MONEYHELLO!

EDITOR’S DESK

WELCOME TO THE 2nd issue of

HELLO MONEY!

The first issue was a learning experience for us and we hope we have been able to use some

of it in this issue and make it better. This issue’s cover story is on title insurance, a much-discussed, but a little-understood topic and what it means for the average homebuyer. Read to find out what is title insurance,why you need one and how you can shop smartly. The issue has our regular sections as well, but one article deserves special mention- Credit card debt: A one-way-street —which shows you how even paying the minimum balance every month can mean that you stay entrapped in credit card debt for a greater part of your life and end up paying thousands of dollars in interest rates. On the eco-nomic front, we have seen a lot of mixed signals, and there have been quite some not-so-good news, but economists attribute much of it to a rather harsh winter, which is now over. With low oil prices, a strong dollar and borrowing costs at record lows, we can expect things to get better and more exciting as the year progresses.

Hello Money ! is published by Jivanta Wealth Science Institute LLC, , based out of Charlotte, North Carolina. We are committed to providing honest efficient and timely information , insights, news and rates on a large portfolio of personal financial products in the United States. Our other offerings include smartcreditcardchoice.com- allows selection of the best credit cards , a daily newsletter on banking & finance and Zivanta.com- a personal finance website providing best checking account, savings account and money market

options. We also provide analytics services for banks and financial institutions.

Jivanta Wealth Science Institute LLC, 100 N. Tryon Street, Suite B220-PMB, 113 CHARLOTTE NC 28202email : hellomoney@zivanta.com

Editor

MONEYHELLO!

CONTENTS

1

3

9

11

Expert speakNews Corner

Q&A

Lightread

Know Your Banker

Cover Story Title Insurance

Special Article-Credit Card Debt

5 Ways

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14

15

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NEWSCORNER

tances to the country from America, citing reasons such as increased risk of money laundering and ina-bility of the system to track all remittances on a case-by-case basis. In a system where family members and relatives would starve or alternatively, join extremist organizations, it becomes imperative for the Somali earning dollars to send that cash back home in an ef-fort to sustain livelihood of the near and dear ones. While the U.S government has appealed to all the banks to put in place a more robust tracking mech-anism for the remittance compliances, banks are still wary of the unforeseen consequences.

With a new innovative move from the bank,Wells Fargo credit card holders can now redeem their ac-cumulated points for cash at the bank’s ATMs. Cus-tomers may also wish to deposit their redeemed cash directly at their bank account. Along similar lines, Chase Bank has also added enhanced ma-chines that allow customers to receive withdraw-als at varied denominations. Bank of America,

U.S banks cut off cash remittances to Somalia in the wake of terrorism and fraud

With increase in mobile payments adoption, Wells Fargo customers can now cash out rewards at A.T.M.s

Source: Reuters

The NY Times

Google Wallet has not had a great history. And now with Apple Pay, the world leader in mobile payments, it leaves very little scope for the Wallet to revive a once-dreamt market share. However, with other Google products and services leading the market pie, they would most likely not leave the payment space battleground. In an effort to leverage on the Android ecosystem, Google is getting into agreements with wireless carriers to feature Google prominently on their Android phones, and also pay them a share of the mobile advertising revenue. With Google leading the ad space, this is a wise call. They are also contem-plating on acquiring Softcard, the consortium mobile payments company, according to news sources. All this means just one thing – if this strategic decisions bear fruits, it will not be an easy journey for Apple Pay.

Google aims to revive Wallet, collaborates with wireless carriers in an essence to pay them to have them onboard Source: The Verge

1

Owing to an increase in terror activities and financial fraud in Somalia, U.S banks have cut off cash remit

As a part of maiden staff research by a U.S govern-ment research agency of a numerical risk ranking of American banks, JPMorgan Chase & Co. bears a sys-temic score of 5.05 per cent for the year ending 2013 in a group of 33 of the banking system’s largest in-stitutions. Some of the other big guns are Citigroup with a score of 4.27 per cent, Bank of America Corp at 3.06 per cent, followed by Morgan Stanley & Gold-man Sachs Group. The risk score can be attributed to a common parameter of asset size greater than $50 billion, other unique parameters being systemic im-portance to the economy, domination to specific busi-nesses such as payments, asset custody services and organization complexity, mostly due to trading and derivatives line of businesses.

Online banking’s popularity continues to grow and now is done more than phone and branch banking, according to a new survey. Thirty-six percent of bank-ing is done online and 29 per cent on a mobile device, BioCatch found, polling people in the United States and the United Kingdom. Branch banking is pre-ferred by 26 per cent and telephone banking is down to less than 10 per cent.Most use Android smartphones, including 66 per cent of men and women in America. In the U.S., more women than men use online banking daily – 37 per cent to 30 per cent. The survey determined that checking account information, charges and billing information is the most-performed online banking activity at 69 per cent, followed by making a transac-tion, like paying a bill or transferring money, at 23 per cent.Of people who don’t do online banking, 61 per cent cite a fear of hacking and 26 cent call the login process a hassle.

J.P Morgan crowned at the top of the list of risky banks in America

Online banking’s popularity contin-ues to soar in the U.S.

Source: Reuters

Source: Detroit

MONEYHELLO!

also at varied denominations. Bank of America, adding to the innovation bandwagon, has add-ed machines in hundreds of locations that allow video-conferencing, so customers can talk with a human teller if they need assistance. This reduces total withdrawal time by more than half, pegged against traditional machines.

Walmart may just be a consumer’s next bank of choice, as it comes with its fleet of cards and online banking. The retail behemoth has tied up with GoBank to offer online banking, though you will not get to open a sav-ings account or take a loan. Yet, you can do a lot more with a checking account, prepaid and credit cards, debit cards linked to your account, and facilities like payment of utility bills, along with a mobile app to make banking easier. Consumer reports give varied recommendations across the range of services, but Walmart’s foray into retail banking is a thing to note.

In a joint effort by the FBI, the Internal Revenue Ser-vice and the U.S. Attorney are about to put many fraud-sters, involved in Ponzi scheme amounting to almost $40 million, behind the bars. It is a scheme where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Keith Franklin Simmons a North Caro-lina businessman is the prime suspect who has been detained for 40 years and Jonathan D. Davey final de-fendant in the conspiracy was sentenced to more than 21 years. This conspiracy roots back to 2007 when he formulated an investment scheme called “Black Dia-mond,” which he advertised as a legitimate hedge fund involved in foreign currency trading. To solicit inves-tors he recruited a number of individuals to serve as regional managers of his hedge fund. Although Black Diamond made the perpetrators rich but it began to collapse as there was not enough new money coming in to keep the old investors satisfied or to continue lining the pockets of the criminals running the fraud.

Walmart teams up with GoBank to offer consumer banking services; the retail giant now offers its own deb-it cards, prepaid cards, credit cards and online banking

FBI, IRS and the U.S Attorney joint-ly nab a Ponzi Scheme rooting back to 2007, amounting $40 million.

Source: ABC30

Source: FBI

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MONEYHELLO!

COVER STORY

TITLE INSURANCE: WHAT IS IT & WHY YOU NEED ONE.

Title insurance has its origins to the judgement of the Pennsylvania Supreme Court in the Watson v. Muirhead case (1868). The court ruled that the transaction conveyance was not at fault in ignoring a valid lien on the title based on legal opinion. In response to protect the real estate buyers from defective title, liens and encumbrances, a group of Philadelphia conveyances established the first title insurance company in 1876.

Buying your dream and ready to close the deal? That’s great news! But do you know that even after you have closed the mortgage deal and have the deed to the property, some fine day someone can walk in and claim that the property belongs to him due to some past will that you are not even aware of? Yes, this is one of the awkward possibilities that may arise. And there are many such. In such a case, you may need to spend thousands of dollars on legal fees to defend your ownership rights and in a worst case scenario, the claimant might even prove that he is right and you might lose your ownership. Fret not; you can insure against this possibility by purchasing title insurance.

a forged deal or someone coming up with a claim of ownership. In such an instance, it might mean legal cases, a lot of money in attorney fees and in a worst case scenario, you might have to pay heavy losses or lose the property itself.

So it is for you and your lender to make ensure that you remain the sole owner of the property and no-body else can come and make a claim. Here is where title insurance comes in. Investopedia defines title insur-ance as “Insurance that covers the loss of an interest in a property due to legal defects and that is required if the property is under mortgage.” Title insurance will cover legal costs and also the insured amount, which is mostly equal to the purchase price of the property. Unlike any other insurance, here the risk covered is something that has happened in the past but can af-fect your ownership rights in the future.

Let us understand what title insurance is and how it works, in some detail. When you are buying a proper-ty, the purchase price will be a big amount and in most cases, you will need to buy it on mortgage. However, having the deed to a property does not mean that you have the right to enjoying the property and no one can challenge it. Others can have certain prior rights and claims to your property. The chances of this in-crease with the age of the property and the number of previous owners. A lot of issues can come up, includ-ing a previous owner not having paid taxes,

What is title insurance?

When you are buying a property under mortgage, you have to buy a lender’s title insurance which is equal to mortgage amount. This is also known as a loan policy. This is mandatory, but being a lender’s insurance, this covers the financial institution that is providing

The different types of title insurance and why you need it

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you the mortgage in case there is a claim, but does not cover you. The policy amount in this case decreases to the amount of loan paid off each year and is valid till the life of the loan. Let us take an example of a scenario in which you pay the mortgage for 15 years and then there is a legitimate claim on the property. The lender who is providing you the mortgage is cov-ered to the extent of the outstanding mortgage, but you may stand to lose your property. To avoid such a situation, you need to buy an owner’s title nsur-ance policy as well, which will protect your interest in the property as long as you maintain an ownership inter-est in the property as long as you maintain an ownership interest in the same property. An owner’s policy requires you to purchase cover for the full val-ue of the property or its selling price. Unlike the lend-er’s title insurance policy, this is not mandatory, but recommended. Remember, buying a title insurance policy for the lender will protect the lender in case a claim arises, but you will still be liable to loss.

For obtaining title insurance you usually need to pay a one-time premium when closing the deal. While you might think that you do not need an owner’s title insurance for a relatively new property, it is still rec-ommended that you purchase owner’s title insurance, because paying a relatively small one-time fee can save you thousands of dollars on losses. Purchasing owner’s title insurance becomes even more important when you have made a big down payment on your property, as you already have built a substantial equity in your home that you would like to protect. If you are refinancing your home, you do not need to buy a new owner’s policy. But since it means a new mortgage, you need to get a new lender’s policy. How-ever, getting it from the same title insurance company can get you big discounts.

Here are some terms that would be helpful to know when talking to a title company. Ask your title company which of these you qualify for:

Basic Rate The rate charged to a consumer who does not qualify for a reduced rate such as, but not limited to, the reissue rate or simultaneous issue rate

Reissue RateThe reduced rate for an Owner’s Policy issued on a property which was previously insured within some period of years. In some states, the term is also used for a refinance rate

Simultaneous Issue RateThe reduced rate for a Loan or Owner’s Policy issued on the same property or loan at the same time as another policy. The term usually refers to a Loan Policy issued at the same time as an Owner’s Policy when a property is purchased

Risk RateA rate that does not include the cost of researching the title or the cost of conducting the closing

All-Inclusive RateA rate that includes at least some part of the cost of researching the title or the cost of conducting the closing

Refinance RateThe reduced rate for a Loan Policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years

Source: http://www.homeclosing101.org

4

The title searchThis is a process in which a professional examiner searches through public records of the property, of

MONEYHELLO!

The losses to the lender will be covered under the in-surance, but in case the owner does not have an own-er’s insurance, he will not be protected against the loss.

fline, online or both and looks at the chain of owner-ship (the successive owners of the property in ques-tion). The search is conducted by a title company or an attorney to ensure that there are no outstanding claims, defects, liens or encumbrances against the property and that the seller has the legal right to sell the property. This is in their interest as it means that they have reduced their chances of losses to a mini-mum.

So when the insurance company issues a policy, it means that a thorough title search has found nothing the matter with the records and that the.property in question is clean enough to be insured. In case some issues are found, you need to point them out to the seller and clear them up. “Why would I need an owner’s title insurance then?” you may ask. This is a valid question but one has to note that title searches, though comprehensive, are not hundred per cent reliable. There have been instances in which even after a title search has been conducted and a policy was issued, there have been hidden encumbrances which have cropped up.

The costs of title insurance or the premium you need to pay will vary from state to state because of the ser-vices included. In some cases this includes cost for the title search and the closing costs, so the premium could be higher. However there are some thumb rules that give you a cost estimate. The average cost for theowner’s title insurance policy is $3.50 per $1,000 and lender’s title insurance is $2.50 per $1,000. Another way to calculate your one-time premium is to use the formulae that title insurance costs you around 0.5 per cent of the purchase price of your home. So for a homethat is worth $4,00,000, the approximate insurance premium would come to $2,000. In some states rates are set by companies themselves while in some cases they are fixed by the state insurance department. In many states, like Texas and Florida, title insurance is strictly government regulated, which means that you

What does it cost?

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will be paying the same premium irrespective of who you buy your title insurance from. In some oth-er states like NY, Ohio and Pennsylvania, there are state-authorised rating bureaus which fix the rates, so again you will find similar rates offered by different title insurance companies. However, while this would mean fixed insurance rates, other ancillary servic-es provided by the title company such as facilitating the closing, service fees, endorsements,recording and courier charges could still be open to negotiation. So when shopping around for the best rates, ask your ti-tle insurance company what all is included in the cost so that you are comparing apples to apples.

The only time you can buy title insurance is during the closing of the deal. You are supposed to pay the premium for the lender’s insurance in any case. Who pays the owner’s premium, however, is not fixed by law but decided by local customs. This leaves room for negotiation. In some areas the seller buys the own-er’s policy. In case that is not the case, you need to buy the owner’s policy on your own. You can buy title insurance from insurance companies, title agents, or, in some states, attorneys. You can ask your lender or real estate agent about which title insurance company

6

Buying title insurance

MONEYHELLO!

The American Land Title Association (ALTA), found-ed in 1907, is the national trade association and voice of the abstract and title insurance industry. ALTA members search, review and insure land titles to pro-tect home buyers and mortgage lenders who invest in real estate. Members of the association are in business in most counties across the nation. Nearly all title in-surance companies hold ALTA membership, in addi-tion to abstracters and title agents. To find a local title company that is also an ALTA meber visithttp://www.homeclosing101.org/local.cfm.

to go for and they can recommend you a good title company, since they are in a position to know which companies provide good service. However, it is not compulsory to buy insurance from the company your borrower or real estate agent suggests. The American Land Title Association (ALTA), founded in 1907, is the national trade association and voice of the ab-stract and title insurance industry.

Financial Stability RatingTM( Demotech Inc) is an industry accepted rating schema which indicates the ability of an insurer to remain financially stable under a variety of economic stress tests and demonstrates insurer’s ability to meet its insurance related obligations. Financial Stability Ratings® of A++, A+, A and S are accepted by the major participants in the secondary mortgage marketplace with underwriter’s rated S and above are regarded to be meeting the bill. The ratings are based on a probability scale. A++ indicates that regardless of the severity of a general economic downturn or a deterioration in the insur-ance cycle, 100% of the insurers receiving a A++ are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment. As we go down the rating scale the confidence of being able to weather an economic downturn diminishes.

Want to zero down on a title insurance company? Check these ratings

Platinum Gold Silver Bronze

Stability Rating A++ Amer-ican Guaranty Chicago Title First American Inves-tors Title Missisippi Valley National Investors Old Republic Stewart Title Guaranty

Stability Rating A+ Alamo Title American Security Attorneys’ Title Conesto-ga Land Title Common-wealth Land Connecticut Attorneys Entitle Insur-ance Fidelity National Iowa Title Land Title In-surance North American Title(LA) Stewart Title In-surance Title Resources Guaranty Westcor Land WFG National

Stability Rating A Agents National Alliant National American Eagle Attorney’s Guaranty (CO) Banker’s Guarantee First American Guaranty First American Guaranty (LA) Ohio Bar Title Premier Land Title Security Title Guaranty Sierra Title Insurance Guaranty

Stability Rating S Amer-istract Title Arsenal Title Dakota Homestead First Atlantic First National General Title Mississippi Guaranty Onetitle Nation-al Real Advantage South-west land

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If you have to buy title insurance, it is recommended to shop for the best deal to save on premiums in case you belong to a state that does not regulate insurance premiums. Many websites provide tools to compare title insurance rates. A more thorough way to ap-proach different title insurance companies in your area and find out the rates they are offering. Even if the rates are fixed by the state, you can still negotiate for a discount on ancillary fees.

If you are buying an owner’s policy along with the lender’s policy from the same insurance company you might also get a substantial discount in premiums in some states because of what one calls a “simultaneous issue rate.” This is because they have already done the title search once and need not do it again. Talk with your title insurance company and find out how much discount you are eligible for.

Buying your home is one of the biggest financial deci-sions that you will make in your lifetime. So it is im-portant that you insure your happiness.

Find out if the title insurance company is an ALTA member. Check its financial stability ratings

Find out if title insurance rates in your state are fixed by law. If not shop around for the best ratesfor a title insurance com-

pany they recommend

Find out if the seller will pay for the owner’s title insurance. Try and negotiate if that is not the case

Ask your lender or real estate agent about which insurance company you should go for. However, you are not required to opt for a title insurance com-

pany they recommend

Title insurance: Buy smart

Even if the insurance rates are fixed, ne-gotiate on the ancillary fees

Ask for a discount if you are buying both the lender and the owner’s policy from the

same insurance company

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MONEYHELLO!

SPECIAL ARTICLE

Janet Hard at the signing

-in ceremony of the Credit Card

Act2009. President Obama cited the

example of Janet on how credit card

debt can be precarious for Americans.

Credit card debt : A one way streetJanet Hard of Freeland Michigan is a nurse; her hus-band is a pipe fitter. They got two boys. She would make her payments in time, but despite this, the in-terest rate on her credit card was increased to 24 per cent. That 24 per cent not only applied for new pur-chases but retroactively to her entire balance. Despite making steady payments totaling $2,400 one year, her debt went down by only $350. This example was cited by President Obama in his speech at the signing in ceremony of the Credit Card Act 2009.

Nearly half of all Americans carry a balance of $7,000 on their cards on an average and have been charged interest rates above 20 per cent. The average house-hold credit card debt in the US is $7,283, amounting to $882.6 billion. It will take more than 30 years with a total payment of $60,975 comprising of interest and principal payment to square off the debt. The interest alone will amount to $50,975

Payment

4

1

5

2

3

6

7

Interest Principal Balance

$10,000.00

$9,999.67

$9,999.33

$9,999.00

$9,998.66

$9,998.33

$9,997.99

$9,997.66

$141.99 $141.65 $0.34

$142.00 $141.67 $0.33

$141.98 $141.65 $0.33

$142.00 $141.66 $0.34

$141.99 $141.66 $0.33

$141.98 $141.64 $0.34

$141.97 $141.64 $0.33

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As the US economy consolidates, the credit card com-panies are loosening their purse strings, confident that the borrowers will pay their debts. This lenien-cy on part of the credit card companies means that reckless borrowing might take place placing more Americans into debt. While it is true that credit card companies provide an important service , reckless spending and imprudence on part of the debtors and indiscreet credit issuance on part of the creditorscan lead to credit card debt hurting a bit too much and for far too long.

However there are other ways also which credit card companies compel customers to land up in trouble-some situations. Contracts are drafted not to inform, but to confuse by putting the terms and conditions in a complicated fashion. Mysterious fees appear on statements, payment deadlines shift, terms change and interest rates rise. All of a sudden, a credit card creates financial complications in place of making life easier.

A 2008 study made Harvard University shows that customers learn the behaviors associated with good credit use through negative reinforcement. The prob-ability of making a second late payment is cut by 44 per cent after paying a late fee. In addition, fees on new credit cards average $15 monthly but drop 75 per cent within the first four years of using the account.

These findings suggest credit card customers experi-ence a learning curve on credit card use as they learn

what behaviors result in penalty fees. Moreover re-sponsibility lies on the cardholder to use the credit card cautiously, taking into consideration the means to pay them off and resist reckless expenditures.

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9

10

$9,998.33

$9,997.99

$9,997.66

$141.98 $141.65 $0.33

$141.98 $141.64 $0.34

$141.97 $141.64 $0.33

Interest Rate

17%

Balance

$10,000.00

InteresPaid

$50,975.77 $60,975.77

Time to PayoffTotal Payments

30 + years

Monthly Payment

$142.00

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MONEYHELLO!

1

23

Make regular payment to help build a good credit history:

Check your statement carefully every month:

Avoid withdrawing cash from your card:

Make full payment of your balance every month within due date. This will help you avoid late pay-ments, enhance your credit score and make you a re-sponsible borrower. On the other hand, if you miss your payment or make less payment, you will incur fees on your card which will in turn affect your score adversely. One way to make credit card payments on time is to set up auto-bill pay on all your credit card accounts.

Check your card statement every month to make sure there are no errors and all the mentioned transactions are legitimate. Also check if the charges that you are paying on your card like late

fees and transaction fees are correct. If you find any suspicious transaction, get in touch with your com-pany at the earliest.Your letter needs to be received within 60 days of when your statement containing the billing error is received.The credit card company has to settle the dispute within two billing cycles after re-ceiving your letter.

If you withdraw cash from your credit card, you are charged from the day you took the advance till the day you make full payment of the entire amount. Also remember that the APR for cash advances is of-ten higher than the APR on credit card purchases. Moreover, unlike regular card purchases, there is no grace period for cash advances.So withdrawing cash on your credit card should be a last resort. Building an emergency

5ways to use your credit card effectively

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Credit cards are very convenient if used rationally. But if you do not use it wisely, it can lead to serious financial woe. Here are five steps to follow to use your credit card more effectively.

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If you carry balance in your card, try making payment as soon as possible:

Avoid impulsive shopping: fund will help you tide over extra cash require-ments during certain months instead of resorting to cash advances.

If you are carrying any balance on your card,try to make payment as quickly as you can. This is because you are charged interest on daily ba-sis until you make the payment and this could eventually land you in a debt trap. In case you find that you are carrying forward balances every month and finding it difficult to clear your balance, you should stop using your card until you have a grip on your finances.

Owing a credit card often increases your zeal to shop more and this is what credit card companies want you to do. The impulse to spend comes from the fact that you do not need to pay in cash and hence ending up spending more than you can af-ford. This could mean that that you are unable to make full payment of your balance in full the next month. Hence you should not indulge yourself in impulsive buys until you have money in your bank account to pay for them.

Avoid carrying balance on credit card or avail auto bill pay option to build a good credit history.

Avoid suspicious transactions by detailed check-ing of credit card statements.

Avoid restoring to cash advances by building emergency fund.

Avoid debt trap by making payment as soon as possible.

Avoid spending more than you can efford.

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Expert Speak

Why the Fed raising rates might not mean good news for you immediately Fed is on the verge of raising the fund rate which banks charge each other on overnight loans, but it is showing a patient approach in doing so, as they want the economic expansion to escalate a little more. The Federal Reserve did not increase the interest rate since the economic depression in 2008, but it is expected that by mid-2015 there might be a probable rate hike.

The decision to implement a change in interest rate by Fed creates a chain reaction in the economy. Banks tend to raise their prime rate, which in turn affects mortgage rates, car loans, business loans and oth-er consumer loans. On the other hand, interest rate on CDs, checking accounts, money market and sav-ings accounts also tend to increase in order to attract consumers to park their excess funds, as it becomes costlier for banks to borrow money to maintain their minimum cash reserve. Interest rate increase is a pos-itive indication for an economy that is growing at an accelerated pace as it is meant to stabilize growth, avoid hyperinflation and signal the status of econ-omy.

The increase in fund rate is favorable mainly for those consumers who hold liquid assets like short-term CDs, money market, checking and savings accounts, as they yield higher returns under such a scenario. But these effects are subject to a moderate time peri-od. Many factors govern the time required for

increase in the rate of liquid assets with Fed rate hike. Hence people with high intensity to save cannot ex-pect higher rates at the bank as soon as the rate goes up. As the Fed fund rate increases, mortgage rates, home equity loans and credit card rates increase pri-marily but liquid assets like CD, checking and savings accounts experience the impact slowly. Banks generally wait an average of 8 to 10 months to boost savingsaccount rates after a Fed rate increase. Mort-gage rates, home equity loans and credit card rates increase primarily but liquid assets like CD, checking and savings accounts experience the impact slowly. Most of the banks raise only a small fraction of inter-est rate raised by Fed. This is because it is estimated that if the banks align the rate with the increase in rate by Fed, then within a year savers will land up with $100 billion more in interest payments. Also, banks generally earn from the spread between lending rate and borrowing rate with little incentives to support the flexibility of changing interest rates. Hence they are expected to be slow to increase interest rates which they are offeringon short term assets like CD, checking, savings accounts etc. Moreover such bank-ing strategies are given indulgence by the slow nature of customers to punish them by seeking out banks that pay out moreand which the banks are aware of. If consumers really cared, a lot more money would flock to online banks that now offer savings accounts with rates of 1 percent, 100 times the typical rates at large banks.

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Banks generally wait an average of 8 to 10 months to boost savings account rates after a Fed rate increase.

Dr. Abdul Hafiz Jones is the Vice Dean of Graduate Stud-ies and Scientific Research at University of Ha’il -College of Business Administration. An MBA from the Wayne Huizenga School of Business, Nova Southeastern Univer-sity and a Phd from Argosy University (Washington DC Campus) , Arlington, Virginia, USA, he has over 10 years experience as a stock broker and investment advisor with American Express & Money Concepts International. He also has a decade’s experience in financial reporting for the US telecom industry and has worked for firms like Deloitte and Nextel, among others. Dr. Jones lives with his wife and two boys in Sterling, Virginia, but currently resides in Ha’il , Saudi Arabia in his academic role. The views are his own.

MONEYHELLO!

The first step toward taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend. Start by listing your income from all sources. Then, list your “fixed” expenses — those that are the same each month — like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary — like groceries, entertainment, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education. You can find information about budgeting and money manage-ment techniques online, at your public library, and in bookstores. Computer software programs can be useful tools for developing and maintaining a budget, balancing your checkbook, and creating plans to save money and pay down your debt.

Choosing a bank is a major decision, and there is no one right choice for all consumers. When you shop for a bank, you have to consider the actual products and services it provides as well as the location of branch-es, size of the bank, fees, and interest rates. Even if you conduct most transactions online or at automat-ed teller machines, you want to choose a bank with quality customer service.Also, consider the variety of products that the bank provides; some banks may specialize in checking and savings accounts, while others are full-service banks, offering loans and CDs. You don’t have to maintain all of your accounts at one

When buying any sort of insurance, whether it is home, life, auto, rental or other keep the following in mind:

•Find out whether your state insurance department offers any information concerning insurance compa-nies and rates. This is a good way to get a feeling for the range of prices and the lowest-cost providers in your area.

• Check several sources for the best deal. Try getting quotes from an insurance focused website, but be aware that many online services may provide prices for just a few companies. An independent insurance agent that works with several insurers in your local area might be able to get you a better deal.

• Make sure the insurance company is licensed and covered by the state’s guaranty fund. The fund pays claims in case the company defaults. Your state insur-ance department can provide this information.

• Check the financial stability and soundness of the insurance company. Ratings are available online and at most public libraries.• Research the complaint record of the company. Contact your state insurance department or visit the website of theNational Association of Insurance Commissioners, which has a database of complaints filed with state regulators.• Find out what others think about the company’s customer service.• Once you pay your first insurance premium, make sure you receive a written policy. This tells you the agent forwarded your premium to the insurance company. If you don’t receive a policy within 60

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bank; you can have relationships with several to get the best rates on different services.

If you suspect fraud, call the National Insurance Crime Bureau’s hotline at 1-800-835-6422. Or for more information, check out the Coalition Against Insurance Fraud website.Source: http://www.usa.gov/

MONEYHELLO!

LIGHTREAD

As more transactions become electronic, bank crimes have become electronic tooFirst thing one Monday morning, a robber broke into a bank, pointed his guns at the cashier and said, ‘Give me all your money, or you’ll be GEOGRAPHY’The cashier laughed and said, ‘You mean to say HISTORY.’ The robber answered, ‘Don’t change the subject.’The robber in the joke is perhaps not as smart. But this is not the bank robber as we would define today. The miscreants have become way smarter, and dare I say, more peace-loving. Sure guns do not scare them, but the recent trends of bank robberies in the U.S. do hint at the fact that robbers are equally business-smart.

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Consumer banking has become less dependent on bank branches and more dependent on technology. With rising woes of traffic and con-sumers tight pressed for time, most of the retail banking operations can be done sitting at home. This has led to an in-crease in cyber crime and hence, more intelli-gent robbers.

MONEYHELLO!

On a lighter note, the justice department states in its bank robbery guide – ‘Bank tellers are unarmed and consistently compliant. Even robbery transactions are handled quickly and efficiently’.

As a matter of fact, in a recent robbery case at Queens, the convictions were for a minimum sentence of 16 years. However, the same became 32 years because they robbed the tellers at gun point.

Interestingly, robbers rob for a living too. So when it is about pay-off against the risks involved, why carry guns?

That was about guns, now talking about robbery sites, the economy has seen a sharp decline in robbery ons-ite against robbery offsite, where onsite refers to the bank branch and offsite refers to cyber crime or elec-tronic media. Over the last 50 years, there has been a consistent decline in bank crimes that happen in branches.

In 1980, 50% of all bank robbers flashed a gun.

In 2015, <25% of bank robberies involve a gun.

In 2003, 54% of bank robbers used a note while 26% showed a firearm.

In 2011, 58% of bank robbers used a note while 24% showed a firearm.

With the advent of technology, security cameras have become more intelligent and heists are caught more often than not. In 2003, CCTVs captured 93% of bank robberies, while in 2011, CCTVs captured 98% of them.

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KNOW YOUR BANKER: BETH MOONEY ,CEO, KEYCORP

We all want to read stories that inspire us- how an office clerk went on to become a CEO, a newspaper vendor went on to become a publishing baron or the boy who failed in his school exams went on to invent something that changed our lives. The reason why these stories inspire us is simple. It makes us believe that if we work hard and keep at it; even we can be successful and achieve our dreams. This is the story of Beth E. Mooney, 60, who since 2011, holds the po-sition as theChairman and Chief Executive Officer of KeyCorp, one of the top 20 banks in the United States. What makes her story interesting is that she is the first woman-in-chief of the one of America’s top 20 banks. Also because she started at the bottom and climbed her way to the top. And once she was at the helm, she engineered a fabled turnaround. Sounds like a fairy tale, but true.

Mooney has been instrumental in changing the for-tunes of the bank ever sinceshe took control. As re-ported in the financial magazine Barrons, the bank had a tough time during the 2008 financial crisis and suffered more than $5 billion in credit losses, mostly on loans to home builders and commercial real estate developers and sought a $2.5 billion loan from the government’s Troubled Asset Relief Program. That has since been repaid. KeyCorp lost a cumulative $2.8 billion in 2008 and 2009, before moving back into the black in 2010.Its shares plummeted to a low of $4.40

in 2009 from nearly $40 at the start of 2007, and the bank was forced to slash its quarterly dividend to a penny a share from a one-time high of 38 cents. Central to the bank’s turnaround was improving its capital position by raising equity, quickly writing off bad loans, and improving its underwriting standards. These moves helped lift its Tier 1 capital ratio from as low as 5.6 per cent in 2008 to 11 per cent as of June 2014. Regulators cleared KeyCorp in March 2014, af-ter the industry’s most recent stress tests, to return up to 80 per cent of its earnings to shareholders, one of the highest payout ratios allowable among its peers. Central to the bank’s turnaround was improving its capital position by raising equity, quickly writing off bad loans, and improving its underwriting standards. Currently the bank has a market capital of $12.15 bil-lion and trades at slightly over $14 at NYSE, with a dividend yield of 1.84 per cent.

On asked how she made it, Mooney was quoted say-ing, “I never had a five-year plan. I played my career more like a game of cards. You start with the hand you’re dealt, keep one and throw one. I always wel-comed the opportunity to take a challenge and prove myself.” Precious words of wisdom as they come, in a world where being on one’s toes is the KEY to success.

When she stepped into the role of KeyCorp’s chairman and CEO in May, Mooney became the first female chief of a top 20 U.S. bank.She now oversees more than 15,000 employees and assets of near $90 billion, and will need to steer the Cleveland, Ohio-based bank past one of its darker eras. After hemor-rhaging money in 2008-09, it returned to profitability last year and in March repaid the$2.5 billion in TARP funds.

Mooney did not start with a top MBA degree from one of the ivy-league institutions. Instead, after grad-uating with a history degree from the University of Texas at Austin in 1977, she started looking for a bank job where the only requirement was typing skills. She started her career as a bank secretary but had much bigger aspirations. According to a Forbes article, in 1979, she took downtown Dallas “by storm,” knock-ing on the door of every big bank to demand ac-ceptance into their management training programs. At the Republic Bank of Dallas, she refused to leave the manager’s office until he offered her a job. Three hours later, he acquiesced, provided she earned an MBA from Southern Methodist University by night. Mooney never refused a new challenge and moved nine times in 16 years, working in every banking role from commercial and real estate lending to chief fi-nancial officer. In 2011, she debuted at No. 96 on the Forbes list of the world’s 100 most powerful women.

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Beth MooneyCEO, KeyCorp