Same Day ACH – Does it Impact Me?

  • 06 Sep 2017
  • Posted by Amarasco

For those following the new rules towards the processing of ACH transactions, it’s no surprise to you that Same Day ACH will now apply to debit transactions in addition to credit transactions starting at the beginning of September.  For those who perhaps haven’t been following this as closely (it’s okay, we understand), let’s back up and explain to you what this is all about and how it may impact you.

ACH 101?

The Automatic Clearing House (ACH) is an electronic network that processes financial transactions in the United States.  In short, if you didn’t use your debit/check card to move money but money was electronically deposited or withdrawn from your account, it moved using the ACH rails.  ACH processes all electronic transactions except debit/credit card transactions.  There are two primary ACH providers, the FedACH that processes about 60% of all ACH transactions and the Electronic Payments Network (EPN), a privately owned network that processes the other 40% of ACH transactions.

What is Same Day ACH and What Have I Missed?

The National Automated Clearing House Association (NACHA) is a governance group who manages the rules dictating the ACH movement of money.  In an effort to expedite the movement of money, NACHA has introduced rules allowing two new settlement times, 1PM and 5PM, allowing banks to process ACH transactions during the day and again overnight during batch processing.

In September 2016, NACHA made rules available to the ACH networks to allow for same day ACH credits.  From a consumer perspective, this may have meant that your payroll was available in your account sooner than prior to this rule shift.  From a business perspective, businesses were able to receive money in their account electronically much sooner from those who purchased their goods and/or services.  Receiving money faster is preferable and ideal, which is exactly why the networks started the Same Day ACH migration with credits and not debits.  However, the credit side of the transaction is only one half of the transaction and until both sides are operating on similar schedules, the credit side will always be contingent on the debit side from a timing perspective.  So, in short, Phase 1 had little impact on the expedited movement of money.

What happens in September?

Effective September 15, 2017, NACHA will make rules available to process Same Day ACH Debits.  ACH Debits are primarily used by businesses to collect money from consumers or other businesses.  Think about a gym – gyms have many members setup to make monthly electronic payments from their bank.  In the background, the gym’s bank has a master template of all gym members and their associated bank card information from which they’ll draft the payment.  Assuming gym memberships are due on the 1st of the month, the gym will automatically draft payments using ACH on the 1st that will process in a batch process overnight on the 1st. Thus, in effect, members accounts won’t see the debit from their account unit the 2nd day of the month.  Following this example, as of September 15, 2017, the gym will now have the ability to process the debit transactions from their membership base using the Same Day ACH Rules, which means gym members will now see the transaction in the morning on the 1st of the month, not the 2nd.

ACH Originators





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What Is a Certificate of Deposit (CD)?

  • 29 Jun 2017
  • Posted by Amarasco

Certificates of deposit, or CDs, are not the most exciting investments, but they are among the safest. They make perfect sense for the risk-averse or for people just looking to park some cash over a specific period of time.

The ABCs of CDs

CDs differ from traditional savings accounts in that you are committing to keep a sum of money put for a set period of time. Known as the “term length,” these periods

generally range from as short as three months to up to 10 years.

In return for your commitment, you should get a higher interest rate than you would by keeping the money in a standard checking or savings account. Generally speaking, the longer the term, the higher your interest rate. The amount you deposit also has a bearing on the rate you will receive.

CDs are protected at financial institutions that have federal backing. For banks, that's the Federal Deposit Insurance Corp.; for credit unions, it's the National Credit Union Administration. Some state-chartered credit unions may operate with private insurance. In the event your bank or credit union fails, your CD deposit is insured for up to $250,000.


Again, this is a commitment between you and the bank or credit union, and if you break it by withdrawing money from a CD before the end of the term, it will cost you. The penalty may be a flat fee, a specified number of months' worth of interest or some combination of the two. If you think you might need the money before your three-month, one-year or five-year term is up, best not to put it into a CD. Any extra interest you earn might be canceled out by the early withdrawal penalty.

The CD menu

Most CDs offer a fixed rate for a fixed term, but some institutions offer variations. Here are some common types:

  • Variable-rate CDs: These may be tied to a market index, or they may let you take advantage of future rate increases.
  • Low/no penalty for early withdrawal: Also called liquid CDs, these allow greater access to your money, but as a trade-off usually come with lower interest rates and may require you to maintain a minimum balance.
  • Callable CDs: These allow the bank or credit union to shorten the terms as they wish.
  • Jumbo CDs: Basically the same as a regular CD, but with the reward of even higher rates in exchange for even higher minimum deposits, typically on the order of $100,000 or more.
  • IRA CDs: These are held in a tax-advantaged individual retirement account, or IRA.

CD ladders

The ladder principle is built on the idea of climbing to higher earnings by depositing money into multiple CDs that come due, or mature, at different times. This approach might appeal to the consumer with, say, $10,000 in savings who (a) wants to earn more than she would from a traditional savings account and (b) doesn't want to lock it all up for five years.

So instead of putting it all in a five-year CD, you could split it among five different CDs, with maturity dates of one, two, three, four and five years. As each certificate matures, you reinvest the money in a new five-year CD. You're enjoying the highest possible interest rate, and you're still freeing up some money every year.

Overall, CDs are a safe form of savings that keep things simple, with the caveat you have to keep your hands off your funds for some amount of time. You could call them a comfort investment to reduce the drama of personal finances.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

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How to Boost Your Small Business Credit Score

  • 27 Jun 2017
  • Posted by Amarasco

Are you a small-business owner who's not getting the love you need from lenders? Are suppliers insisting on terms you find downright unfriendly?

The common denominator may be a poor business credit score. Here are some steps you can take to fix it.

What goes into your business credit score?

Just like a personal credit score, a business credit score measures the level of risk you pose for a lender. Unlike personal credit scores, most of which adhere to the FICO model, business credit scores don't follow an industry standard.

The three major bureaus — Dun & Bradstreet, Equifax and Experian — use different methods to compile and monitor business credit

scores. Each calculates its scores according to different criteria and uses different number ranges. Here's an overview:

  • Dun & Bradstreet uses a proprietary Paydex score that is based on payment data. You can develop a respectable score by establishing credit with suppliers you are likely to have an ongoing relationship with. That way, you can build and maintain credit, assuming you pay your suppliers on time — and the earlier the better, as the highest rating is reserved for businesses that pay 30 days earlier than terms demand.
  • Equifax uses three assessments to rate businesses: a payment index examines your payment history, a credit risk score evaluates the likelihood your business will become severely delinquent, and a business failure score measures the chance your business will close.
  • In addition to examining credit history, Experian calculates its score by checking public records for liens, judgments and bankruptcies. It also considers demographic information, including how long you've been in business, the kind of business you're in and the size of your business.

Unlike a personal credit report, which you can get for free, you have to pay between $35 and $100 to see your company's credit report. It's worth it, though, to see if you need to take steps to improve your score.

Manage your business credit score

Regardless of a particular bureau's approach, you can take steps to beef up your business's score.

  • Establish a business credit history. You probably had to start your business using personal funds and credit. As soon as you can, separate your business expenses from your personal finances. Open a commercial bank account and put your company's bills and account in the company's name.
  • Pay your bills on time. This is the most important thing you can do to boost your score. It's the best way to prove you are not a risk to lenders or vendors.
  • Understand all the factors in your score. Payment history is not all that matters. Much more is involved, including the age, size and type of the business and how close to your credit limit you are.
  • Make sure the information in the credit reports is accurate. Monitor your reports, checking for and addressing errors and updating information as your business develops, because changes in things such as your company's location, staff size and revenue can affect your score.
  • Examine the credit of your customers and vendors. The more creditworthy the people you do business with, the more smoothly your business will run and the less likely some problem with an account will ripple through and end up dinging your score.

Taking steps now to improve your business credit score is a smart idea. The better your company's credit, the more favorable terms you're likely to get from vendors and lenders. And should you face hard times, it can be tough to get small-business loans with bad credit.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

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How to Save $1,000 a Year -- Without Breaking a Sweat

  • 13 Apr 2017
  • Posted by Amarasco

Nonprofit Guidewell Financial Solutions offers 10 tips for saving big on a limited budget.

GuidewellConsumers who have never saved before sometimes worry they won’t be able to make it a habit, especially if they’re living paycheck-to-paycheck.  However, small changes in financial choices and lifestyle can lead to tangible savings rewards. To celebrate Financial Literacy Month, nonprofit Guidewell Financial Solutions (aka Consumer Credit Counseling Service of Maryland and Delaware) shares these tips on how to save a thousand dollars in a single year:

Use direct deposit. This is an effective way to start saving. Here’s how it works - Have paychecks electronically deposited into a checking account.  Before the money goes into checking, have $10 automatically deducted and directly placed in a personal savings account.

Savings = $240/yr or more 

Brown bag it!  Bring lunch from home ($1-3 per meal) instead of dining out at work ($8-15 per meal).

Savings = $1,300/yr or more

Less is more.  Downsizing the family cell phone, cable, or satellite television package is a simple way to put more money in the bank.

Savings = $600/yr or more

Avoid putting the pedal to the metal.  Even in this era of low gas prices, the cost of fuel, oil, tires, and vehicle depreciation averages about 52 cents a mile for consumers who regularly drive to work. To reduce transportation costs, consider carpooling, walking, or biking just two days a month.

Savings =  $288/yr or more

Compare banking options. Paying for checking account services? Shop around and find an account that doesn’t charge monthly fees.

Savings = $120/yr or more

Say “no” to the one armed bandit.  Putting change into the office vending machine is convenient, but it comes at a cost.  Bring snacks and sodas from home instead.

Savings = $100/yr or more 

Stick to in-network ATMS. It’s handy to get cash from on-the-spot ATMs, but the fees really add up. Plan withdrawals so they only take place a ATMs that belong to your bank.

Savings = $100/yr or more

Go local. Rent free books and DVDs from the public library instead of renting or buying them online or at a store.

Savings = $100/yr or more

Do some homework. Comparison shop before purchasing or renewing auto, renters, or homeowners insurance. Also think about increasing the plan deductible.

Savings = $100/yr or more

Practice paycheck power. Employees who get paid bi-weekly receive three paychecks for the month twice a year.  Each time this happens, place the extra paycheck into savings.

Do the math!

Consumers who have never saved before can begin by tracking where their money goes. Before setting up a savings plan, it may also help to get outside budgeting advice and support from a reputable nonprofit agency. Guidewell Financial provides financial counseling and financial coaching in person or by phone. For an appointment or resources, call 1-800-642-2227 or visit the agency website. Small changes made now and carried throughout the year will lead to less stress and greater financial security in 2016.

About Guidewell Financial Solutions

 Guidewell Financial Solutions (also known as Consumer Credit Counseling Service of Maryland and Delaware) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling.  Maryland License #14-01 / Delaware License #07-01  

Copyright © 2017 Guidewell Financial Solutions.

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The Future of Branch Banking

  • 12 Sep 2016
  • Posted by Admin

As digital banking use continues to increase, bank branch traffic is decreasing. But that doesn’t signal the end of branch banking. Quite the contrary; the interactions that are occurring in the branches are very important.

While consumers want the convenience of online and mobile banking, when they are making a large purchase (think home or car), need financial advice or have a service need, a person-to-person connection is the overwhelming choice, not an app. When people are making a major financial decision that involves short and long term financial planning they really want that personal relationship. And this is what sets Howard Bank apart from other banks – a hands on approach.

Branch banking will continue to change over the next five to ten years. The trend of customers coming into the branch less for transactions and more for advice will continue. “Our branch layout will change from the standpoint that there’s no need to have a 4,000 square foot branch tomorrow; an 800 to 1,200 square foot branch storefront is more appropriate,” says Barry Luciani, Senior Vice President, Branch Executive at Howard Bank.

The core function of the branch has become relationship building. And this means that the

people in the branch are key. “They have to be equipped to problem solve and listen to customers and then come up with financial solutions. And they have to give value-added advice back to the customer,” says Luciani. “The days of accepting a check in our branches is going down. We’re seeing transaction counts decrease year over year. So now you have to go back and re-engineer. What does the branch really do now for today and tomorrow? It all goes back to providing advice and relationship building with our customers.”

Listening to customers and offering good customer service is important, whether that service is in-person, on the phone, or by electronic means. “At Howard Bank, we pride ourselves on customer service which is that hands on approach. We are proactively listening to our customers, because that’s really what drives coming up with those solutions,” notes Luciani, including electronic banking services such as online banking, online bill pay, mobile banking, and mobile deposit.

In addition to hands on service and financial technology, Howard’s size and community bank status offers great advantages to its customers. “We’re here, we’re in it, and the leaders understand the market. When you need to get to a decision maker, Mary Ann [Scully, President and CEO of Howard Bank] is only a thirty-minute drive or a phone call away. And the same with all the decision makers. If there’s a problem, we’re not calling Charlotte, Buffalo or Winston-Salem. We’re on the phone with the people who are involved with the day-to-day management of those processes. That really differentiates being a community bank, local, and managed in the Baltimore market.”

So while branch banking may be evolving, it is a positive change and will continue to be part of an overall hands on banking solution developed for the customer.

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Mortgage Tips for First-time Homebuyers

  • 01 Sep 2016
  • Posted by Admin

David Fitzell, MortgagePurchasing your first home is a big investment and commitment. When it comes to a mortgage for that home, it makes sense to seek the help of a professional who understands the intricacies of these loans.

Howard Bank’s mortgage team has the experience and the tools to assist buyers through this process. Senior Vice President of Howard Bank Mortgage, David Fitzell says, “For many families, this is their largest investment, and they want personal interaction. And all banks and lenders are not created equally. Navigating through some of the (financing) complexities takes a strong, educated mortgage banker to help you through that.”

Fitzell outlines some of the elements that a Howard Bank mortgage officer helps customers manage.

  • Get educated up front. Come talk to a lender.
  • Consider all the grant programs and government backed loans that may be available to you. Howard Bank participates in numerous grant programs and is an expert in that space.
  • Determine what you can reasonably /comfortably afford. This is not necessarily the amount you qualify for.
  • Do you have money for a down payment? Many consider 20% an industry norm, but there are other options available.

“Interest rates are at historic lows. This really makes this an opportune time to buy,” says Fitzell.

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Do You Know How to Void a Check?

  • 15 Mar 2016
  • Posted by Admin

When you set up automatic payments or deposits, you often need to provide a voided check. Your bank information is printed on each check, and whoever asked for the voided check will copy that information and set up an electronic link with your account. There’s only one hitch: you need to know how to void a check, and you may not have ever done it before.

How to Void a Check
Voiding a check is really pretty easy.
Write the word “V O I D” across the front of the check in large letters. Make the word tall enough and wide enough to cover most of the check. However, don’t cover up the numbers at the bottom of your check -- those are needed to set up the link with your bank account. Use a pen or a fine tipped marker so that nobody can erase the word “VOID.”


how-to-void-a-checkImportant: don't just email that check, do something to hide your account information from thieves.
Once you’ve done all this, make a note of it in your check register so that you know where the check in question went; you don’t want to wonder whether or not you wrote a large check to somebody and worry about it hitting your account. Just write “VOID” next to the check number and date, and note who you gave the check to.
Writing “VOID” across the front of the check prevents anybody from using the check to make a payment (by filling in a payee and an amount). Nobody will have access to a blank check, which could be used to steal your money.

If you don’t have Checks: How can you void a check if you don’t have any checks?
You’ll have to find another way. If you’re setting up direct deposit, ask your employer if there are any

alternatives to providing a voided check (or ask your biller if you’re setting up automatic payments). A few ideas are listed below.
One solution is to go to the bank and ask for a “counter check.” The teller will print a check with your account information on it, and you can void that check as if it came out of your checkbook.

You may also be able to set up deposit or withdrawal instructions without using a voided check. Ask if you can provide a deposit slip instead of a voided check (a pre-printed deposit slip is usually required -- you can’t just fill it in by hand). You probably have a few of these left in the back of your checkbook.See if you can set up your bank account link online. Instead of using forms (which require that you void a check), try to use an online system. In most cases, you just enter your bank account information in an online form.

Another approach is to get documentation from the bank instead of voiding a check. Ask for a letter, printed on bank letterhead, that lists your account number, routing number, and account type (checking or savings). Alternatively, some banks provide a form letter used for setting up direct deposit -- just print it while you’re logged in to the online banking system and it will have everything you need.

Once you have your hands on a voided check, consider scanning or photocopying it. You may need to provide voided checks numerous times. If an original check is not required (for example, if you’re going to fax in the instructions), you can use the same copy over and over. Be sure to keep this copy somewhere safe -- in a locked filing cabinet or in an encrypted folder on your computer.

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