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  In short, if you didn’t use your debit/check card to move money but money was electronically deposited or withdrawn from your account, it moved using the ACH rails.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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Your History Lesson, featuring the ATM

  • 20 Oct 2015
  • Posted by Amarasco

ATM, cashpoint, hole in the wall...regardless of how you refer to it, chances are you’ve experienced standing in front of one, and in line for one, more than you realize. Maybe you’ve been outside in subzero temperatures, maybe an absurd service fee has been inflicted upon you, or even a combination of the two. Nearing its 50-year anniversary, the now ubiquitous cash dispenser made its debut in 1967. Though its uniqueness is undeniable, its origins are a bit knotty. It’s been said the first cash machine appeared in Japan, though there’s very little published on the matter. Whether or not that’s true, Europe certainly had the most successful implementation of after-hours cash dispensers, a response from bankers to the rising labor costs and unionization. The automated teller machines of today are essentially the culmination of several inventions from multiple people over a few decades. The history is confusing, but we’ve decided to take it upon us to break it down. In 1960, American inventor and businessman Luther Simjian persuaded a New York City bank to purchase a few of his Bankograph machines, a machine that could accept cash or check deposits at any time of day or night. So that customers could trust that they would in fact see their loot again, a camera inside took a snapshot of each deposit, dispensing a photocopy receipt. Well, unfortunately for Simjian, his automatic-deposit machines didn’t quite take off, quite possibly due to his niche market. “The only people using the machines were prostitutes and gamblers who didn’t want to deal with tellers face to face,” he once said. Then there was John Shepherd-Barron. A Scottish inventor, it’s been said he had a flash of genius for a cash dispensing machine while soaking in the bathtub. Using paper vouchers printed with radioactive ink, Shepherd-Barron’s first ATM was installed at a Barclays branch in London during 1967. Customers entered an identification code and withdrew a maximum of £10, translating to about $15 today. By the end of the 1960s, engineer, and former professional baseball player, Donald Wetzel had the first automated banking machine installed in the U.S. on Long Island. This machine, like today, used plastic cards where account information was stored in magnetic strips. Dozens of banks followed suit, outfitting their branches and installing ATMs in cities and beyond. The true value of ATMs was confirmed in 1977, when Citibank’s chairman had ATMs installed throughout New York City – that winter a blizzard dumped some 17 inches of snow that blanketed the city and essentially shut it down. ATM use increased by 20 percent during that snowstorm. Several bankers, engineers and inventors would’ve liked to lay claim to the birth of the ATM. But in reality, it was the culmination of each of them attempting to design a different aspect of a machine that would one day even be in Antarctica. Pretty cool, right? (And even cooler: Howard Bank gives you access to over 37,000 surcharge-free ATMs. Check out our MoneyPass® Network Benefits to learn more.)  

Want to learn more about the history of ATMs? Automated Teller Machines A Brief History of the ATM Long Live the ATM Top 10 Things You Didn't Know About Money
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Money Market vs. Certificate of Deposit: Which Is Better - Money Markets or CDs - For Your Portfolio?...

  • 12 Jun 2014
  • Posted by Admin

By: Joshua Kennon

Certificates of deposit and money market funds are popular choices for investors in the United States because each offers a unique set of advantages, terms, yields, pricing, conditions, and restrictions.  Depending on circumstances, resources, and your own investment portfolio preferences, either, or both, can work for you when you are looking for a place to earn a relatively secure stream of interest income, but don't want to dive into tax-free municipal bonds or corporate bonds.

In the Left Corner: Certificates of Deposit
Certificates of deposit (or CDs for short) are debt instruments issued by banks and other financial institutions to investors. In exchange for lending the institution money for a predetermined length of time, the investor is paid a set rate of interest. Maturities on certificates of deposit can range from a few weeks to several years, with the interest rate earned by the investor increasing in proportion to the time his capital is tied up in the investment under most yield rate environments. Pros: The investor can calculate his expected earnings at the outset of the investment. Certificates of deposited are FDIC insured for up to $250,000 and offer an easy solution for the elderly who desire only to maintain their capital for the remainder of their life. Cons: If the investor opts for a longer maturity and, thus, higher rate of interest, he will lose access to his funds and forego alternative uses of his capital.

In the Right Corner: Money Market Funds
Money markets, on the other hand, are very different.  First, it is important to understand the difference between and FDIC insured money market account at a bank and a non-FDIC insured money market mutual fund offered through a brokerage firm.  They are not the same thing. A money market account at your bank offers many of the benefits a certificate of deposit does, only it has the added feature of check writing, in most cases.  If you have a larger balance, you might be able to get a slightly higher yield depending on the rates being paid at the time, and you won't have to wait for certain maturity dates to get your hands on your principal.  On the flip side, withdrawals are often limited to a set contractual amount (e.g., no more than 4 withdrawals a year). Money market mutual funds, in contrast, are pooled mutual funds focused on acquiring portfolios of government t-bills, savings bonds, certificates of deposit, and other safe and conservative financial instruments.  The portfolio manager strives to keep the fund at exactly $1.00 per share so it appears to work like cash, even though it's not.  In times of severe stress or manager error, a money market mutual fund can theoretically "break the buck", though it has been a very rare event, historically. Pros: Depositing money in a money market is as easy as depositing cash into a savings or checking account. Cash is immediately available for alternative investments if you change your mind and want to put your capital to work elsewhere, in stocks, buying real estate, or even spending it. Cons: Some financial institutions place a limit on the number of checks that can be drawn against the account in any given month. The rate of interest is directly proportional to the investor's level of deposited assets, not to maturity as is the case with certificates of deposit. Hence, money markets are disproportionately beneficial to wealthier investors.

The Verdict:
Although both can be useful, for those who need access to their capital and/or have much higher cash balances, money markets are often the superior choice.  For those who want to time maturities to certain events or benefit from a willingness to lock away savings for a long period of time, certificates of deposit are often the better portfolio selection.

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How To: Choose and Open a Personal Savings Account

  • 08 May 2014
  • Posted by Admin

If you are working toward saving money, one of the savings vehicles you may want to consider is a savings account. Savings accounts usually pay interest (although a relatively small amount) on the account balances, and your savings are generally protected by FDIC insurance. A savings account is relatively uncomplicated, but there are definitely some things to consider and evaluate before choosing and opening one. First, consider which bank you want to open the account with. Look for convenience, and accessibility, but also consider the interest paid. Some banks only pay interest over a specific account balance, or with some, the interest increases as the balance increases. Also, review any fees that you may have to pay. Common fees include low balance fees, monthly fees, and ATM fees (if you have access to your money via ATM). Any fees that you have to pay will likely reduce your savings, so try to minimize them. You may consider opening a savings account with an online bank. While online banks are less accessible, they often offer no-fee accounts with larger interest payments. Think about how you will use the account–if you don’t plan to make many withdrawals, it’s probably worth it. Once you decide upon a bank, you’ll have to determine what kind of savings account you’ll open. A basic savings account offers minimum interest but fewer requirements and restrictions, while money market or high-yield accounts often offer higher interest rates but more restrictions. After you open your account, remember to start saving. Even if you only have a small amount to contribute each month, even a little money is a great start. If you've done your research and you're ready to open a Howard Bank account, you can stop by any of our branches or open select accounts online

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