You Have Choices When Your CD Matures

If you have a CD reaching maturing soon, have you given thought to what you’d like to do with the funds in it? Deciding what path to take when a CD matures isn’t as easy as coming to a fork in the road. There are actually quite a few options available. It’s just a matter of weighing all those options, and then choosing the one that’s right for you.choices-when-your-cd-matures

Before exploring your choices, it’s important to note that your financial institution is required to notify you in advance before your CD matures. Once you receive that notification, you typically have only a week or two to decide what you’d like to do with your funds. If you don’t instruct your bank on what to do with your CD when it matures, they will make the decision for you. In most cases, the financial institution will automatically roll over the funds to another CD with a term length similar to your old one. But beware – the new CD may have a lower interest rate than your old CD. To prevent your money from ending up stuck in a CD with an undesirable rate, it’s a good idea to make your own informed decision about your funds when your CD matures, rather than letting your bank make the choice.

  • One option available to you is to deposit additional funds into the CD and then roll it over into a new term. Unless your CD is an “add-on” CD, your maturity period is likely your only opportunity to add funds to your existing balance. If you decide to go this route however, be sure that you know what rate you will receive for the new term before you agree to it.
  • If you have a big purchase on the horizon, it may be a good time to withdraw the funds. Typically, CD maturity is the only time you can pull your funds out of a CD without incurring an early withdrawal penalty. Taking your money out of a CD once it matures can be ideal if you have specific objective in mind, such as placing a down payment on a house or buying a new car.
  • If you think you may need the funds in the not-too-distant future, but don’t have an immediate need for them, your best bet may be to withdraw the money and place it in an interest-bearing savings or checking account. By taking the money out of your CD, it will no longer be tied up for a locked-in time period, and you’ll have the flexibility of withdrawing it without penalty whenever you’re ready.
  • Another option is to pursue a different investment vehicle, depending on your level of risk tolerance, and your financial goals. Other investment opportunities could include stocks or bonds, retirement accounts, or college savings plans. Just remember that it’s always a good idea to consult with a tax professional or an investment advisor before making any major investment decisions.
  • If you’d like to keep your money in a CD, another possibility is to choose an entirely different CD to roll your money into. You could go with a different CD at the same financial institution, or you could open a new CD at another bank or credit union. Sites like DepositAccounts.comAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon! and Nerdwallet.comAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon! can useful when comparing CDs across multiple financial institutions.
  • Depending how much money is in the maturing CD, you may want to consider splitting the funds and placing them into two or more new CDs with varying term lengths. This strategy is referred to as “CD laddering”. Generally speaking, CD laddering involves buying a series of CDs with different terms so they mature at different intervals. So over the course of the CDs’ various term lengths you’ll have access to funds on an ongoing basis, because you’ll have a CD regularly reaching maturity.

No matter where you are in your financial journey, if you have a CD reaching maturity it’s important to think proactively about your goals and immediate financial needs before determining what to do with your funds. A little planning goes a long way, and you’ll thank yourself later!


A Convenient One-Stop Option To Pay Bills

Imagine life without having to pay bills. Talk about heavenly bliss! But the painful reality is that almost all of us have to deal with bills. Some of us are better equipped to handle the stress and inconvenience of paying bills than others. But the good news is that automatic bill pay exists to help make the chore of paying bills a little easier.AdobeStock_145451274

Automatic bill pay – sometimes referred to as “online bill pay” or just “bill pay” – takes away the juggling act of remembering which bills are due when. It allows you to schedule your recurring payments online so they come directly out of your bank account when they’re due. Many banks even offer their own automatic bill pay systems, which allow you to view your various bills and schedule their payments in one central spot.

Think about that – no need to keep track of paper bills and making sure you pay them on time. No need to write out checks or purchase stamps and envelopes to mail them. No need to second-guess whether you actually included the invoice or the check in that envelope!

Timely bill payments, incidentally, are one of the biggest factors that make up your credit score. And because automatic bill pay helps you to pay your bills on time, it can have a major, positive impact on your credit report. By having your bills set up to be paid automatically on or before their due dates, you reduce the risk of late payments and resulting late fees – you just need to make sure you have enough money in your bank account to cover your scheduled payments

For this reason, when scheduling automatic bill payments, it’s a good idea to set up electronic alerts if they’re available. These notifications can inform you via email or text message when your payment is coming due, which can help you ensure you have sufficient funds in your account. And in most cases you can also set up alerts with your bank’s Online Banking system, and have them notify you when your account balance dips to a certain threshold.

From a security standpoint, payments made through automatic bill pay are also safer than check payments sent out through the mail. When you make an online bill payment, your sensitive personal and account information is encrypted, keeping it out of the hands of criminals. The same can’t be said of check payments. If a crook intercepts the envelope containing your check payment, they not only have access to your account information, but they’ll likely have your name and address as well.

One potential drawback of automatic bill pay however, is that some consumers may rely too heavily on it to manage their finances. In other words, they “set it and forget it”. When using automatic bill pay, it’s still important to monitor your scheduled payments to ensure the correct amounts are being paid at the right times.

Automatic bill pay can also be detrimental to your budgeting goals if you lose sight of what’s going on with your finances. Even if your payments are coming out of your account automatically, it’s still important to stay organized and on top of how much money is coming in and going out of your account every month.

Another thing to keep in mind that is that automatic bill pay might not be a good fit for bills that fluctuate heavily from month to month, such as credit card or utility bills. For instance, if you end up with a higher bill than expected one month, it could cause you to overdraw your account, leaving you with overdraft or insufficient funds fees.

Overall, automatic bill pay can a great tool to help you manage your bills and achieve on-time payments. It’s just important to remember that it isn’t an excuse to get lazy with your finances.


Switching Banks Can Be Easier Than You Think

Maybe it’s overbearing fees or lousy customer service. Or maybe you just landed a new job and have to relocate across the country. Whatever the reason, you’re faced with the need to switch banks.AdobeStock_63753131

Moving from one financial institution to another is almost like a juggling act. There are plenty of balls in the air that you need to keep an eye on as you shut down your old account and open a new one. That’s why it’s a good idea to map out a strategy in advance.

Here are some steps to follow to help make switching banks as painless as possible:

  1. Do your homework. Research what financial institutions would be a good fit for you. Choices range from a traditional bank or credit union to an online-only bank.


  1. Make your choice and open an account. Once you have an idea about what type of financial institution you’d like to work with, dig deeper. Will you need to maintain a minimum balance once you open the account? What kinds of fees can you expect? What interest rate do they offer on savings or checking accounts? Do they have a lot of ATMs you can use? Do they offer Online and Mobile Banking? Contemplating these questions will help ensure that you choose an account that best suits your needs. Once your choice is made, gather all of the documentation and information you’ll need to open the account. And don’t close your old accounts just yet.


  1. Order what you’ll need. When you open your account, don’t forget to place an order for things like checks and debit cards. The sooner you can get those and start using them instead of your old ones, the quicker you can cut ties with your old bank. You should also register for Online Banking if your bank offers it, and set up any automatic account alerts you’d like to receive via text message or email. And remember to download your new bank’s mobile app if you’ll be doing your banking on-the-go.


  1. Get some money into your new account. If you plan to use direct deposit, provide your employer with your new bank account and routing numbers, and find out how long it will take for the update to happen. It’s also a good idea to transfer some money over from your old account, but be careful not to move so much money over that you’re in danger of overdrafting the account or not meeting your old bank’s minimum balance requirements.


  1. Update online payment info. If you utilize online payment services like PayPal or Stripe, you’ll want to update the bank account info that’s tied to them so any future payments will come out of your new accounts. You should also compile a list of all the electronic payments you make – automatic or otherwise – and ensure that the payment details on those accounts reflect your new financial institution. If you were using bill pay at your old bank, you should set up all of those same automatic payments through your new accounts.


  1. Double check everything. Once you’ve covered all of your bases and are ready to close your old accounts – don’t. At least not yet. It’s a good idea to double check and confirm that your direct deposits are going into your new account as intended, that all of the checks you’ve written from your old account have cleared, and that all of your electronic payments are successfully coming out of your new account.


  1. Close out your old account. Once you can confirm that everything is A-OK with your new account, it’s time to cut the cord with your old bank. Any money that you have left in your old accounts should be transferred over to your new ones, and you should inform your old bank of your decision to close out the accounts. The Consumer Finance Protection Bureau recommends getting written confirmation that your accounts have been closed.

And if you’re concerned that switching banks might have a negative impact on your credit score, there’s no need to worry. Closing a deposit account – or opening one – will have no bearing on your credit report. Keep in mind though that abusing a bank account (for example, writing bad checks, or not repaying a negative balance) could prevent you from opening another bank account in the future, as this kind of activity is tracked and reported on by agencies like ChexSystemsAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!.

No matter what your reason for making the switch to a new bank, taking the time to plan ahead will help to make the move as easy and stress-free as possible.


Have You Considered an Add-On CD?

If you think you know your way around certificates of deposit (commonly referred to as CDs), here’s a twist to this savings product you may not be aware of – an add-on CD.add-on-cd

As a quick refresher, a CD is also known as a “time deposit” or a “term deposit” because it’s set for a certain period of time. The depositor can choose which term they want to go into. CDs are a great way to earn a competitive interest rate (rates for CD accounts are typically higher than traditional savings accounts or money market accounts) and know that the rate will remain in place for the entire duration of the CD term.

But what if you want to see your savings grow faster? Wouldn’t it be a shame if you came into some money and wanted to take advantage of a great CD rate you locked in 6 months ago? Well, if you opened a traditional CD, you’d be out of luck. Once you make your initial opening deposit with a traditional CD, you can’t add money to it during the CD’s term. But that’s not the case with an add-on CD. With an add-on CD, you can continue to pump money into the account throughout the locked-in time period.

As you can imagine, an add-on CD can be extremely helpful during a period of time when interest rates are expected to fall. For instance, say you opened a 24-Month Traditional CD last year, and you’d like to open another, but the interest rate has taken a nose dive. You could end up earning a much lower interest rate for those new funds compared to the money already sitting in your initial CD. If you had opened a 24-Month Add-On CD however, you could invest your additional funds there, and earn interest on them at the same higher rate you locked in at account opening.

An add-on CD can also be a good option if you don’t necessarily have a large amount of money to place in a traditional CD all at once. Maybe at the beginning you only have $1,000 to open the CD, but you know that you’ll have extra funds to devote to it in the coming months. Having one add-on CD can also be easier to manage and track than having your funds scattered across a multitude of CD products with varying expiration dates.

As is the case with traditional CDs however, it’s important to note that with an add-on CD you’ll typically be charged a penalty if you withdraw your funds before the CD matures.

At Bank5 Connect, we offer an add-on CD with a two year term, called the 24-Month Investment CD. This add-on CD requires a $500 minimum deposit, and after that you can add funds to it any time you’d like, in any amount. And all Bank5 Connect CDs, regardless of term length, are insured up to $250,000 by the FDIC, and insured past $250,000 by the Depositors Insurance Fund (also known as DIF). This means that at Bank5 Connect, your CD deposits are insured in full. To learn more about all of the CDs offered at Bank5 Connect, visit

For many people, an add-on CD can be a great way to save, but keep in mind that it’s always a good idea to consult with a tax advisor or financial professional before making any major investment decisions.

Are You Considering an Online-Only Bank?

Believe it or not, the roots of online banking stretch back to the 1980s. According to historical records, Bank of Scotland offered a service called Homelink in 1983 that allowed people to pay bills and transfer money via the internet. At that time, you could only hook up to the ‘net by using a landline telephone or a TV.considering-an-online-only-bank

We’ve come a long way since then, to the point where online-only banks like Bank5 Connect have made noticeable inroads in the banking world. Not having to go to a physical location to conduct your banking transactions is becoming more the norm than ever before.

So what in particular has motivated millions to go this route?

Convenience and flexibility. There’s no longer a need to get dressed, drive to the nearest branch, and wait in a teller line to deposit money into your account. With an online bank, you can use a mobile app to snap a photo of your check, even if you’re lying in bed in your pajamas! Plus, you don’t have to wait until a bank branch is open to conduct transactions or to check on your account activity. You can do that, and more, practically any time of day using a laptop, desktop, smartphone or tablet. It’s banking on your terms, where and when you want to do it.

Insured deposits. Most, if not all, online-only banks are insured by the FDIC. This means that deposit accounts at FDIC member online-only banks are covered in the same manner as accounts at their brick-and-mortar counterparts. FDIC insurance protects each customer’s deposits, up to $250,000 per financial institution. However, it’s possible for you protect all of your deposits, even in excess of FDIC limitsAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!. One way to accomplish this is to open an account at a Massachusetts-based online bank, like Bank5 Connect, that offers DIF insurance in addition to FDIC coverage. DIF (the Depositors Insurance Fund) insures any deposits above the FDIC limit.

Lower fees, higher interest rates. Because online-only banks typically have lower costs (as in no physical branches to maintain), they can pass their savings on to their customers. Fees are generally lower and interest rates on deposits are generally higher with an online-only bank than with a brick-and-mortar institution.

Some people are hesitant to move their money from a brick-and-mortar bank to an online-only bank due to the fact that they’ll have less direct contact with the bank and its employees. There can be a concern about not being able to walk into a branch and speak with someone when something goes wrong with an account. In order to alleviate this fear, it’s important to choose an online bank that offers strong customer support like extended phone support hours or a live chat feature. It’s also a good idea to read some reviewsAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon! from actual customers to get a sense of what call center hold times might be like, or how satisfied customers are with their overall ability to reach the bank.

Another common reservation people have about online-only banks is a fear about not being able to easily access their money. If you decide to go with an online bank that has no physical branches or dedicated ATMs, how will you make a cash withdrawal? To ensure you’ll have ample opportunity to withdraw your money as needed, you should thoroughly research the bank’s ATM policy. Some online banks are part of a national ATM network, meaning you can use any ATM in that network without incurring fees. Others will reimburse you for ATM fees. Bank5 Connect offers a mix of both. Bank5 Connect is part of the SUM ATM NetworkAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!, which is comprised of thousands of ATMs across the United States. In addition, Bank5 Connect will never charge its customers for using an ATM outside of the SUM Network, and will reimburse other banks’ surcharges up to $15 per statement cycle.

If the perks of online-only banking align with your lifestyle, it might be time to make the switch and find an online bank that best suits your needs. Just be prepared to spend more time in your pajamas!

What to Do With a Financial Windfall

What would you do if you won the lottery, or received a huge settlement or inheritance? It’s something most of us have happily dreamed about, but actually coming into a giant sum of money can be overwhelming and even a bit frightening. There’s the temptation to make big ticket purchases, pressure from family and friends to “share the wealth”, and fraudsters at the ready looking to scam you out of big bucks. So, what should you do with all that money? Here are some tips to consider when you find yourself faced with a financial

Keep calm. Let’s face it – it’s extremely tempting to want quit your job, or trade up for a bigger house when you suddenly have big bucks in the bank. But you’d be surprised at how easily some people overestimate their newfound wealth. Many lottery winners are shocked when they find out the amount of taxes that will be taken out of their winnings. And moving into a giant house can come with super-sized utility bills, increased property taxes, and massive upkeep costs – things people can easily forget about when they’re in a rush to buy. When you receive an unexpected sum of money, it’s important to refrain from impulsive decisions you could later regret. Rather than take any immediate steps, it’s essential to start thinking through your financial options, and prioritize which ones are most important to you.

Think long-term. As you’re weighing the various things you can do with your newfound financial freedom, it’s crucial to think further down the road than just buying a new sports car or some fancy jewelry. The National Endowment for Financial Education reports that an estimated 70% of financial windfall recipients lose the money within just a few years of receiving it, and you don’t want to meet that same fate. In order to help make your money last, it’s a good idea to consider putting some of it aside for your future. That could mean setting up a retirement account, creating a college savings account for your children, or establishing an emergency fund, depending on where your savings currently stand.

Pay up. While it’s important to plan for your future financial needs, it’s equally important to assess your current financial situation and obligations. If you have a lot of credit cards to pay off, now’s the time to do it. Credit cards typically have some of the highest interest rates out there, so the longer you keep that debt, the more you’re going to end up paying in interest fees. Likewise, if you have any unpaid bills, you should pay them immediately in order to avoid additional late fees or judgements against you. You should also evaluate any loans you currently have. Depending on the terms of your loans, and your current interest rates, it may make financial sense to pay them off if you don’t have a pre-payment penalty. Doing so could end up saving you a lot of money in interest.

Get advice. It’s very important not to “go it alone”. A newfound wealth comes with a lot of considerations, including investment opportunities and tax obligations. In order to ensure that you make the wisest decisions with your new money, and understand any potential risks associated with those decisions, it’s critical to consult with financial professionals that you trust. Depending on what you’re looking to do with your money, and what questions you have, it could be a good idea to meet with a tax advisor, an accountant, an investment manager, or even a finance lawyer. Just make sure you do your homework to find advisors you can trust.

Protect your cash. Coming into significant wealth can put a target on your back, especially if your financial windfall was broadcast to the public – like in the case of a lottery winner. For this reason, it’s very important for you to be vigilant, and on high alert for any potential scammers. Stay up-to-speed on popular scamsAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon! and fraud tactics, and protect your personal and financial information when you’re online or using a mobile device.

By refraining from impulsive decisions, and thoughtfully planning out your financial objectives with the help of trusted professionals, you will have the best chance of making the riches from your financial windfall last, and providing a secure financial future for yourself.

Need Help Establishing Credit?

Wouldn’t it be great if you could snap your fingers and you instantly had a solid credit history? The reality is that it takes time and effort to establish credit. But once you have good credit, it can open doors financially for you. Having good credit can mean the difference between getting approved or denied for a mortgage or car loan. And the stronger your credit, the greater your chances of getting favorable terms and interest rates on loans and credit cards.need-help-establishing-credit

But building credit can be a bit of a catch 22. A lot of credit card companies and lenders won’t grant you credit unless you have a proven track record of handling credit responsibly. This can make it a bit challenging for those who haven’t established a credit history yet.

Luckily, there are many ways to establish a foundation of credit to build upon. Here are some credit building tips you can use:

Take out a credit-builder loan. With this type of loan, the lender places the money being “borrowed” into a savings account on your behalf. You then pay off the loan through a series of monthly payments. Once the loan is paid in full, you gain access to the money in the savings account. Credit-builder loans are usually for relatively small amounts of money, making it easier to meet your monthly loan payments. The lender reports your payment history on the loan to the three national credit reporting agencies, so as long as you make your monthly payments on time, you’ll be building a positive track record on your credit report. These types of loans can be a bit hard to find, but a good place to look for one would be at a smaller financial institution, like a community bank or credit union.

Obtain a secured credit card. These types of credit cards are intended specifically for people with little or no credit. When you take out a secured credit card, you pay a deposit to the financial institution who then grants you a credit limit, which is usually equal to the amount of your deposit. Once the account is opened, the card works just like any other credit card. The only difference is that the financial institution has your deposit as a guarantee on the credit line. In other words, if you don’t make your payments, they will take the money out of your deposit. Like a credit-builder loan, the payments you make with a secured credit card are reported to the credit bureaus, helping you to build up a solid credit history if you make them on time. The point of a secured credit card is to build your credit to the point where you can qualify for an unsecured card — one that doesn’t require a cash deposit and has better benefits.

Look into opening a store credit card. Many popular retailers offer their own, private credit cards. While these cards can typically only be used to purchase items from the store issuing them, a plus side is that they usually have more flexible underwriting standards, meaning they are easier to get than a traditional credit card. These types of credit cards can be good “entry-level” cards, allowing you to build up a credit history before applying for a regular credit card. It’s worth noting however that they do typically have lower credit limits and higher interest rates than non-store credit cards.

Take out a student credit card. Like a store credit card, a student credit card is generally easier to get than a traditional credit card; that is, if you’re a college student. Credit card companies have been known to be pretty aggressive with targeting college students, due to their future earning potential. A college student can typically be approved for a student credit card even if they don’t have any credit, as long as they can show enough income or assets to cover the minimum monthly payments.

Become an authorized user on a credit card. If your parents or someone close to you is willing to do so, you could be made an authorized user on their credit card. An authorized user will typically receive their own card in their own name that they can use to make purchases, but financial responsibility for the account remains with the primary cardholder. So, as long as the primary cardholder makes all of the monthly payments on time, the authorized user will benefit by having the positive payment history reflected on their credit report as well. Just keep in mind that being an authorized user works both ways. In other words, if the primary cardholder is irresponsible with the card and fails to make payments on time, your credit could suffer as the authorized user. For this reason, it’s important to only be an authorized user if you completely trust the primary cardholder. You should review your credit report regularly to ensure payments on the account are being made, and if you find your credit is being damaged by the relationship, you should remove yourself as an authorized userAs a courtesy, you will be leaving and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of Come back soon!.

Co-sign on a loan. It’s generally pretty difficult to obtain a traditional loan without a solid credit history, as lenders are hesitant to extend credit to individuals who haven’t demonstrated they can pay the loan back. However, if you co-sign for the loan with someone who already has a good credit history, your chances of being approved will be much higher. A co-signer is basically someone who agrees to share financial responsibility for the loan. In other words, if you default on the loan and stop making payments, the lender will go after the co-signer for the money. Both parties are equally responsible for the debt. Because both of your credit reports are on the line, it’s extremely important to only co-sign with someone you have complete confidence in.

Be responsible with student loan payments. No one likes having to pay back student loans, but if you’re fresh out of college with no credit history, you can at least work them to your advantage. Like other types of loans, student loan payments are reported to the credit bureaus, so paying them on time can help you establish a solid credit history. Just be sure not to miss payments, because then they’ll start to damage your credit history. If you find that your student loan payments are so high that you’re having trouble making them, you might want to consider refinancing them to help reduce the monthly payment amount.

No matter which approach you choose, once you have credit in your name the key is to be responsible with it. By making all of your monthly payments on time, every month, you can be well on your way to building a strong credit history for your future.