Looking for High Yield Accounts?

Consider your local credit unions. While it is pretty hard to get a rate higher than 4% nowadays from banks, many credit unions are still offering rate above 4.5%. Some even offer above 6%. Credituniondeals is a good place to find such deals. Note that credit unions are more restrictive regarding to who can open an account with them, usually one has to belong to certain organizations in order to be able to open accounts with certain credit unions.

DRIP

Suppose you found this killer company and decided to buy some of its stocks, so you transfered some money from your checking account to your brokerage account and made the purchase, with a commission fee paid to your broker.
You may wonder, "wouldn't it be nicer if I can avoid such a commission fee?" Yes, it would be, and you may actually be able to do it by buying stocks directly from the company instead of from your broker. The following is a good list of articles on DRIP (dividend reinvestment programs) purchases:

1. How?
2. How to start?
   
3. Where to go?
4. Case study: Bank Of America DRIP
5. Case study: P & G
   

Have you filed your 07 Tax Return yet?

I did mine yesterday using TurboTax online service.

Notice that TurboTax has four versions: Free, Deluxe, Premier, Home&Business. The free edition is just as its name indicates, completely free including e-filing; The other three are all free to start, which means you can use them to prepare your return and pay only if you decide to do an e-filing via that version. Therefore, I used the Deluxe version to prepare my tax, and then went through the process again using the free edition. They are almost identical (they gave the same refund number) except the interface looks a little bit nicer in the deluxe version, and you can not use the audit step in the free version. Of course at the end, I submitted my return with the free edition.

3% Cash Back or 1%?

The Sun's Financial posted a list of credit card that earn cash back. The American Express and Costco TrueEarning card is the 3rd card on the list. The cash back percentage are indeed as Sun listed, I'd just like to add two things here:

1. 3% back of gasoline only for purchases made at Costco Gasoline and domestic stand-alone gas stations. Gas purchased at warehouse clubs other than Costco (for example, Sam's club), superstores or supermarkets WILL NOT count towards this 3%.
2. You will receive a 2% or 3% rebate only if the merchant submits the Charge for your purchase under the appropriate merchant code, industry code and required service or product identifier established by us (referring to American Express) and the merchant. If the merchant submits a Charge of purchase under a different merchant code, industry code and required service or product identifier, you will receive a rebate of only 1% instead of 2% and 3%. This change becomes effective on May 1, 2008. Note: I don't really quite understand what this is implying. Sounds like that we will depend on the merchant to get the 3% cash back, which will not be a good thing. Need to find out, and will update afterwards.
   

Simple Arbitrage

If I had a big lump sum of money, I'd put it in a (or several) FDIC insured high yield saving account(s). The idea of living on fixed income, in this case, the interest, is far more appealing to me than seeking capital gain in the stock market because the risk associated with the former is much less than the latter. Putting money in FDIC insured savings is almost risk-free. The problem is that I don't have this big lump sum of money. This thus creates the following arbitrage scenario:

1. Borrow with 0% or low interest rate.
   
2. Deposit the borrowed money into high yield (higher than the interest rate you borrow at) saving accounts or CDs.
3. Pay back the borrowed money before the borrowed interests go up.

These are the general steps. There are many details to be furnished to complete a sound arbitrage. One of them is that where can you borrow at 0% or a low interest rate? This is easily answered by App-O-Rama, a website that gathers and publishes up-to-date "good" credit card offers from many financial institutions. If you have a good credit, you will have no trouble of getting approved by multiple cards simultaneously. Here is an example. Another important thing to keep in mind is the date when the borrowed low interest rate becomes a high rate. Before you jump in this arbitrage game, make sure you calculate when and how to pay back the borrowed money, and how much profit you gonna make. Also, are you purchasing a house soon? If so, arbitrage is probably not a good idea for now since most of the credit card application process will result a hard pull on your credit and hence lower your credit score.