Posts filed under ‘Banking’
Five Better Ways to Save Money
Today, most major banks only offer regular savings accounts with an interest rate between 0.01% and 0.05%. These banks include Chase, Wells Fargo, Bank of America and Citibank. These savings accounts are virtually earning customers no money. In addition, all of these banks charge customers a monthly service fee if they don’t keep a minimum balance.
Thankfully, there are better options out there. Several online banks are now offering great savings account interest rates, and it’s easy to open an account from your home computer. Just link your new account to your regular bank account and start saving money smartly today.
Listed below five online banks that are currently offering the best regular savings account interest rates:
- Discover Bank: Discover is offering a 0.9% interest rate on its online savings account. There is no monthly fee; however, there is a $500 minimum opening deposit.
- American Express Bank: This savings account will also earn you an interest rate of 0.09%. However, there is no minimum opening deposit, no minimum balance and no monthly fee.
- Ally Bank: This savings account offers a 0.84% interest rate with no minimum opening deposit and no monthly fees.
- First Internet Bank of Indiana: The Tomorrow’s Tycoons savings account offered by this bank requires a minimum opening deposit of $100, but there is no minimum daily balance or monthly fee. The interest rate for this account is 0.65%.
- Nationwide Bank: Nationwide offers a savings account with an interest rate of 0.40%. There is a minimum opening deposit of $50. Also, you must either keep a minimum daily balance of $300 or set up a reoccurring monthly deposit of at least $25. Otherwise, you will pay a $3.00 monthly fee.
To search and compare bank rates, use BankRate.com; a great online resource for all things finance and banking.
Nancy Johnson works in the health care field and owns the site http://www.medicalbillingdegree.org In her spare time, she enjoys writing guest blog posts on various topics of interest.
International Monetary Fund (IMF) will give Ethiopia $62.7 million
ADDIS ABABA (Reuters) – The International Monetary Fund (IMF) will give Ethiopia $62.7 million from its Exogenous Shock Facility, the final tranche of a $240.2 million package.
The lender said in a statement late on Monday that Ethiopia had successfully implemented good macroeconomic policies, such as bringing soaring inflation down and building international reserves to about 2.1 months of import cover.
“Inflation has continued to decline, reflecting monetary restraint and aided by favorable weather conditions,” the IMF said in the statement on its website.
“The mild impact of the global recession on the Ethiopian economy has allowed for better performance on the external targets.”
Ethiopia, one of Africa’s fastest growing economies, on Monday said year-on-year inflation was 10.6 percent in October, compared with 64.2 percent in July 2008.
The rate has been generally declining since the government stopped state borrowing and increased bank reserves.
The Horn of Africa country also devalued its currency by 16.7 percent in September, a move the IMF said would bolster Ethiopia’s competitiveness.
The fund forecasts Ethiopia’s economy will grow by 8.0 percent this year and 8.5 percent in 2011.
© Thomson Reuters 2010 All rights reserved
Ethiopian birr devalued, IMF welcomes move.
One US dollar =16.35 Eth Birr
By Barry Malone
ADDIS ABABA (Reuters) – The Ethiopian birr was devalued by 16.7 percent on Wednesday, according to exchange rates published on the central bank’s website, a move welcomed by the International Monetary Fund (IMF).
The birr was quoted by the National Bank of Ethiopia at a weighted average of 16.3514 against the dollar compared with 13.6284 on Tuesday. A central bank official confirmed the new rate but was not authorised to make further comment.
“The IMF welcomes this move given it will help bolster Ethiopia’s competitiveness,” IMF representative in Ethiopia, Sukhwinder Singh, told Reuters. “It will need to be supported by appropriate monetary policy.”
Last month, the government unveiled an ambitious five-year economic plan which targets average annual economic growth of 14.9 percent over the period and aims to end the Horn of Africa nation’s dependence on food aid.
Ethiopia is Africa’s biggest coffee exporter and the world’s fourth largest exporter of sesame. It is also one of Africa’s biggest potential markets — with a population of 80 million — and most of its people have no telephones or bank accounts.
The devaluation is the Horn of Africa nation’s fourth since January 2009. Devaluations can spur economic growth and reduce current account deficits to the extent they boost exports and discourage imports, although they carry the risk of importing inflation.
‘DEPRECIATION LIKELY TO CONTINUE’
“I think it’s related to the new five-year plan and a strategy of export promotion and import substitution,” Tewodros Mekonnen, an economist with local think tank, the Ethiopian Economic Association, told Reuters.
Obviously there’s a risk it could cause inflation. It will probably also boost foreign direct investment and remittances.”
Inflation in Ethiopia hit a high of 64.2 percent in July 2008.
After that peak, the government halted state borrowing and increased bank reserves to drive down the rate.
The country’s central bank also instructed private banks to restrict borrowing.
The inflation rate slowed to 5.7 percent in July.
“Years of high inflation have eroded the country’s export competitiveness, and the government has continually favoured sharp currency depreciations to counteract this,” Joseph Lake, an analyst at the Economist Intelligence Unit, told Reuters.
“Though inflation has eased in recent months, this pattern of currency depreciation is likely to continue. Low levels of foreign exchange reserves, and twin fiscal and current-account deficits will continue to put pressure on the currency,” Lake said.
The country — one of the world’s biggest recipients of foreign aid — is keen to attract foreign investment in agriculture and mineral exploration.
Ethiopia has operated a managed floating exchange rate regime since 1992.
ATM rip-off by US Bank
By Getachew Teklu
I don’t know how you feel about it, but I really hate the idea of paying fees to use an ATM to get my own money from my bank. In fact, I have never paid any because faithfully using only my own bank’s ATM machines. However, on August 4, 2010 using US. Bank ATM machine to get $20.00 and charged $3.00 ATM Fee. My own bank Wells Fargo charge me another $2.50 to get my own money. The total cost to get $20.00 is $5.50. Last year ATM users paid fees that poured an estimated over $5 billion into financial institution coffers.
ATM are a cash cow for banks, and the fees are rising. The cost of using another bank’s ATM machine is now $3.00 per transaction, up from $1.00 just five years ago. You pay two fees when you stray from your own institution’s ATM. The first hit, charged by your own bank, is called the foreign, or “off-us,” fee; it currently averages $2.00 per transaction. (At big banks, the average is $2.50 to $3.00.) About 30 to 70 cents of this fee is known as the interchange fee and goes to the bank whose ATM you used as compensation for handling the transaction. Even if your bank does not charge you when you use another institution’s ATM, it pays this fee. The second fee, a surcharge imposed on you by the other bank for using its ATM, is now $2.00 ($3.00 for big banks like US Bank) These fees show up right on your ATM receipt. My advice to you minimizes the pain whenever possible; use your own bank’s or credit union’s ATM to avoid fees. Also try some of these tactics: Switch to a bank or credit union that doesn’t impose ATM surcharges. Generally, the larger the bank, the higher the fees. There is no stimulus package for consumer to recover ATM fees that is imposed by large banks like US Bank. No body can protect us from bank rip off at the moment.
microfinance institutions (MFIs) continue to grow
Investments in microfinance institutions (MFIs) continue to grow. Significant media attention, as well as the emergence of new distribution channels, has generated a strong interest among new investors.
Retail investors, high net worth individuals and institutional investors all invest in MFIs. These investors often seek a double bottom line (i.e. both a social and a financial return). Investors can make either a direct investment in a microfinance investment vehicle (MIV), which in turn invests in a MFI, or an indirect investment via a fund-of-funds, which in turn invests in a MIV. Investments can range from US$100 to millions of dollars depending on the type of investor and vehicle.
MIV deals typically include debt, equity, or guarantee transactions, with debt deals being the most common. As the field is still in its infancy, equity transactions are not as prevalent.
Currently, the global average transaction is about US$1.5 million, and most transactions are hard-currency transactions. However, to support the growth of the industry and its risk management, it is critical that investments are done in local currency.
Ratings and assessments of MFIs play an important role in the investment process. The role of ratings and assessments is two-fold: 1) to allow MFIs to make an internal performance evaluation and adjust accordingly; and 2) to support investors in their due diligence process.
Source: CGAP
Thank you! World Bank lends Ethiopia $180mn for energy infrastructure
The World Bank Board of Executive Directors approved an International Development Association (IDA) credit of $180 million to support energy infrastructure, Ethiopian Television reports here Friday.
This loan aims to support Ethiopia’s efforts to provide adequate and cost effective electricity supply and rapidly scale up electricity coverage and access for all citizens.
Ethiopia is currently undertaking billions of dollars worth of investments on hydro-electric plants, which will help the country to also supply power to neighbouring countries like Djibouti, Kenya and Sudan.
Ethiopia is currently generating around 2,000 megawatt of power for its local consumption.
“The additional financing aims at scaling-up certain components of the Energy Access Project which seeks to expand access to electricity and improve the quality and adequacy of power supply ; improve energy end-use efficiency, developing renewable energy resources ; and strengthen institutional capacity,” the World Bank said.
The New Bank Fees: How to Fight Back
Bank on it: Higher fees, and more of them, are coming soon to a financial institution near you. Banks are gearing up for a wave of new fees in an attempt to make up for lost revenue from new regulatory rules on credit cards and overdraft fees. Robin Sidel has details. Regulators in the past year have pushed through a raft of changes designed to rein in banks’ most abusive practices, from excessive overdraft fees to the way lenders raise interest rates when a credit-card payment is late. The new rules are expected to slice billions from firms’ profits—and more if lawmakers move forward with a bill to limit how much financial institutions can charge merchants for debit-card transactions. Banks, of course, aren’t giving up those revenues without a fight. Instead, industry leaders like Bank of America Corp., Wells Fargo & Co., HSBC Holdings PLC’s HSBC North America, Fifth Third Bancorp and others are experimenting with new ways to nick their customers, from imposing maintenance fees on checking accounts to rolling out new charges for services like fraud alerts, debit cards and credit reports. Making matters trickier, while the banks must disclose the new fees fully, they likely will do so only in the ordinary-looking correspondence that most consumers toss in the trash without reading. The result: Many people will learn of the new charges only after opening their monthly statements. Read full story: http://online.wsj.com/article/SB10001424052748703438604575315003993317326.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop
Can the Buy Side Take on the Sell Side?
By James Kwak
The Economist did not like 13 Bankers: “A broader perspective would have led to more nuanced conclusions. The origins of America’s financial ‘oligarchy’, for instance, might have more to do with campaign-finance rules and political appointees than banks’ size. The faith that Messrs Johnson and Kwak put in merely capping the size of banks is misplaced.”*
But a reader pointed us to the Economist columnist who goes by the name of Buttonwood (the site of the founding of the New York Stock Exchange), who seems a bit more favorable. In a recent column criticizing the rent-seeking of the financial sector, Buttonwood seems to tell broadly the same story: Read the rest of this entry at http://baselinescenario.com/
Corruption Carries High Cost, World Bank Says
By Mohammed A. Salih
Poverty is on the rise in Sub-Saharan Africa (SSA) and various forms of corruption threaten to undermine the impact of investments made to meet the Millennium Development Goals (MDGs) in the continent, said the World Bank in a report released Monday on Africa’s development.
The report says the number of people who live on less than two dollars a day has doubled from 292 million in 1981 to nearly 555 million in 2005.
Painting a gloomy picture of Africa’s state of development, the report says the SSA region presents the “most formidable development challenge” of the world. It says thousands of people are dying from preventable diseases on a daily basis, and HIV/AIDS and malaria continue to spread through the continent.
The report also highlights “pervasive” corruption in Africa in a 29-page essay elaborating on the subject. It focuses on “quiet corruption”, a term referring to the “the failure of public servants to deliver goods or services paid for by governments” that do not involve monetary exchange.
The report warns about quiet corruption’s “harmful long-term consequences” for Africa, saying it strongly marginalises the poor.
Although “ubiquitous” in Africa, the Bank says, because it is less “salient” and “noisy”, quiet corruption draws less public attention compared to big corruption.
As an example of quiet corruption, the report says that in some SSA countries, primary school teachers are not in school 15 to 25 percent of the time.
The problem has spread to the health sector as well, with deadly consequences. In rural Tanzania, four out of five children who died of malaria had sought medical attention from the country’s health facilities, to no avail.
The World Bank says a number of factors such as the absence of diagnostic equipment, drug theft, and absence of providers in health centres contributed to the children’s deaths.
In the agriculture sector, one major reason behind the low fertiliser usage among African farmers is the poor quality of fertilisers manufactured in the continent. Although manufacturers have the capability to produce good fertiliser, 43 percent of fertilisers in West Africa in the 1990s lacked the expected nutrients due to poor controls at the producer and wholesaler levels, the report says.
Referring to the pervasiveness of “quiet corruption”, the World Bank report calls the familiar “big-time corruption” – bribes and kickbacks to public officials – the “tip of the iceberg”.
While the World Bank regularly publishes reports on the state of developing world, it has been frequently lambasted for the role it has played in developing countries.
Doug Hellinger, executive director of Development GAP, accuses the World Bank of contributing over time to some of the current problems in Africa through its policies. Hellinger’s organisation works to promote economic justice across the South, a term referring to the developing countries.
“The Bank historically has been the facilitator for Northern corruption by changing the policy environment in these countries,” he told IPS. The term “North” refers to the world’s developed countries.
“Just the fact that the World Bank insisted on full implementation of the Structural Adjustment Programs (SAPs) and held back loans until they were implemented and the fact that these programmes such as privatisation and import liberalisation benefited Northern companies, it created an environment of corruption, it’s a corrupt practice,” he said.
SAPs are used to promote and implement free market policies, deregulation and privatisation in countries that borrow loans from institutions like the World Bank and International Monetary Fund.
Hellinger blames institutions like the World Bank for contributing to the inefficiency of health and education systems in the countries of SSA because “they have been the major institution for the cutting of budgetary support for health and education services” in those countries.
Africa has been a key focus of efforts to implement the MDGs set by world leaders in 2000. While the countries in the region are at different stages of development, SSA appears to have a long way to go to achieve the MDGs.
The MDGs include, among others, considerably reducing poverty, child mortality rates and halting epidemics such as AIDS by 2015. But many countries in SSA still fare poorly in some key areas on the World Bank’s Development Indicator. The overall GDP of the SSA’s 47 countries grew 5.1 percent, with Angola’s growth rate of 14.8 percent at the top and Botswana with a negative growth of -1.0 at the bottom. Zimbabwe has the highest adult literacy rate of 91.2 percent in the SSA, while Mali and Burkina Faso have the lowest with 28.7 percent.
In Chad, only nine percent of the population has access to improved sanitation facilities, while the access rate is 94 percent in Mauritius.
Liberia has the lowest primary enrollment rate of 30.9 percent and Sao Tome and Principe has the highest rate, at 97.1 percent.
Child mortality is also a serious problem, with 155 out of 1,000 children in Sierra Leone dying before the age of one, while in Seychelles, the rate is 12 per 1,000.
What is new in Ethiopia 2010?
By Getachew Teklu
Addis Ababa
Ethiopia has secured billions of dollars in loans from China to support the African nation’s planned development projects. The projects include the construction of a light rail line in Addis Abeba and 200 buildings by the Ethiopian Housing Corp., installation of a new Ethio-Djibouti railway line, and purchase of nine vessels for Ethiopian Shipping Lines.
The European Union, for its part, contributed an additional 4.85 million euros (USD6.1 million) to help the Ethiopian Mine Action Officeto demine lands in Tigray, Afar and Somali regions. The bloc previously contributed 9.75 million euros for the project.
Meanwhile, the Ethiopian Environmental Protection Authority has secured 200 million birr (USD14 million) from foreign funds and grants for the implementation of its proclamations, regulations and directives, which are necessary to enable Ethiopia to implement international conventions that it has ratified.
