While I’m always up for offering my two cents on CD rates and how to maximize your earnings, I’m adding some fresh insights into the world of CD investing from the FDIC for today’s post. As the organization that insures your savings even in the event of a bank failure, the FDIC has plenty of sound advice on how to wisely invest your money. You can read the full article here, but I’ll give you my top three tips in a condensed version below.

Stay away from slam dunk CD rates

The FDIC raises a warning sign we should all know: interest rates well above national averages. By now, everyone know that you’ll be lucky to earn much more than 1 percent on a 1-year CD. If you see a promotion for CD rates of 5 percent, steer clear of it. Remember the old adage “if it looks too good to be true, it probably is”? Well, that adage is correct when it comes to investing in CDs.

Beware of brokered CDs

I’ve covered the benefits of brokered CDs before, but there can be some trickery involved in these types of certificates of deposit, too. The FDIC advises investors to know who is actually issuing their CD when buying from a broker. If the broker is buying your CD from an institution that doesn’t have FDIC coverage, you’re putting yourself in a very bad situation.

Make sure you know your maturity

As naive as this sounds, the FDIC says that some investors fail to understand where their CDs actually mature. Wow! I can only hope that everyone reading this blog will make sure they know how long they will lock money away in a CD. Imagine the rude awakening when you realize that you’ve just invested in a 10-year CD.

What tips would you offer new CD investors? Have you learned any valuable lessons from your past certificates of deposit?

By now, you’ve heard the news: a lot of banks are charging for checking accounts. It’s no surprise, really. If you’ve been paying attention to the repercussions from the most recent round of Congressional financial reform, then you’re already aware that banks are going to need to make up for lost profits somewhere. And yes, that “somewhere” pretty much means you, me and every other average account holder.

However, free checking is not a piece of the past that we’ll simply look back on with fondness as a sign of “the good old days.” No, standard money management can still be found at the friendly price tag of $0.00. You’ll just need to consider the following tips:

Big banks need big profits

If you keep your money at Bank of America, Chase or any of the other financial giants, you’ve probably already received notices regarding an increase in the potential amount of fees for personal checking accounts. Expect this trend to continue, too. The biggest banks need to turn the biggest profits to pass along to shareholders.

Small banks are fighting for your business

That community bank around the corner? It needs account holders, and it needs to distinguish itself from the mega-banks of the world. While small banks may not be able to offer thousands of ATMs and a branch network that extends around the country, they are doing their best to continue attracting new customers with the incentive of free checking.

Consider credit unions

Credit unions are non-profit institutions, which translates to fewer fees for their members. Similar to small banks, credit unions do lack some of the convenience of huge banks, but they make up for it with great customer service and an affordable banking experience.

Do you still have a free checking account? If not, which of these options appeals to you?

I guess there’s a reason why Ally Bank chose its particular name: its above average-rates make the financial institution a true friend for today’s CD investor. And in today’s frustrating savings climate, you need a good pal in your corner if you’re going to actually accrue any real interest. Today, I’m offering an introduction to the range of CD offerings at the online-only bank.

High-Yield CD: While 0.99% on a 1-year maturity may not sound like “high-yield”, that’s just about the best earnings potential you’re going to find in a 12-month FDIC-insured certificate of deposit. Ally’s High-Yield CD comes in a variety of term commitments, starting as short as a 3-month CD that earns 0.39% and extending to 5-year offerings that currently earn a 1.80% APY.

No-Penalty CD: If you’re reading my blog and actually taking my advice, this would be my top choice at Ally. You’ll incur no penalty for removing any of your funds early, and this 11-month CD is fairly competitive with the bank’s 1-year traditional CD. This no-penalty offering currently earns a 0.91% APY.

Raise Your Rate CD: This is another attractive offer from Ally. Available in 2-year and 4-year terms, this flexible CD allows account holders to adjust their savings rate once prior to maturity. APYs begin at 1.18% and 1.59% respectively, and assuming that interest rates rise before your CD matures, that APY will increase.

With any of these CD accounts, Ally requires no minimum to start saving. Of course, the more you can invest, the more you’ll be able to earn. Check out Ally’s official website for some helpful calculators and rate comparison tools to understand how much you can potentially earn. Please note that other online-only banks can prove to be good “allies”, too. Because they have lower operating costs without the expenses of branch maintenance and tellers, they’re your best bet for increased earnings power.

If you’re like, well, most everyday Americans, you’ve probably spent the last few months angry about what’s going on at big banks. From bank fees on your personal checking account to big bonuses for top banking executives, account holders do have quite a few reasons to be frustrated with the largest financial institutions in the country.

However, as mad as you might be, those big banks are pretty important to our economic recovery as Paul R. Monica, Assistant Managing Editor at CNN, points out in this video. As the stock market watches some sluggish earnings reports from the likes of JPMorgan Chase and Citigroup, the economic recovery is at risk of stalling if these banks can’t turn it up a notch.

Now, I don’t expect this to change your tune and make you feel any better about handing over $10 each month for an “account maintenance fee” or dealing with subpar customer service. In fact, I would still vote that you look for a community bank that operates on a more fee-friendly approach toward their checking account holders. If you do still keep your cash at a big bank, though, perhaps this video will help to explain why those fees keep climbing. Their stock values are falling. If you’re only keeping a few thousand dollars in your account and you don’t have any kind of loan with the bank, you’re costing them money. As regulatory pressure continues to heat up on big banks, you’ll see more of those fees pop up on your monthly statement. I despise those fees just as much as you do, but I hope they pay off enough to keep the stock market on a steady positive path.

What do you think about the latest earnings reports from some of the biggest members of the banking industry?

If you’re in the market for a new certificate of deposit, I’m guessing you have been searching high and low for the best CD rates around. With rates so low, every basis point counts, especially if you’re locking away your money for long-term planning. While you can easily go to banks around the country and open a new CD, you can also buy CDs from brokerage houses such as Fidelity and Charles Schwab. I think it’s best to stick with big name brokerage firms. If you see rates well above national averages, take it as a warning sign. Brokerages are suffering from the same sluggish interest rates as banks, so they shouldn’t be able to offer any kind of incredible deals.

So are there really benefits to brokered CDs? Indeed.

Easy and efficient

Forget comparing interest rates and terms at 20 different banks. Because brokerages have access to a wide range of maturities at different financial institutions, you can do all your picking, choosing and financial planning via the convenience of your brokerage account. It simplifies your search.

Goodbye penalties

For CD investors, one of the biggest fears is the dreaded early withdrawal penalty. Brokered CDs typically eliminate that fear. If you want to remove your funds early, the brokerage will simply sell your certificate of deposit to another investor. While some banks have begun offering no-penalty CDs, those typically pay below-average interest.

The FDIC has your back

Brokerage CDs should still carry the FDIC insurance you would find at a bank (be absolutely sure of this before opening), so you’ll be able to invest with confidence. If you have more than $250,000 to invest, a brokerage makes it easy to take advantage of multiple banks, too, so you can spread out those dollars while remaining protected.

What do you think? Have you ever opened a CD with a brokerage? Was the process easier than going through a bank?

I cover plenty of personal checking account options at different banks on this blog, but I’ve just realized that my bank reviews have been lacking in one category: business banking. While I know a lot of readers are searching for ways to save on personal bank fees, I’m sure there are readers who would benefit from opening a business bank account. If you’re self-employed or earn a significant amount of your spendable income from an activity other than your regular 9 to 5 day job, a business checking account can prove to be one of your best financial friends.

Tax season

There, I said them – two of the most dreaded words in a small business owner’s vocabulary. If you are attempting to separate your personal expenses from your business expenses in your monthly checking account statements, it’s tough. Trust me, I know from experience. With a business checking account, there won’t be any second guessing when tax time arrives. You can link a business checking account to a debit or credit card and have an easy-to-understand list of your deductions.

Take a load off your shoulders

One of the most challenging parts of owning your own business is assuming all of the business duties: paying invoices, mailing bills, signing checks. The list goes on, but with a business checking account, you can authorize your employees to help with some of those duties. Of course, you’ll only want to authorize your most trustworthy employees to avoid the risk of fraud.

Many banks actually offer some personal benefits for opening both your business checking and personal checking accounts with them. Be sure to ask your existing bank if there is a way you can save on any bank fees by opening a business account with them. Stay tuned in the coming weeks as I begin to review the different options for business owners at banks around the country.

If you’re comparing CD rates, chances are you’ve seen the word “jumbo” pop up during your online search. A jumbo CD is pretty much what it sounds like: a certificate of deposit with a jumbo-sized amount of cash. A standard jumbo CD requires a minimum deposit of $100,000. In today’s post, I’m going to take a closer look at jumbo CDs and why this type of account is outdated.

The history of jumbo CDs

Before the rise of Internet-only banks, there was some incentive to open a jumbo CD. Some financial institutions offered much higher rates to depositors who were willing to lock away such large amounts of cash for extended periods of time. However, online banks have begun offering above-average rates on CDs of all sizes. Basically, jumbo CD investors don’t have much of an advantage over investors who can only put away a few thousands bucks.

Alternatives to jumbo CD investing

In today’s market, I don’t know many savvy investors who are putting $100,000 in CDs. Sure, they’re good low-risk investments, but the sluggish interest rates make earning interest pretty challenging. If you are looking to put away a good chunk of cash, CD laddering is an attractive strategy that offers access to the best interest rates available with the benefit of increased liquidity. Think about it: if you found yourself in need of some cash as a jumbo CD investor and removed some funds early, you would pay a huge price for your early withdrawal penalty. As a laddering investor, you might only need to remove cash from one of your CDs and come away with a much less severe penalty payment.

The market for CD investors has changed dramatically over the past five years as rates have fallen and banks have introduced new types of CDs. How have your investing strategies changed with the times?

If you’re like, well, 400 million other people, you have a Facebook account. With that account, you can share status updates, videos, random thoughts, and now, you can share your banking reward points when you’re a Citibank account holder and ThankYou Rewards member.With the bank’s new Facebook app, account holders can pool points to take vacations together, buy big gifts or make charitable donations. Citi account holders can earn points for credit card use and via their checking accounts.

An innovative leader

While there are plenty of negative headlines about big banks, I have to give Citibank some credit here for their innovative approach to using social media to transform the banking experience. Some banks have been reluctant to do much of anything with Facebook and Twitter, but Citi has been a leader on this front.

Getting social to raise customer satisfaction

For so many banks, Facebook and Twitter have become channels dominated by the voices of angry account holders – just take a look at Bank of America’s Twitter feed to understand how many customers use it as a place to raise their complaints. That’s why Citi’s proactive efforts to reap the positive side of getting customers talking, sharing and liking their bank is so important. It’s what may actually distinguish Citi as a too-big-to-fail institution that isn’t too big to take extra steps to provide a better customer experience.

As social media tools continue to evolve, I expect we’ll see plenty more of this type of effort to engage account holders. You can read more on this tool via the official press release from Citi.

What do you think of Citi’s new tool? Would you use Facebook to share banking rewards points?

A simple way to understand CD ladders

Now, I know I’ve covered CD laddering before, but I found this great clip from Bill Gerhard, Director of Financial Services at AAA, that makes understanding a ladder very simple. Gerhard lists the benefits of the laddering strategy, which include:

• Protection for low interest rates during an economic lull
• Easier access to higher CD rates when rates are climbing
• Increased liquidity – at least one CD will always be approaching maturity

Gerhard goes further and actually uses a chart to detail a 3-year CD ladder that highlights how the ladder works. Click play, and you’ll be on your way to mastering this strategy in two minutes!

Why CD rates matter in 2012

While some readers have written me asking why in the world they would want to invest in CDs with such low interest rates, I feel like now is a great time to compare CD rates. Why? Because the economy still isn’t stable. Sure, everyone would love to reap great returns from the stock market, but let’s face the reality: the stock market is shaky due to fears of the economic crisis in Europe. CD rates may be low, but one of the biggest selling points of a certificate of deposit is the assurance that you will not lose any of your principal investment (provided, of course, that you don’t remove your funds prior to maturity and incur and early withdrawal penalty).

What do you think? Do you have plans to open a new certificate of deposit in the New Year?

While I spend plenty of time reviewing banks to give you tips on where to avoid fees and which institutions offer some of the best customer service in the banking industry, today’s post is a bit different. As financial analysts make their predictions for the year ahead, I found this video from CNBC to be quite interesting for any readers who are interested in investing in bank stocks.

As the debate over big vs. small banks continues, this video highlights that small banks do possess some advantages over the country’s biggest financial institutions in 2012. While the troubles at big banks have made lots of headlines over the past year in the form of falling stock prices (ex: Bank of America stockholders suffered some very big losses in 2011), debit fee debacles and exposure to European government default risks, this clip shows that community and regional banks hold some key advantages due to more limited regulation. Check out the video above for some advice on where to invest your cash this year.

Outside of the investment area, I’ll be anxious to see how the Volcker Rule and added capital requirements impact big banks like JPMorgan, Bank of America and Wells Fargo this year. As we saw with the Durbin Amendment last year, bank rules tend to have big consequences for banking customers, too.

Do you plan on investing any of your cash in banks this year? If so, what did you learn from your investments in 2011?