Certificates of deposit often offer higher interest rates than savings accounts and money market accounts because the banks expect customers to keep their money locked away in CDs for a predetermined period of time. Most banks discourage withdrawals from CDs by charging a penalty for any withdrawal before maturity.
The penalty usually takes the form of a certain portion of interest that the customer would have been earned. A number of banks have begun improving their certificates of deposit by offering “no penalty” options. Ally Bank is offering an 11-month no penalty CD.
Unlike Ally Bank’s other CD offerings, which charge a penalty of 60 days’ interest if you withdraw any portion of your deposit before the maturity date, you can withdraw your entire balance in the no penalty CD at any time starting six days after you open the account. You cannot, however, withdraw a portion of your balance; you must remove all the funds in the CD in order to qualify for the penalty-free benefit.
One thing to keep in mind before you open a CD is the likelihood of interest rates increasing before maturity. Unless you’re experimenting with Ally’s “Raise Your Rate” CD, you lock in the current interest rate when you open the account. If interest rates increase around you, you will not be able to take advantage of the higher rates unless you close the account and open a new one — a free option with the no penalty CD.
Rates are at all-time lows, and they have no place to go but up. The only question is the timing.
For more of my thoughts on Ally Bank, read my review. Consumerism Commentary is an authorized affiliate of Ally Bank.
On the surface, it seems like it would make sense to enroll in a biweekly mortgage payment plan. In theory, these biweekly mortgage programs offered by lending servicing companies work by allowing you to send half of your monthly mortgage amount every two weeks. As a result, you make two “extra” biweekly payments each year, reducing the total number of months it takes to pay off the mortgage.
There are some misconceptions or disadvantages, though, so it pays to read the fine print before you sign up for one of these plans.
You may not save on interest. While it sounds like sending a payment earlier in the month will reduce the amount of interest you need to pay, that is not necessarily the case. Furthermore, even if you send a partial payment early, your loan servicing company may just hold onto your funds in their own account before sending one monthly payment to the lender.
You might pay more. Loan servicing companies often charge extra fees for biweekly payment plans. You may need to pay an up-front fee of over $400. If not, the company will likely charge a transaction fee for each payment you make or a monthly fee for remaining within the program.
If your loan agreement allows it, you would most likely be better off creating your own accelerated payment plan.
Check with your lender to make sure you will be allowed to send a payments early.
If you are allowed, ask whether you will be charged a fee for prepaying your mortgage. This fee punishes consumers who want to be more responsible about their mortgage payments.
Next, ensure that the lender will credit the funds to your loan right away rather than waiting until the end of the month.
Furthermore, you must indicate that any payment above the amount you owe each month should be applied to reducing your principal, not interest, to reduce the total amount of interest you pay over the course of the loan.
If the lender responds with favorable answers, pay extra each month, ensuring to note on your payment coupon that the extra funds should be designated towards the loan principal.
One successful retail business model is the concept in which a company sells a main device at a discounted price while the necessary, refillable or replaceable supplies for that device are sold at a premium. One example is the ink-jet or laser printer; the printers are generally priced to be bargains, occasionally included for free with computers, because the manufacturers know the customers will be coming back to the well for ink cartridge after ink cartridge. A consumer who buys a Canon brand printer will basically be locked into buying Canon brand ink.
The same is true for cartridge-based razors. Some time after college, I graduated from the electric razor to the Gillette Mach 3 razor and shaving cream system. I had heard that making this switch would be better for my skin, and like Smithee, I was dealing with razor bumps and ingrown hairs. I have a habit of sticking with things for a long time even if they don’t work, and this was not an exception. The razor-in-a-cartridge system was an improvement over my cheap electric razor, but I still wasn’t quite happy with the results.
Ten years later, I decided to make the adjustment. Other shaving techniques, like the use of a straight or double-edge razor, was foreign to me. I remembered reading an article by someone I knew as The Frugal Law Student, teaching his readers on The Art of Manliness how to shave like their grandpas. Searching out the article and reading advice from more experienced shavers on the Badger & Blade message board, I took the plunge.
In February, I ordered new shaving materials from Amazon.com:
The razor came with one blade, but that would not be enough for me to grow accustomed to a new shaving technique. Armed with advice from the message boards, I purchased a blade sampler pack from Amazon.com ($38.75 for 80 blades) in order to determine which brand of double-edged blade is best for me. I am still progressing through the brands, experimenting with my technique, and discovering what works best with my skin. Each brand is surprisingly different. My favorites so far — those which do not do much damage to my skin while providing the smoothest shaves — include Feather and Astra, while I will likely never let another Bic razor touch my face.
While this seems like a significant financial outlay at the beginning, it’s a much cheaper system than a cartridge system. My start-up cost was $66, and the recurring costs of blades at one blade per week will be about $0.50 a week or $25 a year if I continue shaving three times a week with multiple passes using one blade per week. You might be able to find blades on Amazon for even less, approaching $0.15 a blade. The shave soap might last six months so that’s another $12 a year. The total cost for the first year is $103, and the total cost for every subsequent year is $37.
Compare this with the costs of the cartridge system. The Gillette Mach3 Turbo costs $8 but 16 blade cartridges cost $30, or about $2 a piece. One blade a week (three shaves) adds up to $100 a year, though we can subtract $8 from the first year because the razor includes four blade cartridges. (In other words, they’re giving away the razor.) Shaving foam costs $18 for a pack of six, which might last one year. The total cost for the first year is $118, and the total cost for every subsequent year is also $118.
When I previously shaved with the Gillette Mach3, the earlier version of the Mach3 Turbo, I would do so in the morning and the process would take about three minutes. Shaving with a double-edged blade and safety razor is more of a ritual. At first, it took from twenty minutes to half an hour to shave properly, including hydration, building and applying the lather, shaving with two or three slow passes, and further hydration. To accommodate the new requirements of my time, I shaved at night. I woke up in the morning still smooth, and that was never the case when I shaved at night with a cartridge razor.
As readers have already mentioned in the comments below, it is possible to keep this process under ten or even five minutes. My face has adjusted to the new shaving technique and the process no longer requires as much hydration, speeding the process further.
More important than the cost savings, and worth the extra time and effort, is the fact that my skin is much more comfortable. For the most part, I have no more ingrown hairs, razor bumps on my neck, or other unsightly skin blemishes due to dull blades that require pressure and pull hairs away from the skin.
Although I’m happy with the change I made, whether you follow suit is up to you. It will save money and will eventually be just as quick as shaving with a cartridge razor, but it’s a personal choice. If you are already satisfied with using a cartridge razor, there is no need to change your process, but this has proven to be worthwhile for me.
I’ve already mentioned some of the resources I’ve used to improve my shaving technique, but I also recommend the instructional videos on YouTube created by mantic59 for anyone who is interested in pursuing a similar path. As you watch these videos and read articles on Badger & Blade about finding the right technique, you will find a lot of differing opinions. It’s best to take some suggestions and experiment in order to discover what works best for your skin. There is one thing to be sure about: just about anything other than a cartridge system will be best for your wallet.
I should also note that I use no other chemicals on my face during this process other than the shaving soap. I prepare my face with hot water, keep hydrated with hot water, and rinse only with cool water. I don’t use any fragrant aftershave chemicals, astringents, or balms. There is a tendency for my skin to dry out after the shave if I don’t hydrate with enough cool water.
What materials do you use for shaving, and are you satisfied with the results?
Update: According to news reports, GM paid back one loan in order to qualify for a new government loan at a lower rate. This basically negates my original opinion regarding the loan repayment announcement. Read further at your own risk.
Ever since General Motors announced that it paid back its $6.7 billion government loan, a number of people have pointed out that the company isn’t telling the full story. GM simply shifted the money it received through the TARP bailout and directed those funds back to the government. While there is truth to this matter of accounting, it doesn’t really matter.
First, the idea that the TARP bailout funds no longer need to be used for other purposes like balance sheet padding, capital expenditures, or operating expenses show that the company is in at least a slightly better position than it was when it received the loan. If the cash it has is better suited repaying a loan and reducing future interest expenses, then don’t leave it sitting in a bank account.
Second, there’s no reason TARP funds can’t be commingled. This is easily illustrated on a smaller scale, in your own bank account.
On Monday, you receive a gift of $100 from your friend and deposit it into your account. On Wednesday, you get paid for some work you performed and deposit $100 into your account. On Friday, you have $200 in your account and you can finally buy a $100 cell phone without danger of brining your bank account down to zero. Did you buy the phone with gift money or your income? It doesn’t really matter. Both sources helped you reach the point where the purchase was possible.
Now add a loan into the mix. On Tuesday of that same week, before you got paid for your work, you borrowed $100 from a friend. Rather than buying a phone on Friday, you repaid that friend $100 plus interest. Did you use the gift or income to pay back the loan? Once again, it doesn’t really matter. Once the funds are commingled, a dollar is a dollar.
It’s right to criticize GM. The company was too big and didn’t adapt to changing consumer needs. They should have been allowed to fail, and would have if it weren’t for the belief a GM failure would have significant repercussions throughout the global economy, already in a weakened state.
It does look bad if a company appears to use TARP funds to pay off a government loan, particularly when the CEO boasts about it publicly, but it’s not a major issue. GM is in a better position now, and although this loan is only a small portion of the funds received from the government, this is at least a move in the right direction.
As I sat down to write this article, a commercial for an upcoming movie appeared on the television. Here was my thought process throughout the minute-long trailer. One: I recognize that voice. That’s Ben Stiller, who is adequate in comedies but better in movies that are slightly off mainstream. Two: The music in the background ... Continue reading this article…
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If you’re on Facebook, you might have seen the latest hoax. Hoaxes like these allow me to feel confident about my decision not to install any applications on Facebook or participate in any shady-looking groups. I ignore the endless petitions and attempts to find 1,000,000 fans for the latest trend. The latest hoax invites people ... Continue reading this article…
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Today, the Consumerism Commentary Podcast celebrates its one-year anniversary. On the Season Three premiere, Tom Dziubek and I discuss exploring the art of photography without damaging your personal finances. Photography can be one of the most expensive hobbies, but it doesn’t have to be. Here are several tips for saving money. Consumerism Commentary Podcast #53 ... Continue reading this article…
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As a fan of index mutual funds for the long term, I’ve stuck with first TIAA-Cref and currently Vanguard for my IRAs. I started with TIAA-Cref because when I first discovered Roth IRAs, I didn’t have enough saved to qualify for Vanguard’s minimums. Both brokerages offer low-cost options for those who want to invest in ... Continue reading this article…
Today’s news is all about the Benjamins. The United States Treasury has redesigned the $100 bill, and it is sporting a number of technically and visually impressive features. Just like the movies, currency is going 3-D. The new bill has a blue 3-D security ribbon woven into the paper. The ribbon displays alternating and moving ... Continue reading this article…
Earlier today, General Motors announced that the company paid $4.7 billion to the U.S. government and $1.1 billion to the Canadian government, fulfilling its obligation agreed to when it received its initial bailout funds. In total, GM received $52 billion from the U.S. government, but only $6.7 billion of this amount was considered a loan. ... Continue reading this article…
My wife and I use Netflix‘s streaming service as one of the pillars that holds up our cable-free entertainment setup. It was also the main reason I started subscribing to a XBox Live Gold membership, though that comes with some other benefits which I always forget about until the moment I notice them. The XBox ... Continue reading this article…
The latest issue of Money Magazine shares a list of one hundred tips for dealing with your money, from investing in stocks and locating a deal on a house to maintaining sanity on flights and feeling superior to Nicholas Cage. Ignoring the investment-related ideas for the moment, there are a number of good suggestions. Here ... Continue reading this article…
This week’s guest on the Season Two finale of the Consumerism Commentary Podcast is Adam Baker, creator of the Man vs. Debt website and author of the e-book Unautomate Your Finances: A Simple, Passionate Approach to Money. Baker talks to Tom Dziubek and Flexo about eliminating bad automation from your personal finance habits and clutter ... Continue reading this article…
“Middle class” is a term that has a hundred different meanings if you ask a hundred people for their definition. Unlike my frustrations with people who call a house a liability, or more accurately, those who claim a house is not an asset, the label of middle class leaves a lot to personal interpretation. While ... Continue reading this article…
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