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Uncategorized

National Credit Card Fraud Survey

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.

Credit card fraud regularly steals the headlines and scares us. From big data breaches (like Home Depot and Target) to regular warnings from credit card companies, fraud seems to be constantly around us and in the news. However, a recent national survey conducted by MagnifyMoney, along with Google Consumer Surveys, shows that although the incidence of fraud is indeed high, most people who experienced fraud have never lost a dime. Credit card companies are promising $0 liabilities for fraud, and according to our survey, they seem to be delivering.

Here are the key findings:

  • 22.1% of consumers have experienced credit card fraud.
  • Account take-over is the most common form of fraud. 93% of all fraud is account, not identity take-over.
  • 96% of consumers never had to pay a dime. The credit card company took care of the fraud an absorbed any financial loss.
  • Consumers were very satisfied with the service received during the fraud. 94.2% of consumers polled said that the service was excellent (72.9%) or good (21.3%).

Although fraud does occur frequently, the financial impact on consumers is limited.

Nick Clements, the Co-Founder of MagnifyMoney (and a former Risk Director who ran fraud departments of credit card companies) noted:

The risk of credit card fraud continues to increase, and consumers need to remain vigilant. However, our approach to fraud needs to change. We need to recognize that fraud will probably happen to us at some point, and preventing fraud completely is out of our hands. All it takes is a crooked bartender or a breached megastore and we are at risk. More importantly, we need to focus on early detection and reporting of fraud to our credit card companies. Because of the $0 liability promised by most credit card issuers, a fraud that is reported on time should cost the consumer nothing. Our effort should be focused on early detection and rapid reporting of any credit card fraud. The good news: there are plenty of tools out there (most of them free) that can help consumers detect fraud early and avoid financial loss. Despite the many grim headlines, credit card fraud should not be one of our biggest worries.

The Difference Between Account and Identity Take-Over

An account take-over occurs when a fraudster steals the details or the actual plastic of an account that is already open. The fraudster will then use that information (or card) to start making purchases. This is the easiest type of fraud to fix: just close the account and re-issue the card with a new number. And that represents 93% of all fraud committed, according to this survey.

A more difficult type of fraud to deal with is identity take-over. This occurs when your Social Security and other personal information is stolen, and the fraudster starts opening new accounts in your name that you don’t know about. You can try to prevent that type of fraud by ensuring that you protect your Social Security number. You can detect that type of fraud by signing up for a credit monitoring service and keeping a regular eye on your credit report. If you do end up becoming an identity theft victim, you should use IdentityTheft.gov, a government website, to manage the process. (Note: If you sign up for a credit monitoring service, you would likely have access to an identity theft case management team who will help you through the process).

In summary:

  • Account take-over is the most common form of fraud. But it is also the easiest to resolve.
  • Identity take-over is much more difficult to deal with, but does not happen as often. You need to pro-actively monitor your credit to ensure you are aware of a potential breach.

Chip & Signature: And Who Does It Help?

Millions of Americans have been receiving new credit cards with chips, for increased security. In our survey, 86% of Americans now have some or all of their credit cards with chips. However, chips exist to protect the banks rather than the consumers. The fraud liability is with the banks, not the people using the credit cards (so long as the consumer reports any fraud on time). Chips will help to reduce some fraud in physical stores. But it is not useful for online and mobile commerce, where the physical plastic is not used.

In addition, there have been many complaints about the increased transaction time of chip cards. 20% of those surveyed complained that chip cards are “painfully slow.”

What Can A Consumer Do?

MagnifyMoney has published a free Credit Monitoring and Identity Theft Guide. This guide can help you create a strategy to reduce the risk of identity theft happening, to identify fraud as soon as it does happen and to make it as easy as possible to resolve any fraud that does happen on your account.

And make sure you check you statements regularly. In our survey, 34.3% of consumers found out about the fraud by looking at their statement. With more and more people signing up for e-statements, it is too easy to ignore the details. But consumers need to stay vigilant and remember: so long as they catch it and report it quickly, they should have nothing to worry about.

This survey was commissioned by MagnifyMoney and conducted by Google Consumer Surveys. 3,496 people nationally were questioned via the internet and their mobile phones. Of those sampled, a nationally representative sample of 594 people who had experienced credit card fraud were given the questions referenced in this article. You can read more about the methodology of Google Consumer Surveys here.

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.

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Reviews, Strategies to Save, Uncategorized

American Express® Personal Savings Account and CD Rates Review: A Solid Choice for Online Banking

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.

What you need to know about the American Express savings account

American Express Savings Account Features

APY (%)

1.70% variable

Minimum Deposit Amount

$0

Account Minimum

$0

Permitted Monthly Withdrawals

Up to 6

Annual Fee

$0

FDIC Insured?

Yes

Mobile App?

No

Transfer Time

Deposits will be available within five business days. Transfers from savings to a checking account take one to three business days.

In an American Express Personal Savings High Yield Savings account, your money earns 1.70% APY. It isn’t the highest APY you can currently earn from an online savings account listed on our site, but it’s still well above average. The account charges no monthly fee and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account. If you’re concerned about safety, know that the FDIC insures your deposits of up to the legal limit.

The account appears to be a great option for savers who want the flexibility of earning a high interest rate on a large sum without the withdrawal restrictions of a certificate of deposit (CD).

How the American Express savings account works

The savings account compounds interest daily. It’s current APY 1.70%, and amount earned is credited to your account on your monthly cycle date. The rate is variable, which means that American Express can raise or lower the interest rate at any time without notice to you before or after the savings account is opened.

Account holders must fund the account within 60 days, which you can do by setting up a bank transfer or direct deposit to the savings account. If you prefer a physical method, you can send a check.

Federal law mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. This applies consistently across savings accounts.

What we like about the American Express savings account

  • High APY: The account’s 1.70% APY is better than what you would earn by putting your money in the accounts offered by most brick-and-mortar banks. In fact, it’s within 0.3% of the highest-yielding savings accounts. While there could be higher rates available elsewhere, this account remains a solid choice based on yield.
  • Automatic savings: It’s easy to make saving automatic when you have an online savings account. With the American Express Personal Savings account, you can easily set up a recurring deposit to pull funds from an external savings or checking account. To make your saving automatic and without emotion, you can even have a portion of your paycheck directly deposited to the account.
  • Spending discouraged: With your money in an online account like the American Express Personal Savings account, you can get your cash only after making a transfer to an external checking account to which you have debit card access. The minor inconvenience could be just enough to keep you touching the account and making unnecessary withdrawals.

What we don’t like about the American Express savings account

  • No ATM card, no checks, no debit card: Not having card access is great when you need to prevent yourself from spending your savings. But the hassle of setting up and making an Automated Clearing House (ACH) transfer from your online American Express savings account can be problematic if you need immediate access to your funds. Also, the account terms state that transfers can take one to three business days for funds to become available in your checking account. If you’re worried about this, there are alternative high-yield accounts you can use that offer an ATM card linked to the account.
  • Variable APY: The annual yield American Express is offering on this savings account is high at 1.70% APY, but the bank can change that rate at any time and for any reason. If you’re looking for a more predictable rate of return, consider a certificate of deposit. CDs might not offer competitive yields, but you will know exactly what your return will be.
  • Limited withdrawals: Because this is a high-yield savings account, Federal law mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. Some savers have a separate account for emergencies in case they max out their savings withdrawal but still need immediate funds.

American Express vs. top online banks

American Express Savings vs. Other Online Savings Accounts
Vio BankBarclays BankMarcus by Goldman SachsAmerican Express
APY1.85% 1.70% 1.70% 1.70%
Minimum Deposit Amount100nonenonenone
Account Minimum1000.01nonenone
Permitted Monthly Withdrawals6666
Annual Feenonenonenonenone
FDIC Insured?YesYesYesYes
Mobile App?YesYesYesNo
Deposit SpeedDeposits will be made available in two to five business daysDeposits will be made available within five business daysDeposits will be made available the next business dayDeposits will be made available within five business days

As indicated earlier, the American Express Personal Savings account offer is strong, but it’s not the best available. To see how it compares, we enlisted MagnifyMoney’s team to shed light on some national, online-only banks with a health rating of a B or better and with the highest APYs on savings accounts — as listed on DepositAccounts.com, another LendingTree site. If there was a tie, we chose the bank with the lower required deposit. Here are a few alternatives to the Amex personal savings account.

Vio Bank-MidFirst Bank – High Yield Online Savings Account, 1.85% APY, $100 to open (no ATM card)

The Vio Bank High Yield Online Savings Account is a solid choice for savers. The high APY and low minimum deposit make this account extremely attractive not only for savers but investors as well, as the interest rate outperforms most CD rates available at competitive banks.

The ACH transfers seem to take little time – between two to five business days – and you are limited to six withdrawals per billing cycle, but the positives outweigh the negatives. It isn’t commonplace to find an online savings bank with an app but Vio Bank delivers, all without charging monthly maintenance fees.

SEE DETAILS Secured

on Vio Bank’s secure website

Member FDIC

Barclays Bank – Online Savings Account, 1.70% APY, no balance to open, no monthly maintenance (no ATM card)

Barclays Bank, one of the largest in the world, seems to offer an account that competes against the best of the other online banks. A high APY and no minimum account balance – not to mention no balance required to open – make this an attractive choice.

The Barclays landing page for this account makes it easy for you to set savings goals and open the account. The APY may only be slightly higher than the American Express Savings account, but the ease of use and customer service give Barclays a distinctive edge.

SEE DETAILS Secured

on Barclays’s secure website

Member FDIC

Marcus by Goldman Sachs – High-Yield Online Savings Account, 1.70% APY, no minimum deposit (no ATM card)

Savers can earn a competitive 1.70% APY in their Marcus by Goldman Sachs® High-Yield account, making deposits up to $1,000,000 per account. The account needs to be funded within 60 days via transfer, direct deposit, check or wire. Goldman Sachs Bank USA doesn’t charge any fees or service charges.

Like with most accounts of this type, there isn’t any ATM access, and savers will need to withdraw their money via ACH transfer, wire transfer or check. Still, the account allows high balances and boasts a healthy APY, making it a smart choice – one that appears to outpace the American Express account.

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

American Express CD Rates

These CDs are great for those who don’t have a lot of money to deposit. The rates are slightly lower than the best CD rates available, as listed on our site, but the ease of access keeps them attractive.

Term

APY

6 months

0.40%

12 months

0.55%

18 months

1.95%

24 months

2.00%

36 months

2.05%

48 months

2.10%

60 months

2.15%

CDs from American Express do not require a minimum deposit amount. You’re free to deposit as little or as much as you want to begin earning interest on any of its CD terms. This is great for individuals who don’t have a lot of money to deposit in CDs offered by other online banks. The downside is that you won’t be receiving as high of an APY as you could at other online banks.

How CDs offered by American Express work

American Express offers terms spanning from 6 months to 5 years on its CDs. Interested is credited on a monthly basis and compounds until the CD matures. You can choose to have the interest transferred out of the CD and into the American Express Personal Savings Account on a monthly basis, transferred into a linked account, or mailed to you monthly, quarterly or annually via a check. If you touch the principal, however, you’ll incur an early withdrawal penalty. The penalty is based on your CD’s term:

  • For CDs with a term of less than 12 months: 90 days’ worth of interest
  • For CDs with a term of 12 months, but less than 48 months: 270 days’ worth of interest
  • For CDs with a term of 48 months: 365 days’ worth of interest
  • For CDs with a term of 60 months: 540 days’ worth of interest

If you’re able to keep your principal and interest within the CD, you’ll receive notice, either by mail or email, that your CD is about to mature in 10 days. If you don’t tell American Express that you do not wish to renew your CD, it will automatically be renewed for the same term unless the bank no longer offers that term. You can call American Express any time before your maturity date to tell them that you do not wish to have your CD automatically renewed.

Online banks vs. brick-and-mortar banks

Online banks have been experiencing growth that outpaces that of their physical counterparts not only because of the rise in mobile banking among consumers due to convenience, but also because the online banks can offer more benefits as they don’t have to deal with as many overhead expenses as brick-and-mortar banks do.

A 2017 study by DepositAccounts.com, another subsidiary of LendingTree, showed the annual percentage yield that internet banks offer on savings accounts was more than four times of what brick-and-mortar banks or credit unions offer.

Simply put, the main benefit of putting your money in an online savings account is your money does more for you than it might in a traditional savings account. In its 2017 study, DepositAccounts provided an example based on the average APYs in certain savings categories: If a saver were to put $100,000 in a savings account and leave it alone for 10 years, he or she would earn $8,338.79 at an online bank versus $1,747.04 in a brick-and-mortar bank and $1,895.28 in a credit union. This test assumed a fixed APY.

Overall Review of the American Express Personal Savings Account and CDs

Overall, the American Express Personal Savings Account is a solid, high-yield online savings option. The interest rate it offers is high, and the features of the account are comparable to other online banks’ savings accounts. The account also carries the cachet of the American Express name. While there are certain aspects of the Personal Savings account that could be improved, other online banks appear to encounter similar obstacles.

American Express CDs, when compared against those by other banks, don’t quite measure up. The interest rates of the 6-month and 12-month CDs are nowhere near the best rates offered by other online banks, as seen in our rankings, and the rates on the 18-to-60-month CDs fall short of the other rates offered. The only feature that makes American Express stand out from most of the other online banks is that it doesn’t require a minimum deposit to open an account and start earning interest. If you’re not quite ready to deposit a huge chunk of money into a locked account, you may want to start out small with one of the CDs offered by American Express.

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.

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Uncategorized

Checking vs Savings Accounts: What Are the Biggest Differences?

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.

There’s no doubt that Americans rely on banks to better manage their savings. In fact, the average American household has $175,510 worth of savings in bank accounts and retirement savings accounts, according to our recent analysis.

The primary bank account vehicles for consumers are checking and savings accounts. Both give financial consumers a protective place to park their money, yet each are best used for different purposes.

While there are multiple differences between the two types of consumer bank accounts, the primary difference between checking vs savings accounts can be found in the way each account is structured.

Checking vs. savings accounts: Key differences

The differences between checking and savings accounts go deeper than basic saving and spending. Via the chart below, let’s take a deep dive on both types of bank accounts and examine what each does effectively, and how they vary from one another.

 SavingsChecking
Best used for Cash you want to keep safe but still take advantage of higher interest rates; Short-term expensesDaily spending needs
Minimum balance requirementUsually no minimum required for basic savings accounts. Basic checking accounts rarely require a minimum deposit amount, but may charge a maintenance fee if you don’t keep a certain amount in your account.
Interest1.52% APY average for online banks0.19% APY on average overall
Typical fees-Excessive withdrawal fee
-Overdraft fee
-Overdraft fee
-Monthly maintenance fee
Withdrawal limitsLimited to six withdrawals per month or you an risk excessive withdrawal feeNo limits on numbers of transactions per month typically

Let’s flesh out the similarities and the major differences between checking and savings accounts, using the primary chart topics listed above:

Usage. Bank savings and checking accounts exist for different reasons.
Savings accounts are designed to save money over a long period of time, enhanced by interest paid to the customer by banks and credit unions, for the right to have their money held on deposit. Savings accounts are not designed to be used on a daily basis – they’re accounts built for the long haul.

Checking accounts are designed for everyday usage, to pay bills, to spend on household needs like food, clothing, day care or any consumer financial expenses the checking account holder must cover. The checking account acts as a financial intermediary for the consumer, who uses the account to handle financial transactions and to both receive and disburse money.

Minimum balances. Savings and checking accounts differ in minimum balance requirements. While most bank checking accounts don’t require a minimum balance, and most banks don’t require a minimum deposit for basic deposit savings account, certificates of deposit and money market accounts are a different story. For example, some money market accounts may require a minimum deposit of up to $2,500 to open an account.

Interest payments. Banks can pay interest for both savings and checking accounts, but typically savings accounts earn higher rates. In early 2019, for example, the average bank checking account pays up to 0.81%, according to the U.S. Federal Deposit Insurance Corporation (FDIC) . It’s worth noting that many banks don’t pay interest on checking accounts anymore, but online banks are more likely to do so.

Meanwhile, the average bank savings account pays up to 0.84%, according to the FDIC. You can easily get rates above 2% APY if you’re willing to check out online bank offerings.

Typical fees. The “fee factor” between saving and checking accounts matters, too.

By and large, banks don’t charge high fees for basic savings deposit accounts – they can expect to pay a nominal account opening fee of $25 and a monthly maintenance fee of around $5. Also, banks may charge account minimum fees for money market and CD accounts. Many banks are actually doing away with basic savings accounts fees — check with your financial institution and see if they charge a savings account fee. If they do so, ask them how you can waive the fee – they’ll likely have options for you to do so.

Checking account fees can really stack up, however. In the normal course of business, checking account maintenance fees, minimum balance fees, overdraft fees, return deposit fees, ATM fees and paper statement fees can eliminate any gains your making from the nominal interest rate paid out by banks.

It’s always a good idea to talk to your bank directly about eliminating checking account fees, too. For example, agreeing to overdraft protection can help you curb pricey overdraft fees and agreeing to have your monthly statement presented online can eliminate paper statement fees.

Online bill pay. Bank checking accounts now consider online bill pay as a basic service for checking account customers, including mobile bill pay options. Bank savings accounts, which don’t want you dipping into account savings, don’t offer online bill payment for customers, although customers with a savings account can transfer funds into a checking account to cover bills.

Types of savings accounts

Savings accounts are designed specifically to do what their names suggests – save money. The amount of money saved depends on the customer, but a bank savings consumer can choose from three main types of saving account options:

A standard savings account is a type of deposit account that offers a higher interest rate thank a checking account typically.The standard limitation with savings is that you are limited to six withdrawals or transfers per month, or risk getting hit with fees.

CDs are savings vehicles designed to hold money for a longer period of time than traditional savings accounts, and frequently pay higher interest than deposit accounts. But they require you to typically lock up your funds for set periods of time and often charge penalties if you withdraw the funds before the term is up.

Lastly, money market accounts pay consumers the highest interest rates, and require a significantly higher initial account deposit than with other deposit accounts.

Types of checking accounts

Checking accounts are designed for an alternative, yet equally important purpose — to act as a financial tool to manage daily living expenses, like bill-paying, grocery shopping, recreational spending and other consumer financial needs.

As opposed to savings accounts, which are built for the long haul, checking accounts are designed to be used on a regular basis.

Checking vs. savings: How to choose

While bank checking accounts and savings accounts do have differences, especially on spending versus saving money, the best approach is to open both accounts with your financial institution.

Aside from saving money on fees (banks routinely cut some fees if you have active checking and savings accounts with them), you can transfer money between the two accounts, have a designated account for spending and a dedicated account for savings at the same financial institution, and tie your basic spending and savings needs into one neat bundle.

That’s a win-win scenario for any bank consumer.

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.