Will I be notified before my CD matures?

By Sabrina Karl

If you hold certificates of deposit, or are contemplating whether CDs are right for your savings goals, you might wonder what happens at maturity. For instance, do you have to track the certificate’s maturity date, or can you count on the bank to nudge you when the time comes?

Theoretically, you can expect the bank to notify you before a certificate matures. That’s because the Truth in Savings Act requires them to provide 30 calendar days’ notice before a CD’s maturity date, or 20 days if they extend a grace period of at least five calendar days.

That notification will be mailed or emailed, depending on preferences you’ve established with the bank. It will also outline your options on how to handle the maturing funds, with a deadline by which you’ll need to communicate your choice.

In most cases, you can: roll the money into a new CD with the same or comparable term; transfer it into a savings or checking account at that bank; or request the funds by mailed check or electronic transfer to another financial institution.

While it can be tempting to simply roll the CD into another certificate at that bank, the smarter move is to shop around to make sure you’ll earn a competitive rate. Once you know the top available returns, you can evaluate the rollover rate you’re being offered.

You’ll find that rollover rates are often not competitive, so moving to a different CD that pays a top national rate will be much more lucrative. This is why you might want to track maturity dates yourself instead of relying on a notice from your bank. Not only can bank oversights occur, but when you’re on top of maturity dates, you’ll have ample time to identify the smartest place to move your money next.

How to foil phone scammers trying to get your bank info

By Sabrina Karl

Whether or not you’re familiar with the term phishing, you’ve most likely been a target. That’s because phishing scams attempt to access the private banking info of millions of Americans every year. Fortunately, easy-to-follow rules of thumb can help you thwart phishing criminals and keep your money safe.

A common strategy of phishers is to call you directly, presenting themselves as your bank. They may suggest there’s an issue regarding your account that needs your urgent attention, or they may simply say they’re conducting routine account maintenance. What they’ll likely ask for next is your bank account number, your banking login credentials, or your social security number.

Private information like this should never be provided over the phone to someone who has contacted you, since you have no idea who is actually on the other end of the line. No matter how official and convincing the caller may sound, someone calling to ask for this type of information should raise a red flag.

If the scammer doesn’t succeed in coaxing this information out of you in the initial phone call, they’re likely to try a couple more tactics. One is to urge you to call a phone number they provide for your bank, or to visit a specific web address that they provide. These are most likely spoofed numbers and sites, with calls being answered by accomplices of the caller and the fake website siphoning your sensitive information or installing malware on your computer.

The way to thwart them is to not provide sensitive information during the initial phone call, and to avoid calling any number or visiting any website the caller provides. If you want to contact your bank, call them at the phone number listed on your statements, or type your bank’s known web address directly into your browser.

What are the best banks for savings and CDs?

By Sabrina Karl

If you have money to put away in savings or a CD, it’s tempting to default to the bank where you hold your primary checking account, as it’s hard to beat that convenience. But you can generally earn significantly more by branching out to different banks for different accounts.

Decades ago, Americans banked at one of the financial institutions in their local community. But the internet has brought hundreds of new options to consumers. Some of these are online-only banks. But there are also myriad traditional banks that have simply used the internet to expand their market to larger geographical boundaries.

Add to this all the credit unions in the country that have similarly broadened their reach. Not only are there credit unions that serve residents of your community, your county and your state — there are now over a hundred that are open to Americans living anywhere in the nation.

While it may feel easiest and safest to stick with the institution you know, its rates on savings accounts and CDs may only match the national average, or quite possibly fall below it. Meanwhile, other institutions pay 3, 4, or even 5 times the national average on savings accounts and CDs. It can’t be overstated that it literally pays to shop around.

Fortunately, you don’t have to check all the institutions yourself. In addition to the great rates you find on these pages, multiple websites filter the top rates currently available. Simply look for FDIC insurance on any bank (or NCUA insurance on any credit union) that you’re considering.

As with many things in life, you can trade small conveniences for monetary gain. Opening your savings account or CD at a new bank will involve some paperwork and electronic transfers. But the boost to your savings can be substantial.

Watch out for check overpayment scams

By Sabrina Karl

As sure as the sun rises, fraudsters will always try to separate people from their money. Bank accounts are particularly susceptible since they don’t carry the maximum liability protection that credit cards do. But knowing the most common scams can help you keep your account — and your money — safe.

Various agencies accept and track consumer fraud complaints, including the Federal Trade Commission, the Consumer Financial Protection Bureau, and the Better Business Bureau. In addition, many states also have their own consumer protection department.

From the millions of complaints received by these agencies, we know what the most commonly reported scams are, and one of these is the check overpayment scheme.

The scam targets those who are selling something via Craigslist, the classifieds, or another public avenue. The seller will get an offer, sometimes a generous one, from someone who appears very motivated to secure the deal and move the transaction quickly along.

After reaching an agreement, the buyer will later tell the seller some reason why their check will be for more than the purchase amount. They may say it was an error, or that the extra funds will cover fees they’ll incur from an agent or shipping representative. They then request that, after you deposit their check, you wire the surplus to a certain account or Western Union location.

The scam is that the check they’re providing will bounce, as it is counterfeit or forged. Your bank may not catch it immediately, but once they do, you will be out the full amount, and perhaps also your sale item if you shipped it.

Any check overpayment with a request to return the difference is a red flag, and you should abruptly end the transaction. In addition, it’s recommended you report the experience to all of the agencies above.

How do today's CD rates compare to the past?

By Sabrina Karl

It’s been more than three years since the Federal Reserve began pushing up interest rates, and CD rates have inched up accordingly. But exactly how far have they climbed compared to the historical lows of a few years ago?

First, a nutshell history on rates. In December 2008, the Fed dropped the federal funds rate to zero to lift the economy out of the Great Recession, and tethered it there for seven years. As a result, savings, money market and CD interest rates plummeted through 2015.

Since then, the Fed has hiked rates eight times, significantly raising bank deposit rates. The easiest way to compare today’s rates to the past is to look at FDIC national weekly averages. But this is important: The averages across every U.S. bank are far below what you can easily find by shopping around. In fact, the top nationally available rate in any term is three to four times the national average.

That said, national averages offer a scale of comparison. For instance, the FDIC national average for 1-year certificates was 0.66 percent last week. That’s double the 0.33 percent average of a year ago, and far above the 0.19 percent low between 2013-2016.

But the 1-year average in May 2009 (when the FDIC began weekly tracking) was 1.29 percent, indicating we’ve only made up about half the ground lost since the financial crisis.

Similarly, last week’s national average for 3-year certificates was 0.99 percent, compared to 1.82 percent in 2009. And for 5-year CDs, we reached 1.27 percent last week, while the 2009 average was 2.23 percent.

The steady uptick in CD rates over the last three years has certainly been welcomed by savers everywhere, but clearly the verdict is still out on whether a return to pre-recession rates is on any foreseeable horizon.