Personal Finance Blog By MoneyRates - April 2008
April 30, 2008
Many financial analysts have been stating in recent news stories and interviews on CNBC that in today's economy consumers cannot keep up with inflation by keeping their money in savings accounts. The typical quote refers to savings rates below 2% and inflation rates of 4% or higher -at which point a consumer would be effectively losing 2% or more of their savings a year just to keep up with higher prices and the pace of inflation. However, an important component of their formula that is not highlighted in the analyst's discussions is that they are invariably quoting the national average on savings and not referring to the type of savings rates an online investor could utilize. For instance, over the last year when the inflation rate topped 3.8% an online investor could have easily returned over 5.00% in a variety of money market accounts, checking accounts, savings accounts, and one year CDs offered by leading online banks like Countrywide Bank, EverBank, IndyMac Bank, Huntington Bank, and One United Bank. And those are just a few of the large number of banks who have been offering over 5.00% APYs or even 4.00% APYs on deposit products over the last year. A period of time during which the national average on a savings account would have been much lower after factoring in the thousands of banks that pay depositors very low rates. While it is certainly true that the American consumer is facing an uphill battle keeping up with the rate of increase in food and energy costs, the differential between the inflation rate and savings rates is not as dramatic as widely quoted if consumers can when save money at 4.00% and higher and not at the assumed national average of 1.50% and lower. Listed below are links for this week's highest bank savings rates:
April 25, 2008
Analysts at CIBC World Markets are forecasting gas prices as high as $7 a gallon within four years with estimated crude oil prices of over $200 a barrel. The shocking scenario is even more alarming because CIBC analysts were mocked for their forecast a couple of years ago of $100 a barrel (when the current prices were below $40) and it turns out their forecast was accurate. Even at today's gas prices a $100 fill-up will not be an uncommon event for SUV owners so it is difficult to imagine the effect on the American consumer of prices double where they are today. Fortunately, there are a couple of sources on the internet for saving money at the pump by updating in real time the changes in local markets at gas stations. Analyzing gas prices in the ten largest cities in the United State reveals that consumers on average could save $0.12 per gallon at a station within 10 miles of their home by using an online resource. Several online gas price update sites are listed below:
Gaspricewatch.com - An interactive map allows visitors to scroll around their town and to see current prices. The site relies on spotters to update prices in local markets. Most prices seem to have been updated within 48 hours.
Gasbuddy.com - This site is menu-driven and visitors can find the lowest gas price in their metropolitan area through the menu system. The basic menus only include stations with prices updated within the last 24 hours.
Fuelmeup.com - This site is also menu-driven and will report the lowest gas prices in your area sorted by city, state, or zip code. The site gives visitors the address of the gas stations, but does include an interactive map for easy navigation help.
April 22, 2008
Crude oil futures set a new intra-day record today of $119.86 a barrel after closing at a record close Monday of $117.48. In some cities gasoline is over $4 a gallon while the national average is a record high of over $3.50 a gallon. Analysts are quoting oil supply worries and a weak dollar as the main reasons for the prolonged increase in gas prices. Consumers, who feel the costs of higher gas prices more than anyone, do have a way to benefit from higher gas prices without aiding the oil companies and Middle Eastern countries who are the ones benefiting from the extraordinary prices. EverBank, a bank based in Jacksonville Florida, is offering multi-currency investments whose return consists of the appreciation of the currencies of oil-producing countries versus the US dollar and a fixed rate of return. If the currencies in the EverBank investment fall in value versus the US dollar then investors can lose principal. The fixed portion of the investment varies from 2% to 3.79% depending upon the currencies involved. An investor in one of the petrol-based currency investments can benefit from an increase in oil prices without investing in the oil companies or a Middle Eastern countries who are both widely viewed by the American consumer as profiting greedily at the consumer's expense.
More details about the EverBank multi-currency investments including online applications are here.
April 21, 2008
The IRS has made the following information available on their website IRS.gov regarding the schedule of rebate payment checks for taxpayers who filed their 2007 tax return by April 15, 2008:
Stimulus Payment Schedule for Tax Returns Processed by April 15
Economic stimulus payments will be issued according to the last two-digits of the main filer's Social Security number. People who use direct deposit also will be among the first to receive the payments starting May 2. Paper checks will be put in the mail starting May 16.
REBATE PAYMENT BY DIRECT DEPOSIT
Last two SSN digits:
00 through 20 processed May 2
21 through 75 processed May 9
76 through 99 processed May 16
REBATE PAYMENT BY PAPER CHECK
Last two SSN digits:
00 through 09 mailed by May 16
10 through 18 mailed by May 23
19 through 25 mailed by May 30
26 through 38 mailed by June 6
39 through 51 mailed by June 13
52 through 63 mailed by June 20
64 through 75 mailed by June 27
76 through 87 mailed by July 4
88 through 99 mailed by July 11
People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. A return must be filed by October 15 in order to receive a stimulus payment this year. See the online calculator for an estimate of the amount you will receive.
A small percentage of tax returns will require additional time to process and to compute a stimulus payment amount. For these returns, stimulus payments may not be issued in accordance with the schedule above, even if the tax return was processed by April 15.