TIME Personal Finance

The Richie Rich Effect: Kids Cash In On Improving Economy

A new study shows children are receiving larger allowances from their parents.
A new study shows children are receiving larger allowances from their parents. Jamie Grill—Getty Images

In this economy? Well, yeah

Your kids are demanding a raise, and you’re probably going to give it to them.

So says a new study that shows children are receiving increasingly large allowances from their parents, partly as a result of the improving economy, it seems.

While the percentage of parents giving an allowance of up to $10 a week fell from 77.3 percent in 2011 to 68.4 percent in 2013, the percentage of parents giving between $11-$20 or between $21-$30 jumped sharply, according to an annual Parents, Kids & Money survey, Reuters reports.

And some kids seem to be rolling in dough. Four percent of parents gave between $41 and $50 a week in 2013, nearly quadruple the number from the 2011 survey—and more than one percent of parents are handing out between $91 and $100 a week.

So are your kids getting above or below average allowances? A 2012 survey by the American Institute of CPA’s shows eldest children received an average of $16.25 each week.

The allowance increase could partially be attributable to families feeling more stable in the post-recession years, or it could be that kids are paying for more things they need, like clothing, for example, Reuters reports.

Others suggest there might be a social factor at play. Humorist Dan Zevin told Reuters his son had been influenced by what his friends had been given. “The only thing that matters to your kid is what Richie Rich’s parents are giving down the street,” he said.

Just hope the kids don’t ask for a bonus.

[Reuters]

TIME Personal Finance

Nearly Half of America Lives Paycheck-to-Paycheck

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The economic picture is looking brighter these days. The federal government announced Thursday that economic growth had picked up to its fastest pace in two years, while employment growth over the past five months has averaged a healthy 185,000 new jobs. But as evidenced by a report out Thursday from the Corporation for Enterprise Development, nearly half of Americans are living in a state of “persistent economic security,” that makes it “difficult to look beyond immediate needs and plan for a more secure future.”

In other words, too many of us are living paycheck to paycheck. The CFED calls these folks “liquid asset poor,” and its report finds that 44% of Americans are living with less than $5,887 in savings for a family of four. The plight of these folks is compounded by the fact that the recession ravaged many Americans’ credit scores to the point that now 56% percent of us have subprime credit. That means that if emergencies arise, many Americans are forced to resort to high-interest debt from credit cards or payday loans.

And this financial insecurity isn’t just affected the lower classes. According to the CFED, one-quarter of middle-class households also fall into the category of “liquid asset poor.” Geographically, most of the economically insecure are clustered in the South and West, with Georgia, Mississippi, Alabama, Nevada, and Arkansas being the states with the highest percentage of financially insecure.

TIME Retirement

The Problem With President Obama’s ‘MyRA’ Savings Accounts

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Expanding savings opportunities makes sense. But a big issue is whether people have the means to use them.

To better enable Americans to save for retirement, President Obama said he would order a new “starter” savings plan called MyRA geared at low-income households. It’s a fine idea. But as with any personal savings account, you must be able to fund it for it to matter. That may be the biggest problem with the program.

Little is known about these new accounts. They would function like a Roth IRA, allowing savers to put in after-tax money that would then grow tax-free. They’d be available through your employer to anyone who does not have an individual retirement account or work for a company that offers a traditional pension or 401(k) plan. That comes to about 39 million households.

The big advantage is that you could open a MyRA with as little as $25 and make contributions of as little as $5, creating a regular savings opportunity that most low-income households have never had. Typically, plan administrators require $1,000 or more to open an account. MyRAs would also benefit from a no-fee structure that does not eat away at savings.

Your MyRA would also enjoy a government guarantee against loss of principal. The downside is that your money would be funneled into low-yielding Treasury securities and have little potential to grow enough to make a big dent in your personal retirement savings crisis—or that of the nation as a whole—until you have accumulated enough to roll it into a regular IRA where you might benefit from investments with greater growth potential.

Offering low-income households a place to save doesn’t really fix the big problem: they still must have the money and the discipline to take advantage. More than half of workers have less than $25,000 in savings and 28% has less than $1,000 in savings, reports the Employee Benefits Research Institute. And with the MyRA, you could take money out anytime without penalty. That would be awfully tempting the first time money gets tight.

The retirement savings plan represents an important first step,” says Ai-Jen Poo, director of the National Domestic Worker’s Alliance. Still, she says, “Most Americans are not able to plan for their futures because they are trying to deal with their most immediate needs, like paying their rent and keeping their lights on.”

The new accounts call to mind the so-called “catch-up” provision enabling savers past age 50 to put away an extra $5,500 in their 401(k) each year. That’s a fine idea too, but since its adoption in 2001 only the relatively well to do have used it. Let’s face it: Not many folks have an extra $5,500 lying around.

Only 13% of those eligible have made the extra contributions, according to an analysis of data provided by Fidelity Investments. That’s largely because regardless of age almost no one even contributes the maximum $17,500—already a lot of money to take out of your budget each year. For the vast majority, the extra $5,500 has proven to be irrelevant, concludes the Center for Retirement Research at Boston College.

So let’s not pretend that MyRAs will save our collective retirement dreams. They give more people more opportunity to save, and you cannot argue with that. But for these accounts to make a real difference, the folks they are meant to help most will need extraordinary willpower.

MONEY Banking

What Does the Bank of the Future Look Like?

Besides being able to chat with reps online, you should be able to instant-message with your bank via your phone soon too. Also, watch for ATMs with videochat capabilities. Illustration: Stephan Walter

Instant service, contactless payments and directed coupons may all be part of your banking in the upcoming years.

Here’s what you can expect from banks of the future:

You’ll get instant service. Besides being able to chat with reps online, says Alex Matjanec of MyBank Tracker.com, you should be able to instant-message with your bank via your phone soon too. Also, watch for ATMs with videochat capabilities (Bank of America is now trotting this out).

You won’t need a debit card. Despite PayPal, Google, and Square’s attempts at digital wallets — which allow you to pay for purchases with a smartphone –“contactless” payment hasn’t yet hit critical mass. Customers will be more likely to adopt it when their banks offer it, says Monahan.

Your storefront bank will go 2.0. Traditional banks will offer one set of terms for online-only customers — higher rates, fewer fees — and another for those who want to go into a branch, predicts MoneyRates.com’s Richard Barrington. Fifth Third has already launched web-only accounts with better terms.

Your bank will play personal shopper. With every debit, your financial institution is creating a picture of your tastes. Now that banks can get in touch via your smartphone, expect them to start texting you deals from “partners” on products you’re likely to buy, says Ajai Nagarkatte of financial services association and research firm BAI.

MONEY best banks

Best Banks in America

While high fees and low yields are still the norm, MONEY's annual survey uncovered a few financial institutions that are offering the opposite. You may just want to move your money to one of them.

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Danita Delimont—Getty Images/Gallo Images

Originally published in the November 2013 issue of Money magazine.

Do you — gasp! — like your bank?

Surprising as it may seem, Americans are pretty happy with their financial institutions. According to a recent J.D. Power & Associates survey, customer satisfaction is back up as high as it was in 2007, before the financial crisis began. The nation’s largest banks in particular have seen a big jump in customer ratings over the past year, narrowing the lead their smaller peers have long maintained.

Your growing contentment may be owed, at least partly, to the fact that banks have been working to improve client relations: “Many of the big banks are now offering person-to-person customer service at the same level that the smaller banks have in the past,” says Jim Miller, J.D. Power’s senior director of banking.

The largest depository institutions, he explains, have been pushing employees to build relationships, even to simply greet people with a smile.

Or maybe you like the new technological conveniences offered. In response to Americans’ rapid adoption of web and mobile banking, banks of all sizes have been adding services in these areas — like having customer reps available by instant-messaging and allowing check deposit via smartphone.

In fact, “institutions are rolling out mobile-banking features as soon as they can,” says Mary Monahan, executive vice president of market research firm Javelin.

But what about all the fees banks tacked on and hiked up post-2008? You can’t have forgotten about those? Well, the J.D. Power data shows that consumers better understand what they’re being charged, and Miller takes satisfaction in this realm to mean that you’ve accepted the fees as standard. So maybe you’re not happy so much as … resigned?

You need not give up so easily. MONEY’s third annual quest to find the best banks in America — which involved reviewing checking, savings, and CD terms from 58 of the nation’s largest banks and credit unions — uncovered a few atypical institutions that deserve your loyalty. Plus, industry gurus say there are some interesting new developments coming down the pike for retail depositors.

  • Best Online Bank

    Winner: Ally Bank
    Branches: None

    Repeating last year’s performance, online banks walloped all sizes of brick-and-mortars; the 15 web-only institutions MONEY surveyed commonly offered free checking and high rates on savings. Plus, since the banks typically don’t have their own ATMs, you won’t be charged to use another bank’s machine — and you may even be reimbursed for that institution’s surcharges.

    Why Ally is a winner

    Ally offers stellar interest rates on fee-free checking and savings accounts. For checking, the bank has the best yields on balances below $50,000, with 0.4% on up to $15,000 and 0.75% above it. Plus you can use any ATM free, no fees or surcharges.

    Related: What does the bank of the future look like?

    On savings, Ally’s flat 0.84% APY handily beats the averages for online banks across all balances. You also have the option of a money-market account at the same rate. Another plus: Customer reps — real live people! — are available by phone and instant message 24/7.

    Caveat

    Savings yield is lower than some competitors’, including standalone savings co-winners Barclays and GE Capital, but they don’t also have checking.

    Standout accounts

    Ally Interest Checking

    • Maintenance fee: $0
    • Out-of-network ATM fee: $0, plus reimburses unlimited surcharges
    • Interest rate on $3,000: 0.4%

    Ally Online Savings

    • Maintenance fee: $0
    • Interest rate on all balances: 0.84%

  • Best Big Bank

    Winner: TD Bank
    Branches: 1,300 in 15 states and D.C.

    Understanding that some people prefer a physical institution with a wide national presence, MONEY looked for a pick among the 13 banks with more than 1,000 branches. It was tough going since these big banks were still the worst of the worst in terms of account terms. Only 2% of checking accounts were free, and hurdles to waive fees were high compared with all banks: a median minimum balance of $5,000 or direct deposit of $500 a month. On savings, the average yield on $20,000 was a grim 0.07% — 14 bucks a year.

    Why TD Bank is a winner

    Good perks on high-balance accounts, decent lower-balance options, and an impressive commitment to customer service.

    The simplest checking account, TD Convenience Checking, makes it easy to skirt maintenance fees: Just keep a very low $100 daily minimum. Simple Savings requires only a $300 balance and earns a flat 0.05% — not jaw dropping, but it is the median rate for balances below $15,000 across all surveyed.

    For those who stash more — at least $2,500 — the perks on checking are among the best from large banks. You get ATM surcharge reimbursements and a bit of interest. With $10,000 in savings, you get better-than-average interest. In addition, TD has 24/7 customer service on the phone and extended branch hours that include evenings and weekends (70 hours total a week, vs. 47 on average among banks we surveyed).

    Caveat

    TD Relationship Savings requires linked checking, credit card, or mortgage.

    Standout accounts

    TD Premier Checking

    • Maintenance fee: $25 ($24 if paperless)
    • Minimum balance to avoid maintenance fee: $2,500 daily
    • Out-of-network ATM fee: $0, plus reimburses unlimited surcharges with a $2,500 balance
    • Interest on $3,000: 0.05%

    TD Relationship Savings

    • Maintenance fee: $15 ($14 if paperless)
    • Minimum balance to avoid maintenance fee: $10,000 daily
    • Interest rate on…

    $20,000: 0.3%,
    $40,000: 0.4%,
    $100,000: 0.5%

  • Best Customer Experience

    Winner: Citizens Bank
    Branches: 1,369 in 12 states

    This year, for the first time, MONEY took a look at each bank’s availability of customer service. While all had reps reachable by phone, only 28% offered live service around the clock. Four in 10 provided help through instant-messaging. The average branch is open 47 hours a week. Also, to get a sense of customer satisfaction, MONEY reviewed independent surveys on Americans’ experiences with their banks.

    Why it’s a winner

    Citizens is a customer-service triple threat — the only institution in our survey that had phone reps available 24/7, offered customer service via online instant-messaging (weekdays, 9 a.m. to 8 p.m.), and had long branch hours (55 during the week, plus 10 on weekends, including Sundays).

    With more than 1,300 branches — plus 3,600 ATMs — Citizens offers a robust presence for those who don’t do all their banking online. Citizens also scored well with customers in a recent American Banker/Reputation Institute survey.

    Caveat

    Citizens’ accounts didn’t shine in our analysis, since the bank doesn’t offer free checking or pay well on savings. That said, the $10 fee on Green Checking can be waived with five transactions a month.

  • Best Mobile App

    Winner: Chase
    Branches: 5,657 in 23 states

    Of the 58 institutions MONEY surveyed, 54 had a mobile app. Almost all allowed users to check balances, transfer funds between their own accounts, and find the nearest ATM. Thirty-seven offered the ability to deposit checks, 26 let customers cancel a pending transaction, and 25 allowed for person-to-person transfers. Bigger banks led the way in both form and function.

    Why Chase is a winner

    Chase’s app was the full package. It had all the basic features MONEY was surveying for. Plus it offers remote deposit capture for checks and real-time alerts that tell you when your account has dipped below a limit you set.

    One neat feature for date night with the neighbors: QuickPay lets you transfer money to someone with simply a phone number or email (they’ll just need to go through a one-time setup). Best of all, the app is easy to use, with clearly labeled buttons and tabs. Chase also offers the option to bank by text-messaging (SMS) if you prefer.

    Caveat

    Chase’s account options were poor. The most basic checking comes with a $12 monthly fee and $2 nonbank ATM fee; the best rate on savings is 0.2% — and that’s for balances over $500,000.

  • Best Midsize Bank

    Winner: Capital One
    Branches: 929 in eight states and D.C.

    Midsize banks — those with fewer than 1,000 branches — tended to offer slightly better terms than bigger banks, like higher yields on savings (0.11% on $20,000 vs. 0.07%) and more no-fee checking (19% of accounts vs. 2%).

    The next four banks were the stars. Don’t live near one of them? Go with the big bank or online winners instead.

    Why Capital One is a winner

    No other physical bank surveyed offered account terms as good as these. The free High Yield Checking account comes with no out-of-network ATM fees and an APY higher than any other brick-and-mortar surveyed. The Smart Savings account pays the same, five times the average savings yield for non-online institutions surveyed.

    Caveats

    The interest rate on High Yield Checking is reset after a year, to a rate the bank says is “competitive.” The current yield on older accounts is 0.25% — still among the best from a brick-and-mortar.

    Standout accounts

    High Yield Checking

    • Maintenance fee: $0
    • Out-of-network ATM fee: $0, plus reimburses up to $15 in surcharges a month.
    • Interest rate on all balances: 0.5%

    Smart Savings

    • Maintenance fee: $5
    • Minimum balance to avoid fee: $300
    • Interest rate on all balances: 0.5%

    NOTE: Interest rates may vary from state to state. Capital One is in Conn., Del., La., Md., N.Y., N.J., Texas, and Va.

  • Best Midsize Bank, part 2

    Winner: Susquehanna
    Branches: 247 in four states

    Why it’s a winner

    Susquehanna has interest-earning checking with relatively simple hurdles to avoid fees, and above-average rates on savings. Plus, with the free Stellar Checking, you can juice your return with a rewards program that gives you, for example, 5¢ for every bill paid online, 5¢ per debit purchase, and $1 each month you transfer $100 to a bank savings account.

    Caveat

    Checking accounts have high foreign-transaction, insufficient-fund, and inactivity fees ($25, $40, and $10, respectively).

    Standout accounts

    Stellar Checking

    • Maintenance fee: $0
    • Out-of-network ATM fee: $2, but up to four are waived and four surcharges a month are reimbursed with a $2,500 balance
    • Interest rate on all balances of $1,000 or more: 0.05%

    Premium Money Market

    • Maintenance fee: $12
    • Minimum balance to avoid fee: $1,000 daily
    • Interest rate on…

    $20,000: 0.1%
    $40,000: 0.2%
    $100,000: 0.4%

    NOTE: Interest rates may vary from state to state. Susquehanna is in Md., N.J., Pa., and W. Va.

  • Best Midsize Bank, part 3

    Winner: Zions
    Branches: 127 in two states

    Why it’s a winner

    On the low end, Basic Checking has no maintenance fee. But Gold Interest Checking offers more — four out-of-network ATM transactions a month and a little interest — with a relatively low balance requirement. Ultimate Savings has nearly double the average interest of the banks surveyed.

    Caveat

    Basic Checking has a $2 nonbank ATM fee.

    Standout accounts

    Gold Interest Checking

    • Maintenance fee: $12
    • Minimum balance to avoid fee: $2,000
    • Out-of-network ATM fee: $2, but up to four waived a month
    • Interest rate on all balances: 0.04%

    Ultimate Savings

    • Maintenance fee: $0
    • Interest rate on all balances above $5,000: 0.16%

    NOTE: Interest rates may vary from state to state. Zions is in Idaho and Utah.

  • Best Midsize Bank, part 4

    Winner: Bank of the West
    Branches: 615 in 19 states

    Why it’s a winner

    Above-average yields and no out-of-network ATM fees for those who keep a high balance. Bank of the West does not have free checking, but you can waive the $8 on Easy Checking with a $250 monthly direct deposit.

    Caveat

    Must have linked Premier Checking to get yields below.

    Standout accounts

    Premier Relationship Checking

    • Maintenance fee: $30
    • Minimum balance to avoid fee: $15,000, or $25,000 across all accounts
    • Out-of-network ATM fee: $0, plus reimburses up to $15 in surcharges a month
    • Interest rate on $3,000: 0.01%

    Choice Money Market

    • Maintenance fee: $15
    • Minimum balance to avoid fee: $5,000 or $75 monthly direct deposit
    • Interest rates on…

    $20,000: 0.12%
    $40,000: 0.21%
    $100,000: 0.35%

    NOTE: Interest rates may vary from state to state. Bank of the West is in Ariz., Calif., Colo., Idaho, lowa, Kans., Minn., Mo., Neb., Nev., N.M., N.D., Okla., Ore., S.D., Utah, Wash., Wis., and Wyo.

  • Best Military Bank

    Winner: Navy Federal Credit Union
    Branches: 235 in 31 states

    America’s armed forces — and their relatives — have access to some very decent banking options. MONEY looked at six military-oriented financial institutions, most of them credit unions, and found that free checking was almost standard (all but one institution had it) and higher rates were customary (the median savings yield for deposits of $20,000 was 0.28%). The institution above was a runner-up for many categories surveyed.

    Why it’s a winner

    Navy Federal — which you can join if you are active-duty military, a Department of Defense or Coast Guard civilian employee or contractor, or are a household or family member of an NFCU member — gets a special nod because of the top-shelf terms it offers across a variety of accounts, both personal and business.

    EveryDay Checking has no monthly service fee and pays a 0.05% rate; Flagship Checking, which is fee-free if you keep a balance of $1,500, has an APY as high as 0.45% and reimburses up to $10 in ATM surcharges a month. (It’s also worth noting that Navy Federal participates in the CO-OP network, which allows you to use 55,000 ATMs for free, plus you also pay only $1 to use a Plus network machine.) Navy Federal’s Money Market Savings Account, meanwhile, offers 0.5% on $25,000.

    All of Navy Federal’s business accounts allow unlimited electronic deposits. The maintenance fee-free Business Checking can make sense for those with a side gig, while more established companies should look at the Premier Business Checking account, which has a higher free-transaction limit.

    Caveats

    Navy Federal’s most basic business account offers only 30 free cash transactions (though all electronic transactions are free).

    Standout Accounts

    NFCU Flagship Checking

    • Maintenance fee: $10
    • Minimum balance to avoid fee: $1,500 daily
    • Out-of-network ATM fee: $0, plus reimburses up to $10 in surcharges a month
    • Interest rate on $3,000: 0.35%

    Money Market Savings

    • Maintenance fee: $0
    • Interest rate on… $20,000: 0.45%; $40,000: 0.5%; $100,000: 0.55%

    Business Checking Terms

    • Maintenance fee: $0
    • Free-transaction cap: 30 cash deposits (unlimited electronic)
    • Fee per additional transaction: $0.25
    • Cash deposit limit: None
    • Fee per additional $100 deposit: None
  • Best Checking Account

    Winner: Ally Bank
    Branches: None

    Splitting your deposits among multiple institutions can allow you to chase the best yields, since some of the banks that pay the most on savings and CDs do not also offer checking. No surprise that online banks took all the prizes here, though interest rates had fallen a hair since last year. Ally, which had paid 1.01% on one-year CDs, now pays 0.94%.

    Why it’s a winner

    Ally has a fee-free checking account that pays interest — with no linked savings account required. (That’s important if you’re splitting up your banking.) Best of all, the yields — 0.4% below $15,000 and 0.75% above it — outdo those on savings accounts at most banks.

    Caveat

    Capital One’s High Yield Checking across-the-board 0.5% rate beats Ally’s for balances less than $15,000. That 0.5% APY is locked in for only a year, however, after which it has been resetting to 0.25%. So Ally’s the better deal in the long run.

    Standout account

    Ally Interest Checking

    • Maintenance fee: $0
    • Out-of-network ATM fee: $0
    • Interest rate on $3,000: 0.4%

  • Best Teen & College Student Checking

    Winner: Citibank and U.S. Bank (Tie)
    Branches: 982 in 13 states and the District of Columbia for Citibank, 3,087 in 25 states for U.S. Bank

    MONEY looked at 36 checking accounts geared toward teenagers and/or college students. Two-thirds had no minimum balances or maintenance fees, though about half did not offer any discernible perks over a normal account.

    The winners combined free accounts with educational tools to teach budgeting and financial skills and offered at least a few free out-of-network ATM transactions a month (an important consideration for busy college students, who often forget to take out cash until the last minute).

    Which of the two is best for your child depends on which offers the closest ATMs, so as to reduce the ding of out-of-network fees or surcharges.

    Why they are winners

    Citibank’s account for college students has no minimums or fees, plus out-of-network ATM usage won’t rack up charges (at least not from Citibank). Also, if parents are co-signers, they can receive SMS or email alerts to keep them abreast of account activity. Another perk is Citi’s suite of online financial management tools. These are available for all customers — not just students — but can be particularly useful to those on a budget for the first time. Your child can track goals, set bill reminders and budget alerts, and create spending reports.

    U.S. Bank’s no-fee student checking is open to both high school and college students, and it features educational materials geared toward young people on money management topics like avoiding overdrafts and preventing identity theft.

    Although this account waives only four out-of-network ATM fees per cycle, the high number of ATM locations (the bank has 5,000 plus participates in the MoneyPass -surcharge-free ATM network, adding another 25,000 nationwide) means there’s a good likelihood teens can limit withdrawals to U.S. Bank ATMs. As with Citi’s account, co-signing parents can receive SMS or email alerts on account activity.

    Caveats

    Teenagers who are not yet in college can’t use Citibank’s account. U.S. Bank provides educational articles but no tools for budgeting or money management beyond basics like account alerts.

    Standout accounts

    Citibank Student Account

    • Minimum deposit: None
    • Maintenance fee: None
    • Out-of-network ATM fee: None

    U.S. Bank Student Account

    • Minimum deposit: $25
    • Maintenance fee: None
    • Out-of-network ATM fee: Four free transactions a month, then $2.50
  • Best Checking for Established Businesses

    Winner: Capital One
    Branches: 929 in eight states and D.C.

    Only 15% of the business accounts surveyed had no maintenance fee. Among the rest, charges ranged from $5 to $95, and averaged $16. In choosing an account, consider how many transactions you make a month (some offer as few as 25 for free, others are unlimited) and how much cash you deposit (accounts varied in the amount allowed without charge).

    Why Capital One is a winner

    For businesses that generate and spend a lot of money, Spark Business Unlimited provides a sweet suite of features: no cap on free transactions plus the fourth-highest cash deposit threshold.

    Caveat

    Minimum balance is high — and so is the fee — so the account makes sense only for businesses that already have a cash cushion.

    Standout account

    Spark Business Unlimited Checking

    • Maintenance fee: $35
    • Minimum balance to avoid fee: $25,000
    • Out-of-network ATM fee: $2
    • Free transactions: unlimited
    • Cash deposit limit: $40,000; above it you may get moved to another account

  • Best Checking for Startups or Side Businesses

    Winner: PNC
    Branches: 2,780 in 19 states

    Why it’s a winner

    PNC’s Free Business Checking was one of only a few small-business accounts that had no minimum balance and charged no maintenance fee — musts for businesses that don’t have consistent or significant revenue. Plus, the account allows a generous number of free transactions per month (200, vs. the average of 142 among no-fee small-business accounts). Moreover, the $5,000 in free cash deposits is nearly $500 more than its rivals. Finally, there’s no monthly inactivity fee, so if business is slow, at least you won’t have to worry about the bank putting you one step closer to the poorhouse.

    Caveat

    Because of the costs for transactions over the limit and for cash deposits over $5,000, a bigger business will do better with the Capital One account on the prior slide.

    Standout account

    Free Business Checking

    • Maintenance fee: $0
    • Out-of-network ATM fee: $2.50
    • Free transactions: 200
    • Fee per additional transaction: 50¢
    • Cash deposit limit: $5,000
    • Fee per additional $100 deposit: 50¢

  • Best Savings Account

    Winner: Barclays and GE Capital Bank (tie)
    Branches: None for either

    Why they are winners

    GE’s Online Savings account and Barclays’ Online Savings account are neck and neck, both offering the highest rate among all the accounts surveyed — a flat 0.90%, with no fees or minimum balances.

    Caveats

    Interest rates may vary after the accounts are opened, though both have been relatively consistent. Neither bank offers checking accounts.

    Standout accounts

    GE Online Savings and Barclays Online Savings

    • Maintenance fee: $0
    • Interest rate on all balances: 0.90%

  • Best for 12-Month CDs

    Winner: GE Capital Retail Bank and Ally Bank (tie)
    Branches: One for GE, none for Ally

    Why they are winners

    On one-year CDs with balances of $25,000 and up, GE pays more than any other bank surveyed (the average was 0.45%, the median 0.25%). For balances below $15,000, GE pays a high rate, but is outdone by Ally’s 12-month CD and tied with Ally’s no-penalty 11-month CD.

    Caveats

    GE’s penalty for early withdrawal is 90 days’ worth of interest; Ally’s is 60 days’ interest. Ally’s No Penalty CD does not deduct interest if you withdraw after the first six days.

    Standout accounts

    GE Capital 12-Month CD

    • Minimum deposit: $2,000
    • Interest rate on…

    $10,000: 0.85%
    $20,000: 0.95%
    $30,000: 1.05%

    Ally High Yield 12-Month CD

    • Minimum deposit: $1
    • Interest rate on all balances: 0.94%

    Ally No Penalty 11-Month CD

    • Minimum deposit: $1
    • Interest rate on all balances: 0.85%

     

    MONEY looked at the 40 biggest retail banks by consumer deposits and number of branches, plus the 15 biggest online banks and three biggest credit unions by deposits, according to financial services consulting firm Novantas. Banks with more than 1,000 branches were in the running for Best Big Bank, while those with fewer were up for Midsize. All banks surveyed were candidates for best customer experience, business accounts, app, and standalone accounts.
    The top consideration for checking picks was maintenance fees and ease of waiving them, followed by other charges, restrictions, and perks, like interest. For savings and CDs, MONEY weighted rates first, followed by fees, minimums and other rules. For customer experience, we looked at the availability of service; for mobile, breadth of features and ease of use. As a tiebreaker, MONEY used data from independent customer service studies.
MONEY

Help! Rich Grandparents, Poor Grandparents: What to Do?

Did you ever want to be a personal-finance advice columnist? Well, here’s your chance.

In MONEY magazine’s “Readers to the Rescue” department, we publish questions from readers seeking help with sticky financial situations, along with advice from other readers on how to solve those problems. Here’s our latest reader question:

How do you handle a situation where one set of grandparents can afford to be (and is) much more generous to their grandchildren than the other set can afford to be?

Got a good answer? Submit it to us in the form below. We’ll publish selected reader advice in an upcoming issue. (Your answer may be edited for length and clarity.) Please include your contact information so we can get in touch; if we use your advice in the magazine, we’d like to check with you first, and possibly run your picture as well.

Thanks!


To submit your own question for “Readers to the Rescue,” send an email to social@moneymail.com.

To be notified of future “Readers to the Rescue” questions and answers, find MONEY on Facebook or follow MONEY on Twitter.

MONEY

Sugar-Coated Financial Advice for Women Leaves Bitter Taste

Do women really require female-targeted money books with chick-lit titles, cute covers and hipster language ?

That’s the debate sparked by an essay published on Slate last week about the rise of sugar-coated personal finance books for women.

Many people — not just those of us who write about women’s financial issues — have been baffled by the popularity of books such as Hot (broke) Messes and Does This Make My Assets Look Fat?

And in her Slate piece, Hannah Seligson argues that these books perpetuate a myth that women are financial dopes who can’t handle money, a la Sex and the City‘s Carrie Bradshaw (“Oops, I spent $40,000 on shoes”) and the protagonist of the Shopaholic books and movie.

Many women still hold the damaging view that they aren’t “good” with money, despite evidence to the contrary. Seligson cites data from Generation Earn, by US News & World Report columnist Kimberly Palmer, which dismantles the idea that women are chronic overspenders or have more debt than men.

Although Seligson is right that women are no less savvy and responsible about money than men are, I disagree with her conclusion that women don’t need additional, specialized financial advice.

The problem Seligson doesn’t address is that women, on average, are still lagging far behind men on the financial front. As I wrote in a November feature for MONEY, women tend to earn less and thus save less. And certain lifestyle issues — taking time out of the workforce to raise children, for example — further compromise women’s long-term financial health.

On average, according a survey from MassMutual, women’s retirement nest eggs are two-thirds the size of men’s. Studies from the Employee Benefits Research Institute show a similar gap. Yet we have to stretch our assets, flattering or not, to cover much longer lives.

It’s galling — and as a woman, it’s scary.

Is the answer to dole out financial advice in the paperback equivalent of brightly colored Pez dispensers?

As Tracy Clark-Flory wrote in a rejoinder on Salon: “As if I needed more reason to avoid the subject of finance, said section is apparently color-coded for the ladies, just like the rest of the bookstore…with the color pink.” Although Clark-Flory would like “a special sub-section just for me, and all other literate females,” the truth is that many women are buying the advice that’s packaged like candy.

I just don’t know if the spoonful of sugar is going to make the medicine go down. The more upsetting truth about these books isn’t that women don’t need them — as Seligson argues — but that they need something. And what’s being aimed at them is making matters worse, by perpetuating women’s own lack of financial confidence.

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MONEY

Women More Optimistic than Men about Finances

Women appear to be more optimistic about the economy and their financial future than men are, according to a recent survey. But it helps to be young.

Asked whether business conditions where they live will improve over the next year, 56% of women polled by Citigroup said yes, compared to just 50% of men.

(The telephone survey, conducted in June, is accurate within 2.2 percentage points, according to Citi.) The outlook was similar when it came to personal finance: 66% of women were hopeful that their own personal financial situations would improve, versus 62% of men.

While the difference may seem slight, other numbers indicate that the financial outlook of the sexes is diverging; men grew more pessimistic in the three months since Citibank conducted a prior edition of the survey, while women’s confidence in financial matters held constant or worsened to a lesser degree than men’s.

Why the shift? Lisa Caputo, CEO of Citibank’s Women & Co. business, says, “When people are optimistic, it’s because they’ve taken the steps to make sure that their own personal financial situation feels good to them.”

Alternatively, women’s relative optimism could be due to current big-picture financial conditions. One of the noteworthy effects of the latest recession, in fact, has been that the unemployment rate for men has risen faster and higher than it has for women.

And the relative optimism doesn’t extend to all areas of personal finance: The survey also showed that 36% of women reported being uncomfortable with their level of debt, compared to 30% of men. That could be due to perception rather than anxiety: At least one study indicates that wives tend to estimate that their family’s debt level is higher than their husbands do.

A bigger difference in the survey concerned how women view their personal financial situations throughout their lives. Stunningly, 82 percent of women under 40 surveyed believe their personal fiscal situation is on the upswing. But just 59 percent of women over the age of 40 were as optimistic.

And why is that? Having lived longer and undergone more financial ups and downs, females over 40 might be more likely to envision their future based on past experiences rather than future possibilities. For older women, the financial demands of a secure retirement may feel more immediate; younger women might find it easier to put off such worries to a later date. The financial challenges faced by women are well known: They tend to earn less over their lifetime than men do, and they tend to outlive men, meaning that they have longer retirements to fund. Earlier this year, a survey of workers age 60 or over found that 76% of women didn’t feel confident they had enough money to retire, compared to 68% of men.

Do you have a guess as to why women right now might feel more confident about their financial prospects than men? Leave your comments below.

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MONEY

Should Personal Finance Writers Be Liable for Bad Advice?

After I argued last week that Congress ought to force financial advisers to do a better job for their clients, a reader posted a related question: Would personal finance journalists have to meet these higher standards as well? He followed up with an email:

George, for this fiduciary responsibility that you are advocating — shouldn’t it also apply to you and the other columnists who post advice on CNNMoney? For that matter, why not to Suze Orman and Jim Cramer? Shouldn’t you be able to be sued if your advice doesn’t work out for an investor that took it?

Fair questions.

I can’t say I have years of experience in the field of securities law and regulation, but here’s my short answer: No.

A slightly longer answer (none of which should be understood as an official answer from MONEY’s lawyers or owners): The fiduciary standard I discussed would, in the amendment introduced by Senators Akaka, Menendez and Durbin, be expanded to cover “a broker or dealer, when providing personalized investment advice about securities to a retail customer.” Suze Orman, my colleagues at MONEY and CNNMoney.com and I aren’t brokers or dealers, so we wouldn’t be covered by that legislation.

Even though that knocks us out of a fiduciary obligation in this go-round, I think it’s worth exploring whether we financial journalists do in fact offer “personalized investment advice.” You could argue that we do, since at MONEY and CNNMoney.com we regularly answer questions from individuals seeking advice. But I would disagree, for two reasons.

First, our answers to specific questions — along with all the advice we give in articles that aren’t responding to individual readers — aren’t “personalized”; they’re intended to be useful information for anyone who looks at them. Second, to the extent that we do answer a specific person’s question in a column, I’d say there’s a huge qualitative distinction between what we know about the writer and his or her situation (generally, a paragraph of background information) and what an investment professional knows (or should know) about the particular circumstances of the customers he or she is advising. As a general rule, financial journalists most of the time don’t even meet the fiduciary standard’s weaker cousin, the suitability standard, as part of which brokers are instructed, “Know Your Customer.” I think people seeking advice from personal finance journalists have expectations of us that are far different than those they have of financial industry professionals. We journalists are strangers dispensing free advice; financial advisers, however, are meeting them face-to-face and doing business. While they might reasonably assume that we journalists will have intelligent, well-thought-out answers to their questions, I doubt they believe that our obligations to them are as strong as those of someone they’re paying to ensure their financial security.

Another thought: The fiduciary duty, when it is applied, is usually understood as covering someone not simply who is in a trusted position, but also who can profit at a trusting person’s expense by choosing one course of action over another. Whatever advice we financial journalists might give, we wouldn’t make more money by recommending a lousy investment over a good one — a far different situation from that of a broker who might earn a larger commission by selling you a product that’s worse for you than another that earns him less.

But though my colleagues and I might not be legally obligated to give you good advice, we have selfish motives for doing so. The dumber our recommendations, the more likely you are to figure out we’re giving bad advice, and the more likely you are to lose interest in us. It’s a matter of pride — and continued employment — for a journalist to write material that readers find useful and good; none of us wants to develop a reputation for stupidity.

Granted, a fiduciary obligation might establish minimum requirements of professional competency for personal finance journalists. But who needs such a formal standard when you have the Internet? As I have learned from personal experience, if people think I’ve given bad advice, word gets around pretty quickly.

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MONEY

More Money Friday Roundup: Spirit CEO Speaks & Fannie Execs Surprised

Personal finance from around the Web:

  • Home owners apparently were not the only ones caught off guard when home prices began to fall as the housing bubble burst. Former Fannie Mae executives tell Congress that plummeting prices consistently surprised them as well. [Associated Press]

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