Investing in Your 20s & 30s For Dummies book cover

Investing in Your 20s & 30s For Dummies

By: Eric Tyson Published: 06-09-2021

Take advantage of the decades ahead and invest in your financial future today 

You may be at the stage of your life where you’re still watching every penny, but you know the earlier you invest, the more time your money has to work for you. Investing in Your 20s and 30s For Dummies provides novice investors with time-tested advice, along with strategies that reflect today’s market conditions. You’ll get no-nonsense guidance on how to invest in stocks, bonds, funds, and even real estate—complete with definitions of all the must-know lingo. You’ll also learn about the latest investment trends, including using robo-advisors to manage your portfolio, relying on apps to make fast trades, and putting your hard-earned cash in digital currencies. Armed with the knowledge and strategies in this book, you can invest wisely, monitor your progress, and avoid risking too much. Today’s investing landscape is changing at record speed, and this book helps you keep up. Find information on the latest tax laws, financial lessons learned from the COVID-19 pandemic, and popular funds for the 2020s.   

  • Learn the investment basics you need to get started 
  • Discover new tools and technologies that make it easier than ever to participate in the market 
  • Build a diverse portfolio that reflects your values, financial goals, and risk tolerance 
  • Feel more confident as you fund an investment account, choose equities or funds, and plan for the future 
  • Make an impact with your money by selecting socially responsible investments 
  • Figure out how much money to invest in employer-sponsored accounts or other retirement plans 

If you’re a little unsure about stepping into the world of investing, Investing in Your 20s and 30s For Dummies gives you the confidence you need to establish a smart investment strategy. Grab your copy today. 

Articles From Investing in Your 20s & 30s For Dummies

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33 results
33 results
Investing in Your 20s and 30s: Consider Your Investment Options and Desires

Article / Updated 10-26-2021

Many good investing choices exist: You can invest in real estate, the stock market, mutual funds, exchange-traded funds, or your own business or someone else’s. Or you can pay down debts, such as on your student loans, credit cards, auto loan, or mortgage debt more quickly. What makes sense for you depends on your goals as well as your personal preferences. If you detest risk-taking and volatile investments, paying down some debts may make better sense than investing in the stock market. How much market volatility can you tolerate? To determine your general investment desires, think about how you would deal with an investment that plunges 20 percent, 40 percent, or more in a few years or less. Some aggressive investments can fall fast. You shouldn’t go into the stock market, real estate, or small-business investment arena if such a drop is likely to cause you to sell or make you a miserable wreck. If you haven’t tried riskier investments yet, you may want to experiment a bit to see how you feel with your money invested in them. A simple way to mask the risk of volatile investments is to diversify your portfolio — that is, put your money into different investments. Not watching prices too closely helps, too; that’s one of the reasons why real estate investors are less likely to bail out when the market declines. Unfortunately, stock market investors can get daily and even minute-by-minute price updates. Add that fact to the quick phone call, click of your computer mouse, or tap on your smartphone that it takes to dump a stock or fund in a flash, and you have all the ingredients for shortsighted investing — and potential financial disaster. When you have others to consider Making investing decisions and determining your likes and dislikes is challenging when you consider just your own concerns. When you have to consider someone else, dealing with these issues becomes doubly hard, given the typically different money personalities and emotions that come into play. In most couples, usually one person takes primary responsibility for managing the household finances, including investments. The couples that do the best job with their investments are those who communicate well, plan ahead, and compromise. For many couples, the biggest step is making the time to discuss their financial management, whether as a couple or working with an advisor or counselor. The key to success is taking the time for each person to explain their different point of view and then offer compromises. So, be sure to make time to discuss your points of view or hire a financial advisor or psychologist/marriage counselor to help you deal with these issues and differences.

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Investing in Your 20s and 30s For Dummies Cheat Sheet

Cheat Sheet / Updated 05-23-2021

Investing as a young adult holds the promise of paying off big for decades to come if you know what you’re doing. This Cheat Sheet highlights important beliefs that can help guide you in your investment journey. When you understand your investing goals and beliefs, you can build your knowledge, do research, and make good choices that make the most of your money and investments. Copyright © 2021 Eric Tyson All rights reserved.

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10 Things to Know about Investing Apps in Your 20s and 30s

Article / Updated 10-22-2018

Most investing apps are offered by existing larger companies as another option for their customers to connect to and interact with what they offer. And, of course, companies would love for you to use their apps so they can continue to promote themselves to you and ensure that you remain a loyal customer. The investment companies you do business with — banks, mutual fund companies, brokerage firms, and so on — are no exception. That said, you can also find some apps offered by smaller, start-up companies that solely exist online and perhaps even only as an app. You don’t need me to tell you that you should be skeptical and extremely careful with such enterprises. Over time, the best new firms emerge and help improve the overall financial landscape and your options. But you don’t want to be some small company’s guinea pig. Given the choice between a start-up and a longer-standing, proven, successful investment company with good customer service, you can guess which one should get your investment dollars. With that as background, here is some advice for how to make the most out of using investing related apps and sidestep common app pitfalls and problems, as well as a short list of the best investment apps. Beware of the General Dangers of Putting Apps on Your Cellphone Computer viruses, malware, and ransomware attacks have garnered more attention, but similar problems occur with smartphone apps. The worst of the lot can end up tracking and spying on you. Some are a scam and/or some sort of virus or malware. Even if an app doesn’t have these nefarious issues, you should also check out the background and agenda of any company offering an investment-related app and understand how such companies may be making money from the app. Most apps are nothing more than glorified advertising from the company behind the app. Sure, the product may dangle something seemingly helpful (such as free stock quotes), but ultimately you need to uncover what the provider’s agenda, track record, and reputation are. Do your research on an app before downloading and beginning to use one. Check with more than one independent source and read independent reviews, especially those which are critical and less than flattering. Use Apps Only from Proven Companies with Good Reputations and Longevity Most of the companies I recommend in this chapter are fairly large companies with lengthy track records of success. For sure, technology is disrupting and changing many industries and companies. But that doesn’t mean you should only do business with firms that exist solely online, in the cloud, and so on. First, such companies are far more likely to be here today but gone tomorrow. Second, if you need actual customer service — such as talking with a real live person by phone — some of these newfangled firms simply don’t provide such contact options. They may only offer email, which isn’t ideal for resolving nuanced or mildly complicated problems. Finally, start-ups by definition lack a long-term proven track record. Research the history of companies that you’re considering doing business with. Download apps directly from the company’s website so you’re sure you’re getting their actual app rather than a knock-off or a fraudulent one. Consider the Alternatives to an App Before downloading and using an app, you should question the need for it and consider the alternatives. Remember that the company behind the app wants to tie you to its company so you do more business with it. Is that your goal? You likely have your phone with you all the time. Do you really want this app running and in your face all the time? Maybe, maybe not — think about it and examine the alternatives. Getting constantly changing investment prices on your phone every hour or every day isn’t going to make you a better investor. Use the Best Personal Finance Apps to Have More to Invest Unless you’ve been fortunate to earn a lot of money in a short period of time, received a large inheritance, or won the lottery, you likely want more money to invest. Some folks need extra help and hand-holding to lick the problem of overspending, and some simply want to feel on top of where their money goes and do something constructive about it. Many websites and related apps purport to address this problem, but in reality they have massive conflicts of interest through the affiliate relationships (that is, kickbacks) they have with companies that they direct business to. Advertising is also a common problem. Some apps to date have overcome these problems, but things can change, so don’t take my current recommendation in this space as a forever endorsement. That said, here are a few good options right now: The Goodbudget app offers its simplicity and practicality. The basic version provides you with up to one year of spending-tracking history in 10 main categories (envelopes). A paid or premium version ($45 per year) gives you up to five years of expense tracking with unlimited categories as well as email support. Start with the free version and then deciding later whether an upgrade is worth your while. Some apps are simply designed to save you money. GasBuddy, for example, shows you the price for gasoline at various service stations in a local area. It’s free for consumers to use. Especially when you’re going on lengthy car trips, car tolls can add up quickly. The Tollsmart Toll Calculator app is a low-cost app that enables you to compare toll costs for alternative routes. The Waze app can help with navigating traffic. Somebody should really combine a navigation app with the information from a toll app so drivers can select routes that save time and money! CamelCamelCamel is a price tracker that scans items on Amazon, shows you their price history, and sends you alerts when a product you’re interested in drops in price. PriceGrabber scans items everywhere online, although its website is much easier to use than its app is. Be Skeptical of Investing Apps Offering “Free” Trading Thanks to deregulation decades ago, and now technology, brokerage trading fees have dropped dramatically. Many leading investment companies that I highlight elsewhere in this book offer broad menus of the best investments (for example, mutual funds, exchange-traded funds, stocks, bonds, and so on). I explain in this book how to buy many of the funds without any trading fees at all, and when fees are levied, they’re typically quite low. But that hasn’t stopped some folks from trying to offer even better deals. Hence, the rise of some brokerage firms claiming “free” trading. Of course, there’s a catch — a brokerage firm can’t possibly exist, let alone survive, if it doesn’t charge any fees at all for any of its services. One such company offering “free” brokerage trades had many catches when the author researched what it offers: It exists only as an app, so you can’t access the company through a traditional desktop display or through a web-based version. If you need customer service or help resolving a problem on your account, you have limited access to phone assistance, and then only during normal business hours. After hours, including on weekends, you’re stuck using email. You can only use the app for taxable accounts; it doesn’t offer retirement accounts like an IRA. It also doesn’t offer mutual funds. You can’t tap into any tools or research. If you want or need a paper statement of your account, it will cost you $5 each time you request it. Should you decide to close your account and have it transferred to another broker, you get to pay $75 for the privilege of leaving. Review Current and Historic Financial and Economic Data The St. Louis Fed’s signature economic database — FRED, which stands for Federal Reserve Economic Database — is accessible through an app. Here’s a rare case where you can have a wealth of data at your fingertips and not be bombarded with ads or plugs to buy things. Are you curious how the latest unemployment rate compares with prior years and decades? Would you like to see how corporate profits stack up now compared with past economic cycles? How about understanding what the “financial stress index” is and how it has changed in recent months and years? You can see all this data and much much more on the St. Louis FRED website. Invest with Leading Fund Providers Of course, many banks, investment companies, brokers, and so on have apps. So if you have a favorite investment firm or bank, check out what it offers. For its broad array of cost effective funds with solid long-term performance, I use Vanguard’s app. In addition to Vanguard, other major fund companies with quality offerings and apps include T. Rowe Price and Fidelity. Tap into the Best Investment Brokerage Firms Check out the apps offered by leading investment brokerage firms recommended in this book, such as ETrade, TD Ameritrade, Scottrade, and Charles Schwab. Also remember that the leading fund companies mentioned in the preceding section also have discount brokerage operations. Examine the Best Real Estate Apps If you’re looking for a home or basic types of investment real estate, the Real Estate App from realtor.com has the most comprehensive and up-to-date collection of listings. It includes a mapping feature that enables you to specify specific areas in which you want to see the homes for sale. Also, you can detail specific features of a home that interest you. If you’re still a renter, realtor.com also has an easy to use Rentals App. Seek out Good Small-Business Apps You can find lots of apps for small business. Among the better ones are the QuickBooks App and the Wave Accounting App for small businesses (not to be confused with the Waze app for trip navigation). Dropbox is also a quality app; it is a cloud-based service for storing and sharing documents, files, photos, videos, and so on.

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Investing in Your 20s and 30s: Tips to Maximize Your Stock Market Returns

Article / Updated 04-16-2018

Anybody, no matter what his or her educational background, IQ, occupation, income, or assets, can make solid returns investing in stocks. To maximize your chances of stock market investment success, remember the following: Don’t try to time the markets. Anticipating where the stock market and specific stocks are heading is next to impossible, especially over the short term. Economic factors, which are influenced by thousands of elements as well as human emotions, determine stock market prices. Be a regular buyer of stocks with new savings. As I discuss earlier in this chapter, buy more stocks when prices are down and market pessimism is high. Diversify your investments. Invest in the stocks of different-size companies in varying industries around the world. When assessing your investments’ performance, examine your whole portfolio at least once a year, and calculate your total return after expenses and trading fees. Keep trading costs, management fees, and commissions to a minimum. These costs represent a big drain on your returns. If you invest through an individual broker or a financial advisor who earns a living on commissions, odds are that you’re paying more than you need to be, and you’re likely receiving biased advice, too. Pay attention to taxes. Like commissions and fees, federal and state taxes are major investment expenses that you can minimize. Contribute most of your money to your tax-advantaged retirement accounts. You can invest your money outside retirement accounts, but keep an eye on taxes. Calculate your annual returns on an after-tax basis. Don’t overestimate your ability to pick the big-winning stocks. One of the best ways to invest in stocks is through mutual funds and ETFs, which allow you to use an experienced, full-time money manager at a low cost to perform all the investing grunt work for you.

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Investing in Your 20s and 30s: Sidestep Common Minefields

Article / Updated 04-16-2018

Shares of stock, which represent fractional ownership in companies, offer a way for people of all economic means to invest in companies and build wealth. History shows that long-term investors can win in the stock market because it appreciates over the years. That said, some people who remain active in the market over many years manage to lose some money because of easily avoidable mistakes. You can greatly increase your chances of investing success and earning higher returns if you avoid the following common stock investing mistakes: Broker conflicts: Some investors make the mistake of investing in individual stocks through a broker who earns commissions. The standard pitch of these firms and their brokers is that they maintain research departments that monitor and report on stocks. Their brokers use this research to tell you when to buy, sell, or hold. It sounds good in theory, but this system has significant problems. Many brokerage firms happen to be in another business that creates enormous conflicts of interest in producing objective company reviews. These investment firms also solicit companies to help them sell new stock and bond issues. To gain this business, the brokerage firms need to demonstrate enthusiasm and optimism for the company’s future prospects. Studies of brokerage firms’ stock ratings have shown that from a predictive perspective, most of their research is barely worth the cost of the paper that it’s printed on. Short-term trading: Unfortunately (for themselves), some investors track their stock investments closely and believe that they need to sell after short holding periods — months, weeks, or even days. With the growth of Internet and computerized trading, such shortsightedness has taken a turn for the worse as more investors now engage in a foolish process known as day trading, in which they buy and sell a stock within the same day! Whether you hold a stock for only a few hours or a few months, you’re not investing; you’re gambling. Specifically, the numerous drawbacks to short-term trading include higher trading costs, more taxes and tax headaches, lower returns from being out of the market when it moves up, and inordinate amounts of time spent researching and monitoring your investments. Following gurus: It’s tempting to wish that you could consult a guru who could foresee an impending major decline and get you out of an investment before it tanks. Nearly all these folks significantly misrepresent their past predictions and recommendations. Also, the few who made some halfway-decent predictions in the recent short term had poor or unremarkable longer-term track records. As you develop your investment portfolio, take a level of risk and aggressiveness with which you’re comfortable. No pundit has a working crystal ball that can tell you what’s going to happen with the economy and financial markets in the future.

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Investing in Your 20s and 30s: Avoid Temptations and Hype

Article / Updated 04-16-2018

Because the financial markets move on the financial realities of the economy and companies, as well as on people’s expectations and emotions (particularly fear and greed), you shouldn’t try to time the markets. Knowing when to buy and sell is much harder than you may think. As a young adult, you’re in a position to take more risks because you’re investing for the long haul. However, you should be careful that you don’t get sucked into investing a lot of your money in aggressive investments that seem to be in a hyped state. Many people don’t become aware of an investment until it receives lots of attention. By the time everyone else talks about an investment, it’s often nearing or at its peak. Before you invest in any individual stock, no matter how great a company you think it is, you need to understand the company’s line of business, strategies, competitors, financial statements, and P/E ratio versus the competition, among many other issues. Selecting and monitoring good companies take research, time, and discipline. Also, remember that if a company taps into a product line or way of doing business that proves to be highly successful, that success invites competition. So you need to understand the barriers to entry that a leading company has erected and how difficult or easy it is for competitors to join the fray. Be wary of analysts’ predictions about earnings and stock prices. Investment banking firm analysts, who are too optimistic (as shown in numerous independent studies), have a conflict of interest because the investment banks that they work for seek to cultivate the business (new stock and bond issues) of the companies that they purport to rate and analyze. Simply buying today’s rising and analyst-recommended stocks often leads to future disappointment. If the company’s growth slows or the profits don’t materialize as expected, the underlying stock price can nosedive. Psychologically, it’s easier for many folks to buy stocks after those stocks have had a huge increase in price. Just as you shouldn’t attempt to drive your car looking solely through your rearview mirror, basing investments solely on past performance usually leads novice investors into overpriced investments. If many people are talking about the stunning rise in the market, and new investors pile in based on the expectation of hefty profits, tread carefully. You don't necessarily need to sell your current stock holdings if you see an investment market getting frothy and speculative. As long as you diversify your stocks worldwide and hold other investments, such as real estate and bonds, the stocks that you hold in one market need to be only a portion of your total holdings. Timing the markets is difficult: You can never know how high is high and when it’s time to sell, and then how low is low and when it’s time to buy. And if you sell non-retirement-account investments at a profit, you end up sacrificing a lot of the profit to federal and state taxes.

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Investing in Your 20s and 30s: Alternatives to Money Market Mutual Funds

Article / Updated 04-16-2018

Banks developed an account that is similar to a money market mutual fund, which they typically call a money market deposit account (MMDA). Banks set the interest rate on MMDAs, and historically, those rates have been a bit lower than what you can get from one of the better money market mutual funds (although this has been less true during the extended period of low interest rates during the 2010s). Check writing on MMDAs, if it’s available, may be restricted to a few checks monthly. As latecomers to the mutual fund business, some banks now offer real money market mutual funds, including tax-free money funds. Again, the better money market mutual funds from mutual fund companies are generally superior to those offered by banks. The reason: Most bank money market funds have higher operating expenses and, hence, lower yields than the best money funds offered by mutual fund companies. A bank or credit union savings account is sometimes the most practical place to keep your money. Your local bank, for example, may appeal to you if you like being able to conduct business face to face. Perhaps you operate a business where some cash is processed; in this case, you probably can’t beat the convenience and other services that a local bank offers. If you have only $1,000 or $2,000 to invest, a bank savings account may be your better option; the best money market funds generally require a higher minimum initial investment. For investing short-term excess cash, you may first want to consider keeping it in your checking account. This option may make financial sense if the extra money helps you avoid monthly service charges because your balance occasionally dips below the minimum. In fact, keeping money in a separate savings account rather than in your checking account may not benefit you if service charges wipe out your interest earnings. This is especially true with interest rates at such relatively low levels. Be sure to shop around for the best deals on your checking account because minimum balance requirements, service fees, and interest rates vary. Credit unions offer some of the best deals, although they usually don’t offer extensive access to free ATMs. The largest banks with the most ATMs generally don’t have the best terms on checking and savings accounts.

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Investing in Your 20s and 30s: Alternatives to Bank Accounts

Article / Updated 04-16-2018

If you’ve been with me since the beginning of this chapter, you know that the best banks that are focused online should have a cost advantage over their peers that have branch locations. Well, there are other financial companies that have similar, and in some cases even better, cost advantages (which translates into better deals for you): credit unions, discount and online brokerage firms, and mutual fund companies. Credit union accounts and benefits Credit unions are unique creatures within the financial-services-firm universe. Credit unions are similar to banks in the products and services that they offer (although private banks tend to offer a deeper array). However, unlike banks, which are run as private businesses seeking profits, credit unions operate as nonprofit entities and are technically owned by their members (customers). If they’re efficiently operated, the best credit unions offer their customers better terms on deposits, including checking and savings accounts (higher interest rates and lower fees) and some loans (lower rates and fees). Don’t assume that credit unions necessarily or always offer better products and services than traditional banks, because they don’t. The profit motive of private businesses isn’t evil; quite to the contrary, the profit motive spurs businesses to keep getting better at and improving on what they do. Credit unions have insurance coverage up to $250,000 per customer through the National Credit Union Administration (NCUA), similar to the FDIC protection that banks offer their customers. As when checking out a bank, be sure that any credit union you may deposit money into has NCUA insurance coverage. The trick to getting access to a credit union is that by law, each individual credit union may offer its services only to a defined membership. Examples of the types of credit union memberships available include Alumni College and university Community Employer Place of worship There can be some overlap between these groups. To access a credit union, you also may be able to use your family ties. To find credit unions in your local area, visit the Credit Union National Association consumer’s website. Brokerage accounts A type of account worth checking out at brokerage firms is generally known as an asset management account. When these types of accounts first came into existence decades ago, they really were only for affluent investors. That is no longer the case, although the best deals on such accounts at some firms are available to higher-balance investors. Brokerage firms enable you to buy and sell stocks, bonds, and other securities. Among the larger brokerage firms or investment companies with substantial brokerage operations you may have read or heard about are Charles Schwab, ETrade, Fidelity, ScottTrade, T.D. Ameritrade, and Vanguard. Now, some of these firms have fairly extensive branch office networks, and others don’t. But those that have a reasonable number of branch offices have been able to keep a competitive position because of their extensive customer and asset base and because they aren’t burdened by banking regulations (they aren’t banks) and the costs associated with operating as a bank. The best of brokerage firm asset management accounts typically enable you to Invest in various investments, such as stocks, bonds, mutual funds, and exchange-traded funds, and hold those investments in a single account. Write checks against a money market balance that pays competitive yields. Use a VISA or MasterCard debit card for transactions. Money market mutual funds Because bank savings accounts historically have paid pretty crummy interest rates, you need to think long and hard about keeping your spare cash in the bank. Instead of relying on the bank, try keeping your extra savings in a money market fund, which is a type of mutual fund. (Other funds focus on bonds or stocks.) Money market funds historically have offered a higher-yielding alternative to bank savings and bank money market deposit accounts. The mutual fund business is huge; fund companies hold assets totaling in excess of $17 trillion. A significant chunk of that — nearly $3 trillion — is held in money market mutual funds. A money market fund is similar to a bank savings account except that it is offered by a mutual fund company and therefore lacks FDIC coverage. Historically, this hasn’t been a problem, as retail money market funds have never lost shareholder principal for retail investors. A money market fund is similar to a bank savings account except that it is offered by a mutual fund company and therefore lacks FDIC coverage. Historically, this hasn’t been a problem because retail money market funds have lost shareholder principal in only one case for retail investors (the Reserve Primary fund lost less than 1 percent of assets during the 2008 financial crisis). The attraction of money market funds has been that the best ones pay higher yields than bank savings accounts and also come in tax-free versions, which is good for higher-tax-bracket investors.

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Investing in Your 20s and 30s: How to Protect Yourself when Banking Online

Article / Updated 04-16-2018

The attractions of banking online are pretty obvious. For starters, it can be enormously convenient, as you bank when you want on your computer. You don’t have to race around during your lunch break to find a local bank branch. And thanks to their lower overhead, the best online banks are able to offer competitive interest rates and account terms to their customers. You probably know from experience that conducting any type of transaction online is safe as long as you use some common sense and know who you’re doing business with before you go forward. That said, others who’ve gone before you have gotten ripped off, and you do need to protect yourself. Take the following steps to protect yourself and your identity when conducting business online: Never access your bank accounts from a shared computer or on a shared network, such as the free access networks offered in hotel rooms and in other public or business facilities. Make certain that your computer has antivirus and firewall software that is updated periodically to keep up with the latest threats. Be aware of missed statements, which could indicate that your account has been taken over. Report unauthorized transactions to your bank or credit card company as soon as possible; otherwise, your bank may not stand behind the loss of funds. Use a complicated and unique password (including letters and numbers) for your online bank account. Log out immediately after completing your transactions on financial websites.

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How to Evaluate Any Bank

Article / Updated 04-16-2018

Most folks know to look for a bank that participates in the U.S.-government-operated FDIC program. Otherwise, if the bank fails, your money on deposit isn’t protected. FDIC covers your deposits up to a cool $250,000. Some online banks are able to offer higher interest rates because they are based overseas and, therefore, are not participating in the FDIC program. (Banks must pay insurance premiums into the FDIC fund, which adds, of course, to a bank’s costs.) Another risk for you is that noncovered banks may take excessive risks with their business to be able to pay depositors higher interest rates. When considering doing business with an online bank or a smaller bank you’ve not heard of, you should be especially careful to ensure that the bank is covered under FDIC. Don’t simply accept the bank’s word for it or the display of the FDIC logo in its offices or on its website. Check the FDIC’s website database of FDIC-insured institutions to see whether the bank you’re considering doing business with is covered. Search by going to the FDIC’s Bank Find page. You can search by the name, city, state, or zip code of the bank. For insured banks, you can see the date when it became insured, its insurance certificate number, the main office location for the bank (and branches), its primary government regulator, and other links to detailed information about the bank. In the event that your bank doesn’t appear on the FDIC list, yet the bank claims FDIC coverage, contact the FDIC at (877) 275-3342. In addition to ensuring that a bank is covered by the FDIC, investigate the following: What is the bank’s reputation for its services? This may not be easy to discern, but at a minimum, you should conduct an Internet search of the bank’s name along with the words complaints or problems and examine the results. How accessible are customer-service people at the bank? Is a phone number provided on the bank’s website? How hard is it to reach a live person, the local branch, and its personnel (including the manager)? Are the customer-service representatives you reach knowledgeable and service-oriented? What are the process and options for getting your money out? This issue is a good one to discuss with the bank’s customer-service people. What fees are charged for particular services? This information should be posted on the bank’s website in a section called something like Accounts Terms or Disclosures. Also, request and inspect the bank’s Truth in Savings Disclosure, which answers relevant account questions in a standardized format. This figure is an example of an online bank’s disclosure for savings accounts.

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