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Apache is functioning normally

July 4, 2024 by Brett Tams

A standby letter of credit (also known as an SLOC or SBLC) is a legal document, typically used in international trade, that acts as a safety net for a deal. It communicates that a bank will guarantee payment if, for example, their customer fails to send funds to a seller for goods or services provided.

Generally, SOLCs are important when the buyer and seller haven’t been acquainted and haven’t yet established a sense of trust. These documents can help a seller secure a contract with a new client. This is especially helpful when they are competing with larger, more established sellers.

What Is a Standby Letter of Credit?

An SLOC (or SBLC; the terms are used interchangeably) is an irrevocable commitment by an issuing bank that it will make payment to a designated beneficiary if the bank’s client defaults on a deal. To phrase it a bit differently, these commitments ensure the payment of a specific amount if one party does not make good on a business agreement. For example, a seller might ship goods to a buyer, but the buyer fails to pay within a specified number of days. In such cases, the bank will intervene and compensate the seller if certain conditions are met.

However, the conditions can be very specific, and failure to meet them can result in the seller not being compensated. For example, issues with shipping or with the product itself could result in denial of payment.

These letters of credit are common in international trade when buyers and sellers aren’t familiar with one another. When entities from two different countries do a deal, the laws and regulations involved may differ. This can add a layer of uncertainty to whether the deal will go through smoothly. An SLOC can help the seller feel more confident they will be paid.

An SBLC acts as a safety net or insurance policy for the seller. If all goes well with the transaction, they won’t have to make use of it. Only if there are issues with the sale will the SBLC be needed, but that bank guarantee adds a level of confidence.

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How a Standby Letter of Credit Works

Now that you know the meaning of SBLC, here’s how it actually functions.

• When a buyer and seller are entering into a large contract, an SLOC might be created, especially if the buyer and seller don’t know one another. The buyer might create one to help secure a contract or the seller might ask the buyer to obtain a letter.

• In either case, the buyer goes to a bank and requests an SLOC.

• The bank will then perform underwriting to verify the buyer’s creditworthiness.

• The bank might also ask the buyer for collateral if they have bad credit (this is an example of why bad credit is a big deal). The amount of collateral will depend on a variety of factors, including the level of risk, the size of the deal, and the strength of the business.

• Once the process is complete, the buyer receives the SLOC.

• The bank will charge a fee, typically between 1% and 10% of value per year while the contract is in effect.

• Once the transaction project is complete, the SBLC is no longer valid, and the bank will no longer charge a fee.

However, if the buyer defaults on the agreement for any reason, the seller must provide all documentation listed in the SBLC to the buyer’s bank, informing them that the buyer has not held up their end of the arrangement. The bank will then reimburse the seller and later collect payment from the buyer, plus interest.

A deal can fail to be completed for many reasons, such as bankruptcy, lack of cash flow, or dishonesty on the part of the buyer. If the bank determines the buyer has violated the terms of the SLOC, it will then make payment to the seller.

Recommended: Why Are My Credit Scores Different?

Types of Standby Letters of Credit

There are two types of standby letters of credit: financial SBLCs and performance SBLCs.

Financial SBLC

A financial SBLC guarantees payment for goods or services provided. The SBLC guarantees that the buyer’s bank will pay the seller if the buyer doesn’t pay within the timeframe outlined in the letter. If the bank does need to step in and make payment, it will later collect payment from the buyer, plus interest.

Performance SBLC

A performance SBLC is less common but usually guarantees the completion of a project. In this case, a person or company agrees to complete a project within a specified timeframe. Thus, a performance SBLC would reimburse the party paying for the project if it isn’t completed in time or if the client otherwise feels the project was not completed to satisfaction.

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Standby Letter of Credit Example

The most common use of SBLCs is to guarantee payment when a seller ships goods, typically internationally, to a buyer.

• For instance, a buyer might secure a contract to purchase a large shipment of corn from overseas. The seller, never having done business with the buyer before, might ask the purchaser to obtain an SBLC to ensure they are paid for the shipment. Even if the purchaser has taken steps to build credit, this is a new relationship between the two businesses, and trust hasn’t yet been established.

• The SBLC indicates that the buyer will remit payment within 30 days of receiving the shipment. Thanks to shipment tracking, the seller can see that the buyer has received the shipment of corn. However, 30 days have passed, and the buyer hasn’t paid.

• The seller can then go to the buyer’s bank, which issued to SBLC, and provide the necessary documentation about this deal and lack of payment.

• If the bank agrees that the buyer hasn’t held up their end of the agreement, the bank will then pay the seller for the corn. The bank would then collect payment and additional charges from the buyer.

Recommended: Do Personal Loans Affect Your Credit Score?

Advantages of a Standby Letter of Credit

SLOCs have a few advantages worth noting:

• Guarantee of payment The main benefit of SLOCs is they guarantee payment for the seller. Even if the buyer can’t pay, the seller can ask the buyer’s bank to reimburse them.

• Helps buyers land contracts A seller might hesitate to ship goods to a buyer they don’t know and trust, even if credit monitoring reveals they seem like a good bet. There’s still an element of risk. The SLOC can make a seller more confident about doing a deal since they will be more likely to get paid.

Disadvantages of a Standby Letter of Credit

There are disadvantages to SLOCs, too. These include:

• Increased costs The bank that guarantees the SLOC will charge the buyer a fee for every year the contract is in effect. And if the bank has to pay the seller, they will charge the buyer principal plus interest.

• Not always a guarantee Although SLOCs guarantee sellers will be paid, there can be many hurdles involved before payment is issued. For example, shipping delays or problems with the product itself can lead to denial of reimbursement.

How to Obtain a Standby Letter of Credit

Obtaining a standby letter of credit is generally the responsibility of the buyer. Their bank will reimburse the seller in the event they don’t pay promptly. The bank will also have to determine how creditworthy the client is and decide if collateral is required. (One of the benefits of good credit can be not having to put up collateral in situations like this one.)

To issue the letter, the buyer might work with either a domestic or international trade division of a bank, depending on the deal’s particulars. At this point, it’s also wise for the buyer to have an attorney on site to review the terms of the agreement.

A seller can ask that the buyer obtain an SLOC as part of the contract. All parties should have legal experts involved to ensure the accuracy and conditions of the agreement.

Recommended: Do Credit Scores Update Often?

The Takeaway

Standby letters of credit (SLOCs) are useful legal documents for both buyers and sellers doing business, especially if they are working on an international deal. These letters can act as a safety net, saying that if a buyer doesn’t complete a deal, their bank will step in and make payment. For sellers, these letters can help increase confidence that they will be paid for goods or services. For buyers, they can be helpful in securing new contracts.

Not all banking involves international business deals, however. If you are looking for a reliable bank for your daily personal finance needs, see what SoFi offers.

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FAQ

What does standby mean in letter of credit?

A letter of credit is a legal document that provides a safety net for a financial deal. “Standby” in this context refers to the fact that these letters are only implemented (and funds then issued) by the bank if the buyer fails to pay. If the buyer pays within the expected timeframe, no action is taken. The letter of credit has stayed on standby status.

What is the difference between a letter of credit and a standby letter of credit?

The difference between a letter of credit and a standby letter of credit is what each of them promises. A letter of credit is a guarantee from a bank that the buyer will pay. On the other hand, a standby letter of credit is a guarantee from the bank that they will pay if the buyer fails to do so.

Can SBLC be used as collateral?

The SBLC itself is not usually considered collateral. However, a bank may require the buyer to provide collateral before issuing an SBLC if the bank feels the buyer’s creditworthiness is not up to par.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

July 3, 2024 by Brett Tams

Safe deposit boxes are storage units located in banks that offer a secure way to store important items you may not want to keep at home, such as critical documents, collectibles, and family heirlooms.

Due to the growth of online banking and digital storage, safe deposit boxes aren’t as popular as they once were. However, there are some situations where these boxes can be useful. Here are key things to know about safe deposit boxes.

What Is a Safe Deposit Box?

A safe deposit box (also called a safety deposit box) is a secure locked box, usually made of metal, that stays in the safe or vault of a federally insured bank or credit union. They are typically used to keep valuables, important documents, and sentimental keepsakes protected from theft or damage.

Safe deposit boxes often come in two different sizes, usually 3” by 5” or 10” by 10,” and can be rented for an annual fee. In exchange for the fee, banks provide security measures to protect your valuables, such as alarms and surveillance cameras. In addition, the safe deposit boxes are stored in vaults that are designed to withstand natural disasters such as fires, floods, hurricanes, and tornadoes.

Unlike a bank account, however, the contents of a safe deposit box are not protected by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). As a result, there is still a small risk that you could lose the items in your container due to theft or damage.

Recommended: What Are the Differences Between FDIC and NCUA Insurance?

What You Should and Shouldn’t Keep in a Safe Deposit Box

Safe deposit boxes can be a good place to keep hard-to-replace documents and small valuables that you won’t need to access frequently. However, you generally don’t want to keep any items that you may need to grab in a hurry in the box, and certain items are prohibited.

Here’s a breakdown of things to keep — and not to keep — in a safe deposit box.

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Items Typically Kept in a Safe Deposit Box

• Important documents: Documents that are difficult to replace and often needed for legal purposes are commonly stored in safe deposit boxes. These include: birth certificates, marriage licenses, car titles, divorce records, citizenship papers, property deeds, and mortgage documents.

• Valuables: Jewelry, rare coins, stamps, and other valuable collectibles can be safely stored away from potential theft.

• Financial Instruments: Stock certificates, bonds, and other financial instruments that require safekeeping can be securely stored in a safe deposit box.

• Backup data: You might store external hard drives or USB drives containing sensitive personal or business information here to protect against data loss.

• Personal keepsakes: Irreplaceable items like family heirlooms, photos, and memorabilia can be stored to ensure they don’t get lost or damaged.

Items to Avoid Putting in a Safe Deposit Box

• Cash: While you may be tempted to store some cash in your safe deposit box, you’re likely better off putting the money in a high-yield savings account at a bank or credit union, which will allow your money to grow. The cash will also be insured (up to certain limits) by the FDIC or NCUA.

• Original copies of wills: Original wills should not be stored in a safe deposit box because they may be difficult to access immediately after the owner’s death, delaying probate. You might instead store a copy of a will.

• Durable power of attorney: Similar to wills, these documents might be needed quickly in emergencies, and delays could cause significant issues. Consider storing a copy.

• Passport: If you need to travel urgently, accessing your passport from a bank vault could be problematic due to limited bank hours.

• Frequently used items: Any items you need regular access to should not be kept in a safe deposit box due to limited accessibility.

• Prohibited items: Banks and credit unions generally prohibit the storage of firearms, explosives, weapons, hazardous materials, illegal substances (such as drugs), alcohol, perishable items, and cremated remains.

How Much Does a Safe Deposit Box Cost?

Rental fees vary by the box’s size and financial institution. The average cost to rent a box at a commercial U.S. bank runs between $15 and $350 per year. Additional costs may include fees for lost keys or late payments.

Some banks and credit unions will offer discounts on a safe deposit box cost if you have a relationship with the bank. In some cases, an institution may offer free access to a safe deposit box as a perk to their customers.

How to Get a Safe Deposit Box

To rent a safe deposit box, you’ll generally need to follow these steps:

1. Research your options. Not all banks and credit unions offer safe deposit boxes. You’ll want to find an institution that both provides this service and is conveniently located.

2. Meet the requirements. Many banks require you to be an existing customer with a checking or savings account. However, some banks may allow noncustomers to rent boxes for an additional fee.

3. Provide identification. You’ll need to bring valid identification, such as a driver’s license or passport, to verify your identity. If you plan to allow another person access to your safe deposit box, they will need to be present and show ID as well.

4. Sign a rental agreement. You (and, if applicable, your corenter) will need to sign a rental agreement outlining the terms and conditions of the box rental.

5. Make a payment. You generally need to pay the initial rental fee upfront. Some banks may offer discounts for long-term rentals or automatic payments.

6. Get your key. Upon completing the paperwork, you will receive a key to your safe deposit box. The bank retains a second key. Both keys are required to access the box. If the bank offers keyless access, they will likely scan your finger or hand.

Keep in mind that every time you wish to access your safe deposit box, you’ll need to present your photo ID, as well as your key (if it’s not keyless). The bank may also require your signature before allowing you to open your box.

Recommended: How Long Does It Take to Open a Bank Account?

How Safe Is a Safe Deposit Box?

Safe deposit boxes are generally very secure. They are housed in a bank vault, which offers robust protection against theft, fire, flood, and other disasters. Banks employ multiple layers of security, including surveillance cameras, alarms, and restricted access to the vault area.

When you rent a safe deposit box, the bank typically gives you a key to use. The bank also retains a second “guard key” which must be used by a bank employee in tandem with your key. Some banks now use a keyless biometric entry system, where you scan your finger or hand instead.

However, it’s important to note that the contents of a safe deposit box are not insured by the bank or the FDIC. As a result, you may need to obtain separate insurance or add a rider to your homeowners or renters insurance for coverage.

Recommended: Are Online Savings Accounts Safe?

Pros and Cons of Safe Deposit Boxes

Safe deposit boxes can be a good way to protect your valuables. Here are some of the upsides of renting one:

• Security: Safe deposit boxes offer a high level of security, since they are stored in areas with limited access and stepped-up surveillance.

• Environmental protection: They can protect your valuables from environmental damage, such as a flood or fire.

• Privacy: The contents of a safe deposit box are known only to the renter, offering a high degree of privacy.

• Organization: Safe deposit boxes help keep important documents and valuables in one secure location, making it less likely you will misplace them.

But safe deposit boxes also come with downsides. Here are some to consider:

• Limited access: Access is restricted to bank hours, which can be inconvenient, especially in an emergency.

• Cost: There is an ongoing rental fee, which varies based on the size of the box.

• Not insured: Contents are not insured by the bank or FDIC. Separate insurance may be needed for valuable items.

• Delayed access for loved ones: In the event of the renter’s death, accessing the box may require legal processes that could delay access to important documents.

Recommended: Different Types of Savings Accounts You Can Have

The Takeaway

If you’re looking for a safe place to stash vital papers or valuable possessions, you might consider renting a safe deposit back at a brick-and-mortar bank or credit union. Items stored in these containers are protected against theft, loss, or damage due to a flood, fire, or other disaster.

But the protection has limits: Unlike regular bank accounts, safe deposit boxes are not insured by the FDIC. Also keep in mind that safe deposit boxes aren’t ideal for items you may need to grab in a hurry, since access is limited to banking hours.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What can I use instead of a safe deposit box?

Alternatives to a safe deposit box include:

• A fire-rated personal home safe: This can offer protection from environmental damage (such as fire or flood). However, a thief could potentially steal the whole safe.

• Digital storage solutions: Cloud services can securely store important documents and data backups.

• An attorney’s office: For legal documents, a trusted lawyer’s office may offer secure storage.

• Private vault facility: These are a viable alternative to a safe deposit box but tend to cost more.

Can safe deposit boxes be jointly shared?

Yes. When you open a safe deposit box, you can designate one or more corenters who will have equal access to the box. This is useful for couples, business partners, or family members who need shared access to important documents and valuables. Each renter typically receives a key, and all corenters’ signatures are required on the rental agreement.

Is it safe to keep money in a safe deposit box?

While it is physically safe to keep money in a safe deposit box, it is not recommended. Cash stored in a safe deposit box does not earn interest and is not insured by the Federal Deposit Insurance Corporation (FDIC). You’re generally better off keeping cash in a high-yield savings account or other insured financial instrument that offers safety, liquidity, and interest earnings.

Do banks know what you put in a safety deposit box?

No. The contents of a safe deposit box are private, and bank employees do not have access to the items stored inside. When you rent a safe deposit box, you receive a key, and the bank retains a second key. Both keys are required to open the box, but only you can open it and see its contents. This ensures privacy and confidentiality.

Photo credit: iStock/AlexSecret

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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Source: sofi.com

Apache is functioning normally

July 3, 2024 by Brett Tams

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

Home equity loan Home equity line of credit (HELOC) Interest rate Fixed Variable Monthly payment amount Fixed Variable Closing costs and fees Yes Yes, might be lower than other loan types Repayment period Typically 5-30 years Typically 10-20 years

FAQ

What is a rate lock?

Interest rates on mortgages fluctuate all the time, but a rate lock allows you to lock in your current rate for a set amount of time. This ensures you get the rate you want as you complete the homebuying process.

What are mortgage points?

Mortgage points are a type of prepaid interest that you can pay upfront — often as part of your closing costs — for a lower overall interest rate. This can lower your APR and monthly payments.

What are closing costs?

Closing costs are the fees you, as the buyer, need to pay before getting a loan. Common fees include attorney fees, home appraisal fees, origination fees, and application fees.

If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

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Apache is functioning normally

July 3, 2024 by Brett Tams

Although you may have never heard the term before, core deposits are a basic concept in retail banking. When customers (probably just like you) deposit funds in a checking, savings, or money market account, financial institutions consider this money to be core deposits. Financial institutions then use core deposits to loan money to other consumers and generate profits through interest-bearing investments. So, generally speaking, growing core deposits helps institutions better leverage these funds and earn profits.

Though this may sound like technical knowledge, the truth is that understanding how core deposits work and why they are important can help you better navigate your banking life.

What Is a Core Deposit?

Simply put, core deposits are a stable source of capital for financial institutions like banks and credit unions. It’s money that consumers deposit and that the bank then turns around and uses elsewhere. For instance, those funds could be part of a loan. Core deposits usually include individual savings accounts, business savings accounts, and money market accounts.

In addition, financial institutions may offer incentives to encourage consumers to deposit money in a specific account to increase their core deposits. Building their capital with core deposits can have an array of advantages for a financial institution, including boosting revenue.

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.

How To Calculate Core Deposits

Given that core deposits can reflect a bank’s health, it may be valuable at times to figure out how much a financial institution has. This may be a bit technical for a typical layperson, but here is the technique.

• To calculate core deposits, one can look at the balance sheet or deposit footnotes that consist of checking, savings, and money market deposits. Ideally, it’s best to leave out particular broker or certificate deposits since both deposit accounts tend to follow rates and involve higher costs for the financial institution. Banks that are oversaturated with deposits like this may have liquidity issues and struggle to fund their loan portfolio.

• The next step: Compare the number of core deposits to overall deposits to find the ratio of core deposits.

◦ Banks with 85% to 90% core deposit ratios are considered to be solid financial institutions.

◦ Additionally, banks should generally have a substantial percentage of non-interest-bearing deposits, consisting of about 30% of total deposits. That ratio of 30% or higher also indicates that a financial institution is in good health.

Recommended: When Will Direct Deposit Hit My Account?

Methods for Increasing Core Deposits

The success of a financial institution relies on the growth of its core deposits. For this reason, financial institutions continually look for ways to attract and retain their customer base and increase those deposits. It’s critical to success.

Here are some strategies financial institutions implement to grow their core deposits.

Cultivating Relationships

Banks can boost core deposits by cultivating relationships with their current customers. After a consumer puts their money in the institution (whether by setting up the direct deposit process, electronically, or with a teller or ATM), they are now a client. The bank or credit union can focus on nurturing that relationship, so the consumer uses the bank for all of their banking needs. Perhaps they will move a savings or business account that they keep elsewhere to this bank.

What’s more, if the customer feels valued, they will likely share their experience with friends and family (you may have done this in your own banking life, for instance). This good word of mouth can lead to the growth of core deposits and strengthen the financial organization.

There are a variety of ways to cultivate better customer relationships. With account holders who bank at brick-and-mortar institutions, one technique is to enhance interactions with the staff. For example, a teller or bank representative might suggest personalized products to meet a client’s needs, such as one of the different kinds of deposit accounts. Online banks can also glean their customers’ needs and create tailored offers with incentives, like a cash bonus or additional services (say, budgeting help).

Another initiative might be to reach out to high net worth clients to personalize the relationship, knowing that these individuals are likely to have cash to deposit. Banks that pay attention to their customer’s needs and make an effort to add special touches can improve customer satisfaction, increasing core deposits.

Recommended: How to Deposit Cash at an ATM

Bolstered Online Services

In today’s world of digital financial management, enhancing online services can encourage more customers to deposit funds at a financial institution and potentially do so in larger amounts. Having the latest bells and whistles, such as seamless spending and saving tracking and the most advanced biometric security measures, can be a big plus.

This can be an especially good tactic for smaller financial institutions. Community banks may struggle with growing core deposits. If an institution like this has limited capital, enhancing online services can be an important avenue to pump up those core deposits. Improved online banking services may well cost a fraction of what it does to bolster a physical bank branch. Creating digital services can also help the bank reach more consumers. While a bank branch may generate between 75 and 100 new accounts per month, a digital branch could help increase this number by hundreds.

When opening a new account, many consumers choose to compare options online first. Even if a bank has competitive rates and has conveniently located branches, prospective account holders may choose competing banks if they rank higher on search engines. For this reason, creating an online presence and digital services that are as strong as possible can grow the number of deposits.

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Offer Tailored Services

Financial institutions that offer tailored services to particular industries or specialized banking products can attract consumers who value these services. For example, banks can identify niches or target audiences in their community that provide the most deposit advantages. If they are doing business in an area known for an abundance of hospitals, a niche bank might develop more banking products and services that meet the needs of healthcare professionals (say, ways to pay off student loans faster). They can mold an incentive strategy around the industry to attract more customers and core deposits.

Recommended: Understanding Funds Availability Rules

Banking and the FDIC

A financial institution must strike a balance between core deposits being available for consumers to withdraw funds and their cash being used to make loans and otherwise generate revenue. (After all, one of the ways a bank makes money is based on charging a higher interest rate on loans than is paid on deposits.)

There are governmental guidelines for this: All financial institutions must have bank reserves, a percentage of deposits they must hold and have available as cash. In the past, this figure has ranged between 3% and 10%. But as of 2020 and the COVID-19 crisis, this requirement was lowered to 0% to stimulate the economy. So, since banks are not required to set aside any deposits, if all of the depositors requested total withdrawals from their accounts, the bank wouldn’t have enough money to fulfill this request.

That’s where the Federal Deposit Insurance Corporation (FDIC) comes in and can insure core deposits. Here’s how much does the FDIC insure: up to $250,000 per depositor, per account ownership category, per insured institution. So even in the very unlikely event that a bank were to fail, consumers will have this amount covered.

The Takeaway

Core deposits — the funds put in checking, savings, and money market accounts — help banks make money and offer loans to consumers. Growing core deposits is vital to an institution’s success, and this goal can be achieved in a variety of ways, including offering more personalized services and more online banking capabilities.

If you are interested in accessing state-of-the-art benefits of digital banking, see what SoFi offers.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is the difference between core deposits and purchased deposits?

Core deposits are typically stable bank deposits, such as those in checking accounts and time deposits. Purchased deposits are rate-sensitive funding sources that banks use. These purchased deposits are more volatile and, as rates change, more likely to be withdrawn or swapped out.

What is a non-core deposit?

Non-core deposits are certificates of deposit or money market accounts that have a specified rate of interest over their term.

How much does FDIC cover?

The FDIC covers up to $250,000 per depositor, per account ownership category, per insured institution in the very unlikely event of a bank failure.

Photo credit: iStock/MicroStockHub

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBK-Q224-1945677-V1

Source: sofi.com

Apache is functioning normally

July 2, 2024 by Brett Tams

Overdraft and non-sufficient funds (NSF) fees have a lot in common. Both fees are triggered when there’s not enough money in an account to cover a transaction, except with overdrafts, the transaction usually goes through and with NSF, it’s canceled.

Both of these bank fees can be avoided with a bit of focus and practice. Read on to learn the details.

What Are Overdraft Fees?

When a bank account balance is negative (meaning transactions exceed deposits), the account holder is often charged an overdraft fee. The transaction goes through, but the account holder owes the bank the cost of the transaction to bring the account back to zero, as well as the overdraft fee set by the bank.

Typically, overdraft fees will continue with each transaction until an account’s balance is out of the red. That means if an account holder is unaware of the overdraft and goes on using the card without making a deposit, they could be hit with a fee for each charge, no matter how small.

The average overdraft fee is currently $26, but it can be as high as $39, which can add up quickly when someone isn’t paying attention to their checking account balance. It’s worth noting that the government is considering capping these fees at a lower figure, which would benefit consumers.

How Do Overdraft Fees Work?

Overdraft policies vary from bank to bank, but typically they kick in when a debit card or checking account transaction exceeds the amount held in a bank account. There is usually a limit for how much overdraft is covered, say $50.

When the transaction goes through, the bank has a few choices:

• If the account holder has opted for a tool like overdraft protection, they may be shielded from overdraft fees up to a certain amount

• If the account is in good standing, or if the account holder has never over drafted before, the bank may choose to waive overdraft fees in this instance (or you might be able to request this and see if you can avoid overdraft fees).

• If the account holder has a history of over drafting, or is relatively new, the bank may choose to charge the overdraft fee.

When You Could Get Hit With an Overdraft Fee

It’s not just debit card purchases that can set off an overdraft fee. If the account holder doesn’t have enough cash in their checking account, any of the following transactions could lead to an overdraft fee:

• ATM withdrawals

• Checks

• Autopay bill payments or withdrawals

• Transfers between bank accounts

As mentioned above, once an account holder overdraws, the bank may continue to charge subsequent overdraft fees on the account until the balance is restored through a deposit.

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What Are NSF Fees?

On the surface, it’s hard to tell the difference between overdraft and NSF fees. Both fees occur when an account doesn’t have enough cash to cover a transaction.

However, an NSF fee is charged when an account doesn’t have enough money to cover a transaction and the transaction is canceled or rejected.

The average NSF fee is currently $20, but some banks may charge considerably higher.

How Do NSF Fees Work?

An account holder might trigger an NSF fee instead of an overdraft fee if they:

• Opt out of or never signed up for overdraft protection

• Already exceeded the bank or credit union’s overdraft protection limit

• Write a check that’s more than the balance of the account

When You Could Get Hit With an NSF Fee

NSF fee policies vary by banking institution, but an account holder is more likely to be charged in the following situations:

• Check writing. When someone writes a check for more than the account’s balance, the check bounces, and the transaction won’t go through. The account holder will be charged an NSF fee by their bank, and they may be charged an additional fee by the bank or entity that tried to cash the check.

• ACH payments. An ACH payment, or Automated Clearing House Network payment, can be an easy way to transfer money or pay someone, but if the transferring bank doesn’t cover ACH payments, the transaction could be canceled and the NSF fee charged.

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What Are the Differences Between Overdraft and NSF Fees?

NSF and overdraft fees are commonly lumped together as general bank fees, but they are not the same. Here’s the difference between overdraft and NSF fees:

NSF Fee vs. Overdraft Fee

	NSF Fee	Overdraft Fee
Average Fee	$19	$26
Transaction goes through?	No	Yes
Charged repeatedly until corrected?	No	Yes
Can it be avoided through overdraft protection?	No	Yes

Tips for Avoiding Overdraft and NSF Fees

Overdraft and NSF fees are frustrating for many people because they fall into the category of bank fees you should avoid — and you can easily do so with a few simple practices.

1. Setting Up Email and Text Alerts

Many banks and credit unions offer email and text bank alerts that account holders can set up to notify them of low balances. For example, an account holder could set up an alert when their checking account balance falls below a certain amount.

With enough notice, account holders have time to transfer money into the account to cover upcoming charges or auto-debits.

2. Utilizing Direct Deposit

Setting up direct deposit with an employer means paychecks go directly to a bank account on payday. It’s a nearly immediate payment, opposed to waiting for a check by mail then depositing it at the bank. This could save someone from overdraft fees, especially if paychecks and major bills occur at regular intervals.

3. Having a Savings Cushion to Prevent Overdraft

Keeping a healthy cash cushion in a checking account can prevent it from dropping dangerously low. While it’s not best practice to keep tons of extra cash in a checking account (as these accounts often have low or no interest), keeping a few hundred extra in the account could keep someone from overdrafts when they need to make a transfer or forget about a check they wrote.

4. Checking Finances Regularly

While automation can help, nothing beats a regular check-in for managing your bank account. Consider reviewing account balances at least once a week. It can help you keep those numbers in mind when a large transaction or purchase comes up.

Recommended: Is Overdraft Protection Worth It?

5. Utilizing a Budgeting App

Keeping a budget is an important part of financial wellness. Not only does it involve knowing the balance of bank accounts, but it can also prevent people from over- or unnecessary spending that sends an account into overdraft. Some budgeting apps come with alerts to notify users when account balances are low. One good resource: Your financial institution. See what it offers.

The Takeaway

Both overdraft and non-sufficient funds (NSF) fees occur when your bank balance drops below zero into negative territory. The key difference is that with overdraft fees, the transaction is typically completed, while with NSF fees, the transaction is usually rejected.

You might look for a bank which doesn’t charge overdraft fees up to a limit to minimize the impact of these charges and take steps to always keep your account with a positive balance.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is the difference between overdraft and non-sufficient funds fees?

The difference between overdraft and NSF fees is the success or failure of the transactions. Overdrafting will allow the debit to clear. With an NSF, the transaction does not go through.

Is an overdraft fee or an NSF fee more expensive?

Currently, NSF fees average around $19, while overdraft charges are about $26.

How can you avoid overdraft and NSF fees?

You can avoid overdraft and NSF fees by keeping a close eye on bank account balances and choosing a bank that offers overdraft protection or forgiveness.

Photo credit: iStock/Ivan Pantic

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SOBK-Q224-1939911-V1

Source: sofi.com

Apache is functioning normally

July 2, 2024 by Brett Tams

The home-buying process can be especially nerve-wracking if you’re worried about having less-than-ideal credit. Luckily, some lenders will consider applicants with bad credit — or no credit at all.

CNBC Select rounded up the top lenders that consider applicants with credit scores lower than the typical 620 requirement. We evaluated each based on the types of loans offered, customer support, the required minimum down payment amount, and other factors (see our methodology below).

Keep in mind that while you may be approved for a mortgage with a lower credit score, you’ll likely receive an interest rate on the higher end of the lender’s rate range.

Best mortgage lenders for bad credit

Best for flexible terms

Rocket Mortgage

Annual Percentage Rate (APR)

Apply online for personalized rates
Types of loans

Conventional loans, FHA loans, VA loans and jumbo loans
Terms

15- and 30-year conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.
Credit needed

Typically requires a 620 credit score but will consider applicants with a 580 as long as other eligibility criteria are met.
Minimum down payment

3.5% if moving forward with an FHA loan

Already have a mortgage through Rocket Mortgage or looking to start one? Check out the Rocket Visa Signature Card to learn how you can earn rewards

Pros

Largest home lender in the U.S.
Offers 1% down conventional mortgage
High scores for customer satisfaction
Shorter-than-average closing time
Rebate of up to $10,000 for buying with Rocket Homes

Cons

No USDA mortgages, construction loans or HELOCs
Hard credit check required for customized rate
Higher origination fees than competition
No retail branches

Who’s this for? Rocket Mortgage stands out if you’re seeking flexibility. While most lenders tend to require a minimum credit score of 620, Rocket Mortgage accepts applicants with credit scores as low as 580.

Standout benefits: Rocket Mortgage offers a free program called Fresh Start to help potential applicants boost their credit scores before applying. Its proprietary low down payment option, the ONE+ mortgage, allows borrowers to put as little as 1% down.

[ Jump to more details ]

Best for veterans

Navy Federal Credit Union

Annual Percentage Rate (APR)

Apply online for personalized rates
Types of loans

Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans, adjustable-rate mortgage
Terms

10 – 30 years
Credit needed

Not disclosed but lender is flexible
Minimum down payment

0%; 5% for conventional loan option

Terms apply.

Pros

0% downpayment for most loan options
flexible repayment terms ranging from 10 years to 30 years
Offers refinancing, second-home financing and loans for investment properties
No PMI required
Fast pre-approval
RealtyPlus program allows applicants to receive up to $9,000 cash back

Cons

Must be a Navy Federal Credit Union member to apply

Who’s this for? Navy Federal Credit Union is ideal for current or retired members of the Armed Forces with a Navy Federal Credit Union membership (immediate family members are also eligible). While this lender doesn’t disclose its required minimum credit score, it works with members to analyze their circumstances and find the right mortgage fit for them, making Navy Federal Credit Union a potentially more flexible lender if you have a lower credit score.

Standout benefits: You can use the RealtyPlus program to buy a home and receive up to $9,000 in cash back. Private mortgage insurance (PMI), is also not a requirement for a low down payment on a mortgage through this lender.

[ Jump to more details ]

Best for no PMI

CitiMortgage®

Annual Percentage Rate (APR)

Apply online for personalized rates
Types of loans

Conventional loans, FHA loans, VA loans and Jumbo loans
Terms

15 – 30 years
Credit needed
Minimum down payment

Terms apply.

Pros

Citi’s HomeRun Mortgage program allows for a downpayment as low as 3%
Citi’s Lender Assistance program gives eligible homebuyers a credit of up to $5,000 to use toward closing costs
Ability to choose between fixed-rate and adjustable-rate mortgages
New and existing Citi bank customers can qualify for closing cost discounts based on their account balance
HomeRun mortgage program allows for a downpayment of less than 20% without PMI
Provides homeownership education and counseling

Cons

No options for a 0% downpayment
Existing customers need high account balances to receive some of the highest interest rate discounts

Who’s this for? CitiMortgage is great if you want to put less than 20% down but avoid the monthly PMI bill. If you apply for a mortgage through Citi’s HomeRun program, you can make down payments as low as 3% without PMI. If you’ve already purchased your home, this program can also be used to refinance your mortgage.

Standout benefits: Existing Citi customers with an account balance between $1 and $49,999.99 can be eligible for a $500 closing credit. Those with higher balances can receive an interest rate discount. Qualified borrowers can use the Lender Paid Assistance program to get up to $7,500 in credits toward closing costs. Homeownership counseling and education are also available.

[ Jump to more details ]

Best for no credit score requirement

Guild Mortgage

Annual Percentage Rate (APR)

Fixed-rate and adjustable-rate available, apply online for rates.
Types of loans

Conventional loans, construction loans, FHA loans, VA loans, USDA loans and Jumbo loans
Terms

15-year to 30-year
Credit needed

Some loans require a 620 credit score, some require a 540 credit score or no credit score at all.
Minimum down payment

0% if moving forward with a USDA loan; 0% if moving forward with an Arrive Home™ or Zero Down mortgage (a 3% to 5% down payment is financed through a second mortgage with these options) ; 1% on conventional loans for some qualifying borrowers

Pros

Offers several low down payment mortgage options available
Wide variety of loans
Accepts applicants with credit as low as 540 or no credit at all with some loans
Provides lots of information online about the homebuying process
Robust brick-and-mortar and online presence

Cons

Rates are not available to view on the website
Mortgages may not be available for every home type

Who’s this for? Guild Mortgage can provide options even if you don’t have a credit score or have a score as low as 540 — a lower threshold than the typical 620 credit score lenders usually require to even look at an applicant. Instead, Guild uses proof of on-time payments such as rent checks, utility bills and insurance payments to verify an applicant’s credit. It also boasts a variety of loans and down payment assistance programs if you want to make a small down payment.

Standout benefits: Guild Mortgage’s Zero Down allows borrowers with a credit score of 600 or greater to take out an FHA loan with 0% down — the lender will provide an additional repayable loan to the borrower as a second mortgage to supplement the FHA’s traditional 3.5% down payment requirement. Qualifying borrowers who make up to 160% of the area median income can also take out Guild Mortgage’s Arrive Home™ loan, which allows borrowers to put 0% down by taking out a repayable second mortgage with the company.

[ Jump to more details ]

Best for a quick closing

CrossCountry Mortgage

Annual Percentage Rate (APR)

Fixed-rate and adjustable-rate available, apply online for rates.
Types of loans

Conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans
Terms

Apply online for terms
Credit needed

620 for conventional loans, 500 to 580 for some government-insured loans
Minimum down payment

Pros

Provides down payment grants
FastTrack Credit Approval program allows some borrowers to close on mortgage within 10 days
Website provides a variety of tools, including a mortgage calculator, homebuying guide, and refinancing guide
Available in all 50 states

Cons

Higher-than-average rates
Rates are not online

Who’s this for? CrossCountry Mortgage is great if you want a lender with faster-than-average closing times. It offers conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans. While most of its conventional loans require a 620 credit score, some federally insured options accept borrowers with a credit score as low as 500.

Standout benefits: CrossCountry Mortgage offers down payment grants for qualified buyers. With its FastTrack Credit Approval, CrossCountry says its borrowers have an edge in the home buying process with a reapproval process that allows borrowers to get the funds in as little as 10 days.

[ Jump to more details ]

Rocket Mortgage

Rocket Mortgage — the largest home loan provider in the country — has a variety of loan options available — especially for those looking to make a small down payment. It accepts borrowers with credit scores as low as 580 and provides a large number of educational resources on its easy-to-use website. Rocket has consistently scored above average on customer satisfaction surveys.

Minimum credit score

580

Types of mortgage loans offered

Fixed-rate, adjustable-rate, FHA loans, VA loans, jumbo loans, HomeReady and Home Possible loans

Down payment minimum

1% with the ONE+; 3.5% with FHA loan

[ Return to summary ]

Navy Federal Credit Union

Navy Federal Credit Union is the largest provider of VA loans and provides many benefits to veterans, and their immediate families. With a VA loan, you have the option to pay 0% down and the seller can contribute up to 4% of the home’s value toward closing costs. Navy Federal also offers the Military Choice mortgage, which has similar guidelines to the VA loan, such as no PMI and a 0% minimum down payment, but allows sellers to contribute up to 6% of the home’s value toward closing costs.

Minimum credit score

Not disclosed.

Types of mortgage loans offered

Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans

Down payment minimum

0%; 5% with conventional loans

[ Return to summary ]

CitiMortgage

CitiMortgage allows homebuyers to make a small down payment without worrying about PMI. Citi offers qualifying existing customers closing cost aid or interest rate discounts.

Minimum credit score

580 if taking out an FHA loan.

Types of mortgage loans offered

Conventional loans, FHA loans, VA loans and jumbo loans

Down payment minimum

[ Return to summary ]

Guild Mortgage

Guild Mortgage provides many loan types for borrowers with much lower credit than lenders usually require. In some cases, a credit score is not even needed. Guild also provides several low down payment options.

Minimum credit score

540 for some mortgages; no credit needed for some mortgages

Types of mortgage loans offered

Conventional loans, construction loans, FHA loans, VA loans, USDA loans and Jumbo loans

Down payment minimum

0% with a down payment assistance loan as a second mortgage.

[ Return to summary ]

CrossCountry Mortgage

CrossCountry Mortgage offers a wide variety of loans and says it can give its borrowers a leg up in the homebuying process through its FastTrack Credit Approval which allows borrowers to close on a loan in as little as 10 days.

Minimum credit score

580 or 500 for some government-insured loans.

Types of mortgage loans offered

Conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans

Down payment minimum

[ Return to summary ]

FAQs

What is pre-approval and how does it work?

Pre-approval is a statement or letter from a lender indicating how much money you qualify to borrow to purchase a home and your potential interest rate. You’ll likely have to provide bank statements, pay stubs, tax forms and employment verification, among other requirements, and once pre-approved, you’ll receive a mortgage pre-approval letter, which you can use to begin viewing homes and making offers. It’s best to get pre-approved at the start of your homebuying journey before you start looking at homes.

How do mortgages work?

A mortgage is a loan you can use to purchase a home. It’s also an agreement between you and the lender that essentially says you can purchase a home without paying for it in full and upfront — you’ll just need to put some of the money down — usually between 3% and 20% of the home price — and pay smaller, fixed monthly payments over a certain number of years, plus interest.

How is my mortgage rate decided?

Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn’t set mortgage rates, they do tend to move in reaction to actions taken by the Federal Reserve on its interest rates.

While market forces may influence the general range of mortgage rates, your specific rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.

What is a conventional loan?

A conventional loan is a loan that’s funded by private lenders and sold to government enterprises such as Fannie Mae and Freddie Mac. It’s the most common type of loan and some lenders may require a down payment as low as 3% or 5%.

What is an FHA loan?

A Federal Housing Administration loan, or FHA loan, typically allows you to purchase a home with looser requirements — for example, you may get approved with a lower credit score or be able to get away with having a higher debt-to-income ratio. You’ll typically only need to make a 3.5% down payment.

What is a USDA loan?

A USDA loan is offered through the United States Department of Agriculture and is aimed at individuals who want to purchase a home in a rural area. Best of all, USDA loans require a minimum down payment of 0% — in other words, you can use it to buy a rural home without a down payment.

What is a VA loan?

VA mortgage loans are provided through the U.S. Department of Veterans Affairs, meant for service members, veterans and their spouses and require a 0% down payment with no mortgage insurance.

What is a jumbo loan?

Borrowers who need a mortgage for more than $766,550 to purchase a single-family home (in most areas) will need to take out a jumbo loan. Note that these types of loans typically have stricter credit score and debt-to-income ratio requirements in part because they do not meet the Federal Housing Finance Agency’s (FHFA) conforming guidelines.

What is the difference between a 15- and 30-year term?

A 15-year mortgage gives homeowners 15 years to pay it off in fixed, equal amounts plus interest, while a 30-year mortgage gives 30 years to pay it off. With a 30-year mortgage, your monthly payments will be lower since you’ll have a longer period to pay off the loan, however, you’ll wind up paying more in interest over the life of the loan since it is charged every month. A 15-year mortgage, on the other hand, lets you save on interest but you’ll likely have to make a higher monthly payment.

Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best bad credit mortgages.

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Our methodology

To determine which mortgage lenders are the best for bad credit, CNBC Select analyzed dozens of U.S. mortgages offered by online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

When narrowing down and ranking the best mortgages, we focused on the following features:

Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
Closing timeline: The lenders on our list can offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances in which a particular lender does.
Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.

Note that the rates and fee structures advertised for mortgages are subject to fluctuate per the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee the interest rate and monthly payment remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

Source: cnbc.com

Apache is functioning normally

July 1, 2024 by Brett Tams

A depository institution is a financial institution into which consumers can deposit funds and where they will be safely held. Banks and credit unions are typical examples of these institutions.

Learning about how these institutions work and their pros and cons can build your financial literacy.

What Is a Depository Institution?

A depository institution is a place or entity — such as a bank — that allows consumers and businesses to deposit money, securities, and/or other types of assets. There, the deposit is kept safely and may earn interest.

To share a bit more detail, depository institutions are financial institutions that:

• Engage in banking activities

• Are recognized as a bank by either the bank supervisory or monetary authorities of the country it is incorporated in

• Receive substantial deposits as a part of their regular course of business

• Can accept demand deposits

In the U.S., all federally insured offices of the following are considered to be depository institutions:

• Commercial banks

• Mutual and stock savings banks

• Savings or building and loan associations

• Cooperative banks

• Credit unions

• International banking facilities of domestic depository institutions

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

How Do Depository Institutions Work?

A depository can receive funds from consumers and businesses via such means as:

• Cash

• Direct deposit

• Teller or ATM deposits

• Checks

• Electronic transfers

The depository institution holds these funds, and they are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per ownership category, per insured financial institution. If the institution is a credit union, funds will be similarly protected by the National Credit Union Administration, or NCUA vs. FDIC.

Funds are accessible on demand (aka demand deposits rather than time deposits), and the depository institution is required to keep a certain amount of cash in its vault to ensure it has funds available for clients.

Customers are able to earn interest on different types of deposits. The depository institution also earns interest; it’s one of the ways financial institutions make money. It does so by lending money on deposit to their customers in the form of different types of loans. (For instance, some of the money on deposit might earn the account holder 2% interest, while the bank then uses the funds for a mortgage that charges 6.00% interest. There’s a good profit margin there for the depository institution.)

Recommended: What Is a Community Development Financial Institution?

Types of Depository Institutions

To better understand the purpose depository institutions serve, let’s look at some examples.

Credit Unions

Credit unions may offer many of the same services as banks, but they are owned by account holders, who are also sometimes called members. These institutions are not nonprofits. The profits that the credit union earns are paid to members in the form of dividends or are reinvested into the credit union. To put it another way, the depositors are partial owners of the credit union. You often need to live in a certain area or work at a certain profession to keep your money at a credit union.

Commercial Banks

Commercial banks are what many of us visualize when we hear the term “bank,” whether we are thinking of a major bank with hundreds of brick-and-mortar branches or an online-only entity. They are usually owned by private investors and are for-profit organizations.

Commercial banks tend to offer the most diverse services of all depository institutions, from personal banking to global banking services such as foreign exchange-related services, money management, and investment banking. The offerings may depend on how large the institution is and which customer segments it serves (say, consumers and different types of businesses).

Savings Institutions

Savings institutions are the banks that serve local communities and loan institutions. Local residents deposit their money in these institutions, and in return, they can access credit cards, consumer loans, mortgages, and small business loans.

It’s possible to set up a savings institution as a corporation or as a financial cooperative. The latter makes it possible for depositors to have an ownership share in the saving institution.

Recommended: What Is an Intermediary Bank?

Depository Institutions vs Repositories

Repositories and depositories are two different things despite the fact that their names sound almost the same. Here’s some of the key differences.

• Depositories hold cash and other assets, but repositories hold abstract things such as intellectual knowledge, files, and data.

• Depositories are usually credit unions, banks, and savings institutions, while repositories are typically libraries, data-storage facilities, and information-based websites.

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Depository Institutions vs Non-Depositories

Unlike depository institutions, non-depository institutions don’t accept demand deposits. These are some of the differences between these two types of institutions:

• Depository institutions accept deposits and store them for safekeeping. Non-depository institutions, on the other hand, provide financial services but can’t accept demand deposits for safekeeping.

• Depository institutions are FDIC- or NCUA-insured, while non-depository institutions can be SEC-insured or have another type of insurance.

• Credit unions and banks are commonly depository institutions. Non-depository institutions are often brokerage firms and insurance companies.

Pros of Depository Institutions

Depository institutions have a few benefits to note:

• Money is safe and FDIC- or NCUA-insured

• Accounts can earn interest on time deposits such as certificates of deposit (CDs) and possibly other deposits

• Helps keep the economy healthy by allowing depository institution to lend out deposits and earn interest

• Reduced risk of assets being lost or stolen

Cons of Depository Institutions

There are a few downsides to depository institutions. Consider these points:

• Limited growth potential of deposited funds compared to investments, money market accounts, and CDs

• Banks, credit unions, and savings institutions may charge fees for holding funds

• Minimum account balance may be required

Tips for Choosing a Depository Institution

When it comes time to choose a depository institution, it can help to keep the following things in mind when comparing different options.

• Type. Carefully consider if a credit union, saving institution, or commercial bank is the right fit. Some commercial banks have brick-and-mortar locations, while others offer all of their services online. Online banks usually pay higher interest rates on savings and charge fewer and/or lower fees, since they don’t have the overhead associated with operating branch locations. Credit unions also tend to offer higher interest rates and lower fees as they are not-for-profit as commercial banks are.

• Features. Look for a depository institution that offers perks and services that suit your needs. Special features may include high interest rates, early access to direct-deposit paychecks, cash back deals, fee-free ATMs, and free access to credit scores.

• Fees. Shop around to see which depository institution has the lowest and/or fewest fees, such as account maintenance fees and overdraft fees. As noted above, credit unions tend to charge lower and/or fewer fees than commercial banks, as do online banks.

• Convenience. If you like to bank locally and know your bank tellers and officers, choosing an institution that has branches in your neighborhood is a wise move. If you prefer the seamlessness of banking 24/7 by app, however, you might opt to open an online savings account.

Recommended: What Is an Online Savings Account?

The Takeaway

Commercial banks, credit unions, and savings institutions are all examples of depository institutions. Depository institutions can be places to safely store funds that can then easily be accessed. Funds will typically be insured by either the FDIC or NCUA up to their usual limits of $250,000 per depositor, per ownership category, per insured institution.

Looking for a bank to deposit your money in that pays a great APY?

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is the difference between a bank and a depository?

There is no difference between a bank and a depository. A bank is a type of depository institution. Credit unions and saving institutions can also be depositories.

What are the types of depository institutions?

There are three main types of depository institutions. Commercial banks, credit unions, and savings institutions are all types of depository institutions.

Are commercial banks depositories?

Yes, commercial banks are one kind of depository institution where consumers can securely stash their money.

Photo credit: iStock/Mikhail Bogdanov

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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Source: sofi.com

Apache is functioning normally

June 30, 2024 by Brett Tams

Folks on Reddit report that American Express has now added terms to exclude Google Fi from counting as the Wireless category. This matters for things like the $10 Amex Business Platinum credit and for the 4x earn on the Business Gold.

Any purchases from Google Fi, third parties, authorized retailers or resellers are excluded. (Terms link)

From the statement: “Effective June 21, 2024, Google Fi is not an eligible US wireless provider and purchases of Google Fi will not be eligible for additional rewards or statement credits under the wireless rewards category”

From what I gather, it hasn’t worked in a while, and needed manual application to get credit. Going forward it’s less likely we’ll be able to get manual credit given it being clearly excluded.

Hat tip to DDG

Source: doctorofcredit.com

Apache is functioning normally

June 30, 2024 by Brett Tams

If you received a raise at work, first things first: Congratulations! Your first impulse may be to celebrate with a big purchase or party. But rather than blowing your salary bump right away, it’s wise to be strategic. Take a little time and consider how you might use that extra cash. It could help you reach some short- and long-term financial goals.

There can be a lot to consider, but keeping a few things in mind may help you figure out the best course of action.

How to Financially Handle a Pay Raise

To help you decide what to do with a pay raise, you’ll want to think broadly, and about the future. Here are a dozen tips that may help you be better informed as you make your decision about what to do when you get a raise.

1. Using It to Get Rid of Debt

A raise can allow you to set a lump sum of money aside or motivate you to regularly allocate toward your emergency fund so you are financially secure in times of need.
💡 Quick Tip: As opposed to a physical check that can take time to clear, you don’t have to wait days to access a direct deposit. Usually, you can use the money the day it is sent. What’s more, you don’t have to remember to go to the bank or use your app to deposit your check.

2. Using It to Build Your Emergency Fund

Having extra cash is a perfect opportunity to build an emergency fund if you don’t have one or if yours could use a boost. Financial experts advise having at least three to six months’ worth of basic living expenses in the bank. This can tide you over if, say, a big medical bill or car repair hits or if your family were to endure a job loss. A raise can allow you to set a lump sum of money aside or motivate you to regularly allocate toward your emergency fund so you are financially secure in times of need.

3. Re-Evaluating and Updating Your Budgeting

When you get a raise, you may be wondering how to manage this extra cash. There are probably a lot of wish-list items tempting you to increase your spending. Instead of shopping, it may be a good time to reevaluate your budget to see how you can best put your money to work.

Typically, budgets recommend that you first allocate funds toward your mandatory monthly expenses like mortgage, rent and other bills. Next, don’t forget to pay down debt, followed by adding some money to your emergency stash if needed. Have you also thought about retirement funds?

Make sure to figure out how much to save every month and put some of your money to work in a 401(k) or another retirement fund. With the money that’s left, you can spend as you see fit, invest it in the stock market, make charitable donations, or decide other ways to use it.

If you need more guidance on budgeting, look online at different techniques, such as the 50/30/20 budgeting rule, or test-drive some apps that help you see where your money is going and determine how to best manage it.

4. Avoiding Lifestyle Creep

If you are contemplating what to do with a raise, one thing to sidestep is lifestyle creep. That happens when a person makes more money but also spends more of it, typically on luxuries. So if you get a raise and then rent a more expensive apartment or sign up for a luxury-car lease, that’s lifestyle creep. You have bought into some of life’s finer things, but you may wind up just breaking even. In fact, even with more money, you may feel as if you are living beyond your means.

It can be smart to try and avoid this behavior because you don’t want to spend every penny you make. That’s not a healthy financial habit; it doesn’t help you build wealth over time. Yes, you can allow yourself to enjoy some discretionary spending (more on that in a minute). But if you let lifestyle creep happen, it may be hard to make ends meet and find opportunities to save for longer-term goals.

5. Re-Evaluating Your Retirement

When you get a raise, you have a prime opportunity to increase your retirement savings. It may not sound like fun compared to taking a vacation, but allocating money this way can be a good financial strategy to reach your goals.

If you have, say, a 401(k) plan with your employer, you can increase your monthly contribution and possibly snag the employer match, too, which is akin to free money. While it may not feel like a fun use of your raise now, your future self will thank you when you see how well your retirement savings are growing.

6. Invest in Yourself

Consider how your raise might help your long-term wellbeing, your mood, and your quality of life. Would it be wise for you to get in better shape? Have you been having trouble sleeping for a while? Do you feel hungry to learn a new skill? A bit of extra money might help you resolve those situations. Sometimes, not having enough money is a common and valid reason for not doing more of this kind of self-care.

Maybe, with your raise, you can now afford to take a few fitness classes and learn some moves you can do on your own. Perhaps you can work with a therapist on what’s keeping you up at night. Or maybe it would bring you joy to take some guitar lessons or pursue a continuing-ed class in a topic that has always fascinated you. Putting a portion of your raise to work this way can be rewarding on so many levels.
💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

7. Considering Inflation

Inflation has been very much in the spotlight lately. In recent years, inflation has reached highs not seen in decades. When inflation is high, your purchasing power declines. Simply put, your dollar doesn’t go as far.

If you get a raise during a period of high inflation, do the math. If you receive a 5% raise and inflation is 3.6%, then you are staying (just barely) ahead in terms of your finances. That raise is helping to protect your money against inflation but unfortunately it won’t stretch much further. This perspective is good to keep in mind so you don’t overspend and wind up with debt.

8. Preparing for Taxes

Getting a bump in your salary may impact your tax liabilities; it may nudge you into a higher tax bracket. If this is the case, your tax rate will rise, and you may need to pay out a higher percentage in taxes. Typically, this will only take your effective tax rate up a couple of percentage points, but it can make a difference to your bottom line.

To offset that, you may want to adjust your withholdings with your employer. If more money is withheld during the year, you could owe less or get a refund at tax time. This could help you avoid an unpleasant surprise (namely, a tax bill) come April.

9. Saving up More for a Large Expense

Are you saving for a vacation, a wedding, a home renovation, or a new car? If you have a big-ticket item on the horizon, you may want to put part of your raise towards that goal. It can be a good move for your finances in the long-run. The extra money can help you afford what you are saving toward. You can sidestep debt as you make your dream a reality. By doing so, you’re likely improving your credit and building wealth — it’s a win-win situation.

10. Investing Your Money

Investing your hard-earned money is historically one of the best ways to build wealth. For some, that can be a good reason to allocate some of your raise to increasing their investments.

A good place to start is by creating an investment portfolio with stocks, bonds, exchange-traded funds (ETFs) and other assets. This can be a vital part of making your financial plan.

11. Funding and Starting a Side Hustle

If you dream of building your own business from a hobby someday, you could use money from your raise to start a side hustle. If, say, you love making pastry, you might invest in cookware that will take your game up a notch. Or if creating apps is your passion, perhaps there’s a weekend class that could boost your skills. Keep tabs on how much money you allocate toward this side hustle and make sure these funds put you on a path to building a business.

12. Enjoying Your Financial and Career Successes

Many of these tips for using your raise wisely revolve around paying down debt, achieving long-term financial goals, and building wealth. But of course, do use a portion of your raise to reward yourself. You’ve received a financial award because of your hard work and dedication. You deserve to treat yourself! Whether that means having a fantastic dinner out with a couple of close friends or buying a coat you’ve been eyeing for a while now, you should find a way to mark this happy moment.

Managing Your Finances with SoFi

Getting a raise is an exciting life event. It shows that your hard work has paid off and your career is making progress. But it also means that you need to make some decisions about what to do with your money – it can be both exciting, and nerve-wracking.

Making some smart decisions about saving, investing, or even investing in yourself may be a good path. But again, it’ll come down to you, your goals, and your preferences. It may be helpful to speak with a financial professional, too.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

How do I avoid spending too much after I get a raise?

Create and stick to a budget. Even though you are making more money, you still have to be conscious over where your cash goes and avoid lifestyle creep, which involves spending more as you earn more. This can make it harder to achieve your financial goals.

Is it okay to treat myself when I get a raise?

It’s definitely reasonable to treat yourself when you get a raise; you earned it! But it’s not a habit that you want to get out of hand. You want to make sure you’re spending within your means and not accumulating debt.

Can a pay raise be a negative?

A raise can potentially be a negative if you spiral into unreasonable spending. You could wind up with debt to deal with. Also, take note if your raise pushes you into a higher tax bracket, which still means you’re making more money, but you’d be paying a higher tax rate on a portion of your earnings.

Photo credit: iStock/fizkes

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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Source: sofi.com

Apache is functioning normally

June 29, 2024 by Brett Tams

An electronic check, or eCheck, is an electronic version of a paper check. Instead of writing out a check and handing (or mailing) it to the recipient, you enter your banking information and the payment amount online and authorize a transfer of funds from your bank account to the payee’s bank account.

Electronic checks are a fast, safe, and convenient form of payment, but they do have a few downsides. Here’s what you need to know.

What Is an Electronic Check (eCheck)?

An electronic check, or eCheck, is an electronic money transfer designed to perform the same function as a traditional paper check. You can often use an eCheck to pay bills, shop on an online marketplace, or make other types of payments.

To issue an eCheck, you need to provide your bank account number, bank’s routing number, and payment amount, then authorize the transaction by accepting a website’s terms and conditions. The eCheck is then processed by the Automated Clearing House (ACH), a secure system that facilitates electronic payments and money transfers between banks. Once authorized, the funds leave your checking account and get deposited into the payee’s checking account.

Since an eCheck is in an electronic format, it can be processed in fewer days than a traditional paper check. Electronic checks also generally have more security features than standard checks, including authentication, digital signatures, and encryption.

How Does an eCheck Work?

The process of paying by eCheck involves three basic steps:

• Authorization: First, you need to fill out your eCheck through an online payment portal. You then click “Submit,” which authorizes the payee to withdraw the payment amount from your checking account. In some cases, you can provide your banking information and authorize an eCheck over the phone.

• Processing: The business’s payment processor receives the eCheck and sends a payment request to the ACH network. The ACH network confirms that the funds are available in your account.

• Settlement: Once the transaction is verified and approved by the ACH network, the funds are transferred from your account to the payee’s account.

How Long Does an eCheck Take to Clear?

The time it takes for an eCheck to clear can vary, but it generally takes between three to five business days. The reason for the delay is the ACH network processes payments in batches, not one by one. Once they start processing the eCheck, the network has to verify your bank information and perform security checks, which can take a few days.

Also keep in mind that eChecks aren’t processed on weekends and holidays. So if a you send an eCheck on a Friday, the payee may not receive the funds until the middle or end of the following week

Recommended: Cleared Funds: Definition and Breakdown of Funds Clearing Time

Advantages and Disadvantages of eChecks

EChecks have a number of advantages, but also a few drawbacks. Here are some things to keep in mind.

Advantages

• Cost-effective: Electronic checks are often more cost-effective than paper checks, since you don’t need to pay for paper checks or stamps. And unlike using a credit card (which may come with a surcharge), eChecks generally don’t trigger a processing fee.

• Convenience: Electronic checks eliminate the need for physical checks, reducing the time and effort required for writing, mailing, and processing paper checks. They can be easily initiated and authorized online or over the phone.

• Security: Electronic checks offer enhanced security features, such as encryption and authentication, to protect sensitive financial information. This reduces the risk of fraud and unauthorized transactions.

• Environmentally friendly: By reducing the need for paper checks, eChecks contribute to environmental sustainability by minimizing paper waste and the resources required for printing and mailing.

Disadvantages

• Clearing time: Electronic checks can take several days to clear, which may be longer than other electronic payment methods. This can be a drawback for those who require immediate access to funds.

• Possibility for errors: While eChecks reduce the risk of errors compared to paper checks, there is still a possibility of making a mistake in entering your bank account information or routing numbers. Such errors can delay the transaction process.

• Limited acceptance: Not all businesses or individuals accept eChecks as a form of payment. This can limit the usability of eChecks in certain situations.

• Potential for fraud: As with any electronic payment method, eCheck payment may be subject to fraud or unauthorized transactions. You want to be sure to share your bank account information only with trusted merchants.

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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!

What’s the Difference Between ACH and eChecks?

The terms ACH and eCheck are often used interchangeably, but they refer to different aspects of the electronic payment process.

ACH (Automated Clearing House): ACH is a network and system used for processing a wide range of electronic payments, including electronic checks. The network facilitates the transfer of funds between banks and ensures the secure processing of transactions.

Electronic check: An eCheck is a specific type of payment that is processed through the ACH network. It is an electronic version of a traditional check and involves the transfer of funds from one bank account to another.

In short, the ACH network is the infrastructure that enables various types of electronic payments, including eChecks. An eCheck is a type of transaction that utilizes the ACH network for processing.

Is Paying by eCheck Safe?

Yes, paying by eCheck is generally considered safe, thanks to several security measures that are in place. Most notably, eChecks use encryption to protect your sensitive financial information during transmission. This ensures that the data is secure and cannot be intercepted by unauthorized parties. Electronic checks also require timestamped digital signatures to help prevent fraud.

Recommended: Are Mobile Payment Apps Safe?

The Takeaway

Electronic checks are essentially the digital version of traditional paper checks. These checks are facilitated by the Automated Clearing House (ACH) network, an electronic network used by U.S. financial institutions. Funds are electronically withdrawn from the payer’s checking account, transferred over the ACH network, and deposited into the recipient’s checking account.

Electronic checks are a safer alternative than paper checks, and also faster to clear and cheaper to issue. However, eChecks take longer to process than paying with a debit or credit card and they aren’t accepted everywhere.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

How do I pay with an eCheck?

The process of paying with an eCheck mirrors that of writing a traditional check, but in a digital format. If the business you’re paying accepts eChecks, you simply need to enter your bank account number, bank’s routing number, and the payment amount on a secure online payment portal. You then authorize and submit the eCheck.

Does it cost money to send an eCheck?

Not typically. Merchants generally have to pay a small processing fee for accepting eChecks but this cost is not usually passed on to the consumer.

Can you reverse an eCheck?

Yes, but you have to act quickly. To reverse an eCheck, you generally want to notify your bank as soon as you know you need the payment halted, ideally within the same day. Once the payment clears, your bank may not be able to reverse the process.

Photo credit: iStock/kazuma seki

SOBK-Q224-1920598-V1

Source: sofi.com

What Is a Standby Letter of Credit?

How a Standby Letter of Credit Works

Types of Standby Letters of Credit

Financial SBLC

Performance SBLC

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Standby Letter of Credit Example

Advantages of a Standby Letter of Credit

Disadvantages of a Standby Letter of Credit

How to Obtain a Standby Letter of Credit

The Takeaway

FAQ

What does standby mean in letter of credit?

What is the difference between a letter of credit and a standby letter of credit?

Can SBLC be used as collateral?

What Is a Safe Deposit Box?

What You Should and Shouldn’t Keep in a Safe Deposit Box

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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!

Items Typically Kept in a Safe Deposit Box

Items to Avoid Putting in a Safe Deposit Box

How Much Does a Safe Deposit Box Cost?

How to Get a Safe Deposit Box

How Safe Is a Safe Deposit Box?

Pros and Cons of Safe Deposit Boxes

The Takeaway

FAQ

What can I use instead of a safe deposit box?

Can safe deposit boxes be jointly shared?

Is it safe to keep money in a safe deposit box?

Do banks know what you put in a safety deposit box?

FAQ

What is a rate lock?

What are mortgage points?

What are closing costs?

What Is a Core Deposit?

How To Calculate Core Deposits

Methods for Increasing Core Deposits

Cultivating Relationships

Bolstered Online Services

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Offer Tailored Services

Banking and the FDIC

The Takeaway

FAQ

What is the difference between core deposits and purchased deposits?

What is a non-core deposit?

How much does FDIC cover?

What Are Overdraft Fees?

How Do Overdraft Fees Work?

When You Could Get Hit With an Overdraft Fee

What Are NSF Fees?

How Do NSF Fees Work?

When You Could Get Hit With an NSF Fee

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!

What Are the Differences Between Overdraft and NSF Fees?

Tips for Avoiding Overdraft and NSF Fees

1. Setting Up Email and Text Alerts

2. Utilizing Direct Deposit

3. Having a Savings Cushion to Prevent Overdraft

4. Checking Finances Regularly

5. Utilizing a Budgeting App

The Takeaway

FAQ

What is the difference between overdraft and non-sufficient funds fees?

Is an overdraft fee or an NSF fee more expensive?

How can you avoid overdraft and NSF fees?

Best mortgage lenders for bad credit

Best for flexible terms

Rocket Mortgage

Annual Percentage Rate (APR)

Types of loans

Terms

Credit needed

Minimum down payment

Pros

Cons