347 Years to Double Your Money?

Check out this article from Motley Fool:

Double Your Money in 347 Years!

Just look at the going rates on savings accounts at some of the biggest banks out there. According to investmentguru30's research, Bank of America (NYSE: BAC) clocked in with a 0.2% rate -- the best out of the rates he looked at.

Patience, grasshopper. You're going to need it. At 0.2% interest, it will take 347 years before your money doubles. But watch out -- don't dare let your balance drop below the required account minimum or make a fourth withdrawal during the month (you're only allowed three for free). Make one fee-generating move, and you could wipe out a year's worth of interest -- a whopping $2 on a $1,000 balance after one year -- in a single moment.

Hope is not lost, however. Thanks to online savings accounts, like the ones offered through MoneyAisle, you can get a much higher interest rates on either your bank CDs or your Savings. Playing the stock market (especially lately) is risky, and it's important to have cash on hand. If you're going to have cash on hand, you should be sure that you're maximizing the return on your savings as much as possible. Try a savings account auction at MoneyAisle - banks battle it out to give you a great rate on your savings - any time. It's free, and there's no commitment to buy.

And you won't have to wait 347 years to double your money.

Federal Government May Create 'Bad Bank' as Part of Bailout

Check this out from Reuters:

The Obama administration is working on a plan to help stabilize the U.S. banking industry.

According to a source familiar with the government's thinking, it will include creating a "bad bank" to soak up distressed assets hurting banks' balance sheets, offering federal insurance for other problem assets, and injecting taxpayer dollars into banks in exchange for common stock.

According to Sen. Charles Schumer (D-NY), some experts think creating a "bad bank" to buy toxic assets could require as much as $4 trillion.

Say what you will about the Bush administration, but at least they could name things - ("Clear Skies Initiative!", "No Child Left Behind!", etc.)

"Bad bank"? That's supposed to inspire confidence? The Bush White House would've used the phrase "Magical Money Reallocation Puppydog Farm" or something.

We'd still be in an awful financial mess but, hey, puppydogs.

Now Offering Laddering Option for Bank CDs for Credit Unions

Another big announcement today:

MoneyAisle Now Offering Laddering Option for Bank CDs for Credit Unions

Here's an excerpt:

The first of its kind in the industry, MoneyAisle's CD laddering feature enables Credit Unions, as well as non-profits, financial planners, and businesses, to perform sophisticated, automated CD laddering across multiple durations in a single session across multiple FDIC-Member banks. The system runs simultaneous auctions for each of the chosen durations, and displays the round-by-round bids and constantly increasing rates until the highest rates available in the MoneyAisle network for each of these durations are achieved. At the end of the auction, MoneyAisle computes the optimal combination to maximize the overall APY of the ladder within the Credit Union's specified constraints.

"We found MoneyAisle to be very quick and easy to use. This provides a great alternative for our credit union to receive high yields with strong FDIC insured banks. Service and support has been excellent," said David Bieneman, Vice President and Chief Financial Officer of State Central Credit Union, a credit union based in Milwaukee, Wisconsin.

$100 Million in Bank CD Deposits

Big announcement from MoneyAisle HQ yesterday:

MoneyAisle Generates Over $100 Million in Certificate of Deposit Sales

You can read the entire story by clicking the link above, but I wanted to also note here the great milestone we reached in the fourth quarter of 2008 - over $100 million deposited into bank accounts through MoneyAisle's reverse auction technology - banks competitively bidding against each other to get consumers great rates on both bank CDs and High-Yield Savings accounts.

2008 was a great year for MoneyAisle, I can't wait to see what 2009 brings.

Economic Predictions for 2009

There are some scary predictions over at CNN/Money - several top thinkers in the financial sphere were asked what scenarios to expect in the year ahead. Here's part of what NYU professor Nouriel Roubini had to say.

For the next 12 months I would stay away from risky assets. I would stay away from the stock market. I would stay away from commodities. I would stay away from credit, both high-yield and high-grade. I would stay in cash or cashlike instruments such as short-term or longer-term government bonds. It's better to stay in things with low returns rather than to lose 50% of your wealth. You should preserve capital. It'll be hard and challenging enough. I wish I could be more cheerful, but I was right a year ago, and I think I'll be right this year too.

The truth is, over the past 10 years, you would have gotten a higher yield on FDIC-insured CDs over putting your money in the stock market. And when Roubini says "low returns", please keep in mind that through the miracle of compounding interest if you find CD Rates with a higher yield (through a service like MoneyAisle.com), you can make a tidy return on your cash investment - guaranteed growth as opposed to watching your savings crash and burn in the stock market.

I'm reminded of the tortoise and the hare fable - slow and steady growth wins the money race.

MoneyAisle in "Money" magazine

MoneyAisle received another bit of great media coverage this month - we're featured in the February 2009 issue of "Money" magazine (yes, I know it's not February yet. The issue is cover-dated February.)

The article isn't online yet, but if you subscribe or see it on the newsstand the cover story is "How to Thrive in a Bad Economy" - MoneyAisle is featured as a "cool tool" to help you pump up your interest rate on your savings.

When the article appears online you can be sure I'll link to it. Until then, here's an excerpt:

Little-known fact: To win certain customers, banks will occasionally offer better rates than their published deals. See what they'll do for you at new site MoneyAisle.com.

Obama's Inauguration Edition of What I've Been Reading

Is there any other news story today? Here are some interesting articles talking about our new President, Barack Obama, and the current economic crisis. Happy inauguration day!

From CNNMoney:

Obama has gone out of his way to tamp down expectations. He's noted in several speeches that the economy will likely get worse before it gets better. And even his top economic advisers say that the best his proposals (most of which are included in the House Democrats' $825 billion stimulus bill) can do is to create or save between 3 million and 4 million jobs. That's enough to keep the unemployment rate from getting worse by 2010, they estimate, but not enough to actually reduce it from where it is today at 7%.

From The New York Times:

Britain on Monday set the stage for a full takeover of its banking system. And now, Barack Obama is trying to figure out how to shore up this nation’s banking industry as its crisis snowballs.

Mr. Obama is going to have one heck of a first day on the job. Already, his aides have a bevy of ideas to sift through, ranging from having government buy banks’ troubled assets, to creating a “bad bank” to soak them up.

Politico:

Barack Obama boasted on the campaign trail that his administration would not be beholden to special interests, because his presidential bid was funded by small donations from regular folks.

But a Politico analysis of career contributions to the inner circle of the incoming White House — President-elect Obama, Vice President-elect Joe Biden and chief of staff Rahm Emanuel — finds some big special interests that have been investing in the three Democrats for years.

San Francisco Chronicle:

Today is rightly a day for pomp, circumstance and national celebration. But it's nice to see that President-elect Barack Obama has indicated that he intends to get to work within hours of his inauguration ball on the most pressing issue facing America today: the financial crisis.

Video: CD Laddering, Rate Comparison

We've put together a new video to highlight some of the advanced features registered users can access at MoneyAisle. Non-registered users can test-drive auctions for great rates on CDs and High-Yield Savings accounts, but if you register first you have the option of checking out our CD Laddering feature - which lets you split deposits across several FDIC-insured accounts - or Rate Comparison - which lets you run multiple auctions for CDs or savings account and compare rates.

Remember, registration is free and we never spam.

You can find out more here, or you can watch the video above. Enjoy!

New Years Resolution: Save More, Spend Less

A popular New Year's Resolution, besides "exercise more", is to save more money and to spend less. With the economy currently in flux, it's an excellent time to start on a savings habit if you haven't already.

But where to begin? It's very easy to throw out a blanket generalization like "Save More, Spend Less" but it's the details of the saving and spending - the little expenses that add up over time - where you'll see a difference.

Every individual probably has different expenses that could be trimmed, so I'm just going to throw out some examples. If you have some examples of your own, I'd love to hear them.

Bottled Water - If you stop buying bottled water and invest in a reusable plastic bottle (an initial cost of, say, $20) you'll make that savings up tenfold over time.

Coffee - I know, the convenience of stopping at Starbucks over brewing your own cannot be overstated. All I'm asking you to do is calculate how much per month you're spending on those venti money-suckers and then weigh that against the time it would take to brew some up in the coffee maker.

ATM Fees - This is an obvious one, yes. But again, it's the little conveniences which add up over time. "It's only $1.50", you may say at the time. If you plan ahead, however, you can avoid these fees on multiple occasions - which can really add up.

I'll have more ways to save in 2009 (and beyond!) in the days and weeks ahead. Happy saving, all.

New Feature: Accept your Test-Drive Rate for Savings Account and CD Rates

MoneyAisle has a new feature I'd like to share with all of you.

When reading about the company on message boards or other blogs, one of the questions that would come up often is some version of: "Are the Test-Drive auctions actually real auctions?" When possible, I would answer yes, but questions would still persist regarding the rates.

We've done some modifications to MoneyAisle that should put those questions to rest for good.

Starting now, if you're not registered or signed in to MoneyAisle and you run an auction for Savings Account or CD Rates, you'll be able to accept the Test-Drive rate at the auction's end. All you need to do after the auction is register or sign-in, and you'll be taken to a screen revealing the name of the winning bank as well as the option to accept your rate.

Please keep in mind that registered users have access to other cool features such as CD Laddering and Rate Comparison, so registering for an account first gets you the most out of the MoneyAisle experience.

Check it out for yourself. It's another way MoneyAisle is making the search for great rates on cds and high-yield savings accounts even easier.

Update: Here's a new video on how MoneyAisle auctions work:

Great CD Rates: MoneyAisle in the News

MoneyAisle has picked up some great coverage in the media recently. I wanted to use this space to highlight some of it for you all.

The Wall Street Journal:

At MoneyAisle.com, more than 100 small and midsize banks compete for consumer deposits through live auctions. When a customer comes to the site and asks for the terms of a CD or high-yield savings account, the banks bid against one another -- through automated auction software that runs on the Web site -- to win the deposit. The cost is free to consumers, and you don't have to commit to investing anything before you see the results of an auction. Participating banks, which are all FDIC-insured, are screened by an independent bank-rating agency to filter out the riskiest banks.

MSN Money:

Banks really, really, really want your money. And that's good news for savers in an otherwise dismal interest-rate environment.

For an interesting experiment, you might try MoneyAisle, which auctions off your deposit to the highest-bidding bank. It's fun and doesn't require a commitment.

It's 2009 - Do You Know Where Your Money Is?

Welcome to 2009!

Those of you who followed finance news in 2008 (as well as those of you who didn't) may have noticed that the U.S. economy was a bit, well, not great over the past year. The stock market took some big hits and a lot of people's hard-earned savings was put in jeopardy as a result.

I just wanted to start my inaugural blog of the new year by once again reminding everyone that the safest way to protect your investments is through FDIC-insured CDs. CDs offer a higher rate than traditional savings accounts, with the caveat that the money is held by the bank for a fixed term (anywhere from 3 months to up to five years) while offering a fixed rate of interest.

I don't need to tell you that one of the best places to get great rates on CDs is MoneyAisle, but I'm going to tell you anyway.

When your savings is held in FDIC-insured CDs there's no danger of a market crash wiping out 60% of what you had saved - the money percolates in the account, collecting interest and paying you a great return on your investment - stress-free.

If you're currently sweating over what the stock market is doing to your savings, it may be time to look into CDs. As Mukesh told us last month, if you had put your money in high-interest-rate-paying CDs over the past 10 years and rolled them over to yet more high-interest-rate-paying CDs at their maturity, you are likely to have earned a completely risk free 5%+ on an annualized basis, trumping the under 2% a diversified portfolio put together by a fund manager would have gotten you.

Happy New Year, everyone. And Happy saving!