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2019 Fed Meeting Predictions — Potential for Future Rate Cut Before Year’s End

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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The Fed has held policy steady since its March meeting, content to acknowledge the weakening economic outlook in the statements from the April/May and June meetings. Many observers believe a rate cut may be coming in the second half of the year, and interest rates for financial products you use every day have begun moving lower as a result. Read on for our predictions for each upcoming Fed meeting and updates on what went down at the most recent conclaves.

What happened at the June Fed meeting

The Fed kept the federal funds rate steady… for now. The federal funds rate was left at 2.25% to 2.50%, as the Fed continues its rate pause. The Fed changed its tone by dropping its “patient stance” language, saying instead that it would “closely monitor the implications” given the “uncertainties about this outlook,” namely trade developments and global growth concerns.

In simpler terms, the FOMC felt the current data didn’t support a case for cutting rates right now. However, it does expect the economic climate to change in the next few months – possibly for the worse.

“The Committee wanted to see more [before making any changes],” said Fed Chair Jerome Powell at the post-meeting press conference. “I expect a full range of data, and that something will change before the next meeting.” Essentially, as these “uncertainties” become clearer, the Fed will adjust policy accordingly.

The dovish St. Louis Fed President James Bullard was the only dissenter to the policy decision, voting to lower the federal funds rate range by 25 basis points, while all others voted to maintain rates where they are.

A rate cut at the next meeting is by no means an inevitable conclusion. Most experts expected the Fed to signal that a rate cut was imminent. We didn’t get that strong of a sign.

The Fed’s latest Summary of Economic Projections (SEP) predicts no rate changes until 2020, keeping the projection for 2019 within the current range at 2.4%. The 2020 projection, however, dropped to 2.1%, which lies below the current lower limit of the rate range. It’s also well below the previous March projection for 2020 of 2.6%.

Still, Tendayi Kapfidze, chief economist at LendingTree, points to three signs that a rate cut is coming. “For one, at least eight Fed members projected a cut before the end of the year,” he shares. “Two, we saw one member already voting for a cut at this meeting. Three, the Fed removed the word ‘patient’ in their statement, instead calling out the uncertainties and risks.”

As for when the Fed might reduce rates, Kapfidze thinks the next Fed meeting in July is still too soon. “Perhaps September is more realistic.”

The SEP was stronger than expected. The Fed’s economic projections were little changed from its March outlook, again contradicting expert predictions of a softer outlook. Change in real GDP and the federal funds rate projections for 2019 matched the numbers in March, while the unemployment rate projection dropped by a single basis point for 2019.

In its statement, the FOMC points to strong labor market reports, low unemployment, higher household spending and overall moderate economic growth as support for a continued favorable baseline outlook.

That tricky problem with inflation remains. If you recall from last month’s meeting, inflation was the hot topic as the Fed was concerned about inflation continuing to fall short of its goal of 2%. This time around, the Fed again acknowledged that overall inflation and inflation for items other than food and energy are running below 2%.

Chair Powell shared that the Committee points to uncertainties in global growth and trade negotiations as factors for muted inflation. Plus, the SEP gives us some additional insight, showing us that the Fed expects inflation to continue to run below target.

Still, Powell reiterated the Committee’s firm commitment to its inflation objective. He also stated that while inflation continues to run below target, the Committee expects it to pick back up thanks to solid growth and a strong job market, although “at a slower pace than had been expected.”

Our June Fed meeting predictions

The Fed could signal a possible future rate cut. Chair Jerome Powell recently indicated the Fed’s willingness to cut rates, if necessary, in response to a bad outcome in trade negotiations, or data pointing to a weakening economy. This was the first time Powell had hinted at the possibility of monetary policy changes since the Fed chose to put an end to its rate hike streak back in January.

Economist Tim Duy points to the May jobs report, especially revisions to the prior months’ data, as another trigger for the Federal Open Market Committee (FOMC) to foreshadow a possible rate cut. Job gains slowed in May, due to softer economic growth rather than a lack of workers. But Duy warns that the revisions indicate U.S. job growth has “slowed markedly” over the last four months, another worrying sign.

Note that there is practically zero chance of a rate cut at the upcoming June meeting. Instead, you should look for hints to a rate cut later in 2019. “I don’t think they’ll change the rate,” says Tendayi Kapfidze, chief economist at LendingTree. “Definitely not at this meeting. I’d be surprised if it happens before September.”

The Fed could soften their economic forecast. The June Fed meeting will bring the latest Summary of Economic Projections (SEP). Much like it sounds, this is where the FOMC updates their long-term forecast for economic performance over the next few years.

Kapfidze predicts we’ll see another downgraded SEP forecast. “I think they’ll come up with a softer forecast. It’s just a question of how soft,” he said. With the data coming in somewhat mixed and trade negotiations remaining highly unpredictable, Kapfidze said the Fed finds itself in a “delicate moment to get the pulse of the state of the economy.”

We should learn more about the Fed’s approach to their 2% inflation goal. At the April/May meeting, we learned that inflation for personal consumption expenditures — the Fed’s preferred measure of price changes — fell unexpectedly. This left many economists and experts concerned that the Fed was neglecting its mandate to keep inflation symmetrically around 2%.

“Perhaps inflation is not coming back as they anticipated,” Kapfidze muses. So while inflation is stable right now, it’s definitely still a concern.

Upcoming Fed meeting dates:

Here is the FOMC’s calendar of scheduled meetings for 2019. Each entry is tentative until confirmed at the meeting proceeding it. For past meetings, click on the dates below to catch up on our pre-game forecast and after-action report.

Our April/May Fed meeting predictions

The Fed should reaffirm their patient stance at the April 30/May 1 meeting, and may reiterate their view that stronger U.S. economic data is needed before they can make more policy changes. The Fed already said as much in its March meeting minutes, where it confirmed that “a majority of participants” agreed to leave “the target range unchanged for the remainder of the year,” due to the unsettled economic outlook. When considering rate changes, the Fed looks at job growth, wages, and inflation pressures; if the numbers meet the Fed’s parameters, rates stay unchanged, but if they are too hot or too cold, rates need to change. Inflation has been hovering around the Fed’s target of about 2%, and while both job growth and retail sales were points of concern due to low numbers since December, both measures have recovered somewhat in March economic data reports.

Without drastic changes to the data, there is little risk the Fed will be moving rates up (or down). As economist Tim Duy succinctly told MagnifyMoney, “We will not see a rate cut. I don’t think we will see much change in policy at all. It should be a boring meeting.”

About that economic outlook! Even if the Fed stays on pause, it seems like the latest data should tamp down talk of an upcoming recession. We’ve been hearing analysts and commentators talk about a possible recession since December, when the data showed a decline in economic indicators across the board. The cynicism really started to kick in when the Treasury yield curve began to invert, which can be (but isn’t always) a harbinger of recession. However, the stronger March jobs, retail and new home sales reports have lessened such concerns. Plus, the latest GDP report from the Bureau of Economic Analysis shows growth at an annual rate of 3.2% in the first quarter of 2019, exceeding economists’ predictions of 2.5% growth.

Tendayi Kapfidze, lead economist at LendingTree, said as much back in March ahead of that month’s Fed meeting: “Since the financial crisis, data in the first quarter has been coming in weak because of seasonal adjustment. Models that make this adjustment are skewed by this, but then everything can reaccelerate in following quarters.” Plus, on top of that adjustment, the government shutdown greatly affected reports in both their results and how they were measured.

On the whole, we’re still seeing an economy on the rise, not a decline — it’s just not growing quite as fast as it was in 2018.

What happened at the April/May Fed meeting

The Fed maintained their patient policy stance. The Fed left rates unchanged at 2.25% to 2.50%. The latest economic data has indicated some recovery in jobs and retail sales growth, while the unemployment rate remains low, as well. Plus, GDP grew 3.2% in the first quarter, exceeding expert economists’ predictions of 2.5%. This data supports the Fed’s outlook for a growing economy and its decision to keep interest rates unchanged.

What about the Fed’s inflation goal? This was the big question for Fed Chair Jerome Powell at his press conference following the FOMC meeting. Inflation for personal consumption expenditures — the Fed’s preferred measure of price changes — has been dropping for the past three months, with the first quarter coming in at 0.7%, below the committee’s 2% target. Powell did note that inflation “unexpectedly fell,” standing at 1.6% for the previous 12 months ending in March.

When asked about what signs the FOMC might see as a need to take action, Powell first answered, “We are strongly committed to our 2% inflation objective, and to achieving it on a sustained and symmetric basis,” a point he reiterated throughout the conference. “The Committee would be concerned if inflation were running persistently above or below 2%” he continued, also noting that what they are currently seeing does not indicate a persistent problem.

While policy remains on hold for now, economist Tim Duy has indicated that weak inflation numbers should still push the Fed to cut rates before the end of the year — “If the Fed is serious about the inflation target, then the odds favor a rate cut over a rate hike,” he writes. Given Powell’s reassurance of the Fed’s strong commitment to its inflation goal, a rate cut could certainly be in the near future.

Our March Fed meeting predictions

There’s little chance of a rate hike this time around. In a policy speech on March 8, Fed Chair Jerome Powell reinforced the FOMC’s patient approach when considering any changes to the current policy, indicating he saw “nothing in the outlook demanding an immediate policy response and particularly given muted inflation pressures.”

This is no different from what we heard back in January, when the Fed took a breather after its December rate hike. There was no change to the federal funds rate at that meeting, and Powell had stressed that the FOMC would be exercising patience throughout 2019, waiting for signs of risk from economic data before making any further policy changes.

Further strengthening the case for rates on hold, the reliably hawkish Boston Fed President Eric Rosengren cited several reasons that “justify a pause in the recent monetary tightening cycle,” in a policy speech on March 5. His big tell was citing the lack of immediate signs of strengthening inflation, which remains around the Fed’s target rate of 2%.

Even though there had been some speculation of a first quarter hike at the March Fed meeting, LendingTree chief economist Tendayi Kapfidze reminds us that the Fed remains, as ever, data-dependent. “The latest data has been on the weaker side, with the exception of wage inflation,” he says.

The economic forecast may be weaker than December’s. The Fed will release their longer-range economic predictions after the March meeting. These projections should include adjustments in the outlook for GDP, unemployment and inflation. The Fed will also provide its forecast for future federal funds rates.

Kapfidze expects we’ll see a weaker forecast this time around than what we saw in December. “I except the GDP forecast to go down, and the federal funds rate expectations to go down.” This follows a December report that posted lower numbers than the September projections.

Despite flagging economic projections, Rosengren offered a steady outlook in his speech. “My view is that the most likely outcome for 2019 is relatively healthy U.S. economic growth,” he said, again attributing this to “inflation very close to Fed policymakers’ 2 percent target and a U.S. labor market that continues to tighten somewhat.”

The Fed’s economic predictions offer clues to its future policy decisions. In September, the Fed projected a 2019 federal funds rate of 3.1%. That number dropped to 2.9% in the December report. With the current rate at 2.25% to 2.5%, there’s still room for more hikes this year. Keep in mind, however, that, the March meeting may narrow projections for the rest of 2019.

As for Kapfidze, he thinks we’ll see a rate hike in the second half of the year. “If wage inflation continues to increase and it trickles more into the economy, the Fed could choose to raise rates due to that risk.”

However, as of March 12, markets see the odds of a rate hike this year at zero, while the odds of a federal funds cut has risen to around 20%, based the Fed Fund futures.

What happened at the March Fed meeting

The Federal Reserve signaled no rate hikes this year, and the possibility of only one increase in 2020. The Fed has pivoted pretty rapidly from its hawkish stance in 2018 to a more dovish outlook as it puts policy on ice. This change in tone grows directly from the FOMC’s observation of slowing growth in economic activity, namely household spending and business investment. The Fed also noted that employment gains have plateaued along with the unemployment rate, which nevertheless remains at very low levels.

So the federal funds rate looks to remain at 2.25% to 2.50% for a year or more, and the FOMC highlighted that this is the not-too-hot, not-too-cold level that for now best serves its dual mandate to “foster maximum employment and price stability.”

The Fed also released its Summary of Economic Projections (SEP). The March SEP indicated a median projected federal funds rate of 2.6% for 2020, which is why everybody is discussing the possibility of at least one, small increase next year.

For those who were really hoping for at least one more rate hike, all is not lost — Tendayi Kapfidze, LendingTree chief economist, believes we shouldn’t take March’s decision too gravely. “There are special factors that suggest the economy could reaccelerate,” he says. “The government shutdown threw a wrench into things, slowing some activity and distorting how we measure the economy.” He also remarks that since the financial crisis, data in the first quarter has continued to come in weak, still leaving room for everything to reaccelerate in the second and third quarters. He points to the already strong labor market as a plus.

Fed economic forecasts hint at a possible rate cut by the end of 2019. Just as the Fed projects a slightly higher federal funds rate in 2020, it also posted a projected 2.4% for 2019. Note that this projected rate falls below the upper end of the current rate corridor of 2.5%. This means the doves may want to see a possible rate cut if improvements in the economic outlook don’t materialize by mid-year.

When asked about this potential rate cut, Fed Chair Jerome Powell emphasized the Committee’s current positive outlook, while also emphasizing that it remains mindful of potential risks. Still, he maintained that “the data are not currently sending a signal that we need to move in one direction or another.” He also remarked that since it’s still early in the year, they have limited and mixed data to consult.

Kapfidze offers a more concretely positive outlook, noting that the chances of a rate cut are pretty slim. “To get a rate cut, you’d have to have sustained growth below 2%. There would have to be further weakness in the economy, like if trade deals get messier, to warrant a rate cut.”

The Fed downgraded its economic outlook for 2019 for the second time in recent months. In line with Kapfidze’s predictions, we did see a weaker economic outlook coming out of this month’s Fed meeting. The median GDP forecast for 2019 and 2020 decreased from December projections, while it remained the same for 2021 and beyond. This comes hand in hand with the decreased fed funds rate projections.

The FOMC increased their unemployment projections, which Kapfidze found surprising because the labor market has been so strong. “Maybe they believe that those numbers indicate a deceleration,” he said, “but really, it has to be consistent considering the other changes that they made.”

Why the Fed March meeting is important for you

It’s easy to let all of this monetary policy talk go in one ear and out the other. But what the Fed does or doesn’t change has an impact on your daily life. Without a rate hike since December, we’re already starting to see mortgage rates fall. This is helpful not only for those who want to buy a home, but also for those who bought homes at last year’s highs to refinance.

As for personal loans and credit cards, we may still see these rates continue to increase, just at a slower rate. These rates have little chance of decreasing because lenders may take the current weaker economic data as a sign that the economy is going to be more risky.

Deposit accounts will feel the opposite effects as banks may start to cut savings account rates. At best, banks will keep their rates where they are for now, until more evidence for a rate cut arises.

Our January Fed meeting predictions

Don’t expect a rate hike. The FOMC ended the year with yet another rate hike, raising the federal funds rate from 2.25 to 2.5%. It was the committee’s fourth increase of 2018, which began with a rate of just 1.5%.

But the January Fed meeting will likely be an increase-free one. Tendayi Kapfidze, chief economist at LendingTree, the parent company of MagnifyMoney, said the probability of a rate hike is “basically zero.”

Kapfidze’s assessment is twofold. First, he noted that the Fed typically announces rate increases during the third month of each quarter, not the first. This means a hike announcement would be much more likely during the FOMC’s March 19-20 meeting, rather than in January.

Perhaps more importantly, Kapfidze said there’s been too much market flux for the FOMC to make a new decision on the federal funds rate. He predicts the Fed will likely wait for more evidence before it considers another rate hike.

“I think a lot of it is a reaction to market volatility, and therefore that’s lowered the expectations for federal fund hikes,” Kapfidze said.

But if a rate hike is so unlikely, what should consumers expect from the January Fed meeting? Here are three things to keep an eye on.

#1 The frequency of rate hikes moving forward

It’s unclear when the next increase will occur, but the FOMC’s post-meeting statement could give a clearer picture of how often rate hikes might occur in the future.

The Fed released its latest economic projections last month, which predicted the federal funds rate would likely reach 2.9% by the end of 2019. This figure was a decline from its September 2018 projections, which placed that figure at 3.1%.

As a result, many analysts — Kapfidze included — are forecasting a slower year for rate hikes than in 2018. Kapfdize said some analysts are predicting zero increases, or even a rate decrease, but he believes that may be too conservative.

“I still think the underlying economic data supports at least two rate hikes, maybe even three,” Kapfidze said.

Kapfidze’s outlook falls more in line with the Fed’s current projections, as it would mean two rate hikes of 0.25% at some point this year. There could be more clarity after the January meeting, as the FOMC’s accompanying statement will help indicate whether the Fed’s monetary policy has changed since December.

#2 An economic forecast for 2019

The FOMC’s post-meeting statement always includes a brief assessment of the economy, and this month’s comments will provide a helpful first look at the outlook for 2019.

Consumers will have to wait until March for the Fed’s full projections — those are only updated after every other meeting — but the FOMC will follow its January gathering with its usual press release. This statement normally provides insight into the state of household spending, inflation, the unemployment rate and GDP growth, as well as a prediction of how quickly the economy will grow in the coming months.

At last month’s Fed meeting, the committee found that household spending was continuing to increase, unemployment was remaining low and overall inflation remained near 2%. Kapfidze expects January’s forecast to be fairly similar, as recent market fluctuations might make it difficult for the FOMC to predict any major changes.

Read more: What the Fed Rate Hike Means for Your Investments

“I wouldn’t expect any significant change in the tone compared to December,” Kapfidze said. “I think they’ll want to see a little more data come in, and a little more time pass.”

At the very least, the statement will let consumers know if the Fed is taking a patient approach to its analysis, a decision that may help indicate just how volatile the FOMC considers the economy to be.

#3 A response to the government shutdown

The big mystery entering January’s Fed meeting is the partial government shutdown. While Kapfidze said the FOMC’s outlook should be similar to December, he also warned that things could change quickly if Congress and President Trump can’t agree on a spending bill soon.

“The longer it goes on, and the more contentious it gets, the less confidence consumers have — the less confidence business have. And a lot of that could translate to increased financial market volatility,” Kapfidze said.

Kapfidze added that the longer the government stays closed, the more likely the FOMC is to react with a change in monetary policy. During the October 2013 shutdown, for example, the Fed’s Board of Governors released a statement encouraging banks and credit unions to allow consumers a chance at renegotiating debt payments, such as mortgages, student loans and credit cards.

“The agencies encourage financial institutions to consider prudent workout arrangements that increase the potential for creditworthy borrowers to meet their obligations,” the 2013 statement said.

What happened at the January Fed meeting:

No rate hike for now

In its first meeting of 2019, the Federal Open Market Committee announced it was keeping the federal fund rate at 2.25% to 2.5%, therefore not raising the rates, as widely predicted. This decision follows much speculation surrounding the economy after the Fed rate hike in December 2018, which was the fourth rate hike last year. In its press release, the FOMC cited the near-ideal inflation rate of 2%, strong job growth and low unemployment as reasons for leaving the rate unchanged.

In the post-meeting press conference, Federal Reserve Chairman Jerome Powell confirmed that the committee feels that its current policy is appropriate and will adopt a “wait-and-see approach” in regards to future policy changes.

Read more: How Fed Rate Hikes Change Borrowing and Savings Rates

Impact of government shutdown is yet to be seen

The FOMC’s official statement did not address the government shutdown in detail, although it was discussed briefly in the press conference that followed. Powell said he believes that any GDP lost due to the shutdown will be regained in the second quarter, providing there isn’t another shutdown. Any permanent effect would come from another shutdown, but he did not answer how a shutdown might change future policy.

What the January meeting bodes for the rest of the year

Don’t expect more rate hikes. As for what this decision might signal for the future, Powell maintains that the committee is “data dependent”. This data includes labor market conditions, inflation pressures and expectations and price stability. He stressed that they will remain patient while continuing to look at financial developments both abroad and at home. These factors will help determine when a rate adjustment would be appropriate, if at all. When asked whether a rate change would mean an increase or a decrease, he emphasized again the use of this data for clarification on any changes. Still, the Fed did predict in December that the federal funds rate could reach 2.9% by the end of this year, indicating a positive change rather than a negative one.

CD’s might start looking better. For conservative savers wondering whether or not it’s worth it to tie up funds in CDs and risk missing out on future rate hikes – long-term CDs are looking like a safer and safer bet, according to Ken Tumin, founder of DepositAccounts.com, another LendingTree-owned site. Post-Fed meeting, Tumin wrote in his outlook, “I can’t say for sure, but it’s beginning to look more likely that we have already passed the rate peak of this cycle. It may be time to start moving money into long-term CDs.”

Look out for March. Depending on who you ask, the FOMC’s inaction was to be expected. As Tendayi Kapfidze, LendingTree’s chief economist, noted [below], if there is going to be a rate increase this quarter, it will be announced in the FOMC’s March meeting. We will also have to wait for the March meeting to get the Fed’s full economic projections. For now, its statement confirms that household spending is still on an incline, inflation remains under control and unemployment is low. It also notes that growth of business fixed investment has slowed down from last year. As for inflation, market-based measures have decreased in recent months, but survey-based measures of longer-term inflation expectations haven’t changed much.

 

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Learn more: What is the Federal Open Market Committee?

The FOMC is one of two monetary policy-controlling bodies within the Federal Reserve. While the Fed’s Board of Governors oversees the discount rate and reserve requirements, the FOMC is responsible for open market operations, which are defined as the purchase and sale of securities by a central bank.

Most importantly, the committee controls the federal funds rate, which is the interest rate at which banks and credit unions can lend reserve balances to other banks and credit unions.

The committee has eight scheduled meetings each year, during which its members assess the current economic environment and make decisions about national monetary policy — including whether it will institute new rate hikes.

A look back at 2018

As we continue through an economically uncertain 2019, it’s worth understanding what the Fed did in 2018, and how those decisions might affect future policy.

The year 2018 was the Fed’s most aggressive rate-raising year in a decade. The FOMC’s four rate hikes were the most since the 2008 Financial Crisis, after the funds rate stayed at nearly zero for seven years. This approach was largely based on the the FOMC’s economic projections, which found that from 2017 to 2018 GDP grew, unemployment declined and inflation its Fed-preferred rate of 2%.

In addition to the rate hikes, the FOMC also continued to implement its balance sheet normalization program, through which the Fed is aiming to reduce its securities holdings.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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Financial Therapy: What It Is and How to Know if You Need It

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Whether you’re stressing over paying bills or spending money to make yourself feel better, anxiety and money often go hand in hand. Still, financial advice tends to emphasize numbers and strategies, not the root cause of money concerns.

Financial therapy is a holistic process that enlists both therapeutic and financial methods to help you transform your relationship with money. Here’s how to tell whether or not it might be the right move for you.

What is financial therapy?

The Financial Therapy Association was born out of the 2008 financial crisis, which left many Americans feeling totally hopeless and out of control with their money — a kind of trauma that went deeper than traditional financial counseling could heal. Researchers and practitioners from both the mental health and business fields teamed up shortly after the crash to create a unique, new practice that combines the best aspects of both disciplines.

By late 2009, the Financial Therapy Association, or FTA, was officially recognized as a nonprofit corporation, and the group held its first annual conference in September of 2010. Today, the association offers a variety of tools for both consumers and professionals looking to participate in this unique practice, and also offers a searchable database for finding financial therapists by state.

The association defines financial therapy as “a process informed by both therapeutic and financial competencies that helps people think, feel and behave differently with money to improve overall wellbeing through evidence-based practices and interventions.”

In short, just like regular therapy, it helps you get your head on straight — except in this case, it’s particularly concerned with financial matters. Many financial therapists are also licensed family or marriage counselors, so you can take it on solo or with a partner.

5 signs you need a financial therapist

So, how can you tell if financial therapy is right for you?

Chances are, almost anyone could benefit from professional coaching… but if these scenarios sound familiar, you might want to take finding professional help more seriously.

1. Your relationships are strained, and money’s always the reason. If you’re constantly fighting with your spouse (or other relatives or family members) about money matters, a financial therapist can help you find productive ways to navigate your relationships.

2. You’re depressed or anxious about your money in a way that’s impacting your wellbeing. While money can be a stressful topic for anyone from time to time, if it’s ruling your life, a therapist can help you find new behavioral patterns. Whether it’s the emotional toll of debt or the stress of saving a workable nest egg, a financial therapist can offer both mental and monetary tactics to help you tackle the problem.

3. You know the steps you need to take, but can’t quite seem to make them happen. Whether it’s balancing your budget or paying down debt, if you can’t make your behavior match your financial plan, a financial therapist could have the answer.

4. You find yourself lying about money and hiding your excessive or emotional spending. These kinds of behaviors can wreak havoc on your wallet, not to mention your relationships, and may be based in compulsion. A financial therapist can help you develop alternative relaxation tactics so you can overcome your emotional splurges without doing damage to your nest egg.

5. Thinking about your financial future is leading to unexpected emotions or creating family tension. As important as estate planning may be, it can also be a difficult and emotional experience. After all, it means thinking seriously about the reality of your own death. And divvying up your stuff can lead to difficult conversations, particularly if you have a blended family or strained relationships. A financial therapist can help you work through all that emotional baggage and offer helpful communication tactics.

Do you need a financial therapist and a financial advisor?

There’s no specific set of certifications or degrees a professional must have to be a member of the Financial Therapy Association — so each individual counselor is just that: an individual. He or she may lean more heavily toward one side of the professional aisle or the other, and finding the right fit could take some trial and error.

For instance, if you’re mostly concerned with the how-to part of financial advisement, like figuring out the difference between a Roth IRA and a traditional IRA or the best way to tackle credit card debt, a plain-old financial advisor can probably help you, but so could a financial therapist who works primarily as an advisor or wealth management professional.

On the other hand, if you’re really digging into the emotional side of your financial landscape, finding a financial therapist who is a mental health professional first can help you tackle those struggles, while also laying the framework for solid monetary planning and behavior down the line. A financial therapist who identifies more strongly with the clinical counselling part of their job title may also be able to help you in other aspects of your mental health, if you’re struggling with matters beyond your money.

The bottom line is, there’s no one approach that’s right for everyone — and, just like dating, you’ll definitely want to shop around. Whether you hire a financial therapist, a financial advisor or both, when you’re talking about people who are going to advise you on matters as important as your financial future, getting along well is key. It’s worth making several calls and sitting through a few introductory interviews to make sure you’ve found a good fit.

How to find a financial therapist

If financial therapy sounds like it might be a fit for you, there are some wonderful resources available from the Financial Therapy Association to help you find and hire a professional. For instance, it offers a great database of financial therapists that’s searchable by both name and state.

Of course, since it’s such a new field, financial therapists are relatively few and far between — and you may find there’s not one in your area. Several states on the list have zero names listed beneath them (so far, anyway).

Fortunately, the internet makes it possible to do financial therapy work at a distance, and many professionals do just that. If you find someone whose credentials, focus and basic methodologies you like, you can reach out to them directly to see if they’d be able to perform therapy via Skype or phone call. You can also check out the specific “at a distance” list available via the FTA database. The association also offers monthly online webinars and other educational tools to start the process on your own if you’re not quite ready to hire a professional.

The bottom line

Financial therapy can be a great way to help alleviate your anxieties and fears about financial matters, or to help you find ways to break money-related habits you just can’t seem to knock out on your own. And as with any type of therapy, seeking out professional help is anything but a sign of weakness. Money touches all of our lives and has a huge impact on our lifestyles, so it makes sense that it’s a wildly emotional topic. So if financial therapy sounds like it might be a fit for you, don’t be afraid or ashamed to reach out. If anything, recognizing you need help makes you that much stronger — and both your brain and your bank account will thank you for it.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jamie Cattanach
Jamie Cattanach |

Jamie Cattanach is a writer at MagnifyMoney. You can email Jamie here

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9 Great Free Checking Accounts

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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The humble checking account may not offer rewards, cash back or many of the other perks offered by ritzy credit cards, but it remains the cornerstone of your financial life. Nobody likes paying monthly maintenance fees, so why not pick a free checking account that does away with them altogether?

Below, we’ve selected nine of the best free checking accounts (presented in no particular order) by scouring our database for products meeting the following criteria:

  • No monthly maintenance fee
  • A low initial deposit amount (between $0-$25) needed to open the account
  • No minimum daily balance requirement
  • Minimal third-party ATM fees
  • Available nationwide

Account Name

Minimum needed to open

APY

Consumers Credit Union (IL) Free Rewards Checking$05.09%
Simple Account$02.02%
Aspiration Spend and Save$102.00%
nbkc personal account$51.01%
Alliant Credit Union High-Yield Checking$5 (to become a member of this credit union, none for opening the account itself)0.65%
Discover Cashback Credit$0None, but customers receive 1% cash back each month on certain spending with a limit of $3,000
Ally Bank Interest Checking$00.60%
Evansville Teachers FCU Vertical Checking$30 ($25 if you're already a member of this credit union)3.30% (if you meet monthly requirements)
Bay State Savings Bank Kasasa Cash$02.01% (if you meet monthly requirements)

Great free checking accounts

Consumers Credit Union (IL) Free Rewards Checking

The Consumers Credit Union provides an online-only checking account to anyone in the nation who becomes a member. You can qualify for membership with a one-time $5 payment to Consumers Cooperative Association. Some of the perks of the Free Rewards Checking account include:

  • No monthly maintenance fee
  • No minimum balance required
  • Unlimited check writing
  • Unlimited ATM fee refunds

However you do have to meet some requirements in order to get all of the benefits of the account (including the high APY). The APY for this account is divided into three tiers, with the lowest earning 3.09% on balances up to $10,000, the middle 4.09% and the highest tier 5.09%. The requirements for each of these tiers are:

To earn 3.09%

  • Receive eStatements
  • Make at least 12 debit card purchases a month
  • Post direct deposits or ACH payments of at least $500 each month

To earn 4.09%

  • Meet all the requirements of the previous tier
  • Have a Consumers Credit Union Visa credit card and spend at least $500 a month on it

To earn 5.09%

  • Meet all the requirements of the previous tier
  • Spend at least $1,000 a month on your Consumers Credit Union Visa credit card

Keep in mind these high APYs only apply to balances up to $10,000. The portion of any balance between $10,000.01 and $25,000 earn 0.20% APY, and balances greater than $25,000 earn an APY of 0.10%.

LEARN MORE Secured

on Consumers Credit Union (IL)’s secure website

NCUA Insured

Simple Account

Simple is owned and backed by regional bank BBVA and offers customers a free checking account that’s intertwined with the app’s budgeting tools. Simple doesn’t charge any fees, meaning users enjoy:

  • No monthly maintenance fee
  • No minimum balance needed
  • No account closing fee
  • No stop payment fees
  • No debit card replacement fee
  • No ATM fee if using Simple’s network, but users can be charged a fee by other banks if using a non-network ATM

One fee you do have to pay is a foreign transaction fee when using your Simple card internationally, which can be up to 1% of the transaction.

If you maintain a balance of $0.01 or more, you can earn an APY of 2.02%.

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on Simple’s secure website

Aspiration Spend and Save Account

The recently rebranded Aspiration Spend and Save account is online-only and technically is a cash management account (according to the company), combining the high APY of a savings account with the accessibility of a traditional checking account. After paying an initial $10 to open this account, you gain access to a completely fee-free account — if that’s what you choose.

One of the most eye-catching (and marketable) aspects of this account is that Aspiration tells its customers they can pay whatever fees they wish, even if that amount is zero. The online bank does heavily advertise the fact that 10% of whatever fee customers pay them will be donated to charity.

Other benefits this account gives without any fees include:

  • Unlimited ATM fee reimbursement
  • $600 in cellphone damage insurance
  • Scheduled bill payments

Technically, the Spend and Save account operates as two separate linked accounts — a savings account, where your money earns an APY of 2.00% each month (provided you deposit at least $1 in the account), and a spend account you draw on with your Aspiration ATM card. Transfers of funds between the spending and saving sides of the account happen instantly and without any limitations, so it’s easy for customers to think of it as one product.

It’s important to note that the 2.00% APY only applies to funds in the save portion of the account, not the money you have in the spend portion (which earns no APY). But with the instant and limitless transactions you can make between the two sides, there’s no reason to leave money parked in the spend portion of the account that you aren’t planning to utilize in the short term.

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on Aspiration’s secure website

nbkc personal account

nbkc bank may be based in Kansas and Missouri, but customers anywhere in the nation can sign up for its personal account, which provides a whole bevy of benefits with only minimum fees — all while providing a very competitive APY.

Customers can open this free checking account with a $5 deposit, and so long as they maintain an average daily balance of $0.01, earn 1.01% APY. They also can use more than 32,000 ATMs without any fees, and nbkc will rebate up to $12 a month any non-network ATM fees customers accrue.

Account holders will have to pay a $5 fee to wire money domestically, and $45 if they are receiving or sending an international wire transfer.

LEARN MORE Secured

on nbkc bank’s secure website

Member FDIC

Alliant Credit Union High-Rate Checking

Alliant Credit Union offers a free checking account with a very decent yield and great features. You must become an Alliant member before opening an account, which anyone in the country can do by making a $10 donation to Foster Care to Success during your application process. However, there’s no minimum deposit needed to open this free checking account, no minimum daily balance and no monthly maintenance fee.

Alliant’s account also grants customers access to roughly 80,000 ATMs they can use without any fees. If you have to use an ATM outside of this network, Alliant will reimburse fees up to $20 each month.

Finally, this free checking account is called “high-rate” because it gives 0.65% APY—so long as you opt to receive electronic statements instead of paper statements, and make one electronic deposit into the account each month. Examples of deposits include:

  • Direct deposits
  • Payroll deposits
  • ATM deposits
  • Mobile deposits
  • Transfer from another financial institution

LEARN MORE Secured

on Alliant Credit Union’s secure website

NCUA Insured

Discover Cashback Debit

You might be more likely to think of credit cards when it comes to this brand, but Discover also functions as an FDIC-insured, online only bank that offers a suite of personal banking products including one of the best free checking accounts currently on the market. The Discover Cashback Debit account features a smorgasboard of perks and goodies for customers, including:

  • No monthly maintenance fees, minimum balance to open or minimum daily balance
  • A nationwide network of more than 60,000 ATMs customers can use fee-free
  • Free replacement debit cards
  • Free online bill pay

Living up to its name, the Cashback Debit account grants 1% cash back each month on qualifying spending up to $3,000. What kind of spending counts? Just about everything, with the exception of ATM transactions, the purchase of money orders, loan payments or account funding, and peer-to-peer transactions. In addition, some purchases made over a third-party app or service (such as Venmo) may not qualify.

LEARN MORE Secured

on Discover Bank’s secure website

Member FDIC

Ally Bank Interest Checking Account

The Ally Bank Interest Checking Account may not offer a high APY (unless you can maintain at least a $15,000 balance), but the free online banking, bill pay, and checks — both standard and cashier — along with no monthly maintenance fee, required minimum balance or minimum deposit to open make it a great option for customers looking for a free checking account.

While no minimum balance is required to earn 0.10% APY, customers can earn 0.60% if they maintain a daily balance of at least $15,000.

Customers can use any of the 55,000 ATMs in the Allpoint® network for free, and Ally will reimburse up to $10 of non-network ATM fees each billing cycle. Other fees to watch out for include:

  • $15 stop payment fee
  • $25 per-day maximum overdraft fee
  • $20 outgoing domestic wire fee

LEARN MORE Secured

on Ally Bank’s secure website

Member FDIC

Evansville Teachers Federal Credit Union Vertical Checking

Credit unions such as Evansville Teachers Federal Credit Union might not command the same name recognition as nationwide banks, but they can offer rates and services for customers that are every bit as competitive as the big banks. Don’t let the name of this credit union fool you—anyone can become a member if they open a $5 savings account, which then allows you to open a Vertical Checking account with a minimum balance of $25.

This free checking account doesn’t charge a monthly service fee or require you to maintain a minimum balance, and in return gives you an APY of as high as 3.30% on balances up to $20,000, provided you fulfill the below requirements:

  • Make at least 15 debit purchases each month
  • Make at least one direct deposit into the account each month
  • Login to your mobile or online banking at least once each month
  • Opt in to receive eStatements
  • In addition to the high APY, meeting these requirements entitles you to $15 a month for reimbursing third-party ATM fees.

In addition to the high APY, meeting these requirements entitles you to $15 a month for reimbursing third-party ATM fees.

LEARN MORE Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

Bay State Savings Bank Kasasa Cash

This free checking account offers one of the highest APY rates around — up to 2.01%, provided you meet some qualifications — and coupled with its minimal fees, make it a great option for customers looking for free checking.

There’s no minimum amount needed to open the free checking account and, like the other accounts on the list, you don’t need to maintain a minimum balance or pay a monthly maintenance fee. That’s already good news, but where this account really shines is when you fulfill the following criteria each month:

  • Have at least 12 PIN-based debit card purchases
  • Receive electronic statements
  • Enroll — and log in at least once per cycle — to online banking (which is free)

For every month you meet the above qualifications, your balance up to $20,000 earns 2.01% APY. The other big bonus you receive is unlimited refunds on ATM fees that you pay when using a machine out of the bank’s network. If you don’t meet the criteria, you still don’t pay any fees on your account. However, you earn a much lower APY and will have to pay fees on out-of-network ATMs.

LEARN MORE Secured

on Bay State Savings Bank’s secure website

Member FDIC

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here