Amazon Prime started out as the online shopping giant's two-day free shipping service. Now the $100 a year subscription ($50 a year for students) has expanded well beyond that. Customers still get two-day free shipping, but the package includes so much more. It really is the best deal you'll find anywhere.
First, you get free two-day shipping. If you order regularly from Amazon or hate waiting for your packages, this is already a great perk. If not, it's just the icing on the cake.
Second, you get access to all kinds of media hosted on Amazon — including Prime Video and Prime Music. Prime Video is a streaming service similar to Netflix. Their catalog is slightly different from other services, but it still offers a wide range of shows and movies. Amazon even has their own award-winning original programs. If that's not enough, you can rent or purchase new releases right from your account. Prime Music is Amazon's answer to Spotify. There is a limited catalog available to Prime subscribers, but customers can also upgrade to Prime Music Unlimited for $8 a month. (Non-Prime members would pay $10 a month.)
Third, you get unlimited cloud storage for all of your photos. By downloading the Prime Photos app, you can back up all of your pictures and videos. And then clear up much needed space on your phone. The photos are stored safely in the cloud forever. You can browse through them with the app and re-download anything you want.
Fourth, you get the Prime Reading library. This is a limited selection of ebooks and magazines that any Prime member can read for free. You can check out different titles indefinitely with no due dates. These titles can be read on any Kindle device or in the Kindle app. If you want more selection, you can subscribe to Kindle Unlimited for $10 a month. This service lets you read all the ebooks and audiobooks you want. Additionally, Prime members get early access to new Kindle releases at the beginning of each month. Kindle First allows members to purchase one of six new release Kindle books for free. That's 12 free books a year.
Fifth, members can order groceries online with Prime Pantry. This services has some limitations. Only specific products are eligible for pantry orders and it doesn't include any fresh produce. It's all dry goods for your pantry. What's nice is that you can also set up recurring orders. You'll never have to worry about buying toilet paper again.
Sixth, with Amazon's purchase of Whole Foods Market, Prime members will receive even more benefits in store. Select Whole Foods products will become available with Prime Pantry. Prices will be cut in store for all shoppers. More price cuts will be available to Prime members. Amazon Lockers will also be available at select Whole Foods stores. You can pick up Amazon.com orders there or use the lockers to send back a return.
Lastly, Amazon is constantly adding perks and benefits to your Prime membership without raising the cost. This is quite the deal if you're interested in what Amazon has to offer.
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.