Category: Banking

Mobile banking is estimated to be the primary method of managing money in the next two years as more high street branches close. But how do you know which is the right bank?

If you’re feeling drained by the fees, lousy customer service, and find it hard to juggle all your accounts, it might be time to switch to a different bank. 

Before you switch banks, look at these common warning signs to determine if it’s worth the hassle and will benefit your business.

5 Warning Signs That You Need a Different Bank

Most of us prefer the comfort of staying with a bank that we know instead of getting used to a new bank and all the different systems. However, moving to a different bank might save you time and money. 

Here are the five signs to watch out for that tell you it’s time to change banks. 

1. The Fees Are Too High

Fees are part of the deal when using a bank, but they shouldn’t cost you vast amounts of money. 

When you’re trying to establish a new business or running a current company, the last thing you want to deal with is increasing fees for sneaky details like international transactions, inactivity, or account maintenance. 

Even though these small costs don’t seem like much at once, over time, they will start to eat away at your annual budget and leave you with fewer expenses to invest in your business. 

So, changing banks will give you more freedom with your banking without the unfair costs of paper and other additional fees.

2. No Longer Convenient

Banks are meant to make your finances easier to manage, not harder. The reason we use banks is to be able to use our money where and when we want. 

That means you should be able to use digital banking on the go and not have to visit a local branch when you have an inquiry or want to deposit cash.

If you’re not already using digital banking, you’re wasting time. 

3. Bad Customer Service

As a business, you often have to handle large sums of money and contact your bank to arrange certain transactions, so you want to have a friendly voice on the other end of the phone. 

Often, customer service can treat you like a number, not a valued customer, making it hard to develop a working relationship with your bank.

For example, if you have to wait for a long time on the phone, your request is ignored, or you don’t have access to a real-life representative.

If you’re frustrated with the poor customer service, you need to consider changing banks. 

4. No Business Tool Features

Using a personal bank account is entirely different from a business account, so you must have certain features if your company runs smoothly. 

You should be able to access online management tools, payroll features, and credit card processing. Otherwise, you’re not getting the most out of your bank. 

Switching banks might be the only solution for better business features that will help you organise your business finances and give you time to work on other parts of your company. 

5. Lifestyle Changes 

Things can change in people’s lives; you might get a work promotion, start a new business adventure, or simply want to upgrade your bank account.

No matter the reason, your lifestyle can change, and you’ll need a different bank.

It’s always a good idea to evaluate your banking needs and assess if your current branch is giving you what you need at various stages in life. 

Tips for Picking a New Bank

Once you’ve decided that you want a new bank, you’ll have to think carefully before signing up for a new account and getting a card through the mail. Otherwise, you’ll end up moving banks again in a few months. 

Firstly, you should consider your bank account options and what’s available. 

Look at the Different Bank Account Options

In general, a few main kinds of banks are available for customers. These bank accounts are checking, savings, CD, and money market accounts. 

You should decide why you need a bank account and if you want to open several simultaneously. That way, you won’t have to communicate with several banks all the time.

If you want to control all your finances in one place, you should check that the bank offers services for mortgages, financial planning, credit cards, and investment accounts. 

Most businesses prefer to use the same bank for all their accounts as it keeps things simple and straightforward when planning your annual budget. 

Find a Low-fee Bank

Ideally, you also want to have a bank that has low fees. On average, banks will be transparent about their fees, so asking about the additional costs is essential before opening an account. 

You don’t want any surprises later on! 

Don’t Miss the Fine Print

You must always read the fine print on a website or bank documents. As a safety precaution, it’s good to examine the procedure for closures, so you know your money will be safe if the bank ever shuts down. 

Therefore, you don’t need to worry that your money is safe and can focus on growing your business. 

You can check out our page to stay ahead and get regular updates on the business world and economy. At CFI.co, we aim to give you the best insights from world-leading organisations that will help your business thrive. 

Move Banks and Get the Service You Deserve

Nowadays, digital banks are created every day. There is no longer a need for visiting a branch and going for regular meetings that take time out of your day. 

Switching to a different bank is necessary if you keep having trouble with customer service, there are increasing fees, and the bank no longer meets your needs. 

Thankfully, after reading this article, you know the signs to watch out for and how to find the perfect bank. 

If you need more help, visit our page and stay informed about everything business-related. 

How much did you pay the last time you went to an ATM? Banking fees can be a huge source of frustration for many people. However, it’s important to note that not all banks charge the same fees, and some are more likely than others to penalise customers for using their accounts.

That said, there are ways to save money on your banking fees and some common bank fees you can avoid. By following these tips, you can ensure that you’re not wasting money when it comes time to pay your monthly bills.

Let’s dive in. 

1. Keep Your Balance High

One of the easiest ways to save money on your banking fees is to make sure you keep your balance high. This can be done by not spending money regularly, or by setting up direct deposits for automatic payments.

It’s a good idea to get in the habit of checking your account balance each month and keeping it as high as possible. This also enables you to keep an eye on bank account fees and dispute them if necessary. 

If you have a high enough cash balance, many banks will waive monthly bank account fees or other charges simply because they don’t want to lose out on potential revenue from having their customers pay those fees.

2. Get an Interest-Earning Account

Interest is a reward for lending money. Interest rates have recently risen due to the current inflation crisis. Banks pay interest on savings accounts, certificates of deposit (CDs), and some money market accounts.

The amount you earn depends on the type of account and its balance. Generally speaking, the more you have in your account, the higher your rate will be—but that’s not always true!

If a bank offers an “interest checking” account with a low minimum opening balance requirement and no monthly service fee, it can be pretty attractive. It also makes sense to link any high-balance savings or CD to your checking account.

That way, you won’t get hit with unnecessary fees if you move money between these two types of accounts too often. Equally, it won’t affect you if you exceed certain limits while making transfers between them.

3. Set Up Direct Deposits

Setting up a direct deposit option is one of the best ways to save money on banking fees.

When you receive your paycheck, most employers will allow you to have the funds deposited into a separate account. This is called direct deposit and can be set up at any bank or credit union.

When you set up direct deposit, the check must go directly into an account that isn’t attached to your debit card in any way (such as an online checking account).

Direct deposit avoids all types of checks, which means no more trips back-and-forth between work and home or worrying about lost or damaged checks that could cost you even more money in replacement fees.

If you’re a sole trader or run your own business, consider hiring a personal accountant to help you save fees and arrange your finances. 

4. Opt for Online Statements

One way to save money is by opting for online statements. Some banks will charge you if you choose paperless statements, but if you do so, they’ll often waive those fees.

Some other benefits of online banking include the fact you can stay up to date on your finances without having to go into the bank or send someone a paper statement every month

If your bank offers it, there are usually tools like bill pay and mobile check deposit available on their website as well

This gives you more opportunities for catching mistakes before they happen—like missing a payment or overdrawing an account after paying some bills—and prevents them from escalating into larger issues that could negatively impact your credit score or even lead to bounced checks and late fees

5. Don’t Use Your Debit Card for Purchases

To save money on your banking fees, you can also opt to use credit cards instead of debit cards. Credit cards have higher interest rates and thus come with more fees.

However, they do not charge debit card transactions or foreign exchange fees (which are levied when using your debit card abroad), so these additional charges can be a good deal depending on how much you use it in the first place.

6. Stay Away From ATMs That Aren’t From Your Bank or Credit Union

If you’re going to be making a lot of transactions with your debit card, it may be worthwhile to consider using an ATM that is owned by your bank. Many banks will waive their own ATM fees for customers who use their ATMs, which can save you money if you have to do a lot of ATM-related transactions.

If this isn’t an option or doesn’t work for whatever reason, credit unions are another good alternative. Credit unions tend not to charge as much in fees as large banks and are often more profitable for consumers as well because they’re smaller institutions focused on helping members rather than maximizing profits. Still, you should avoid bank fees altogether. 

If there’s one near where you live that offers lower rates and better services overall (such as low-interest rates and higher savings bonuses), then it might make sense for you to switch over from your current bank account so that you can avoid paying those extra charges every month instead!

Yet another option would be switching over to something like Bitcoin due to its lack of fees (and potential increase over time).

It Doesn’t Take a Lot of Effort to Save Money on Banking Fees 

Keep your balance high, get an interest-earning account, and shop around.  These are just a few of the ways you can save money on your banking fees.

There are many others, so don’t be afraid to ask questions and do some research when you have some spare time. 

For more stories like this, be sure to check out our finance page.

According to Preqin, hedge fund assets have reached over $4 trillion by the end of March 2021. These are investment vehicles that pool together money from different investors. Unfortunately, many people don’t understand how these funds work.

This leads to careless decisions that can result in financial ruin. If used the right way can generate higher returns than traditional investments.

For more insights on what hedge funds can do for you, continue reading to learn more.

What Are Hedge Funds?

A hedge fund combines money on behalf of certified clients. This helps maximise profits and reduce risk. To do this, hedge fund managers often use aggressive trading tactics to place wages.

This helps generate profits in both rising and declining stock market environments. These funds often have higher minimums and management costs than other investments.

Benefits of Hedge Funds

Hedge funds can reduce their exposure to broader market moves by 50 per cent. That is why any market change doesn’t phase them.

Yet, they are still known for being high-risk investment options.

The positive side is that these funds have many benefits, such as: 

High-Visibility Portfolio

Hedge funds can enhance your portfolio by investing your wealth in lucrative assets. Their high-profile portfolio reflects an individual’s investment prospects and choices. It also reveals the derivatives, equities, real estate, and much more.

Adds Flavor to Your Portfolio

Mutual funds engage in cautious and conventional investment strategies. Hedge funds aim to explore the financial world by investing large cash in unique assets. Hedge fund managers can help diversify and invest your funds in the optimal asset.

Unaffected by Market Volatility

Hedge funds rely less on fixed income markets and more on profit-generating assets. That means market swings don’t affect them as much as traditional investment options. Thus, their capitals are less susceptible to volatility.

What Are the Risks of Hedge Funds?

If you’re thinking about investing in hedge funds, you should be aware of the risks.

Here are some key problems to consider:

High Pricing Structure

Hedge funds charge both a management and a performance fee. The average yearly management charge is between 1 and 2 per cent.

Most funds levy performance fees ranging from 15 to 20 per cent of the fund’s annual earnings. The stronger the fund’s performance, the bigger the investor’s cost ratio.

Insufficient liquidity

In some instances, hedge funds use lockups, withdrawal gates, and side pockets. This is to limit or ban investors from withdrawing capital.

This occurs if there is a discrepancy between the liquidity supplied to customers. It also takes into account the liquidity of a portfolio’s underlying assets.

Complicated Tax Filing

A taxable account may be liable to short-term or long-term capital gains taxes. Hedge fund investors get a Form K-1 with tax reporting information every year.

These documents are often unavailable before the April 15 reporting date. This will require investors to get an extension.

What Is a Hedge Fund Manager?

These managers make daily investment choices for the investors. They decide how to distribute funds and control their risks. They get a performance fee of up to 20% of the fund’s revenues if it’s profitable.

Before hiring one, ask for the Form ADV. This provides access to their disciplinary history, fees, and investing strategy. You can find this form in the Investment Adviser Public Disclosure database.

Choosing From Several Hedge Fund Strategies

Search for hedge funds with a proven track record. Check out their performance and risk management. See if it meets your individual investing goals; you can also check out these strategies for help:

Equities Hedging

You can buy inexpensive equities (long positions) and sell overpriced companies (short positions). These funds can reduce volatility to their benchmark index by hedging their holdings. It can also minimise the risk to major stock market indexes, like S&P 500.

Short or Long Credit

The majority of the return comes from coupon payments provided by the bonds. The rest originates from capital appreciation (long positions) or depreciation (short positions). This results from the changes in the credit quality of the bonds.

These funds invest in different grades, maturities, and forms of collateralisation. It can also incorporate all levels of a company’s capital structure. This is to support its operations and expansion.

Event-Driven

Hedge funds can take positions based on an event to enhance a firm’s stock or bond price. These may include the following:

• Merging of two firms
• Separation of a subsidiary unit
• Restructuring of a company’s capital structure

The goal is to improve its financial position. The occurrence, referred to as a “unique scenario,” is crucial in deciding the stock or bond’s value.

Relative Value

This technique seeks to capitalise on price disparities across connected financial products. They have less exposure to the equity and bond markets than equity hedges. These funds concentrate on distressed debt, sovereign bonds, high yield, and investment-grade bonds.

Global Macro

Funds with the widest investments can opt for all asset classes and markets. Managers check the global economic environment.

They strive to reap benefits from the macroeconomic and geopolitical imbalances or dislocations. During market volatility, these funds can deliver an excellent ROI.

Trading Future and Forward Contract

The purpose of these contracts is to generate a return without using the stock and bond markets. Rather than depending on the fund manager, you will use computer-based algorithms. The algorithms seek to discover market trends for each commodity.

It takes positions depending on the anticipated direction of commodity prices. Managed futures are among the most liquid of all available hedge funds to investors.

Hedge Fund Fees and Minimums

Initial investment minimums for hedge funds vary between $100,000 and $2 million. It may only permit withdrawals after a specific time of the year.

It charges an asset management fee of 1 to 2 per cent of the amount invested. It also sets a performance fee of 20 per cent of the fund’s profit. These expenses might reduce your total return.

Insights on Investing in Hedge Funds

So there you have it, fantastic information about hedge funds, their benefits, and risks. If you invest wisely, it could be a great way to generate passive income. Reckless investments can destroy your financial future.

Remember, these investments are not affected by the market’s volatility. Plus, it helps diversify and add transparency to your portfolio. If you want to reap the benefits, contact us for more information about hedge funds.

Only 48% of small businesses in the US have the financing they need to operate. This may be because they don’t know the business startup loans available to help fund the company. 

So, what is a business startup loan? And what types are there? Keep reading to learn more about how to fund your startup. 

Before Applying For a Business Startup Loan: 

Before you apply for a business loan, you need to know what you’re going after. How much can your company afford to pay back? How much do you need to get started? 

You should also consider your business credit score. A low score will mean you are less likely to get the loan. Read more about each: 

Determine How Much You Need and How Much You Can Afford

Entrepreneurs need to understand their own financial needs before applying for a business loan. This is because it helps them determine if they can actually afford the money. It also ensures they are aware of all of their expenses.

Many people think that they can just apply for a business loan and get funded. They don’t consider the amount of money they need or what kind of interest rates they will be on their loans. This is not true and it can lead to financial disaster in the long run.

Get a Good Business Credit Score 

A business credit score is a key factor in determining whether you are eligible for a loan or not. It is important to have a good business credit score before applying for a loan.

You must know how to get a good business credit score before applying for a loan. There are various ways that you can do it. Those include using your personal credit cards responsibly. paying your bills on time.

It also helps to keep your business current with taxes and other fees if you are operating. A business with a good credit score is more likely to get approved for a loan than one with a low credit score.

A good credit score can help you get approved for loans more easily and in fewer steps. It also helps you avoid unnecessary fees and interest rates of loans.

Types of Business Startup Loans to Apply For 

When you apply for a small business loan, you have a lot of options. The following three are the most common loans: 

SBA Loans

The SBA is a government agency that offers loans to small businesses. They give out loans to applicants who are in the early stages of their business and don’t have enough collateral to secure a bank loan.

The SBA provides startup loans to assist with the costs of starting or expanding a business. These loans are for entrepreneurs who have not been able to secure other financing options. 

It is a business loan guaranteed by the U.S. Small Business Administration (SBA). The money can be used for a variety of purposes including equipment and inventory. You can also use it for buying land, buildings, and construction.

Personal Business Loans

Personal business loans are a great way for startups to get started. They allow entrepreneurs to access capital without having to go through securing venture capital and other forms of loans.

There are two types of personal business loans: secured and unsecured. A secured loan requires collateral like property or equipment. If the loan is not repaid in full in time or if there is a default on the loan agreement, the property will be seized. Unsecured loans do not require collateral and can be repaid in any form

Microloans 

A microloan is a small loan taken out by people with a low credit score and bad credit history. They are usually given to new entrepreneurs and small businesses.

Microloans are an easy way to raise capital for startups. However, they come with some restrictions. 

Microloans are often given in the form of grants or interest-free loans for up to 12 months. But if you plan on taking out any other loans from the same lender, you will have to pay back both microloans at once.

How to Fund Your Business If You Can’t Get a Loan 

Some startups just can’t get a business loan and struggle with funding. There are a few options you can try to fund your business: 

Ask Friends and Family

Most people don’t know how to ask their friends and family to help fund their startup business. It can be a nerve-wracking experience, especially when you are just starting.

We recommend that you use these three tips:

• 1Be specific about your goals and what you will do with the money
• Give people a chance to contribute
• Keep it short and simple

You mustn’t pressure anyone to feel like they have to help. Asking never hurt, but prepare for a no and to move on. 

Crowdfunding

Crowdfunding is a form of funding that allows you to raise money from a large number of people to finance your project. It is a way for anyone with an idea, product, or service to raise funds from the public.

Crowdfunding can fund all types of projects, including those related to startups and small businesses.

Grants

Grants are a great way to fund your business without having to pay for it. They are usually offered by governments or non-profit organizations in the form of money.

There are many types of grants available for entrepreneurs. These include government grants, business grants, and angel investments. Once you find out which one is best for your startup, apply for it!

Learn More About Startup Finances 

This article covered business startup loans and your options as a business owner. We hope you have a deeper understanding of how to fund your startup. 

At CFI, we have expertise in many areas of finances. Whether you need help with startup funding or investment strategies, we have articles to cover each topic. 

Are you interested in learning more? Check out our finance blog.