Interesting Money Facts

 Continued from...

• Interesting study. Even though many banks gripe that they have to raise their fees in order to be able to cover their costs of handling customer transactions, a study recently reported that it costs the typical larger bank only $1,07 to have a live teller care for a deposit. This is compared to a measly 27 cents at an ATM.
• A question for you to think about. Which would you rather have – an outright gift of a million bucks, or a penny in a savings account that doubles every day for 30 days? Hmmm…be sure you really consider this question. Are you ready for the staggering answer? Well, at the end of the 30 days, the one million bucks is still worth one million bucks, but that little penny has grown into a massive $5.37 million dollars (not pennies). Let this be a lesson – investigate interest rates and how they can work for you and against you.
• Interest rates. After the Federal Reserve and the banks raise or lower their rates, it is not until the next billing cycle, or even later, that consumers start to feel it on their variable loan rates. But banks play a small game after a prime rate change that gives them the real edge still. See, when the prime rate is lowered, savings rates come down first, then loan rates do. But when the prime rate is increased, the opposite really happens. You will see loan rates immediately start following the prime rate upward, and only after that - will banks adjust the saving rates back up higher. This is a bit sneaky really. So, usually, when banks increase their prime rat by a quarter of a percent, average CD yields rise by about one tenth to sometimes 15/100ths of a percent over the next two months. In essence, after the lag time, you do not get the full benefit of the prime rate increase.
• Free checking accounts. We all see them pop up when one big bank buys out another bank right? Many of us see the commercials on TV, the bill boards on the highway. When one bank buys out another bank – usually a bank from the West will buy out a bank from the Eastern part of the US and so forth – well they do it to steal customers from other local banks in that area. To get more customers after the take over, they offer free checking accounts. Some are great others are loaded with hidden fees. Be aware.
• Interesting checking account statistic. 83% of consumers think checking is the most convenient way to pay bills. This info came from a Gallup poll. Cash comes in 2^nd at 8%; then electronic banking (online banking) comes in at only 4%. Typically, people use checks to pay for their retail purchases almost 50% of the time. 10% of consumers use checks for all of their purchases and bills. In fact women use checks more than men. Women are at 53% and men are at 42%.

Continued...

(515)

Back to News Updates