Online banking has created a fantastic convenient way to check your balance, transfer money, open new accounts and more. With a click or a tap, you can have instant access to your bank account at any time, anywhere. However, this access can also expose your financial information to threats and can put your balances in jeopardy. To avoid any kind of hacking or fraud on your account, here are a few precautions you can take.
1. Make sure your online banking sign in is sufficiently complex.
The most common advice to safeguard against hacking your account is creating a complex password. Most websites and banks will require a password of significant length that includes special characters. If you want it to be something you'll remember, try making a sentence out of the letters. Then, replace a few I's or O's with exclamation points and zeros respectively. Now you have a complex password. If you want to make sure your password is very secure, then sign up and use a password manager service like LastPass. This service creates incredibly complex passwords for you and automatically logs you in to all of your accounts. Your password vault is encrypted and is basically impossible for anyone to see, including the best hackers.
2. Change your banking password regularly.
You should change all of your important passwords at least once a year. For something like a bank account, it should be about every six months. You can change it even more often if you want. This will keep anyone who might already have your password out of your account. And if your bank or any site says they were hacked, you should definitely change your password — no matter if you had just changed it the day before. If you don't want to worry about changing your password, LastPass will even change it automatically for you based on a specific schedule.
3. If available, activate two-step verification.
Two-step verification requires that you type in a pin sent to your phone as well as your password to sign in. Unless someone happens to have your password and your phone, no one else will be able to log into your account. Many sites, especially banks, now offer this option. The set up is simple and it will leave you with some peace of mind every time you sign in.
4. Avoid logging in to your account on public wifi.
First of all, you should avoid connecting to public, unsecured networks as a general rule. These can be easily hijacked and used to access information on your phone or your computer. But if you must use public wifi, avoid logging into or accessing any sensitive information — especially your bank account. Just logging in while connected to one of these networks might be enough for someone to skim your password and access your account. (Trust me. This exact thing happened to me recently and it was not a fun time.)
5. Limit the amount of devices that will remember or recognize your login.
If you use your tablet, phone and multiple computers on a regular basis, it's tempting to let these devices remember your username or password. This eases your access to your bank, but also lets others access it too. If someone has access to a device where this sensitive information is stored and ready, they can easily authorize something on your account that you don't want. To avoid this, limit the amount of devices that can remember your login. Just stick to the one you use the most and log out on all the others.
6. Don't use your main email for your bank account.
Email can be compromised easily too. If your email is hacked, any account that has it set for password recovery is in jeopardy too. This is why you should also change your email password frequently. If you use one email regularly, you're exposing it to threats more often. To avoid someone getting into your bank account through your email, set up a new one that is strictly for your banking information. This will prevent most email hacks to access your bank account.
7. If you're really worried about it, don't use online banking at all.
Of course, the only sure fire away to avoid exposing your information with online banking is to avoid using it at all. The convenience of the service is a trade off for the security implications. If you still want to use it but you're concerned, limit when and where you access it. Only log in on secure networks and on one device at a time.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.