SEE THIS SLIDE SHOW: The Best Financial Services
BEST ONLINE SAVINGS ACCOUNT
FNBO Direct
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Earn 3.5% on your FDIC-insured savings at www.fnbodirect.com. You pay just $1 to open an account with no maintenance fees and no minimum-balance requirements. You can link the account to as many as three others, including FNBO's bill-payment account. Use electronic transfers to move your funds and your ATM card to withdraw cash.
BEST MONEY-MARKET ACCOUNT
Express Money Market, Flagstar Bank
Open an FDIC-insured account for $1 at www.flagstar.com and earn 3.65%, with easy access via free checks and a Visa debit card. Also, get free, unlimited ATM withdrawals through the Allpoint and Presto networks. Federal law limits you to six pre-authorized transfers or withdrawals per month.
CHECKING ACCOUNT
Schwab Bank High Yield Investor Checking
You don't have to be a Schwab customer to apply for a checking account at www.schwab.com. The account has no minimums and no ATM or other fees. You get a debit card, standard checks and online bill payment, all free. Best of all, your money earns interest while it sits idle, to the tune of 2.2%.
MONEY-MARKET MUTUAL FUND
Fidelity Cash Reserves
Yields are low in the current market, but safety is first-rate if you're looking for a haven to park your cash until the stock market stabilizes. This behemoth has assets of $100 billion, a top-rated portfolio and a large, stable customer base. So it's unlikely that depositors would make significant withdrawals (which could cause the net asset value to drop). Plus, Fidelity has signed up for the new government insurance program. Minimum investment is $2,500, and check-writing is available.
COLLEGE-SAVINGs FUND
State 529 Plans
Your money grows tax-deferred and escapes taxes if you use it for college expenses. Two-thirds of the states also give residents a tax break for contributions. Set the investment mix to become more conservative as your child approaches college age; some plans also offer an option with a guaranteed return.
STUDENT LOANS
Federal Stafford Loan
Despite reports of scarcity, you can still get these government-sponsored loans, which are available to all students who apply. Staffords carry a fixed interest rate of 6.8% or lower. If your student qualifies for financial aid, the feds will subsidize interest on the loan until repayment is due, beginning six months after graduation.
LOANS FOR PARENTS
Parent Loans for Undergraduate Students (PLUS)
These government-backed loans require a minimal credit check and carry a fixed rate of 8.5% or less. You can borrow up to the cost of your child's education and defer repayment until six months after your student graduates. To find lenders, see "Education Lenders and Student Loans" at www.finaid.org.
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