage," Scott Smith President of Northwest Bank announced today. "Working with HSA Clearing Corp, our new website, HSAGeorgia.com, has been designed with up-to-date answers to people's questions about HSAs and also with the specifics about our HSA program."

Legislation enabling the tax-advantaged Health Savings Accounts was included with the Medicare Act of 2003, and contribution amounts were recently expanded with passage of the "Tax Relief and Health Care Act of 2006". The new law allows individuals with HSA-qualified health insurance policies to contribute up to $5,650 for family coverage and $2,850 for those with self-only coverage for 2007. For 2008 these numbers increase to $5,800 and $2,900 respectively. HSA account holders age 55 and older may make an additional "catch-up" contribution of $800 for 2007.

"We are pleased to have Northwest Bank join our growing team of financial institutions across the country offering HSAs", said Roy Ramthun Senior VP of HSA Clearing Corp. "Northwest Bank is providing an affordable, independent Health Savings Account for their customers, no matter which insurance carrier they choose or where they live."

For individuals or insurance agents looking for more information on Northwest Bank's Health Savings Account program, visit www.hsageorgia.com or call Teena Harris at 706-965-3000.

HSA Clearing Corp is the nationwide leader in setting up banks and credit unions to offer Health Savings Accounts/HSAs with their turnkey HSA setup program, allowing the HSA monies to be deposited locally to better benefit communities. For more information on their cost- effective HSA program, contact HSA Clearing Corp at 262-348-1300, or visit www.HSAClearing.com.

The Certificate of Deposit Account Registry Service

The Certificate of Deposit Account Registry Service lets you get FDIC insurance for more than $100,000 in deposits by dividing the money into separate CD's of $100,000 that are all insured.

This may be the best savings account option for bank customers who were tired of having to deal with multiple banks so that all of their deposits would be insured.

From Minyanville.com

Here’s how CDARS works:

* You make deposits through a single member bank.

* Your funds are divided into CDs of less than $100,000 each to ensure that principal and interest receive full FDIC insurance coverage.

* The CDs are issued to member banks in the Promontory Interfinancial Network.

* When funds are sent out of one bank, an equal amount is sent to the originating bank from other members of the network. This keeps the entire amount of the deposit in the community of origin while assuring full FDIC coverage.

* A bank making CDARS transactions can select its own interest rate and therefore doesn’t have to pay an artificially high national brokered rate to attract new funds.

* The smart customer therefore shops around for the best rate.

* The customer deals with one bank, receives one monthly statement and earns a single interest rate.


In general, local or regional banks offer the CDARS program while major banks such as JP Morgan Chase (JPM), Wells Fargo (WFC) and Wachovia (WB) do not. The CDARS program is available through 1,650 banks in all 50 states and the District of Columbia – think Apple Bank for Savings, Security First Bank of North Dakota or Alaska First Bank & Trust.

The American Bankers Association has endorsed the product, saying “CDARS allows banks to offer customers security as well as the convenience of one-stop shopping. It’s good for banks, depositors and the economy.”

Recent 3 Year CD Rates From Major Institutions

From BankRate.com

Institution - Date - Rate - APY*- Minimum Deposit

E-LOAN - 7/23 - 5.32 - 5.46 - 10000


Discover Bank - 7/23 - 5.17 - 5.30 - 2500

Third Federal
Savings and Loan - 7/23- 4.92 - 5.00 - 0

MetLife Bank, NA - 7/20 - 5.21 - 5.35 - 25000

*Annual Percentage Yield

Hedge Fund Blues For Your Mutual Fund Account

It used to be that mutual funds were considered "pedestrian", a way for unsophisticated small investors who couldn't diversify otherwise to enter the equity markets and speculate on potential gains.

Now, however, the mutual fund market has become a place for Hedge fund operators to speculate and, potentially, trash your portfolio if you have a particular kind of fund - a closed end mutual fund.

Read more at the Boston Business Journal.