It pays to also understand your banking habits. If you constantly take cash out of ATMs to spend, then pur conviently located ATMS on the top of your feature list.

SmartyPig booster savings yield:

While you benefit from a high yield on your savings account (currently increased to 2.15% APY), SmartyPig also boosts your savings rate with additional rebates when shopping in selected stores. Here are a few examples:

The biggest rebate is at Macy’s (12%) but you can also find great SmartyPig rebates with the following stores:

Babies”R”us (2%)

Barnes and Nobles (5%)

Bed Bath & Beyond (4%)

GAP (5%)

iTunes (2%)

Jared (7%)

Kmart (4%)

Kohl’s (5%)

Overstock.com (7%)

Sandals (10%)

Sears (4%)

Toys”R”us (2%)

Travelocity Hotel Gift Card (10%)

Travelocity Vacation Gift Card (2 to 10%)

Opening a SmartyPig savings account – How does it work?

SmartyPig offers a very easy process to open a savings account for various savings goals. You also have the option to setup different savings goals (by matching your savings goals with stores, you benefit from additional rebates). Another major advantage SmartyPig has over its competitors is that they add a social element, other people such as your friends and family members can contribute to your goals as well (if they fund a contribution with a credit card there is a 2.9% fee, I suspect this is to cover the credit card processing costs).

So your friends and family not only follow your savings progress but can contribute at the same time (isn’t this a great gift idea?).

SmartyPig trustworthiness and FDIC

SmartyPig is a very solid company. When setting up a savings account, you want to make sure you do it with the right financial institution. They’ve had more than $400 million in goals created and $150 million in goals reached in the United States, both numbers are much higher than I expected. They also claim that they offer the highest yield on savings accounts, which is true when you consider the minimum requirements to open a SmartyPig account. In addition to that, please keep in mind that SmartyPig is part of FDIC, which means that your capital is insured up to $250,000.

Withdrawing your money from SmartyPig

Nothing is easier than accessing your money with SmartyPig. In fact they appear to be one of the most flexible high yield savings accounts. While no minimum deposit is required (beside a monthly savings amount of $25) and no fees are charged to open an account, withdrawing money from your SmartyPig is very cheap and easy too!

You have 3 options while withdrawing money from your SmartyPig account:

-         Electronic funds transfer directly into your bank account

-         Using your debit card (you can have a Mastercard attached to your account).

-         Using gift cards with booster rates by stores (probably the best way to optimize your savings).

Why are you savings money? Answer: to spend it!

Since we all save money for a specific goal, I think that using the booster rate offered by SmartyPig is the best way to save money for specific goals while benefiting from the best APY possible. This is why I suggest you open a SmartyPig account today and start saving!

During the past few years, there have been a lot of tremors in the banking industry, with many banks finding themselves on shaky ground. As consumers, how well is our money protected during a crisis that has plagued our large financial establishments and institutions?

Usually, banks fail when they are unable to pay or meet their obligations towards their customers. In the United States, almost all the banks are insured; it means that they are well governed by the rules and regulations of the Federal Deposit Insurance Corporation, also known as the FDIC. During the 80’s and 90’s, the world faced some of its biggest financial challenges when major S & L (Savings and Loans) institutions collapsed. It was then that many of us may have first become aware of the FDIC, which has the aim of safeguarding the money of bank depositors. The FDIC is a self-regulating federal agency formed to support financial liquidity and stability in the nation’s banking system.

Know what happens when a bank fails? The moment any bank declares bankruptcy, the FDIC comes into play and it immediately starts searching for possible buyers for the bank, in consultation with the central bank and the government. In the meantime, the FDIC, which has insured a sum of $250,000 per individual account, begins covering bank depositors. But what happens when there are no buyers lined up for an ailing bank? As long as there are funds in the FDIC’s coffers, then depositors can still expect full coverage up to the maximum amount of FDIC insurance per account they own. But anything beyond those limits will not be covered, so we are advised, as consumers, to deposit money in multiple accounts (perhaps across several savings accounts, CDs or high yield checking accounts) to keep our funds below those limits.

Naturally, the focus on the FDIC intensifies during difficult financial times. You can expect the FDIC to step in when a bank is in trouble. FDIC plays two major roles: it acts as an insurer to the depositors and pays up to the limit of insurance and secondly, it acts as a mentor of the bank to help it to come out of bankruptcy. FDIC pays the insured from a pool funded by insurance premiums already collected from its bank members, along with earnings made by this pool in various fixed income investments.

In principle, this practice of safe guarding the depositor’s financial interests certainly shores up our confidence in our banks, but there is always the concern that an implosion in the banking industry could result in many banks failing all at the same time. What happens then? For instance, in one previous year, the FDIC started its pool with approximately $53 billion, but by the end of the year it had fallen to just $40 billion due to the bankruptcy of 13 major banks. The Federal Reserve maintains a “troubled banks list and in it, there are 117 banks registered. Could all these banks go belly up? Well this remains to be seen, but in order to protect the banks’ depositors, the FDIC continues to increase its efforts by increasing its pool and finding new investments for their funds.

This guest post comes from Michael, a contributing editor of the Dough Roller, a personal finance and investing blog, and Credit Card Offers IQ, a credit card review site.

Every American has a dream of one day owning their own successful and profitable business. Usually when you think of self-owned businesses, you imagine dry-cleaners, restaurants and law and medical practices.  But how many people do you think wake up in the morning wanting to start their own bank?  The venture is not as difficult as it may sound.

It’s no secret that the US government right now is shutting down bank after bank.  But if you have a strong business sense and the dedication to see it through, there’s no better time than the present to get into the banking industry.  On the surface, the task at hand may seem extremely daunting, but the beauty about owning a bank is that it’s just like owning any other small business venture; Take one step at a time.

STEP 1 – Evaluate Your Assets

In order to start you’re bank, a few things are needed in the “idea” process.  Unless you are extremely confident about your financial position, this is not the business for you.  When deciding whether or not you’ve got the right idea, you should ask the following questions:

• Will I be able to raise the necessary capital in order to start a charter bank? Different states require different capital amounts to open a bank, but a safe number is $10 million.
• What sets my bank apart from others in the area? In order to have a successful bank, you need to have a large customer base and that doesn’t come easy.  Does your bank offer a higher interest rate than others?  Does it provide better and friendlier customer service?  No matter where you decide to open your charter bank, make sure it will be a welcomed community asset.
• Do I have the skill set to run a bank? If you’re educational background is in turf management, then the dream of owning a bank probably isn’t the right one.  Owning and operating a charter bank takes a huge amount of financial knowledge, and unless you know it all, move on to something else.

STEP 2 – Research the State Requirements

The quickest and easiest step in the process, knowing exactly what is needed in order to operate a bank in your state is crucial.  There’s nothing more deflating then thinking you’ve got it all figured out, only to find out that you haven’t followed procedure.  The state requirements can usually be found at the Department of Financial Institutions and if you don’t know where that is, any state employee will gladly point you in the right direction.

STEP 3 – Develop a Fundraising Plan and Employment Plan

Finally getting into the meat and potatoes portion of the idea, this is the step where you find out if your dream can become a reality.  How are you going to generate the necessary capital in order to open this charter bank?  Just as importantly, who are going to be the people in the executive positions making the tough decisions?

Raising a large amount of money means having excellent personal skills and excellent “salesman” skills.  The bank you have envisioned better have one awesome set of ideals in order to not only raise this kind of money but to attract a high caliber employee away from another company.

STEP 4 – Fill Out the Required Paperwork for Approval

Once you feel you have the entire package in place, the next thing to do is generate an approval from the state.  After filling out a quick form online or in person, you can expect to receive a thick packet in the mail with all of the required paperwork.  Included in this packet are:

• Financial questionnaires
• Financial reporting sheets
• Eligibility checklists
• The request for your business plan
• The request for your financial and employment plan
• The request for your bank’s proposal

Making sure that you have filled everything out to its absolute potential, mail the documents back to the state and play the waiting game.  Most applications are returned in a few weeks, but the process has been known to take up-to three full months.

STEP 5 – Make It Happen

With approval from the state, the only thing left to do is execute.  Raising money, building your bank (or your website if you are looking at an online bank), hiring employees and developing a marketing strategy are all now on your to-do-list.  Depending on your efficiency, the dream of owning you own bank could be more realistic than you ever thought possible.

Since 2005, the popularity of an alternative to classic banking has emerged: the prepaid debit card. Many individuals have decided to drop their regular bank account and go with this option. Is it really worth it? Do you really save on fees? Is it that convenient? And more importantly, should you switch your bank account to a prepaid debit card?

A recent study from Breton Woods made an interesting comparison between the 2 banking options. It shows that in some cases, the prepaid debit card can turn out to be a great solution. In fact, they even claimed that “consumers who opt to use a network branded prepaid card could save 35-70% on fees as compared to low balance checking and debit accounts, making prepaid cards a far more valuable, cost-effective financial tool for many.”

The comparison reveals that:

• A typical consumer with a low balance checking account can expect to pay $200 to $350 annually in the form of overdraft fees, ATM fees, and minimum balance fees.
• Consumers using a system of money orders, check cashing and bill payment services can pay anywhere between $167 to $312 annually in various fees.
• A consumer using prepaid debit cards without direct deposit can pay $215 to $320 in annual fees.
• Users of prepaid debit card with direct deposit may pay between $108 to $207 in annual fees. For customers in the same income zone and usage patterns, this option may save a consumer about $96 to $146 over a basic checking account.

However, I would say that if you tend to manage your bank account responsibly, it will be cheaper for you to use a regular account. While the prepaid debit cards are easy to use and can help you manage your budget (since you can’t spend more than what is on it), the overall fees are quite high compared to a regular checking account (keeping in mind that you should avoid overdraft and NSF fees).

Which option is best for you?

If you want to make an educated choice, I suggest you take the time to read the Breton Woods study on this topic. Personally, I still prefer the regular checking account as it is easier for me to manage (I don’t have to load my card with money every month) and I pay minimal fees (because I always meet the minimum balance requirement).  Lastly, I should mention that the manner by which you manage your budget / cashflow could influence which choice is best for you.