Central Banks and Climate Change

Otaviano Canuto, Policy Center for the New South

There are three major reasons for central banks to engage on climate change issues. The first is the set of – physical and transition – risks to financial stability potentially brought about by natural disasters and trends derived from climate change. Second, the potential impact of climate change shocks and trends on economic growth and inflation and, therefore, on their monetary policy decisions. Finally, the possibility of using their balance sheets and their macroprudential toolkit to favor climate mitigation.

6 Common Online Banking Mistakes and How to Avoid Them

In recent years, online banking has continued to grow as banks offer more and more online and mobile banking services. In fact, 73% of banking customers use online banking at least once a month. Similarly, 59% use mobile banking at least once a month. 

With this rapid rise in popularity comes some concerns for bank account holders. Luckily, it is easy to avoid the most common online banking mistakes. We’ll take a look at what to keep an eye on and how you can make online banking a breeze.

1. Login Safety Mistakes

One of the most common banking mistakes is not having adequate safety measures set for online banking services. You should never use auto-login features. This can make it too easy for someone else to access your account. 

Instead, use a password or biometrics login on your phone. If possible, you should also use two-factor authentication to ensure additional safety. 

It’s also important to choose a unique username and password, one that you do not use anywhere else. Your bank may be taking strict online security measures but other websites you use may not. 

If a hacker finds out your password on another website and then learns that you have used it in multiple places, they could have easy access to everything, including your bank account. For similar reasons, you should also change your password regularly, so if a security breach does occur your account is not at risk for long.

Speaking of passwords, it is imperative that your bank account password is very strong. Use a mixture of uppercase and lowercase letters, symbols, and numbers. Make sure it’s not easy to guess either.

2. Unsecure Online Access

How you access your online bank account is also important. This is particularly true if you plan on accessing your online bank in public or through a device you don’t own. 

Don’t bank on public wi-fi if you can avoid it. You also shouldn’t use public computers. Even if you log out completely, hackers can still record keystrokes to gain access to your accounts.

When using your bank’s website, make sure the web address includes “https://”. The “s” is important as it indicates that there are extra security features protecting you.

If you want to download your bank’s app, make sure it is the official one. Download it via iTunes or Google Play. You may even be able to download it through your bank’s website. Either way, make sure your phone is also protected with a strong password too.

3. Not Checking Banking Activity

Another common online banking mistake is not frequently checking your online banking activity. If fraudulent activity occurs, it’s important to catch it early so you can talk to your bank and rectify any issues. 

But in order to do that, you need to actively be aware of what is going on within your account. Online and mobile banking make it easy to view your recent activity. Simply look through your transactions once a month to make sure everything is how it should be. 

If you notice anything is off, you should then immediately get in touch with your bank. Doing this does not take a lot of time and could prevent you from having to deal with much larger problems down the road. 

Additional online banking services can make staying on top of your account even easier. Many banks allow you to enrol in email, text, or push alerts that are triggered by certain activities. These could include unusual activity, balance thresholds, or transactions meeting certain criteria. 

These options are usually available in your profile or through the security features section of the website. Signing up for these options lets you know about problems with your account between times when you check on it. This can help you keep an eye out for anything unusual.

4. Handling Mobile Deposited Checks

Being able to remotely deposit checks can save you a lot of time. But, it’s important that you handle mobile check deposits correctly.

Instead of throwing the check away as soon as you deposit it, keep it for two weeks. It takes a few days for the check to clear. If there is a problem reading the check, you’ll have proof of the correct amount. Afterwards, be sure to shred the check, instead of only throwing it in the trash.

5. Mistakes When Making Online Payments

Online payments make it easy to send money to others and pay bills. But, you need to be very careful when doing these actions.

If you are scheduling a payment, make sure the date is correct. Sending it too late could cause late fees if it’s a bill. Also double-check the amount you enter. Even a slight change in decimal can make a huge difference.

Finally, be sure you follow through with the payment. Online banking portals may have multiple steps. Follow through and make sure you end up with a confirmation page or email. Otherwise, you could owe late fees for your bills if the payment isn’t fully completed.

6. Sending and Receiving Money 

If you send money to another person or account, be sure to double-check their details very carefully. If the details are wrong, you could send the money to a different person or business. This is very difficult to correct as the other person would need to approve returning the money.

If you expect to receive money from someone else, also make sure the details you give them are correct. Otherwise, you may not receive the money you are expecting. This can be difficult to fix too if the person accidentally sends it to someone else.

Avoid Online Banking Mistakes

Online banking is an important part of modern financial management. This is why avoiding common online banking mistakes is so important. Taking these measures can save time, money, and a lot of potential heartache. 

Subscribe to the CFI.co magazine to learn even more ways to improve your finances.

Top 7 Factors to Consider When Choosing a Bank

Are you looking for a new and trusted bank to handle your financial services? Choosing a bank isn’t always easy. While it’s tempting to just go with the bank that you’ve always used, when your financial needs change, you need to look at your options to find the best one for you. 

But how do you choose? What should you keep in mind when you need a new bank?

We have a few factors for you to consider. Keep reading to learn more so you can find your new bank with ease. 

1. Your Banking Needs

So what kind of bank are you looking for, anyway?

Depending on your specific needs, you might choose banks that cater to them. For example, are you looking for a basic business bank account, or is this for your personal bank account?

Are you trying to combine the two? 

When you’re looking for a bank, don’t be afraid to ask about how they treat each kind of account and the specific benefits that they offer that relate to these accounts.

If you have a business in need of a bank, what kind of support does the bank offer? Are there staff members available that can advise you on business growth? Can the bank scale with your business? 

A great personal bank doesn’t equal a great business bank. While many banks offer adequate services for both, it doesn’t hurt to check. 

2. Bank Perks

Many banks offer great perks to new members, and there’s nothing wrong with trying to take advantage of them. What is your bank of choice willing to offer you?

Some banks offer a money bonus (like a gift card) when you join. Others may have discounts on hotels, transportation, or other necessities that are exclusive to their members. 

Bank perks shouldn’t be your primary decision-makers, but they don’t hurt. 

3. Your Credit Score

Did you know that some banks filter clients based on their credit scores? While having a normal credit score is often enough, some banks may favour you if you have a high credit score. 

Credit requirements often only apply to people who are trying to open a business account. The bank wants to ensure that you’re a secure client, and they have enough clients that they’re able to pick and choose.

Before you choose a bank, check on credit requirements and work on building or maintaining your credit score. 

4. The Locations (or Lack Thereof)

Are you used to having a bank that’s in a brick and mortar location? There are a few things that you want to keep in mind when you’re trying to choose in that case.

First, how accessible is the bank for you? Are there multiple locations that make it easy to access your required services on the go?

It’s a good idea to choose a bank that has a location somewhere that you frequent. For example, many grocery stores have banks nearby or even within the building for easy access.

Also, keep ATMs in mind. It’s annoying to find yourself needing to withdraw money only to be hit with ATM fees because your bank’s ATM isn’t available. If there are insufficient bank or ATM locations and you’re someone that spends a lot of time travelling around, you might want to consider another bank.

That said, it’s getting more popular for banks to move online and get rid of brick and mortar options. Consider whether or not you’re comfortable with this.

These online banks are easy to access wherever you are, but when it comes to withdrawing cash without fees, they’re lacking. While they often offer easy online support and chat options, they also don’t have the in-person interactions that many people rely on. 

If you value personal connections and the ability to go to a physical location to get help or withdraw money, in-person bank services might be best for you. If you value ease of use and accessibility, online banks are also great. 

5. Digital Options

Most banks, even if they have a “real” location, also offer digital services. This combines the in-person features of a brick and mortar bank with some of the accessibility and perks of an online bank.

When you’re looking into your bank, ask about their digital services.

Some smaller banks have insufficient digital options. Their sites might be clunky, slow, or difficult to use, and they sometimes don’t have all of the features of larger bank websites.

This doesn’t make small banks bad, and it doesn’t mean that all small banks have problematic websites. 

A good bank website should allow you to get support, check your bank statements, move money around for online purchases or transfers, and make it easy to open up secondary accounts (like savings accounts). If you have a specific digital service in mind, ask about it before you make your choice. 

6. Savings Account Options

Speaking of savings accounts, they aren’t all the same. 

While safety is the primary concern with a savings account, you should also look into interest rates. A savings account with a strong interest rate can protect your money (in a small way, at least) against inflation. 

A good savings account works as a slow investment. An account with no interest (or low interest) should be a red flag. 

7. Basic Services

What kinds of common banking services are you looking for from your new bank? 

Regardless of whether the bank is for business or personal use, you want to know that you’ll be able to access the services that you rely on for your banking. 

For example, are you someone who likes to have a tax professional on hand? Good bankers are often able to handle difficult tax questions and concerns. How does this bank handle loans? 

There are plenty of services that you want to keep in mind when you’re choosing a bank. Make a list and compare it against the services listed on their website, or call to confirm. 

Choosing a Bank Isn’t as Easy as It Seems

There are plenty of options for banks, more so now that online banks are so common. This makes choosing a bank confusing and sometimes overwhelming.

If you keep these factors in mind next time you’re trying to set up a new bank account, you’ll be one step closer to finding a bank that you love and trust. Choosing a bank is a big commitment, so don’t take it lightly. 

Are you looking for more helpful financial resources? Check out our journal for everything that you need to know to stay updated on business, economics, and finance. 

Commercial Banking vs. Private Banking: What’s the Difference?

Are you stuck between choosing a private bank or a commercial bank? There are so many options and services to sift through when you’re considering the kind of bank that you want to give your business to.

If you’re feeling confused, you’ve come to the right place. We’re going to tell you the differences that you need to know between private banking and commercial banking. We’re confident that you’ll be able to choose the perfect bank for you after reading everything we have to share.

Commercial Banking vs. Private Banking

There are a few main categories that we’re going to discuss when it comes to the differences between commercial banking and private banking:

  • Deals
  • Lifestyle expectations, hours you’ll put in
  • Popularity
  • Money

We’ll discuss other, smaller details as well, but we note these categories to hold the main differences between the kinds of banks.

What Is Commercial Banking?

Commercial banks offer loans, investment opportunities, deposit services, and more to businesses and individuals. In addition, commercial banks serve governments and other entities. 

Many commercial banks function as chain locations, meaning that a commercial bank may have locations across the world. Others may stick to certain regions.

The banks are considered commercial because they are publicly traded and they are required to be chartered by the state and/or federal authorities.

Commercial banks offer personal and business trust services as well. This means that they will be able to provide extra services that you might be looking for in a bank.

Some commercial banks dabble in private banking, which we’ll discuss later. By having a section or branch of private banking, commercial banks can reap the benefits of the private sector and expand their reach to those consumers who are better fit for the world of private banking.

Who Should Use Commercial Banking?

Commercial banks are more targeted towards the general population. If you consider yourself to be just another citizen in terms of wealth, you should look towards a commercial bank for your banking needs.

A commercial bank will give you everything you need while catering to your needs and the needs of just about everyone else.

Commercial banks conquer in terms of numbers because of how many people they are built to service. Commercial banks are made to take care of most of the consumers in an area, meaning that they are likely to handle anything that you may want or need to do with your money.

How to Choose a Commercial Bank

If you think commercial banking is for you and you’re looking to choose a commercial bank, you should focus on the services they offer. The commercial bank that you’re looking at may offer loans, investment opportunities, credit accounts, and more.

Plus, you might find that your commercial bank has a special savings account with a great interest rate or a checking account that you can open for your child.

Before you go to choose your commercial bank, you need to look at what kind of services and offers you want from the bank that you’re using. Talk with several different representatives about what the best services are and what kind of services you can take advantage of as a customer there.

What Is Private Banking?

Private banking is a whole new world to those of us who have only been involved in commercial banking.

These kinds of banks focus on wealth management for the extremely rich. This means that they’re more focused on growing money and ensuring that money is kept safe.

While a commercial bank does keep your money safe, private banks are famous for being locked down at all times when it comes to the money in the back.

Who Should Use Private Banking?

Those who have high net worths should invest in private banking. Yes, we do mean it when we say “invest.” Because private banks work with customers who are more likely to pay more fees and keep more money in the bank so that they can get the services that the private bank offers.

If you’re a high-net-worth individual who wants a bank that has estate planning, personalized banking, tax services, and money advisory services, the world of private banking is for you.

How to Choose a Private Bank?

If you think that you would fit into the world of private banking and you’d like to join a private bank, you should focus on the services they have and the money that they want in the bank. In addition, you might want to keep an eye on the fees even if you don’t care for tiny charges like those.

When you’re choosing your private bank, you should talk with several different places and talk about what kinds of services they have as well as how much it would cost to have those services available to you.

Your bank may charge a membership fee for access to these kinds of services, but they may also charge in addition to an already existing membership fee.

The banks that you’re considering should have a full list of any fees that they have. Be sure to pick this up or look this up when you’re considering joining a bank. Even if you don’t care about small charges, you should watch out for large charges that may come your way.

More on the World of Finance

Whether you think that you’d thrive more in the world of commercial banking or the world of private banking, we’re confident that you’ll be able to choose the right bank for you if you focus on your personal financial needs. By looking at what you need and what services you’d like, you’ll be able to find a bank that works the best for you.

If you’re looking to learn more about banking and finances, we invite you to check out the rest of our blog. We have a plethora of information about banking and everything you need to know about it to thrive and succeed.

7 Benefits of Digital Banking

If you’re still writing paper checks, waiting in line at the bank, or meeting with banking associates in person in 2021 and beyond, you’re missing out.

In recent years, digital banking has exploded in popularity, with research suggesting that nearly 70% of people in the UK use mobile banking, with 86% using it as their primary banking channel. If you’ve noticed this growing trend, it may leave you wondering, “Should I start digital banking?”

If you’re unsure about making the leap, it’s time to learn more about the benefits of digital banking—and why you should take advantage of this new technology.

1. Simplified Onboarding

Online banking makes the onboarding process much easier for new customers. With a virtual process guided by the latest technology, applicants can provide required documents to open an account in no time at all—with no need to spend time on a face-to-face meeting with a bank associate.

Of course, it’s still important, both now and whenever you access your digital bank account, to follow through with basic online security practices. Be sure to look for the lock symbol in the address bar, avoid using public WiFi, and use a strong password to keep your data safe.

2. Higher Interest Rates and Lower Fees

This benefit, of course, can vary from bank to bank.

However, in general, you’ll find that online bank accounts tend to have higher interest rates than traditional alternatives. A high-yield online checking account, then, can earn you a little more in interest per year than an account with a traditional bank.

One other money-saving perk is the lower fees. Because online banking demands less overhead than the brick-and-mortar alternative, many online banks pass those savings along to customers. This means that you’ll find lower (or no) monthly maintenance fees, minimum account balances, and even transaction fees, depending on the bank you use.

3. 24/7 Banking From Anywhere

There are few things most of us hate more than a lengthy queue—especially when we only need to take care of a quick transaction.

With digital banking, it’s possible to take care of banking tasks from anywhere and at any time, which opens up a world of convenience. Most banks offer mobile apps that allow you to access your accounts even when you’re out and about, allowing you to double-check your transactions in real time. What’s more, your easy banking pairs well with any budgeting apps you already use for extra convenience.

4. Easy Check Deposits

Most mobile banking apps will save you the trouble of heading to a brick-and-mortar bank each time you need to cash a check. The process is simple: using the camera on your phone, you’ll need to take pictures of the front and back of the check. Certain banks may have additional requirements when you cash checks online, like writing a specific phrase in addition to endorsing the back of the check, but the process remains fast and easy no matter where you bank.

5. Online Bill Pay

For easier bill pay services, digital banking is a must. With most online banks, clients have the opportunity to set up payees in their account, allowing you to send a payment to the company or client in question whenever you need to. This ensures that you no longer have to worry about checks getting lost in the mail!

In addition, automation can make regular billing tasks even easier. Setting up recurring automatic bill payments can help you stay on top of your cash flow for regular expenses, like car payments or subscription services.

When needed, you can also authorize providers to automatically remove money from your account when your bill is due. This can be helpful for providers like electric companies or mortgage lenders. To do this, you will need to provide the company with your bank’s routing number as well as the checking number of your account.

6. See Transactions at a Glance

When you bank online, all of your past transactions are easy to access and view at a glance. This makes it more convenient to check your account history on a regular basis, especially at a time when many of us worry about unauthorized transactions and identity theft.

If you are more accustomed to traditional banking, you may also catch sight of a feature exclusive to virtual banking: pending transactions. With pending transactions, you’ll be able to see transactions that a merchant hasn’t yet processed. This helps you see and understand the full context of your spending, even when a charge hasn’t been authorized yet.

7. Transfer Money With Ease

Whether you’re transferring money to your own account or paying back a friend for those concert tickets, money transfers are easy when you bank online.

Instead of visiting the bank in person, you can start an online transfer and input the details of the account you’re sending money to. Once your request is complete, the transfer may take up to three days to move to the receiver’s account, though it’s often far less if the receiver has an account at the same bank.

Harness the Power of Digital Banking

Given these benefits, it’s not hard to see why digital banking is poised to grow in popularity in the next few years. With added convenience and quick transactions, it’s easier than ever to make the most of your money with an online bank. Consider opening an account today to see the difference it makes!

For more of the helpful banking and finance guides you need, CFI.co has you covered. Check out our related posts for more insights.

What Are the Different Types of Credit?

You got to give credit where credit is due. And sometimes, credit is due to you. Credit allows you to pay back your debts and get loans. Millions of people in the United Kingdom have credit cards and use them wisely. But the average credit card debt per household still totals over 2,100 pounds.  Many people assume that all types of credit are alike.

But there are some significant differences among the types of credit. Understand how credit works and you can reduce your debt. Here is a quick guide. 

Revolving Credit

If you have a credit card, you probably have a revolving credit account. Revolving credit provides you with a maximum credit line. 

Once you hit that line, your creditor assigns a payment you must make. You cannot use your credit line until you pay your payment in full. Most creditors allow monthly payments, but plans can differ. 

If you cannot pay your monthly payment, it will roll into the next month. Your creditor will charge that payment with interest. Some creditors charge very high rates of interest, so you should try to pay in full every month. 

The more on-time payments you make, the higher your credit scores will be. You are more likely to receive approval for loans and advance payments. Using less than your credit limit will also assist your credit scores. 

Some creditors charge additional fees on top of interest rates. You may have to pay a cash advance or foreign transaction fee. Read the terms and conditions of your contract carefully before signing. 

Instalment Credit

If you take out a loan, you probably have instalment credit. Instalment credit lets you borrow a set amount, which you pay off with fixed monthly payments. 

Your contract determines the amount you will borrow and the time period of the loan. Even if you make on-time payments, you may have to pay interest. Keep a close eye on what the interest rates are through time. 

Some contracts do not allow you to pay your loan off early. They may charge you a penalty for doing so, which can be higher than the amount you pay over time. 

Several factors determine the terms of your contract. Your credit score is a major determinant. If you have paid off your loans on-time, your terms will be more lenient. 

Your debt-to-income ratio is almost as important. If you have little debt on hand, your payments will be lower. The bank may make your payments higher if you have a high income. 

You should show a stable history of employment, with no long gaps between jobs. You should also display any additional sources of income you have. The more sources, the more likely you will receive a strong line of credit. 

Open Credit

Open accounts are rarer than revolving or instalment accounts. But some utility and cell phone companies do offer them. 

An open account provides a balance that you must pay in full every month. Open creditors do not charge interest, but they can charge penalties if you don’t pay. In exchange for your regular payments, you receive services. 

Open lines of credit don’t appear initially on your credit report. Companies may refer your information to credit bureaus if you are late on your payments. 

An open credit account is the simplest kind of credit. As long as you pay every month, you should not run into difficulty.

Secured Business Line of Credit

If you are looking to start a business, you may receive a secured business line of credit. This is a special type of loan that is similar to a revolving line. 

A secured business line sets a maximum amount that you can borrow. However, you can keep borrowing past your line. You need to make a payment, but you can break your payments up so you can keep borrowing. 

To receive a secured line, you need to provide collateral. The most common types of collateral are property and equipment. Banks usually do not accept stocks for secured lines.

Real Estate Line of Credit

If you want to invest in real estate, you need to have some money upfront. A real estate line of credit can get you the resources you need. 

Home equity determines many real estate lines. An investor exchanges equity they have in their house for money from a creditor. They can use that money to purchase a property, usually to renovate or flip the property. 

Their line of credit is limited to what the investor receives from the creditor. But an investor has no restrictions on how they can use the cash. The credit line requires no other financial statements besides a personal credit report. 

A real estate line is the best line of credit for a quick payment. But it requires a high credit score.

You can use the equity in your house as collateral and pay the loan back through monthly payments. If you default on your loan, the creditor can place a lien on your house. 

The Five Different Types of Credit

Many people struggle with credit. They don’t understand how payments work, let alone that there are multiple types of credit. But you can distinguish amongst them. 

A revolving credit line charges monthly payments. These payments can incur interest if they are not paid off. An instalment line provides less interest but sets firmer conditions for when you make payments. 

Most utility companies use open lines of credit. Secured business lines are good if you want to start a business, while real estate lines are good for real estate investors. 

Get the facts you need to strengthen your finances. Capital Finance International provides premium reporting on business and economics. Contact us today. 

Investing in Stocks vs Bonds: A Comparative Guide

Are you interested in investing your money into stocks and bonds? You often hear those two items paired together in a sentence, but what do they actually mean? They are both a form of investment, but the similarities stop there. Both of them have a different level of risks, levels of returns, and daily behaviours that you need to be prepared for. Before you invest, it’s important to know these differences to pick which ones are the best course of action for you. See below for an in-depth guide on stocks vs bonds and how they fit into your investment plans.

What Are Stocks?

Imagine, if you would, that someone brings you a pie they made and sets it down in front of you and 2 of your friends. Let’s say the pie is cut into 8 different slices.

The maker of the pie tells you that each slice is £1 each. So you choose to buy 3 slices, one of your friends buys 3 slices, and the other buys only 2. This is essentially the concept of a stock. 

When you buy a stock, you purchase a small piece of ownership in that company. The more shares that you have in the company, the more ownership that you have over it. 

The goal is to buy shares, wait for them to rise, then sell your investment to turn a profit. 

For example, let’s say you decide to buy £100 worth of shares in Callaway Golf Company (ELY). For the sake of simple math, let’s say that Callaway shares are going for £20, so you end up with 5 shares.

As Callaway grows, so too will the value of your shares. Let’s say that over time, they end up experiencing a 50-per cent. So now, each share is worth £30 apiece. You decide to sell all of your shares for £150. 

By buying your stocks low and selling high, you’ve turned a profit of £50. You bought them for £100 and sold them for £150. You can scan the stock market however you so choose, buying any stocks that you envision a legitimate return for!

What Are Bonds?

Instead of purchasing a piece of the company as you would with a stock, a bond is when you loan out your money to a business. This can help them grow and expand their business, getting their hands on the money they’d need (from you) to do so.

In return, the company you lent the bond to will pay you back the full amount with interest. Unlike stocks, bonds are more of a long-term play. They’ll help you make a bit more money over time. The more bonds you invest in, the more you’ll gain in return.

So let’s say that you buy a bond for £1,000 (just for the sake of simple math). Let’s say it pays you back 1% annual interest over the next 10 years. With that bond, you would make £10 in interest over the next decade. 

When the 10 years has concluded on that bond, you will have made £100 in interest payments that you wouldn’t otherwise have made. 

There are many variables to bonds. You can purchase ones with a duration of only a few days or ones with a duration of several decades. The interest rate varies as well, so be sure to find a balance that you’re comfortable with.

What Are the Risks Involved?

As you’ve already seen in this article, both stocks and bonds can have tremendous payouts for those that invest in them. However, there’s always a potential that either one does not do well, and you lose money on the whole deal. Here’s a bit more insight on that:

The Risks of Stocks

Earlier, we highlighted a scenario in which you would make money investing in shares from Callaway Golf. However, every stock that you purchase has risk involved, some more so than others.

All it takes is one setback from the company you’ve invested in to incur a loss. Back in April 2010, BP was flying high. They were seemingly doing everything right and their stocks climbed up to $60 in US Dollars (approximately 44 British pounds).

Then, almost out of nowhere, the deepwater horizon spill occurred. Over 3.19 million barrels of oil were spread throughout the Gulf Coast. As a result, their stocks fell 55%, meaning that investors lost over half of what they paid to buy BP stock in April.

Granted, most losses are not that significant. By educating yourself and reading investor books, you can limit your losses when you invest.

The Risk of Bonds

The ideology of bonds is sound. You lend a certain amount of money to a growing company, then they pay you back over time with interest. All is fair in the world.

But what if that company goes under before they’ve paid you back? What if they go bankrupt during the term of your bond? You may never get back your full investment entirely.

As you can see with both stocks and bonds, there are risks. However, you can minimize the risks of both by performing thorough research.

In the case of bonds, do your due diligence on any company you lend money to. If they’re shooting for the stars too quickly, they might overextend themselves and leave you to suffer a loss as a result.

Stocks Vs Bonds: Invest Your Money in Both

Now that you’ve seen a comparison of both stocks vs bonds, as well as the differences between the two, it’s time to use that information effectively.

For more financial advice, make sure to read this article on the 5 things that you need to do with your money once you’ve turned 20.

Be sure to circle back on our blog often to receive more information and guidance on economics, finance, banking, and so much more.

5 Things You NEED To Do With Your Money Once You Turn 20

When you’re young and carefree, it’s easy to neglect your finances. A lot of young people don’t know how to manage their money and end up getting into debt.

But as a young adult, you’re actually in a great position to set good financial habits for life. Making savvy decisions from when you turn 20 can build solid foundations for a financially healthy future. 

Let’s dig a little deeper. Here’s our list of top money management tips to consider when you’re 20 years old. 

1. Get Into Good Habits With Your Money 

You’re only going to be able to start saving once you’re spending less than you earn. So the first step towards financial security is setting up a watertight method to track and manage your expenses. 

You need to have a clear view of your fixed expenses such as rent and council tax, and also a firm grip on your variable expenses such as fuel, food shopping, and utility bills. Then you can set a budget for discretionary expenses like nights out with friends and clothes purchases. 

After you have a system set up, you can manage your cash flow and track your spending, to ensure you’re staying within your budget. A popular method to manage this is by setting up a zero-based budget, where you allocate every penny of your income to a specific expense or savings goal.

By adopting this method, you should prevent yourself from getting into debt. But if it’s too late for that, you should focus on clearing your debts. Limit your credit card spending; you should only use your credit card enough to establish a decent credit score. Once your short-term debt is clear, you can make a start on clearing your student debt. 

A final good habit to set up is to automate all your payments. It’s good to set up your direct debit payments to go out near the beginning of the month, so you have a clear view of what you have leftover for discretionary spending, once all the bills are paid. 

2. Start Saving Now! 

You’re never too young to start thinking about savings. You should start out by building an emergency fund, then work towards having 3-6 months of expenses set aside. Having a reasonable liquid cash reserve will prevent you from getting into debt in emergency situations. 

You might want to set up separate savings goals for big purchases, such as your first car, so you have the money upfront rather than having to take out a loan. Longer-term savings goals are also worth considering, such as a deposit on a house, paying for postgraduate education or saving for your children’s future. 

In terms of saving for retirement, the earlier you start, the more benefits you will reap. You should aim to be putting at least 10% of your income into a pension fund.

3. Protect Yourself 

You should make sure that you have all the insurance you need to protect yourself from future problems. Car insurance of course is a necessity if you have a car, but you should also consider pet insurance if relevant, as vets’ bills can be very high.

You may want to invest in health insurance and also income protection insurance. If you have children, you’ll also want to look at life insurance. It’s not the most exciting topic to be thinking about, but there are benefits to setting up insurance policies while you’re young and insurers see you as less risky. 

4. Invest in Yourself 

When you get your first job, it’s easy to just feel grateful to have found employment, especially in today’s challenging economic circumstances. But you should still negotiate your salary to make sure you’re being paid what you’re worth. 

You might also want to plan for further education and training. Lifelong learning has many benefits, not just for your career but for your own happiness and sense of fulfilment. 

You could also look into setting up a side hustle to earn some extra money to put against those savings targets. Perhaps you have a hobby that you could make some money out of? Maximizing your income is a great way to grow your savings. 

5. Think Long-Term

There’s never a better time than what you turn 20, to be thinking long term. Establishing your wealth goals and prioritising them when you’re young is critical to long-term financial security.

Once you’ve paid off your debts and you have enough liquid cash saved up to pay for any emergencies and planned future purchases, now’s the time to think about investing. It’s a good idea to start investing as early as possible, by putting money into something other than your retirement plan.

But perhaps you don’t really know what to do with your money? It might be wise to hire a financial advisor to help you choose the right kind of fund to invest your money in. It’s sensible to get some advice about the best investment bank options before you decide where to put your hard-earned cash. 

You need to make sure that your money is working for you, wherever you choose to keep it. You could see which providers have won banking awards, to help you choose the best banking services. 

The longer your money is in an investment fund, the higher the returns are likely to be. So choosing the best bank while you’re young is a good long-term strategy to build wealth. 

Seize The Moment!

The sooner you take control of your finances, the better. Your 20s are the perfect time to establish good habits and routines around money to set you up for long-term financial security.

Building wealth takes time, so starting young will reap long-term benefits. It’s never too early to educate yourself. Check out our informative articles on wealth management to expand your knowledge and help you to make the best decisions about how to manage your money.   

Why You Should Join A Private Bank

The number of mobile wealth management accounts rose from 22% in 2018 to 40% in 2019. They allow users to manage their wealth remotely and effectively. A private bank helps with wealth management but provides a range of other services and benefits as well. They offer personalized service at all hours and let you enjoy exclusive perks.

There are several private bank options, and choosing one can be difficult. There are certain factors to look for before putting your money in their hands. It can also be difficult to begin a career in this field, but the more knowledge you have, the easier it will be.

Read our private banking guide to learn the benefits it provides and how to enter it as a client or account manager.

Private Bank Benefits

A private bank’s primary purpose is wealth management. It helps keep money in the right place and makes investment easier.

These are not the only benefits that private banking provides or the only reason you may choose to join one. There is a range of other benefits offered as well.

When you join a private bank, you’ll get connected to a skilled account manager. They can handle all your financial assets while providing personalized service.

The account manager can also easily connect with other professionals such as wealth management specialists, investment analysts, and tax attorneys.

A private bank also allows you to diversify your investments. Your account manager can put your wealth into ESG or Environmental, Social, and Governance investments. They can also manage your non-financial assets like real estate and natural resources, negotiate leases and contracts, facilitate inspections, and communicate with tax, accounting, and/or legal professionals.

A private bank gives you access to your banker at any time and place using apps and chat services. They also keep your assets private.

A private bank may also include concierge and premier travel services. They can educate you and your heirs and make business travel less of a hassle.

Private banks offer price reductions that can save you a great deal of money. These discounts include free checks and savings of up to $300 per year on a safe-deposit box.

Most private banks offer a range of other perks such as:

  • Loans with low annual percentage rates
  • Savings accounts with higher annual percentage yields
  • More commercial financing options
  • Senior underwriting support
  • Priority loan processing

These benefits and more explain the rise in private banking.

Starting a Career in Private Banking

Working at a private bank offers several benefits over other financial careers such as stockbrokers and investment bankers. These include high income potential, shorter hours, reduced stress, and stronger professional relationships.

Remember that most clients who join a private bank have a great deal of wealth. They are typically classified as either high net worth or ultra-high-net-worth.

You’ll also have to have a range of skills to begin a career in private banking. You should be familiar with wealth management, estate planning, taxes, portfolio management, and any other tasks your client requests.

There are also several steps you must complete to begin your career. They include education, experience, networking, certifications and licenses, and getting a job.

Education

The first thing you’ll need is an undergraduate degree, preferably with a focus on finance. Options include business administration, economics, and other related degrees.

Experience

Follow up your education with experience. Look for internships in a private bank and get all the experience you can in banking, investments, and related fields.

Networking

Networking is another important task. Meet up with potential clients, bankers, professors, and anyone else who can help you advance your career.

Certifications and Licenses

Certifications will make you a more attractive candidate, and there are several options to choose from. T

The Wealth Management Institute or WMI offers a 10-week Wealth Management Private Banking Programme and an associated certificate. The Globecom Institute offers a 9-month course and certificate in Private Banking and Wealth Management and a 3-4 month certification in Operations Investment Banking and Securities Markets.

You’ll need to get licensed before you can begin a career in private banking. You can obtain a Series 6, Series 7, Series 63, or Series 65 license by passing an exam. They differ in the services they allow you to perform and how much you can charge for them.

Finding a Job

Find a job by sending out as many resumes as possible and networking with professionals in the field. You can also start your own firm if you already have a large client base.

These steps are the basics of beginning your career, but you may be able to break tradition. Try moving from another financial field into the private banking industry.

Finding The Best Banking Services

There is a range of private bank options to choose from. They differ in the services they offer and the fees they charge, which can make choosing the best bank difficult.

When deciding where to invest your money, you should look at a variety of different factors. Look for proof of quality, past experiences, and the services offered.

The experiences of past clients can help you choose the best private bank. Look for testimonials that suggest clients have had positive experiences with qualified account managers in the past.

There are also ways to find proof of whether or not you’ve found a high-quality option. Look for things like bank awards and stay away from banks with blemishes like lawsuits.

The best investment bank offers the full range of services you require at the best possible price. Compare all the options and see where you can get everything you need at the most affordable price. 

How Can I Join a Private Bank?

Everyone wants to keep their money safe, especially those with plenty of wealth and investments. This is where a private bank comes in.

Joining a private bank gives you access to a qualified account manager at any time of day. They’ll manage your assets, keep them secure and private, and offer several other perks.

If you’re a high-income earner with a large portfolio of investments, a private bank can provide an account manager to look after them for you. If you’re a qualified financial expert, you can begin a career in private banking to help others manage their money.

The more you know about the private banking industry, the better you’ll be able to enter it or use it to manage your wealth. Contact us for more information today.

Are New Checking Account Offers Really Worth The Switch?

It’s no secret that COVID-19 has created a financial crunch for just about everyone. As you look for ways to make your money stretch further, you might have started looking at various bonus offers and considering switching some of your service providers.

Nowadays, almost every bank is advertising new checking account offers, and that “free” money sounds pretty good. But, is switching bank accounts really worth it?

That’s a good question! Stick with us as we explore the pros and cons of taking advantage of new checking account bonus offers.

3 Ways to Get a New Checking Account Bonus

Before diving into the things to ask before switching banks, it’s important to note that there’s more than one way to take advantage of new checking account offers. Most offers don’t actually say that you have to close your old account.

Typically, they’ll require you to make a minimum deposit and perform specific tasks, like completing a certain number of transactions, setting up direct deposit, or using their app. It’s important to read the fine print carefully and understand exactly what you need to do to get your bonus. Once you understand the requirements, you’ll likely have three options:

  1. Keep your current checking account exactly as it is and open an additional account with the new bank
  2. Make a partial switch, moving certain payments and deposits over to the new account
  3. Close your old accounts and move everything over to the new bank

Most people choose the third option because they don’t want to deal with the hassle of managing multiple accounts. However, there are pros and cons to each approach. It’s a good idea to consider the following questions before you decide.

Questions to Ask Before Making the Switch

Sometimes, it’s clear that you need to switch to a new bank. If you’re having problems with your current bank – like ridiculously high fees or poor customer service – then it makes sense to take advantage of a new checking account bonus.

However, if you’re thinking about making a change purely for the extra money, there are some important things to consider.

1. Is the Bonus Really Worth It?

How much money do you need to make it worth your effort? Do you have to jump through a bunch of hoops to get it?

If you’re really cash-strapped then even a small bonus might sound appealing. If the bank is offering something else, like rewards points or a charity donation, you’ll have to consider whether you’ll receive a sufficient benefit to make the change a smart move.

2. Are There Any Drawbacks?

Be careful not to let the bonus offer distract you from the potential drawbacks of working with the new bank. If there are monthly fees or high minimum balance requirements, then it’s likely you’re going to be unhappy in the long run.

You’ll want to look at the new bank’s maintenance fees, ATM fees, and overdraft fees. Also, consider the new bank’s opening hours and whether the website and app are user-friendly. Do they offer other services you need like mobile deposit, easy transfers, and plenty of ATM machines?

Compare all of these things to your current bank and make sure that making the change won’t end up being a downgrade.

3. How Much of a Hassle Will it Be?

To make the switch, you’ll need to open a new account, initiate a transfer, and make sure you meet all of the bonus requirements. Transferring all of your auto-debit bills is usually the biggest hassle.

It’s easy to make a mistake and you could end up missing payments or bouncing checks. This can lead to late fees, damage to your credit rating, and more. 

If you’re going to make a full switch it’s in your best interest to make sure the bank you choose is one you’ll want to stick with for the long term. Bouncing from one checking account to the next is rarely worth the trouble, even if you do get a bonus each time.

4. How Much Do You Really Like Your Bank?

Are you at your current bank because you really like the services they offer? Or is it just a matter of habit? If there’s nothing special about your bank and you’re comfortable with the answers to the other questions above, then now might be the perfect time for you to make a switch.

Tips for Finding the Best New Checking Account Offers

Doing a bit of research online will help you find out which banking institutions are offering checking account bonuses and exactly what they’re offering. However, it’s important to consider which offers are most valuable to you.

For example, if you overdraft your account frequently, then switching to a bank that’s offering fee-free overdrafts might be a great move for you. However, if an offer requires a large minimum balance that you don’t think you’ll be able to maintain, then moving to this bank will likely end up being a waste of your time.

Remember, in most cases, looking for a long-term partner instead of just a quick cash bonus will bring you the greatest benefit.

Making Smart Financial Moves in a COVID-19 World

Taking a close look at new checking account offers and other bonuses is one way to give your finances a boost, but that’s certainly not your only option. If you want to keep your finances on track, knowledge is power. We suggest taking some time to browse through more of our financial articles

We’ll help you stay up to date with all of the latest financial developments and provide you with tips you can start implementing right away.