Tips on Investing in Non-deposit Products that are not FDIC-Insured


Some banks sell non-deposit investment products (such as mutual funds, annuities, and stocks).
Since the FDIC does not insure these products, keep the following tips in mind to protect your money.

How to Protect Yourself
  • Before investing in non-deposit products, have enough emergency money in savings or
    other readily accessible account to support you and your family for 2 to 6 months. Do
    not use this money to buy investment products.

  • Never invest in a product you don’t understand.

  • Be sure you have enough information before making an investment. Ask questions until
    you are satisfied.

  • Investments always have some degree of risk. Understand the risks before investing.

    Find out more about your registered sales representative or broker/dealer by calling the National Association of Securities Dealers (NASD) at 800-289-9999, or by visiting http://www.nasd.com/.

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Types of Checking Accounts


After you determine what you need in a checking account and understand the different fees involved, you might be ready to choose the type of account you should open. Keep in mind that banks sometimes refer to these accounts by different names. Before making a decision, read the materials (disclosures), ask questions, and understand which checking account best fits your needs. The main types of checkingaccounts include:

Low-cost checking:
Many banks offer low-cost checking for people who don’t write a lot of checks. The charge is often less than $5 per month. There might be a limit to the number of checks you can write without an additional charge.

Electronic checking:
Some banks offer an electronic checking account for you at reduced-cost or a free checking account if you do all of your banking by phone, Internet, and ATM. This type of account usually requires you to use direct deposit. The bank might charge you a fee if you use the services of a teller. This type of account usually offers unlimited check writing privileges, meaning there are no additional charges based on the number of checks you write.

Regular checking:
With a regular checking account, there is often a minimum balance required to waive the monthly service fee. This type of account usually offers unlimited check writing privileges.

Interest checking:
There are different interest-bearing accounts, such as the Negotiable Order of Withdraw (NOW) account(commonly called "interest checking") and the Money Market Deposit Account (MMDA). With these accounts, you usually need to maintain a high minimum balance in order to earn interest and avoid fees. The minimum balance is often at least $1,000.

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Determine Your Checking Account Needs


When you consider opening a checking account, remember that banks offer different types of checking accounts. To determine what you need, think about how you plan to use your checking account. The following are a few examples of questions that will help you determine what you need to look for in a checking account.

Consider Convenience:

  1. How many checks do you think you will write every month?
  2. Do you want a bank that is close to your home or work?
  3. What are the bank’s hours of operation?

Determine Costs:

  1. How much money will you keep in your account?
  2. Will you be charged for writing extra checks?
  3. Are you willing to pay a monthly fee?

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Checking Account Fees



Before you open a checking account…



  1. Ask the bank for the Fee Schedule for checking accounts.

  2. Compare the costs of the various types of checking accounts you are considering. (For a list of common types of checking accounts, look under “Checking Accounts” in the Information Booth).

  3. Ask the bank whether fees can be waived and how to avoid them.

What fees can I expect when opening a checking account?

Monthly Service Fee
Also called a maintenance fee. The bank might charge a fee each month, just for having the account. You might also be charged a fee if your balance drops below the required minimum.

Per Check Fee
Some accounts charge a fee for each check you write. Depending on the account, you might pay the fee for each check or only when you write more than a certain number of checks (perhaps five) a month.

Check Printing Fee
You can buy checks from the bank or through the mail from other companies. If you buy checks from the bank, the charge for printing the checks is usually automatically deducted from your checking account. Fancy checks cost more than basic checks. You can buy more than one box at a time. Carbon copy checks are an option, and allow you to keep a copy of the check for your personal reference.

ATM-Use Fee
You might be charged a fee each time you use an ATM at a bank other than your own.

Overdraft Fee
Also called nonsufficient funds (NSF) fee. NSF fees apply when you bounce a check. The bank will notify you if a check is returned to the person or company to whom it was issued because there were insufficient funds in the account. Your bank will charge a processing fee to your account because of the cost to return the check. Merchants might also charge a fee if a bounced check is used to purchase the goods or services. The fee charged is usually posted near the cashier.

Returned Deposit Item
Banks might charge a fee if a check you deposit in your account bounces.

Stop Payment Fee
If you lose a check or need to make sure a check is not paid by the bank for some other reason, you can request a “stop payment.” There is a fee for this service, and the bank might not be able to catch the check before it is paid.

Phone Inquiry Fee
Some banks charge a fee if you call to check your balance or to see if a check or deposit has cleared.

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Budgeting and Savings Tips



  1. Consider your needs vs. your wants. Think about items you purchase on a regular basis. These add up. Where can you save?
    • Do you eat out at restaurants a lot?
    • Can you cut back on daily expenses, such as coffee, candy, soda, or cigarettes?
    • Do you have services you do not really need, such as cable television or a cell phone?

  2. Set up a direct deposit and an automatic transfer to your savings account.
    • When you get paid, put a portion in savings through direct deposit or automatic transfer.
    • If you have a checking account, you can sign up to have money moved into your savings account every month. What you don’t see, you don’t miss!

  3. Pay your bills on time. This saves the added expense of:
    • Late fees, extra finance charges
    • Disconnection fees for phone, electricity, or other services
    • Fees to reestablish connection if your service is disconnected
    • The cost of eviction, repossession and bill collectors

  4. If you use check-cashing stores regularly, you might be paying $3 - $5 for each check you cash. Consider opening a checking account at a bank or credit union.

  5. If you get a raise or bonus from your employer, save that extra money.

  6. If you have paid off a loan, keep making the monthly payments to yourself. You can save or invest the
    money for your future goals.

  7. Avoid debt that does not help build long-term financial security. For example, avoid borrowing money for things that do not provide financial benefits or that do not last as long as the loan. Examples include: a vacation, clothing, and dinners out in restaurants.

  8. Save your change at the end of the day. Take that change and deposit it into the bank (every week or month).

  9. When you get a tax refund, save as much of it as possible.

  10. If your work offers a retirement plan, such as 401(k) or 403(b) plan that deducts money from your paycheck, join it! Most employers will match up to $.50 on each dollar you contribute. The matched amount is free money!

Meet Your Personal Savings Goals
To meet your personal savings goals, ask yourself these key questions:
1. What will I do now to save for my goals?
2. What will I do by the end of the month to save for my goals?
3. What will I do by the end of the year to save for my goals?


And, Consider these factors when making important savings decisions:
1. How much do you want to accumulate?
2. How long can you leave your money invested?
3. How do you feel about risking your money?

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Budgeting and Savings Tools









Budget Box System
  • The budget box is a small box with dividers for each day of the month, with one divider for each day of the month.
  • When you receive a bill, check the due date and place it behind the divider that represents the bill’s due date. As you receive income, pay all bills that are due.

Computer System

  • If you have access to a personal computer, you can create your own spreadsheet.
  • You may also want to purchase a personal finance program. They are available for less than $75.
  • Using a computer to manage your finances is relatively simple. Once you set up the system, updating information is quick and easy. It is important to enter transactions frequently to truly understand your financial position.

Expense Envelope System

  • This tool is useful if you pay your bills in cash each month.
  • Make an envelope for each expense category, such as rent, gas, electricity, and food.
  • Label the envelope with the name of the category, the amount, and the due date.
  • When you receive income, divide it into the amounts to cover the expenses listed on the envelope.
  • Pay bills right away so you will not be tempted to spend the money on something else.

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Beware of Unethical Mortgage Foreclosure Operators


A fairly new and dangerous threat has arisen for homeowners who have fallen behind on their mortgage payments and may be at risk of foreclosure – opportunistic companies calling themselves "foreclosure rescue operators." They often refer to themselves as a “foreclosure consultant” or “mortgage consultant,” and market themselves as a “foreclosure service” or“foreclosure rescue agency.” They count on homeowners being vulnerable and desperate.

These companies claim they can assist homeowners facing foreclosure with options that allow them to keep their property, refinance or modify an existing mortgage, repair credit or help “buy more time.” In reality, these "options" are intended by foreclosure rescue scam operators to convince you to take the wrong steps so they can take your money and possibly your home.

But, remember the old saying, "If it's too good to be true, it probably is."

Be safe. It is important that you take action by contacting your mortgage lender – or any legitimate financial counselor – to find real options to avoid foreclosure. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. A number of agencies provide free counseling services to homeowners who are having trouble making ends meet (see “Protech Yourself and Resources Sections”). These agencies can help you explore your options, which may range from modifying your loan to refinancing your loan to selling your home and using any equity to start over.

Watch Out for Foreclosure Scams
Lease-Back or Repurchase Scams – In this scenario, a promise is made to pay off your delinquent mortgage, repair your credit and possibly pay off credit cards and other debt. However, in order to do this, you must “temporarily” sign your deed over to a “third party” investor. You are allowed to stay in the home as a renter with the option to purchase the home back after a certain amount of time has passed or your financial situation improves.

The trouble is once you have signed away your rights in your property, you may not be able to repurchase the property later, even if you can and want to. After the new owner takes ownership of your property, the new owner can evict you. Furthermore, the scammer is under no obligation to sell the house back to you. Typically, after the deed is signed away, the property changes hands numerous times. The scammer may have taken a new mortgage out on your home for hundreds of thousands of dollars more than your mortgage, making it impossible for you to buy back your home.

Partial Interest Bankruptcy Scams – A scam operator may ask you to give a partial interest in your home to one or more persons. You then make mortgage payments to the scam operator in lieu of paying the delinquent mortgage. However the scam operator does not pay the existing mortgage or seek new financing. Each holder of a partial interest then files bankruptcy, one after another, without your knowledge. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan. This complicates and delays foreclosure, while allowing the scam operator to maintain a stream of income by collecting payments from you, the victim.

Bankruptcy laws provide important protections to consumers. Scams can only temporarily delay foreclosure, and they may keep you from using bankruptcy laws legitimately to address your financial problems.

Refinance Scams – While there are legitimate refinancing programs available, including through the federal government, look out for people posing as mortgage brokers or lenders and offering to refinance your loan so you can afford the payments. The scammer presents you with “foreclosure rescue” loan documents to sign. You are told that the documents are for a refinance loan that will bring the mortgage current. What you don’t realize is that you are surrendering ownership of your home. The “loan” documents are actually deed transfer documents, and the
scammer counts on your not actually reading the paperwork. Once the deed transfer is executed, you believe your home has been rescued from foreclosure for months or even years until you receive an eviction notice and discover you no longer own your home. At that point, it is often too late to do anything about the deed transfer.

Internet and Phone Scams - Some scam lenders convince you to apply for a low-interest mortgage loan on the phone or Internet. They then extract vital information, such as your social security and bank account numbers. In this scam, the loan is immediately accepted, after which you start faxing the documents and sending wire transfer payments to the phony company without even meeting the lender. Unfortunately, this scam will put you in twice as much trouble-your personal details have been stolen or sold, putting you at risk of identity theft, and your
home is still at risk of foreclosure.

Phantom Help Scams - The scam operator presents himself as someone who is able to counsel or help a homeowner out of foreclosure. In exchange for his or her “services,” outrageous fees are charged and grand promises are made for robust representation, which never occurs. The “services” performed entail light paperwork or occasional phone calls that you could easily have made yourself. In the end, you are worse off than before, because you have little or no time to save your home, or seek other assistance.

Protect Yourself
Know with whom you are dealing. Before you hand over any money or provide any personal information, check out the company or person. You can check your local Better Business Bureau® or state consumer protection office to see if the company or organization is legitimate and if any complaints have been filed.

Contact reputable non-profit housing or financial counselors, such as those you can find by contacting the:

Know what you are signing. Read and understand every document you sign. If a document is too complex, seek advice from a lawyer or trusted financial counselor. Never sign documents
with blank spaces that can be filled in later. Never sign a document that contains errors or false
statements, even if someone promises to correct them later.

Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all documents you sign.

Make your mortgage payments directly to your lender or the mortgage servicer. Do not trust anyone else to make mortgage payments for you.

Never sign over your deed until you clearly understand what will happen to your rights to your home. Foreclosure scams often require you to “temporarily” sign over ownership of your home to another claiming it would be only as a means to help you. Instead contact only legitimate, well known entities who specialize in assisting homeowners with mortgage problems such as a HUD-approved homeowner counseling agency.

Report suspicious activity to the Federal Trade Commission, your State Attorney General’s Office or your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims. Caught in a Foreclosure Scam? If you get caught in one of these scams, it is imperative that you contact a lawyer right away. An attorney can assist you as you navigate your way through eviction hearings. Lower income individuals may be able to find free legal services; see http://www.findlegalhelp.org.

If you believe that you are the victim of criminal activity, such as forged documents being presented for your signature, you should contact your local law enforcement agency.

Warning signs that you may be dealing with a mortgage foreclosure scam operator include if the company:

  • Demands a fee in advance. No legitimate organization that works with borrowers to
    avoid foreclosure will ever ask for money up front.
  • Makes unsolicited offers or “lofty advertisements, claiming they can help save your
    home.
  • Recommends you break off contact with the lender and any counselor that you may have
    been working with.
  • Advises you to stop making mortgage payments.
  • Tells you to send your mortgage payment to anyone other than your loan servicer.
  • Instructs you to transfer ownership of your property.
  • Makes verbal promises that aren’t put in writing.
  • Asks you to sign a document that has blank lines or spaces.

General Resources
FDIC Foreclosure Prevention Website
www.fdic.gov/consumers/loans/prevention/
(877) ASK-FDIC or (877) 275-3342

Mortgage Modification and Refinance Programs

Foreclosure Mitigation Assistance and Counseling

Report Foreclosure Scams

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