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This Week In Your Wallet: High-Yield Checking & Dodging Doc Fees

You work hard for your money. And then, if you’re like many people, you put it in the bank where it — at least over the last half decade or so — has done pretty much nothing for you. And when I say nothing, I mean zilch, zero, bupkis. Lower than low interest rates on savings means the money you’ve stashed in the bank for safety actually lost purchasing power after taxes and inflation.

To quote the ’70s philosopher Jim Croce: But it doesn’t have to be that way…(A free signed book to the first person who Tweets me the rest of that lyric.)

Bankrate.com has come up with a list of 20 checking accounts that yield 2 percent or more, and no that’s not a typo. High-yield checking accounts are different from plain vanilla ones. They’re best for those who regularly bank online and use debit cards, because to receive the best rates, you usually have to use direct deposit, use your debit card a minimum number of times (like 10), sign up for electronic statements and/or pay bills online. That said, if you typically do those things anyway these accounts are worth looking into.

The one strange stumbling block is that these accounts tend to have maximum — rather than minimum — balances because they’re not going to pay you that above-average interest on more than it makes sense for them from a profitability perspective. Maximum balance requirements range from $5,000 to $25,000 or a bit higher. Some accounts are only available to residents of the states, where the banks and credit unions are based.

Is it worth the hassle of switching accounts? Let’s say you have a balance of $25,000 (a common cap for high-yield accounts) in an account with a 2 percent return. With that 2 percent, you’d pocket another $500 each year. Compare this to a traditional checking account’s average return of 0.06 percent — which would earn you $15 on your $25,000 — and you can see why, at the very least, it’s worth looking into.

No Soliciting Please

Save your sanity (and possibly some cents) by reducing the amount of junk mail and  telemarking calls you receive. This week LowCards.com tells you how. For starters, you can stop credit card offers from being mailed to you at OptOutPrescreen.com. You can hit the pause button for five years, or make it permanent by filling out a form online. (An added bonus: This move makes yourfinances more secure too. Pre-approved credit card offers can be like candy for identity thieves.) Similarly, you can stop unwanted junk mail by visiting dmachoice.org, and getting off of the mailing lists from members of the Direct Marketing Association — it represents about 80 percent of direct marketers. As for the calls, register your name and number(s) in the National Do Not Call Registry at DoNotCall.gov. It’s a free service put on by The Federal Communications Commission (FCC). Fill out a short form and have a much quieter phone in about 30 days.

Dodging Doc Fee

If you’ve ever purchased a car from a dealership, then you may have noticed the documentation fee or “doc fee” on the sales contract. It covers the dealership’s cost of filling out and filing paperwork, which can be timely and expensive for the dealer, according to Edmunds.com. Straightforward? Sure. But depending on where you live, fees can range anywhere from less than a $100 to over $700 (i.e. Florida’s average doc fee is $675). That’s why it pays to know how your state handles doc fees, and which dealerships charge more than others. For example, if you live in one of the 10 states that limits doc fees, like California, then the most you’ll ever have to pay is $80. (See the average fee in your state here.) However, if you live in a state that has no limitations on its dealerships, then the fee is at the dealer’s discretion.

When you’re shopping dealerships, make sure to ask how much their doc fee is. Don’t be surprised if neighboring dealers have similar prices, which is why Edmunds suggests expanding your search to nearby towns and cities to see if there’s a bigger difference. And then, when it comes down to buying, you can ask if the fee is negotiable, or better yet, removable. If the dealer doesn’t budge, you can take your business elsewhere, or ask for a deeper discount on the car.

Game Of Loans

Playing off the famous Game of Thrones motto, “Winter is Coming,“ thousands of college graduates are decorating their graduation caps with the line: “Game of Loans: Interest is coming.” And it’s true. In the coming months, new grads will be mapping out their student loan payments. As USA TODAY reports, it’s one of the five financial musts for young adults right out of college.

First, you have to understand your financial obligation and calculate how long it will take you to pay off your debt. (Debt calculators can help.) Then, you have to pay close attention to the interest rates on your loans. Perhaps you’re a good candidate for refinancing so that you get a lower interest rate or monthly payment. I wrote about this recently for Fortune.com. Also know that it’s OK to take advantage of the grace period, but if you do, use your time wisely. Save money to put toward finding a job, relocating or padding your emergency savings.

Speaking of which…in addition to making your first payments, it’s also important to make your first serious budget. Now’s the time to really understand how much you have coming in versus how much you have going out. If you’re fortunate enough to jump right into your first job out of college, then understand the company’s benefits and retirement options. It’s not too early to start saving for retirement. In fact, you’re right on time.

Have a great week,


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