Get Here: E*Trade Has Useful Advertisements!?

Wednesday, January 5, 2011

E*Trade Has Useful Advertisements!? - Bargaineering

Posted: 05 Jan 2011 09:08 AM PST

I was reading CNN Money over the weekend when I saw one of E*Trade’s latest banner advertisements, which I’ve included below. I want to salute them for using advertising that is actually useful.

Useful advertising?!?

It’s pretty obvious, with interest rates so low, that dividend stocks have become more and more enticing. Part of me wonders if we’re having the Time magazine effect, which is my leading indicator that something has jumped the shark, but I still think that buying a bunch of dividend yielding stocks is probably your best bet if you’re able to hold them for a while (and cash the dividend checks).

I used to use E*Trade a lot, before TradeKing and $4.95 trades came along, because I was able to link my E*trade high yield savings account to my E*trade brokerage account. When they did away with the bank, selling them to Discover, I saw little reason to keep a bank yielding so little. When I didn’t have the savings account at E*Trade, I initiated the transfer of my brokerage assets to TradeKing, who was going to charge me a lot less per trade.

I hope more companies start going in this direction with their advertising. I think people can appreciate useful advertising more than straight up promotional ones.

E*Trade Has Useful Advertisements!? from personal finance blog Bargaineering.com.

Lower Tax Rate on Savings Accounts to Incentivize Saving

Posted: 05 Jan 2011 04:21 AM PST

Over the break, I read about the winning idea for the TIAA-CREF’s Raise the Rate competition and was surprised that it was selected as the winner. I’m surprised because I wouldn’t think that savings would be a reliable factor in the probability that you would default, which is what the credit score is designed to measure, and because it would be a bit of a bear to implement.

My submission was to lower the tax rate you paid on the interest you earned from savings account. You already receive this information as a 1099-INT, so the IRS already knows this is interest earned from an interest bearing account. While it would fail the “difficult to implement” test (which we don’t know if it was factored), I bet you more people would save money if they knew they would be taxed less on the interest. (Many people invest in dividend yielding stocks for this very reason)

I’d go as far as to say you get the first $X in interest tax free. You can set that at $500, $1,000, or higher. People respond to financial incentives and removing the tax would give people an incentive, but unfortunately, at least right now, it goes against the government’s goals of wanting to boost consumer spending.

While less “novel,” I thought the people’s choice winner’s idea of creating a Women’s Savings Club would be more effective at increasing people’s savings rate.

Integrating savings rate into your credit score is certainly novel and interesting, especially since it’s already being factored in by lenders, but I don’t think it will increase people’s saving. Do you?

Lower Tax Rate on Savings Accounts to Incentivize Saving from personal finance blog Bargaineering.com.