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How to Spot a Fake Check

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Spotting a fake check requires taking steps like examining the check, analyzing the check source and more. Scammers can use counterfeit personal checks, cashier’s checks and even certified checks for fraudulent activity. So even if you trust a person you’re doing business with — and the check they hand you looks legit — it’s important to look beyond the dollar signs and verify that the check is legitimate.

We’ll walk you through how to do that as well as how to report a fake check scam if you notice one.

How to tell if a check is fake

Protecting yourself from fake checks and check fraud means being cautious about accepting checks from anybody you don’t know. There are a couple steps you can take to ensure you don’t fall victim of a check fraud scam.

Examine the check

First, look very closely at any check you receive — whether it’s a personal, cashier’s or certified check. Cashier’s checks used to be as good as gold, but they’re one of the most common forms of fake checks today. Scam artists often use sophisticated technology to create checks that look real, but here’s what to watch for:

  • Confirm that the payee’s name: Make sure it matches the name of the person giving you the check match.
  • Look for security features: This includes things such as watermarks.
  • Check for a perforated edge: This is where it has been torn from a checkbook or register. Counterfeit checks often have smooth edges because they’re printed on a computer.
  • Make sure the check includes the bank logo and address: Beyond simply confirming that they’re there, also double-check that both are correct.
  • Look at the magnetic ink character recognition (MICR) line on the bottom of the check: This will include the bank routing number, the account number and the check number. Match the routing number to the issuing bank by searching the American Bankers Association website.
  • Look at the paper: Real checks are printed on matte sturdy paper. Make sure this is the case for the check you have in your hands.
  • Rub a damp finger over the printed areas of the check: The purpose of doing this is to make sure they don’t smear, which can indicate a fake check.

Ask yourself if the check source is legit

If you receive a check in the mail or from someone you didn’t contact, take time to investigate who’s giving you money and why. Research the person or company to see if the payment makes sense and check any email exchanges you had with them.

For example, mystery shopping is a legitimate working opportunity, but companies that hire shoppers don’t send checks in advance. Verify that the mystery shopping opportunity is real by checking with the Mystery Shopping Professionals Association.

Common fake check scams to be aware of

Modern day technology has made a wide range of fake check schemes possible, including everything from foreign lottery scams to secret shopper scams. Here are some of the most common fake check schemes to be vigilant of.

Foreign lottery scams

With the foreign lottery scam, you get an email or letter that informs you that you’ve won a foreign lottery or received an inheritance from a distant relative. The scammer sends you a check and asks that you deposit it in your bank account and wire back money to pay fees or foreign taxes. The fake check eventually bounces, but you’ve already sent the scammer some of your own real money.

Internet auction scams

This scam targets people selling cars or other high-priced items via online classified ads. The scammer replies to your post and sends you a check, but it’s for more than your sales price. The scammer will claim they made an error in filling out the fake check, and request that you deposit it anyway and refund the extra via wire transfer. Their check bounces, leaving you missing the amount you “refunded.”

Check repayment scams

The check repayment scam is similar to the internet auction scam, but this time the scammer who wants to purchase your item says that they’re owed money from a third party who will send their money directly to you in repayment. However, the fake check is for more than the purchase price, and you’re instructed to wire them the difference.

Secret shopper scams

With this gem, scammers tell you that you’ve been hired as a mystery shopper to evaluate the services of a money transfer company. You’re sent a check to deposit into your checking account, then asked to withdraw the money and wire a portion to a specific person. You’re told to “keep” a portion for your services. The fake check bounces and you’re liable for the money withdrawn, which can be several thousand dollars.

Consequences of depositing a fake check

The consequences of depositing a fake check are serious — if the check is fraudulent and bounces, your bank has the right to withdraw the funds from your account, which can leave you with a negative balance and overdraft fees.

You could potentially even face consequences, such as having your account closed or having your credit rating dinged. On the most serious end of the spectrum, you could be charged with fraud in the case that law enforcement thinks that you knew the check was fake.

Under federal regulations, banks must make funds available within one to five days, depending on the type of check. A government or cashier’s check, for example, must be cleared one business day after you deposit the check, which is why they’re commonly used in check fraud. Unfortunately, fake checks can take weeks to be identified.

How to report a fake check scam

If you have been the victim of check fraud or you think you’re being scammed, report it. Although it may be embarrassing to admit you’ve been duped, scammers won’t be caught if no one reports the activity. To report a fake check, you can take these steps:

  • Notify your bank.
  • Contact your local law enforcement official, state’s attorney general and consumer protection agency.
  • Report the fraud to the FTC by calling 877-382-4357 or filing an online complaint.
  • If you received the check by mail, report it to the U.S. Postal Inspection Service online or by calling 1-877-876-2455.
  • If the scam initiated online, report it to the FBI’s Internet Crime Complaint Center.

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Powerball Annuity vs. Cash: How Does It Work and Which One Should You Take?

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One of the many decisions you’d have to make if you won the Powerball jackpot is whether you’d rather take your winnings in a Powerball annuity or as a lump sum. Most people want their money now, but don’t cash that check quite yet. You’ll want to think through the two options to make the right choice, as they both come with advantages and disadvantages.

This article covers everything you need to know about selecting either the Powerball lottery annuity versus lump sum if you’re lucky enough to be a winner.

Powerball annuity: How it works

If you win the Powerball jackpot, you can choose to receive the jackpot in an annuity that is paid in 30 graduated payments over 29 years with an annual interest rate of 5%. An annuity calculator can help you determine your payout amounts over time.

As an example, let’s say that the estimated Powerball jackpot is $112 million in the state of California. Using this scenario, your immediate annuity gross payout would be $1,685,761 — before federal and state taxes. Because of the 5% increase each year, the second year you would receive $1,770,049, and the third year you would get $1,858,551. Your annual payments would continue to grow by 5% each year until your final payment of $6,938,820.

Of course, you’d owe taxes on your winnings. This income would put you in the highest federal tax bracket, which is currently 37%. Note that the IRS will automatically take 24% of your winnings, and then you’ll owe the rest when you pay your taxes. You also could owe state taxes, which will vary depending on where you live. New York has the highest rate at 8.82%, while some states, like Tennessee and Texas, don’t tax lottery winnings at all.

Powerball lump sum: How it works

Just like it sounds, the lump-sum option pays out the cash value of the jackpot all at once. In the case of the $112 million Powerball pot, the cash value is $75.4 million.

Unlike the annuity that is taxed as you receive your annual payments, the winner who takes the lump sum pays all applicable taxes upfront. A winning ticket would put you in the highest tax bracket, which is currently 37%, netting you $47,502,000 before state taxes, which vary depending on where you live.

No matter how you decide to take the money, if there is more than one winning ticket, the pot is divided equally. If you’re the sole winner, you get the entire amount.

Powerball annuity vs. cash: Which should I choose?

One prize does not fit all when it comes to the lottery, and the answer to the question of Powerball annuity versus cash is situation-specific. We break down the advantages of the Powerball annuity versus lump sum to help you figure out what’s right for you.

Annuity advantages

  • Easier to manage: It’s not uncommon to hear about lottery winners who go broke just a few years after collecting their prize due to mismanagement of the funds. If you’ve had money trouble before, consider the annuity. “If I meet winners that appear to me to be extremely undisciplined with their investments, I recommend the annuity as a way to protect them against themselves,” said Jason Kurland, a Uniondale, N.Y.-based attorney who has counseled large-jackpot winners, including the anonymous South Carolina winner of the $1.5 billion Mega Millions jackpot.
  • Guaranteed income: Taking the annuity would give you a regular, guaranteed income for the next 29 years, which would pace your spending as well.
  • Tax benefits: With an annuity, you’ll avoid a massive lump-sum tax bill as well as additional taxes on investment gains you’d pay over the years if you were to invest that lump sum.

Lump sum advantages

  • Opportunity for growth: One major reason to take the lump sum is the potential for growth if you invest the money. “If a winner can conservatively invest their lump-sum amount, their fortune will grow at a much quicker pace than if they wait for the annuity payments from the lottery,” said Kurland. “If interest rates go up considerably, the annuity option could become a bit more attractive, but right now, given the low-interest rate environment, it makes more financial sense to take the lump sum.”
  • Potentially lower tax rate: Another reason to take the lump sum is the current tax climate, said Edward Snyder, CFP and co-founder of Oaktree Financial Advisors in Carmel, Ind. “We are at the best situation tax-wise we’ve ever seen,” he said. “Our current tax rate is temporary, though, and rates are set to go up in 2026. The lump sum today would be in the 37% bracket. If you took the annuity, you might be paying higher taxes later.”
  • Estate planning benefits: If the winner is older, the lump sum also offers an advantage for their heirs, said Kurland. “If a winner dies while receiving the annuity payments, their estate could be hit with a huge tax that it can’t afford,” he said. “The tax will be similar for a lump-sum winner, but at least the money will be there to pay it. An estate may not have the luxury of waiting for the annuity payments in order to pay the tax. There have been instances where this actually bankrupted an estate for a winner who chose the annuity payments.”

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Best Savings Accounts for Kids

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Piggy banks are fun for small change, but if you want to teach your kids important lessons about managing money and the power of compound interest, get them their own savings account. While your local bank branch probably offers more than one savings account product, you might consider looking online for one that’s designed with children in mind.

To aid in your search, we have chosen six savings accounts tailored for kids from a selection of nearly 100 kids’ savings options offered at banks and credit unions around the country. We based our selections on how well they met these five criteria:

  • Competitive annual percentage yield (APY): Accounts should demonstrate the rewards you can get by saving your money, and a competitive interest rate helps achieve that objective.
  • Low fees: Kids don’t need to lose their money to fees, so finding an account with zero fees was important.
  • Low minimum deposits: Most kids don’t have a large amount of money to save when they first open an account. Having a low minimum deposit requirement can help them get started quicker.
  • Broad geographical reach: Banks and credit unions need to be available to a large geographic market, with extra points for physical locations where kids can go and deposit cash and coins.
  • Great educational tools: Savings accounts that are geared to kids should have some educational tools to help them learn about what it takes to achieve financial success. Bonus points if the tools are fun, too.

 

Best overall savings account for kids: Capital One

Kids Savings Account from Capital One Capital One’s Kids Savings Account has all of the features you’d expect to see in a savings account for adults but with the additional feature of parental controls, which makes it a great overall solution for kids of all ages. The account earns 0.30% APY, has no monthly fees and can be opened with $0. You can set it up the account, and make your initial deposit at a later date.

The Kids Savings Account parental controls allows parents to sign into the account under their own usernames and passwords to help their children manage their funds. Parents always control transfers in and out of the account, offering good balance between independence for the young holder and parental oversight. Kids get to view their balance and watch their money grow.

Capital One lets you create an automatic savings plan linked with other accounts, so you can automatically transfer your child’s allowance into their Kids Savings Account. When it comes to geographical reach, Capital One has approximately 500 branch locations, as well as a great mobile banking app, which allows you to deposit checks and check balances.

Capital One Kids Savings Account
APY: 0.30%
Monthly Fees: $0
Minimum Opening Balance: $0

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

Best savings account for college savings: Citizens Bank

CollegeSaver from Citizens Bank (RI) If you want to be rewarded for consistent savings, the Citizens Bank CollegeSaver account has a bonus you might consider. If you open the account before your child is six and make a deposit of at least $25 each month until your child turns 18, Citizens Bank will give you a $1,000 bonus (the current account APY is a low 0.01%). You can also open this account if your child is between 6 and 12 years of age, but the minimum monthly deposit will be $50 and opening deposit is $500.

If you were to open the account today with an initial deposit of $25 upon the birth of a child (and assume the current APY held for 18 years), and then deposit $25 a month for 18 years, your $5,400 investment would accrue $24.48 in interest. Add the bonus and you’ll end up with $6,449.48. The bank doesn’t put any stipulations on how the money can be spent, so you can use the balance for college or any other financial needs.

Citizens Bank CollegeSaver
APY: 0.01%
Monthly Fees: $0
Minimum Opening Balance: $25 for children under six years old; $500 for children age six to 12

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on Citizens Bank (RI)’s secure website

Member FDIC

Best savings account for a young child: PNC Bank

S is for Savings from PNC Bank If you want to engage your child with educational tools, PNC’s S is for Savings account offers a lot. Granted, this account offers the lowest APY of the banks that made this list, but it makes up for it with its interactive online banking experience.

The Learning Center features Sesame Street characters that will help them learn basic money concepts. The site has fun activities you and your child can do together.

Features include the ability to set up automatic savings deposits that help them see the benefits of having a savings routine. Kids can work towards goals and learn about the three components of money: saving, sharing and spending. As your child gets older, you may choose to transfer their accumulated balance to a savings account at a bank that offers a higher interest rate.

PNC Bank’s S is for Savings
APY: 0.01%
Monthly Fees: $0 for account holders under 18
Minimum Opening Balance: $25

Best savings account for teens: Alliant Credit Union

Kids Savings Account from Alliant Credit Union When your child turns 13, Alliant Credit Union considers them to be a young adult, offering their High-Rate Savings Account with a 0.55% APY and no monthly fees. For teens who want to set savings goals, the credit union allows them to set up supplemental accounts that can be earmarked for specific items, such as saving for a new car.

What makes this a great option for a teen is that Alliant also offers an interest-paying teen checking account for kids ages 13-17. The checking account earns an APY of 0.25%. The two accounts can be linked and both will earn your teen interest. Alliant also refunds up to $20 per month in ATM fees if the teen uses out-of-network machines.

To open an account at Alliant Credit Union, you must be a member. Membership is open to employees or former employees of partner businesses or organizations. Or you can join by making a $10 donation to the Foster Care to Success Foundation.

Alliant Credit Union High-Rate Savings:
APY: 0.55%
Monthly Fees: $0
Minimum Opening Balance: $5

SEE DETAILS Secured

on Alliant Credit Union’s secure website

NCUA Insured

Best APY for a kid’s savings account: Spectrum Credit Union

MySavings from Spectrum Credit Union Spectrum Credit Union currently offers the highest interest rate on the market for a kid’s savings account, but only on a relatively limited balance. Spectrum’s MySavings account earns 7.00% APY on account balances up to $1,000, making for a rate that’s higher than many CDs. Balances over $1,000 earn the regular savings rate, which is 0.30%. A high interest rate can help get kids excited about savings as their balance will grow quicker.

Spectrum Credit Union currently has branches in six states, but deposits can be made nationwide through the Credit Union CO-OP Shared Network. Membership is open to anyone by joining the Contra Costa County Historical Society ($15 membership fee) or the Navy League of the United States ($25 annual membership fee).

Spectrum Credit Union MySavings
APY: 7.00% for the first $1,000; 0.30% on balances above $1,000
Monthly Fees: $0 for account holders under 18
Minimum Opening Balance: $0

SEE DETAILS Secured

on Spectrum Credit Union’s secure website

NCUA Insured

Best online tools for a kid’s savings account: Capital One

Kids Savings Account from Capital One Kids are digital natives, and that makes a kid’s savings account’s online banking features extra important. In addition to being our pick for best overall savings account for kids, the Capital One Kids Savings Account offers a great selection of online saving and budgeting tools that will keep kids engaged and informed.

One of the best features is the ability to create additional savings accounts and set a target goal for each account. For example, you child may set a goal for holiday gifts, another goal for a new bike or car and another goal for vacation money. They can even give each account a nickname, such as “My Wheels Fund.”

Capital One has a full suite of online tools for your child to track their progress and success, helping to keep them focused on their goals. Capital One also offers standard features on its mobile banking app, some of which are available for kids, including the ability to check their balance or make a mobile deposit.

Capital One Kids Savings Account
APY: 0.30%
Monthly Fees: $0
Minimum Balance: $0

SEE DETAILS Secured

on Capital One’s secure website

Member FDIC

Why your kid should have a savings account

It’s never too early to start teaching your kids about money, and a savings account is a great tool to help accomplish this aim. According to the 9th Annual Parents, Kids & Money Survey by T. Rowe Price, 55% of parents said their child has a savings account, but just 23% of kids said that they talk to their parents frequently about money. Parents who discuss financial topics with their kids at least once a week are more likely to have kids who say they are smart about money than than those who do not have a discussion with their children.

Savings accounts show kids the value of saving at an early age. They get to watch their money grow as compound interest work its magic, and they can set short- and long-term goals for the money they save. The reward of achieving the goals will teach life lessons on patience and planning. Once you open an account for your kids, share money management tips with them, things like “paying yourself first” by saving a portion of gifts and allowances they receive instead of spending it all.

When you teach your child good money habits early on, you help set them up for success later in life. Putting your child on the path for financial responsibility and independence by choosing the best savings account for kids could be the greatest gift you can give them.