Similarly to PayPal consumers of banks and/or credit unions using this service can transfer money online to other individuals using Read more...]]> Anyone regularly making wire transfers should check and see if their bank is using “Popmoney” to avoid fees. Up until last year, I’ve had to pay anywhere between $15 and $30 for each wire transfer, and unless your financial institution is using this service you’re likely paying the same in wiring fees.

Similarly to PayPal consumers of banks and/or credit unions using this service can transfer money online to other individuals using their email address. And unlike PayPal, consumers using Popmoney also have the option to transfer money into any individual’s bank account using their routing number and account number.

If your bank is using it, making wire transfers is a fairly straight forward process. The only negative element is that it takes up to 3 days to complete. That being said, PayPal also requires up to 3 days to add money to your account.

Who is behind Popmoney?

Two companies – CashEdge and Fiserv. Fiserv and CashEdge have been working for 20+ years with financial institutions building innovative and secure solutions to meet the evolving technological needs of banking consumers. Essentially Popmoney came out of a need to simplify the process and price of moving money around.

How Secure is Popmoney?

All transactional pages are protected using secure socket layer (128 Bit SSL) encryption to ensure that all communications are secure. Look for this symbol —> . This indicates an encrypted session.

Popmoney is also certified by TRUSTe and VeriSign for its privacy and security standards. This is standard practice for any website accepting money (including e-commerce and the like).

Remember, your bank or credit union needs to be using this service for you to take advantage of it. If you make more than one wire transfer per month and are still paying fee’s to do so, I’d consider a switch to a banking institution utilizing this service.

Despite an at times tumultuous economic and political landscape, with the Standard and Poor’s downgrade of the US credit rating last summer and the extremely partisan political environment, there have been some real positive statistical takeaways as well. And as the political rhetoric heats up once more before November’s elections, we’ve highlighted Read more...]]> From an entirely observational and economic standpoint, the first term of Obama’s presidency has been entertaining to say the least.

Despite an at times tumultuous economic and political landscape, with the Standard and Poor’s downgrade of the US credit rating last summer and the extremely partisan political environment, there have been some real positive statistical takeaways as well. And as the political rhetoric heats up once more before November’s elections, we’ve highlighted the two most interesting and impacting (in our opinion) economic statistics of Obama’s first term as well as the other two Republican and Democratic Presidents who’ve experienced similar stories:

Dow Gains Over 50% in Obama’s First Term:

This puts Obama in an elite class of just 5 presidents (Obama being the 5th) who have witnessed these sort of gains in the Dow during their watch. Two democrats (Bill Clinton and Franklin D Roosevelt) as well as two Republicans (Calvin Coolidge and Dwight D. Eisenhower) have ever been apart of such a feat as a sitting US president.

Obviously there are arguments as to whether or not the actual president (in either Obama’s case or any of the other four) had much to do with the historic rise of the Dow under their watch. The first president of this elite group, Calvin Coolidge, reigned over the “Roaring 20′s,” a time when the stock market seemed like a never ending hot streak in Vegas. This was a time when only the top 2% of taxpayers paid any federal income tax. And even though Coolidge sought after minimizing the federal government many industries took off in part because of governmental research and investment (ie Radio and Consumer Airlines). The last two presidents (Clinton and Obama) have led the free world under entirely different circumstances. Clinton, the first modern president since 1970 to balance the budget, also got to reign over the rise of the internet and the economic benefits that came with it. However, similarly to the new industries Coolige resided over (radio and commercial flight), it was government spending in research and development that lead to the invention.

$4 Trillion Added to Federal Deficit Under Obama’s First Term:

When Obama took office the debt was $10.626 trillion. Since then, the national debt has risen to $14.639 trillion (roughly a $17,000 debt per citizen). This is a rise in roughly 40% from when Bush was in office. However, if you divide the debt amassed under Bush’s presidency it would come to a little over $5 trillion per term, while Obama’s sits at a nearby $4 trillion. This begs the question, which presidents have added the most to our federal deficit? While this seems like a fairly easy question to find the answer to, it is not.

Why?

Because never before have we dealt with debt in terms of trillions or 10′s of trillions of dollars. Prior to Nixon and the induction of the FED, the US couldn’t just print money like they do today, it was all backed by gold. This made it tougher for sitting presidents to rack up substantial federal deficits. Thus we only have a small batch of presidents (7) to analyze since Richard Nixon abolished the gold standard – making Clinton’s accomplishment of being the first president to balance the budget since Nixon a more remarkable feat.

The bottom line, however, is this: Of the seven presidents since Nixon (and even those before), many have put forth plans or regulations which we are still paying for and thus can’t fully calculate the total impact of in terms of real dollars (think medicare and medicaid). All we really know for certain is that as a whole the sum is staggering, and has been piled on to from BOTH sides of the political aisle.

The primary reason for many people to use Swiss banks in the past was to Read more...]]> When you think about Swiss Banks, the first thing that comes to mind is likely Switzerland’s well-known commitment to privacy. The Swiss banks have been getting money from the rich and the filthy-rich since the Middle Ages. These account holders are then known externally only by their account numbers, and only the banks know their true identities.

The primary reason for many people to use Swiss banks in the past was to evade taxes. Others have been known to use it for sheltering their money from being stolen, especially during times of war. Then there are some that simply opened a Swiss bank account because it was convenient when traveling or vacationing in Europe, because they could simply withdraw money with their own Swiss credit or charge cards.

Related: Foreign currency bank CDs may advertise higher interest rates but with greater risk due to lack of FDIC insurance. Some domestic banks will allow Americans to invest in growing economies around the world through bank deposits in foreign banks.

Who are the primary customers?

There are a few types of people that come to mind, such as politicians, celebrities, dictators, socialites, industrialists, financiers, white-collar criminals, and those who just don’t trust traditional banks. Some top criminals were known to have Swiss bank accounts, like Boston crime boss James “Whitey” Bulger, but run-of-the-mill Swiss nationals and legal residents are the main account holders at Swiss banks.

You may think they are exclusive, but in reality, anyone can open an account. You don’t have to have large amounts of money to open one either. At their web site Swiss-Bank-Accounts.com, anyone can open an account with as little as 5,000 francs. Right now, that’s just over $5,000. The American dollar is weaker than the Swiss franc, which has powered through the global crisis and avoided the drastic devaluation that has hurt other currencies.

How do you set up an account?

• Like many domestic banks, you can often apply online. Or you can also apply by “correspondence”, or letter, at the bank of your choice.
• You can transfer money from your bank to the Swiss bank through wire or the Internet, or mail a check or money order.
• Paypal and Western Union can sometimes be used to fund the account, but contact the bank beforehand.
• You may also be able to use a debit card or credit card to fund the account.
• Go to a local branch of the Swiss bank, like Credit Suisse.
• Or take a trip to Switzerland and visit a bank branch.

With these mundane techniques for opening an account, you may be wondering how confidentiality could possibly be maintained for account holders, especially with the electronic and paper trails they leave behind. But clients of these banks tend to be a bit more ingenious with ways to hide their funds, like using wire transfers and doing multiple offshoring, all the while opening and closing accounts until their money has reached the Swiss bank.

Of course, it’s useful to have the help of unscrupulous brokers, bankers and accountants. They help account holders by placing accounts in the name of other offshore companies, preferably with a multi-layered global presence. These corporations can be intentionally ambiguous phantom organizations with store-fronts and web sites that miraculous disappear and reappear with different names.

The USA Today recently reported on a prime example of this kind of illicit money transfer ingenuity. Leon Cohen-Levy and Mauricio Assor, father and son hoteliers, were accused of placing revenue from a sale of one of their hotels into an anonymous HSBC account that was officially held by a Panamanian firm, and the two men didn’t report their sale to the Internal Revenue Service.

The privacy laws behind Swiss banks have brought on a lot of suspicion regarding non-government and government organizations that have their money stored in offshore Swiss accounts. Accusations have been raised that the Swiss banks’ cloak of privacy has protected drug lords, dictator, suspected tax evaders, and terrorists.

Sound like fun?  Think again

America is proactively looking to uncover any American money that has been laundered using Swiss banks. Back in January of 2003, the U.S. Treasury announced that it would be signing an agreement with Switzerland that will involve sharing information for tax purposes. In March 2009, Switzerland agreed to increase their anti-money laundering laws to honor their agreement with the U.S. So now that the 2009 treaty is in effect, account holders of Swiss bank accounts are required to be identified and any transactions that are suspicious must be reported to the Money Laundering Reporting Office.

Criminal charges are also to be filed against 4,000 or so Americans who had an account with UBS. These account holders will be fully audited and will be liable for tax repayments and penalties, unless they are given leniency by the 2009 IRS voluntary disclosure program. This program has since ended, but the Justice Department and IRS are still putting pressure on suspects of UBS and other offshore bank account holders.

With the U.S. deficit mounting, and taxes inevitably on the rise, more and more U.S. citizens are being tempted to open up offshore accounts for their money. Even with all of the risks involved, like imprisonment, large fines, and disclosure threats, some are still risking it anyway. I, on the other hand, prefer just to keep my money close by.

This post comes from the NerdWallet.com team of financial bloggers and experts in helping consumers compare rewards credit cards.

No More Late Payments, Checks, or Stamps

Are you fully automating your bills? If not, why? Particularly your bill payments. Avoid late fees, checks and Read more...]]> It’s great living in an automated world, isn’t it? Especially when it comes to our banking. We can create mini systems to help us achieve our financial goals faster and with less hassle. Let’s look at a few of the many ways that automated banking can help you.

No More Late Payments, Checks, or Stamps

Are you fully automating your bills? If not, why? Particularly your bill payments. Avoid late fees, checks and stamps by using your bank’s bill pay feature to automatically pay your fixed bills (i.e. mortgage) each month. For varying bills like utilities, consider allowing automated withdrawal. You give up a bit of control, but you don’t have to worry about making the payment from month to month. If the bills do vary from month to month and you’ve allowed for auto withdrawal, make sure you have enough cusion in your checking account.

More Reward Points Earned

Over the last year, I’ve made it a point to have as many bills paid automatically directly from my cash back credit card. This way I’m earning rewards points for most of my fixed expenses. This adds a significant amount to the total rewards I rack up at the end of the year. That’s money back in my pocket. If I could only find a way to get the mortgage on there. One caveat, if you pay for everything with your credit card, make sure you automate your credit card payments, as that’s typically the worst kind of bill to pay late. And it goes without saying to pay your credit card off in full as any interest charges you pay will likely negate the points you earn.

Saving More for the Short-Term

You can automate your savings too. Any financial advisor will tell you one of the first things you need in order to secure your finances is a solid short term savings fund. Often called an “emergency fund”, this account should ideally contain enough money to cover you for 6 to 12 months of expenses. It’s there so that if you lose your job or experience some other financial disaster, you don’t have to raid your retirement savings or go into debt to stay afloat.

Most people don’t have an adequate emergency fund. If you don’t, consider setting up a small automatic deposit or direct deposit from your check to a separate online savings account. This way you never have a chance to spend this money. Start with a small amount each month and I’m sure you’ll never even miss the money. By automating the savings, you don’t have to worry about remembering to save from month to month. You are doing it automatically.

More Retirement Savings

Like short-term savings, retirement savings should be automated to be most effective. It’s common for people to have an automatic savings plan through their employer’s plan. Way to go if you are doing that. But you could also be doing more. Many people neglect their opportunity to automate additional retirement savings outside of the workplace through an IRA. Beyond the obvious tax benefits of such a plan, an IRA would give you far greater control over your investment options. It makes sense to be automating here as well.

Just like with short-term savings, have the money moved from your paycheck directly into the IRA. If you can’t pull that off, then move it automatically from your checking account as soon as it hits. Start small and work your way into a larger monthly contribution over time.

In what ways are you automating your banking?

This is a guest post from Philip Taylor of PT Money: Personal Finance. Visit PT Money for more tips to save more, make more, and spend more wisely.

The Story

In 2009 a barely publicized interview appeared in Computer World magazine. In it, WikiLeaks founder Julian Assange stated that they were in possession of 5 GB of executive memorandum from a major American Read more...]]> As if the robo-signing scandal wasn’t enough, on November 30, 2010, a story involving WikiLeaks became front page financial news that has the potential to once again threaten the existence of some of Wall Street’s most storied institutions.

The Story

In 2009 a barely publicized interview appeared in Computer World magazine. In it, WikiLeaks founder Julian Assange stated that they were in possession of 5 GB of executive memorandum from a major American bank. At the time, this was not seen as a credible news story. While this would undoubtedly be a front page story today, in 2009, when the interview took place, things were different.

First, the interview didn’t appear in a financial magazine that is tracked by banking professionals or investors. Instead, it was published in a computer magazine so the credibility of the claim was disputed and the audience may have been, for the most part, disinterested.

However, once WikiLeaks posted hundreds of thousands of government documents in 2010 related to the Iraq and Afghanistan conflict, they became a source for hard to find secret documents and as a result, are now a well publicized outlet for this sort of discrete information. So at the time, most Americans didn’t even know the site existed – much less realize what is was going to accomplish. These two reasons kept this interview from being publicized in the mainstream media until now.

In November of 2010, Assange was interviewed on an unrelated subject by Forbes, reported Andy Greenburg. During that interview, Assange said that tens of thousands of documents would be revealed in early 2011 that contain unethical actions which, according to Assange, could bring down “a bank or two”.

Downfall of the Banks?

Since 2008, the banking sector has continued to dominate the newswire headlines and not in a positive way. First came TARP, then executive bonuses, and most recently the robo-signing scandal. While the “too big to fail” doctrine is still alive and well in the eyes of the government which will probably continue to shield the larger banks, smaller regional banks, where many consumers have their money, could be seized by the Federal Deposit Insurance Corporation should the worst case scenario play out.

Depending on the severity of the information that will soon be revealed, any major revelation could put severe Wall Street pressure on the banking sector which, in turn, could send the economy in to another recession. This, according to a leading economist, is a worst case scenario. In other sectors, something like WikiLeaks would be a much more benign event but the banks, in the middle of numerous high dollar lawsuits, are under severe financial, public and political strain.

What Should You Do?

Nothing. The FDIC insures your deposited funds up to $250,000 and since this information is at least 14 months old, some believe that the documents will be nothing more than yesterday’s news. In addition, a Bank of America spokesperson said that there is no evidence that any executive hard drives have been stolen. Although any additional lawsuits could spell disaster for the smaller banks, the newest scandal may end up not being a scandal at all.

Just like with their revelation of government documents, WiliLeaks is in control of this news story and for now, the average consumer can only sit back and wait.

Depending on your worldview, this may be good or bad. On Read more...]]> It seems like every week we hear about new laws reducing the fees banks can charge. From a limit on credit card interest hikes to a cap on late fees to a virtual end to overdraft fees on both credit and debit accounts, the government is making it more difficult for banks to charge customers for transactions that “break the rules.”

Depending on your worldview, this may be good or bad. On one hand, many bank fees are unreasonable or excessive, and it makes sense to regulate them. On the other hand, the banks set up a system in which those who handled their finances responsibly skated by for free, or even made money via bank reward programs. If banks now take away these perks, many people will feel they are being penalized in order to help those who couldn’t handle their finances.

Regardless of your opinion, the reality is that new regulations on the banking industry are sure to level the playing field in terms of who pays what. Those who are responsible with their money are still likely to have to pay fees, while those who’ve made mistakes will not be penalized nearly as harshly. (I should take a moment to state that even the most responsible consumers mess up once in a while, and are understandably furious over huge fees for small transgressions, so I don’t want to portray this as a situation in which “good” customers must pay the price for the actions of “bad” customers.)

With the costs of banking likely to go up across the board, what can you do to limit the damage in terms of the fees and interest you pay for the convenience of credit cards, debit cards, checking accounts, etc.?

One word: loyalty.

It’s a novel concept, yes. For those of us under age 60 or so, the thought of being loyal to a bank is a quaint notion. This ain’t the 1940s; we don’t know our neighborhood banker, we don’t go to the neighborhood bank to get all of our loans. No way. Instead, the banking industry has taught us to chase the deal. Who’s got the best interest rate? Who’s got the best rewards? Who’s offering something for nothing?  From credit cards to car loans to mortgages, we have learned that loyalty to any financial institution is asking to be taken for a ride. Why get my mortgage from the bank that offers free checking when I can find a better rate from the out-of-state company with the online-only bank? Just as employers have encouraged worker disloyalty by laying people off in batches to please shareholders, banks have encouraged customer disloyalty by offering “deals” on the front end and trying to make money on the back end through fees, tricky interest rate hikes, and other fine-print “gotchas.”

But… the rules may be changing. Well, actually, they are changing. New laws are forcing lenders to re-think how they look at customers and how they make profits. One of the strategies they are reluctantly embracing is the old-fashioned notion of making money from loyal customers who do all their banking in one place instead of chasing a la carte deals.

OK, maybe that works for the banks, but what’s in it for you? Well, just as your insurance company may give you a price break if you buy multiple policies (such as car and home insurance together), banks are getting into the groove with price breaks (or extra perks) for those who show loyalty with multiple accounts at the same institution.

Examples:

• Chase offers an auto loan discount of up to 0.50% when you have a Chase checking account and a discount of up 0.75% total if you also have your monthly payment deducted straight from that checking account. Chase also offers reduced banking fee packages (or higher interest on deposits) when you keep multiple products such as checking, money market accounts, and CDs with them.
• Wells Fargo offers free, interest-earning checking for those with a Wells Fargo mortgage, or those with over $5,000 saved/invested in Wells Fargo accounts.

These types of incentives are not new, and the examples I use may not be the best on the market. The point is that you can expect banks to get more aggressive and creative in their use of loyalty incentives, while at the same increasing the costs for “free agents” who shop their money around looking for flashy deals.

In the new, highly-regulated banking world (for example, see my recent article on credit card regulation), it may be time to shed your fear of commitment and settle down with one bank. Offering your loyalty might not be as fun as playing the field, but it could be a whole lot cheaper.

This is a guest post from Adam Jusko, founder of IndexCreditCards.com, an information and comparison site for credit card offers that maintains a list of over 1200 cards.

According to Thomas Power’s estimates, Facebook should catch and pass Google in total number of visitors sometime in 2011 if it stays on Read more...]]> An interesting question was posed over at Ecademy.com by writer Thomas Power who asked, “what happens when Facebook becomes an online bank?” The more you read about the relentless snowball effect that is Facebook, the more you realize the potential it has of uprooting entire industries (such as banking).

According to Thomas Power’s estimates, Facebook should catch and pass Google in total number of visitors sometime in 2011 if it stays on it’s current course. And it could reach 1 billion users by 2012! The sheer volume of this user base (and potentially consumer base) could completely rearrange an industry such as banking.

As Thomas Power states, “When you have an audience of that size you can sell them lots of things. You can help them buy better. In fact you can sell them everything negating the need for many existing and costly suppliers and their overheads. Many. Obviously you can offer them discounts through group buying. Cellphones, laptops, cars, flights, holidays, gas, electricity, groceries to name but a few. But then when you think about it you want to manage all your members transactions. All. Everything they buy and everything they sell. And at the end of the year wouldn’t it be nice if you could complete your members tax return negating the need for most of the Inland Revenue and thousands of civil servants. And then how about manage your members patient records so you can get the best deals on pharma products and healthcare too.”

Power then goes on to ask, “so what happens when Facebook becomes a bank?

It starts with a Facebook piggy bank, payment system and credit card. Then it’s a savings account and a loan perhaps for university. What about a mortgage, life insurance, health insurance, car insurance, house insurance and a pension? After all with a billion users these should be the best deals on the planet. Volume speaks price. Low price. This is before you offer your members peer to peer lending like Lending Club giving them better interest and lower risk on their savings.”

Would you bank with Facebook?

Read the entire article here.