Regulation D is a Federal Reserve Board regulation that defines what a transactional and non-transactional account is. In addition, Reg D places withdrawal limits on non-transactional accounts. The savings and money market accounts that you have at your bank are non-transactional accounts, while your checking account is considered a transactional account.

Reg D places a limit of 6 withdrawals per month on withdrawals not done in person, using an ATM, or by mail.

The following transfer/withdrawal types from your savings or money market account count against the Reg D limit:

- Transfers using internet/telephone banking.

- Phone transfers when you talk to a representative at your bank.

- Overdraft transfers to cover a check from your checking account.

- ACH / electronic payments being made to somebody other than your bank.

Many rely on the money that is in their savings account to cover checks in case their checking account is overdrawn. For example, at my financial institution, I have my savings account set up as an overdraft source for my checking account. However, when money is automatically pulled from my savings account to cover a payment coming from my checking account, that counts as a Regulation D transaction. Once I reach 6 Reg D transactions in a month, then my savings account will no longer be used as an overdraft source for the rest of that month, causing me to receive NSF fees and returned payments if I do not have sufficient funds in my checking account.

Reg D can also adversely affect you if you use your savings account to make ACH payments to others. Once you reach the Reg D limit, ACH payments will not be honored from your savings account. This in turn may cause you to receive late payment and returned item fees from the businesses that you are paying.

It is best to avoid using a savings or money market account to electronically pay your bills. In addition, if you use your savings account as an overdraft source, be aware of the Reg D limit and plan accordingly to avoid paying fees.

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I have a confession to make…. 10 years ago I was living my life through a Sim, well at least in my spare time. I know that I’m not the only one who got caught up in the game “The Sims” and spent hours managing the life of my e-self.

Eventually the novelty wore off though; and as it did, I wondered why I spent countless hours managing a pseudo life instead of spending more time managing my own life; in particular my finances.

I get that I was doing this to escape, but what if I would have spent less time “escaping” and instead have turned my finances into some kind of game. There are many ways we can challenge our “real selves” and even turn it into some sort of a game. Of course the advantage to this is that we see the actual benefits in our lives’ instead of just having the benefit of a bigger house in The Sims or a better farm on Farmville.

How much can you reduce your monthly bills by during the next three months? How many days can you go with packing a lunch instead of buying? What is the highest interest rate you can find for your savings? How long can you go without having a car loan payment? How quickly can you pay off a debt?

Measure your progress of these challenges or any others that you can think of and then you have your own game that can be just as consuming as The Sims or Farmville, but much more rewarding.

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If you’re looking for a better personal finance experience than what your bank seems to offer, you have options. Consider your local credit union.

Credit unions, like banks, are financial institutions that offer services like savings accounts, checking accounts, loans and credit cards. They provide many of the same functions as banks, but at a lower cost to you. So while making the switch from a bank to a credit union can be a scary move, most people who take the leap never look back.

There are important distinctions between how banks serve their customers and how credit unions serve their members. At the top of the list is the fact that credit unions are nonprofit organizations while banks are private, for-profit institutions.

This means that the foremost goal of any credit union is to keep its patrons happy, which includes helping you with your debt, credit, and checking and savings needs. A bank’s end goal, on the other hand, is to make a profit.

The nonprofit status also exempts credit unions from federal taxes. This allows them to charge less and give back more.

For you, this means you’ll receive higher interest rates on your savings accounts and see your money grow faster. You can also take out a loan or use a credit card at a lower interest rate than a bank is likely to offer.

Credit unions are also publicly owned by the people who use them, so that the unions have members rather than customers. Every member has an equal share in the credit union, regardless of the amount of money each person puts in. As a member, you’re entitled to vote in board member elections and give your opinion in other corporate decisions.

Customer service – or, in this case, member service – is almost always a large part of the goal for a credit union. By design, credit unions serve groups or areas that are under-served by traditional banks.

Each credit union is open to only a certain group of people. It could be open to people living in a certain area, employed by a certain company or making a below-average salary. In this way, credit unions can better identify the needs of their members and financially enhance their lives.

As with money in bank accounts, money in a federally insured credit union is insured by the U.S. government. When you join a credit union, you are not at risk of losing your savings.

And as an added service to the communities they serve, credit unions typically offer financial education services, helping their members to become savvier consumers for the rest of their lives, no matter where they keep their money.

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It’s a tough time for savers right now with historical low interest rates. As a saver, you probably want a good portion of your emergency fund in an account that you can have relatively easy access to. Over the last couple of years, savers have pulled out of certificate of deposits and placed their savings in savings accounts and money market accounts to avoiding locking in at low market rates. However, CD rates on average are higher than savings and money market rates and by laddering your CDs you can ease your fear of locking in your money when rates are low.

Deposit rates are expected to stay low for at least another 2 1/2 years. Earlier this year, the Fed extended the time frame that they are expecting to keep the target funds rate at 25 basis points (.25%) to at least the end of 2014. In addition, even when the Fed does make a move to increase the target funds rate and once market rates do increase, you can expect for banks to raise their rates on loans quicker than they raise their rates on deposits. So with rates almost guaranteed to stay low for the short to medium term (and with uncertainty for the longer term) what should a saver do?

Typically, CDs offer a higher interest rate than Savings Accounts or a Money Market Accounts (not to be confused with a Money Market Fund investment). In addition, like your other bank accounts, CDs are also usually insured by the FDIC or NCUA. The disadvantage of CDs of course is that it is a term deposit. So you don’t have access to the funds in your CDs unless you are willing to pay an early withdrawal penalty. A technique called CD laddering can ease the disadvantage of CDs being a term deposit while still giving you the advantage of the higher rates of CDs.

The concept of CD laddering is that the saver takes the total amount that they want to purchase in CDs, but arrange for them to mature and renew in intervals. For example, if you would like to place $5,000 of your savings in CDs, you could allocate your CDs so that you have $1,000 (plus the interest) mature each year over 5 years.

Here is an example of how to ladder your CDs:

Today you decide to take $5,000 of your savings and place that money in CDs.You won’t be needing this money for an indefinite period of time, however, your concern is that you will be locking money in at a low rate. You don’t know when exactly rates will rise, so you decide to ladder your CDs; that way every year a portion of your CDs will be renewing at current market rates.

With your $5,000, you by 5 CDs:

$1,000 1 year CD - rate 0.66% - matures 4/2013

$1,000 2 year CD - rate 0.78% - matures 4/2014 

$1,000 3 Year CD - rate 0.93% - matures 4/2015 

$1,000 4 Year CD - rate 1.18% - matures 4/2016 

$1,000 5 Year CD - rate 1.39% - matures 4/2017

* all rates were taken from bankrate.com average rates as of 4/11/12

In this example, as each year passes, you would take that matured CD and place it in a new 5 year CD. That way, you continue the ladder of maturities.

So after the first year your CD portfolio would look like this:

$1,000 2 year CD - rate 0.78% - matures 4/2014

$1,000 3 year CD - rate 0.93% - matures 4/2015

$1,000 4 Year CD - rate 1.18% - matures 4/2016

$1,000 5 Year CD - rate 1.39% - matures 4/2017

$1,000 5 Year CD - rate 1.39% - matures 4/2018

* all rates were taken from bankrate.com average rates as of 4/11/12. I made the assumption that a 5 year CD will remain at a 1.39% rate 1 year from now.

As you could see, in this example, each maturing CD is renewed with a 5 year CD. The advantage to this is that typically the higher the term on a CD, the higher the interest rate you are paid on it. So as time passes and all of your CDs are renewed with 5 year CDs, you will be earning higher rates on all of your CDs, but with having the benefit of having some of your CD portfolio mature each year in case you want to remove some of your money from your CD portfolio.

This is just an example of CD laddering. Of course you can structure your CD ladder in a way that suits you.

The three advantages of CD laddering are liquidity, interest rate risk reduction, and higher yield.

Liquidity - The reason that CDs offer higher interest rates than savings accounts and money market accounts is because the money is locked in for a fixed amount of time, causing us to lose some liquidity. Laddering your CDs will decrease the likelihood that you will have to withdraw from your CDs early and thus be charged an early withdraw penalty. As each year passes and circumstances change, some of your CD portfolio matures so you can act appropriately.

Interest rate risk reduction - Trying to predict interest rate movements and it’s timing is difficult and most of the time it is just guess work. Laddering your CDs takes the guess work out. While laddering may cause you to give up some yield at times, it will also prevent you from losing yield at other times. Typically, people will fare better using this method, rather than trying to time interest rate movements.

Higher Yield - As previously mentioned, laddering your CD portfolio may also make it more practical for you to be able to purchase longer-term CDs which pay higher interest rates. As you can see from the interest rates in my example, the rate on a 5 year CD is significantly higher than that of a one year CD. In my example, after four years of starting CD Laddering, all of my CDs will be earning 5 year CD rates.

In short, CD laddering gives you more liquidity at higher 5-year CD rates and helps protect you from unpredictable interest rate changes.

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Homeowners and Life Insurance are important to have in our lives. Life insurance will financially protect your family in case something happens to you. Homeowners insurance will help financially repair or replace your home and belongings.

Homeowners will have a lot to consider when they are compiling information about how much homeowners insurance to buy. Buying a home is a big investment. Insurance will cover any losses to your possessions in the home and your home. Your policy will cover you financially if someone gets hurt in your home or on your property. Financial losses due to theft, fire and storms will also be covered as they are stated in your policy. The cost of your insurance premium will depend on how expensive your home will be to replace, the kind of coverage you choose, and what amount your deductible is, in your policy.

Liability insurance coverage will cover any accidents that happen to someone visiting your home. If you have expensive assets at stake and could be sued if an accident happens, then you should carry a policy with a high amount of liability coverage.

You will also need to consider what the requirements are from your lender as to how much mortgage insurance you will need to carry. Most lenders require that the amount of the mortgage is covered by insurance. Lenders want to know that if a catastrophic situation happens, the amount of the mortgage still owed on the home is well covered, if the home is lost due to a fire or hurricane.

If you buy a home in a flood zone area, your insurance company will insist that you buy coverage for flood damage, before they will cover you with a general insurance policy for your home. You will want to carry the proper amount of insurance to cover your home, possessions, injuries that might happen and full loss of your home due to disaster. The cost will depend on how expensive your home is to begin with, what your assets are inside the home, and what your financial ability is to pay the insurance premium.

Life insurance should be carried by everyone. It is not just for the man of the house. Women should also carry enough life insurance to cover the loss of their income if something happens to them. Depending on your age at the time you take out your life insurance policy, your health and lifestyle, will depend on how much insurance you should be carrying. The rule of most policies is if you are in your twenties, you should take out a policy that is twenty times your gross income. By the time you are sixty and over, you need to take out around five times your gross income.

If you only take a small $100,000 policy when you are in your twenties, then you can always take out another policy when you have children and your family structure changes. Life insurance is there to protect the family with income, so they can continue living in their home with the same lifestyle they are use to.

To determine how much insurance to take out, you will need to know how much money it will take to run your household and pay off major debts. The insurance money will have to last a while. Knowing how many years of insurance payments you want your family to have is also important. How many children you have now and if you plan on having more children, will need to be considered so you have
enough coverage.

Expenses for a funeral, legal situations, burial expenses and debts that need to be paid should all be considered when buying life insurance. When the death benefit policy is paid off to the survivor, it should be invested. This way the insurance money will give the family a monthly income.

This guest post was submitted by Liza, a financial blogger and also a contributing writer for a mortgage refinancing company.

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