Customer Education Cont.
Current featured articles (click on the link to go to an article)
A traditional bank savings account is a great place to put money aside for special occasions, as they allow you to withdraw funds easily and earn some interest. These accounts do not come with checks and usually limit the number of withdrawals you can make, which helps you avoid the temptation to spend your savings before you’re ready. You can even set upautomatic transfers from your checking account to keep your special savings separate. This separation really helps avoid spending your money frivolously.
Some banks offer “holiday club” accounts. These are similar to traditional savings accounts with a focus on meeting a specific savings amount in a certain timeframe. Holiday club accounts automatically withdraw funds from your checking account each month. The total amount saved is transferred back to your checking account when you have met your goal, so that the funds are available for you to spend as planned. These accounts are a convenient way to help you save regularly, but they may have lower interest rates compared to other savings accounts because they are very shortterm. There is also typically a penalty fee if you make an early withdrawal, so be sure to read all about the plan before you start.
Money Market Deposit Accounts (MMDAs) are an attractive option for saving. They offer higher interest rates than traditional checking accounts and more options for accessing your money than traditional savings accounts. You can withdraw money more freely (with a debit card or checks) than from holiday club accounts or CDs, but there are some restrictions on the number of withdrawals you can make on a monthly basis. MMDAs generally require a higher initial deposit and minimum balance than other savings accounts. It’s important to note that these deposit accounts are different from money market mutual funds. Money market mutual funds are securities that incur investment expenses, are subject to more risk, and are not insured by the FDIC.
Certificates of Deposit (CDs) are savings certificates where the money you put into them are invested by a bank for a set period of time – you can typically choose between one month and five years – and the bank gives you the money back with interest. The longer the term the more interest you earn. CDs have higher interest rates than traditional savings accounts, but you cannot withdraw the funds until the end of the specified term. If you need to withdraw the money before that time, you will have to pay a penalty fee. If your institution offers CDs with various maturities of less than one year, you may also consider timing the maturity dates of CDs purchased throughout the year to coincide with the date of an anticipated expense.
Before putting your money into one of these accounts, be sure to compare current interest rates offered, as rates vary by bank and change constantly. The Truth in Savings Act requires financial institutions to provide a common method of disclosing rates of interest earned, known as the Annual Percentage Yield (APY), to allow consumers to effectively compare accounts between banks. You can compare APYs of different products to determine which one offers the best outcome for you (but note that the APY does not compare early withdrawal penalties where those penalties apply). Also make sure that you understand all restrictions associated with the account. For more information, go to FDIC Consumer Assistance Savings Related Resources.
In addition to saving money for shortterm goals, setting money aside on a regular basis into any type of account and watching the savings accumulate can give you a real sense of financial empowerment. No matter what amount or account type, the earlier you start saving the better.
- How long are you planning to stay? Renting comes with some flexibility. When your lease is up, you have the option to move. Owning a house doesn’t come with that flexibility. Buying and selling a home is a complex, expensive process that includes closing costs and possibly other fees. In general, owning makes financial sense only if you plan to stay put for at least five years.
- What financial resources [down payment] and credit do you have? If you’re thinking about buying a home a traditional down payment is 20% of the home’s price. The larger a down payment the more financially secure you appear to lenders. It’s also good to be aware of your credit score (link to good credit article). Your credit score is one of the most important factors when qualifying for a loan. The higher your credit score, the better your mortgage terms.
- What is your priority location, transportation, amenities? This will determine the cost of homes in the area, but also help you understand additional costs associated. Can you walk or bike to work, ride the bus, or do you need a vehicle? Do you want to live in a place where you can help with landscaping the yard or prefer not to bother with it?
- Compare total costs. When you are considering buying a house, along with the down payment you should consider other financial costs such as:
- Homeowners Association dues
- Property taxes
- Homeowners insurance
- Landscaping/ yard upkeep
5. Do not make a decision on a whim. Homeownership isn’t a good or bad idea on its own. It has everything to do with your own situation.
Look up home prices in the area you’re thinking of buying and use a rent vs. buy calculator such as the one on our customer education page to see if the associated costs make buying worth considering.
If you have questions about buying a home and what it will take to make that purchase, our expert lenders are here to help you through the loan process. To speak to someone, call 575-758-6700 or email Leticia @ email@example.com.
Discover how your community bank can help you realize your financial dreams - Let's dream together!
Centinel Bank is Member FDIC and Equal Housing Lender.
Focus to Improve Your Financial Situation, 5 Ways How
How much do you really know about your financial health or financial situation? Do you know what it is, or how you’re doing? Do you know how to improve it? Taking steps to achieve financial health is just like setting a goal to lose weight – it doesn't happen overnight.
All your financial decisions and activities have an effect on your financial health now and in the future. The more you focus on understanding your financial situation the better off you’re financial health will be.
5 areas to focus your attention to improve your financial situation:
Spend – Understand what you spend and spend your money wisely.
Live within your means. Do this by creating a budget or spending plan and set the maximum amount you plan to spend each week or month. Then stick to it.
Be a smart shopper. Compare prices and quality, especially when planning a big purchase. Don’t give into what you don’t need and don’t let a sale or discount coupon persuade you.
Track your spending habits. They might surprise you. Track money coming in and going out.
Plan for short-term and long-term financial goals.
Earn - In order to make the most of what you earn, understand the fine print and details about your pay and benefits, including deductions and withholdings.
Know the details of your paycheck, how much you make and deductions. Net income is your take-home pay, after taxes and deductions are subtracted by your employer.
Review taxes and deductions withheld. Usually, your deductions and withholdings include federal, state and city income taxes, Social Security and Medicare taxes, your contributions for retirement savings, and payments for health insurance.
Explore and sign up for workplace benefits. Does your employer offer a retirement savings program? Arrange to have retirement savings automatically moved from your paycheck to a retirement account. Many employers match part of every dollar you save this way.
Save & Invest - People who make a habit of saving regularly, even small amounts, are well on their way to success. To help you save, open a bank account. Then, use your savings to plan for life events and to be ready for unplanned or emergency needs.
Pay yourself first. Start saving, form a savings habit. Each pay period, before you spend money, commit to putting money in a savings account. Many banks, including Centinel Bank, will help you automatically transfer from your paycheck or your checking account to savings every month. Make sure you keep your savings in an insured bank account.
Track your savings and investments, and monitor what you own. People who keep track of their savings often end up saving more, because it’s top of mind.
Build up emergency savings for unexpected events. Three months is what is recommended.
Consult with a qualified professional on investments and other key financial matters.
Invest in your future. Don’t forget to save for retirement, education needs or trainings, and other major items.
Protect. Take precautions with your finances. Be vigilant about identity theft, and keep aware of your credit record and credit score.
Keep your financial records in order. Look at your bank statements and bills as soon as they arrive and report any discrepancy or suspicious activity. A good system for keeping personal money records will include copies of important documents like your will, property ownership, information about savings and insurance, and other documents.
Protect your identity. Watch out for fraud and scams. If it “sounds too good to be true” you can probably assume it is, and it is probably fraud, especially if it comes from a stranger or an unfamiliar company.
Be wary of requests to “update” or “confirm” personal information, especially your Social Security number, bank account numbers, credit card numbers, personal identification numbers, date of birth or your mother’s maiden name in response to an unsolicited call, letter or email. Centinel Bank takes the security of customer information very seriously. We rarely request to update or confirm personal information on your account, but there may be rare instances where we might need to, if we do as a verification method you can always request to call the bank back at a known phone number for your protection.
Borrow Sometimes it’s necessary to borrow for major purchases like an education, a car, a house, or maybe even to meet unexpected expenses. Your ability to get a loan generally depends on your credit history, and that depends largely on your track record at repaying what you’ve borrowed in the past and paying your bills on time. Keep your credit history strong.
Understand interest. Borrowing money is a way to purchase something now and pay for it over time. You usually pay “interest” when you borrow money. The longer you take to pay back the money borrowed, the more you will pay in interest. Pay more than the minimum due each month and pay less in interest over the life of the loan.
Pay bills on time. This will help increase your credit score. Even if you fell into trouble with borrowing in the past, you can rebuild your credit history by making regular payments as agreed.
Learn about credit and how to use it effectively. Pay attention to your credit history, as reflected by your credit score and on your credit report.
Determine Your Creditworthiness -5 C's of Credit
Thinking of applying for a loan? Here are the 5 C's most lenders look at to determine your creditworthiness.
- Credit History/Character
This is how trustworthy and reliable you are. It refers to your reputation or track record for repaying debts. Qualifying for the different types of credit hinges largely on your credit history — the track record you’ve established while managing credit and making payments over time. Your credit report is primarily a detailed list of your credit history, consisting of information provided by lenders that have extended credit to you. While information may vary from one credit reporting agency to another, the credit reports include the same types of information, such as the names of lenders that have extended credit to you, types of credit you have, your payment history, and more.
This measures your ability to repay a loan by comparing income against recurring debts. Lenders need to determine whether you can comfortably afford your payments. Your income and employment history are good indicators of your ability to repay outstanding debt. Income amount, stability, and type of income may all be considered; as well as the ratio of your current and any new debt as compared to your before-tax income. This is called your Debt-to-Income ratio and is an important part of your overall financial health.
- Collateral (when applying for secured loans)
Collateral helps secure a loan. Loans, lines of credit, or credit cards you apply for may be secured or unsecured. A loan is secured when you are asked to pledge assets to the lender as security or collateral for the loan. This gives the lender assurance that if you were to default on the loan, they have a way of being repaid. With a secured product such as an auto or home equity loan, you pledge something you own as collateral. The value of your collateral will be evaluated, and any existing debt secured by that collateral will be subtracted from the value. The remaining equity will play a factor in the lending decision.
While your household income is expected to be the primary source of repayment, capital represents your savings, investments, and other assets that can help repay the loan. This can be helpful should you encounter unforeseen negative circumstances such as, if you lose your job or experience other setbacks.
Lenders may want to know how you plan to use the money and will consider the loan’s purpose, such as whether the loan will be used to purchase a vehicle or other property. Environmental and economic conditions, may also be considered.
If you have questions and/or are thinking of applying for a loan, call us @ 575-758-6700.
For a PDF version of this information click here.
The 5 C’s of credit help assess credit risk and are used by many lenders to evaluate potential borrowers. Knowing about these 5 C’s: character, capacity, collateral, capital, and conditions, and what your bank is looking for will help prepare you to recognize what is most important in a lender’s eyes.
Whether you’re starting from scratch or expanding your business, want to buy new equipment, purchase land, improve an existing location, or to just give your business a little breathing room, a loan can help your business in a variety of ways. Knowing what lenders are looking for ahead of time can mean the difference between being accepted or rejected.
Your willingness to communicate openly with your banker can make a difference on the decision. It’s important to have an honest back-and-forth conversation. You should also be able to speak confidently on behalf of your business. The more open you are about your needs, past difficulties, and future endeavors, the better off you’ll be regarding any financing.
5 C’s of credit to determine your business’s creditworthiness:
Lenders want responsible borrowers who can be trusted to honor their commitments. Work experience, experience in your industry and personal credit history are all character traits banks will consider. Your personal integrity and good standing - and the integrity and standing of those closely tied to the success of the business are critically important. This is where a community bank like Centinel Bank can be of benefit to borrowers. Community banks specialize in building long standing relationships with customers. Taking the time to deeply understand each customer’s business, going beyond simple financials, learning about customer trials and tribulations, and specific areas of concern.
This factor describes your ability to repay your loan. Does your business have the financial capacity to support debt and expenses? Typically, a business needs to have $1.25 of income to support every $1 of debt service. The extra $0.25 provides a cushion for your business to absorb unexpected expenses or a downturn in the economy.
What do you have to borrow against? Accounts receivable, inventory, cash, equipment and commercial real estate are all forms of collateral that banks leverage to secure loans. In addition to looking at the value of your collateral, the bank will consider any existing debt you may still owe on that collateral.
How do your assets compare to your liabilities? Where do your savings and retirement accounts stand? Your business owns capital assets such as cash and equipment; is there enough to help support the financing you want? You and others may have invested capital in your business; how much? The answers say a lot about whether the business is one in which is able to invest.
The state of the economy, trends in your industry and pending legislation relative to your business are all conditions that are considered by banks. These types of factors—often out of your control—may affect your ability to make payments.
If you have questions and/or are thinking of applying for a commercial loan, call us @ 575-758-6700.
Good Credit is Key to Solid Financial Future from Centinel Bank of Taos and ICBA
When establishing financial fitness goals, Centinel Bank of Taos and The Independent Community Bankers of America want to remind customers: it’s easier to build a credit score than to repair a bad one.
Having a good credit history is key to any financial plan. Credit scores take into consideration years of past behavior, so it’s important to establish a history of responsible credit practices and build your score by maintaining good habits.
Tips to help build and maintain good credit:
- If you are just beginning to establish your credit history, open a checking account and keep careful track of your balance.
- Use debit and credit cards for convenience and safety, but not to overspend. Missed or late payments damage your credit and hurts your credit score.
- A good mix of credit (i.e., a revolving credit line and an installment loan) also boosts your credit score and further demonstrates that you can manage different types of credit.
- Demonstrate stability in the three to six months before a major purchase. Avoid opening or closing accounts or moving large amounts of money around.
- Build an emergency fund equal to at least six months of living expenses. If the unexpected happens, you will still be able to pay fixed expenses instead of falling behind.
- Alter your credit focus as you approach lifecycle stages. As you near retirement, for example, start paying down major purchases (such as a mortgage).
- Monitor your credit regularly so you can correct any errors and detect any potential signs of identity theft. Order a copy of your credit report annually from www.annualcreditreport.com.
Establishing good spending and saving habits, and sticking with them, is critical when times are tough and can go a long way toward helping you achieve your financial goals. Your Centinel Bank is your local community bank that can serve as a great resource to help get you started on the road to establishing good credit, which will serve as the foundation for a more secure financial future.
About Centinel Bank
Centinel Bank of Taos, founded in 1969, remains a locally owned and operated community bank with a mission to provide unequaled personal services with every experience. Committed to remaining a true community bank, size and the streamlined organizational structure provide an ability to make local decisions that enhance personal experience and customer success. Serving customers with three convenient locations, a full array of deposit and lending solutions for personal and business needs, and electronic banking services. For information, visit our website www.centinelbank.com. Member FDIC. Equal Housing Lender.
The Independent Community Bankers of America®, the nation’s voice for more than 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.
For a PDF version of this information click here.
Where you choose to bank matters. Did you know, not all banks are the same? While they do provide many similar services, there're also many differences. Centinel Bank of Taos is a community bank, locally owned and operated, serving Taos County since 1969. Along with traditional banking services, Centinel Bank offers many community banking benefits.
This April, in celebration of Community Banking Month, we encourage everyone to consider what it means to bank locally. Banking local helps sustain our community today, tomorrow and for generations to come.
What is a “community bank”?
A community bank is a bank that works for the betterment of its community, helping it grow and succeed. Community banks like Centinel Bank are local--Taking in deposits and distributing loans into our local economy keeps funds right here in Taos County. When you deposit money at Centinel Bank, those funds are used to support local businesses, homebuyers, and everyday consumers; residents just like you; and the proceeds from those businesses employ local residents, fund municipalities, and continue the cycle of locally based economic growth. This means creating more jobs and providing a strong foundation for the local economy, making it stronger.
As a community bank, Centinel Bank invests in the future of the area we serve. Lending money is only one way we invest in our Taos County communities. We are proud to give back to them and are always developing programs to help strengthen our community. Ways we give back include:
- Youth initiatives and educational programs
- Support of local non-profits and partnerships with local organizations
- Financial Literacy for children, youth, teens, adults, and seniors
What does locally owned and operated mean?
Centinel Bank is proud of the fact that we are locally owned and operated, meaning that we live and work in the very communities that we serve. As a result, we feel a strong commitment to providing excellent service and building strong relationships, because we live here too and we feel the impact of your success. We also hire talent right from our home communities, helping to boost the economy by keeping dollars at a local level. Because we are locally owned and operated:
We are not a national banking chain.
We make our decisions locally, understanding our Taos County communities and providing products and services that reflect the needs of our community. Our lending decisions are made by people who live in Taos County and develop face-to-face relationships with our customers. We specialize in relationship banking as opposed to transactional banking, giving individual and small business customers personal attention.
Centinel Bank is Taos’ only local community bank. As we celebrate Community Banking Month this April, we want to thank our customers for their patronage and urge those who we hope to count as future customers to consider what it means to bank locally.
Stop by Centinel Bank today to discover how your community bank can help you realize your financial dreams—and how together, we can contribute to a more vibrant and sustainable economy in our Taos County community. Let’s dream together!
Phishing is a form of fraud. Phishing attempts are getting very, very sophisticated. More and more people are finding themselves targets and sometimes victims of the fraud. At Centinel Bank we care about your security and offer the following information.
What is phishing?
Phishing is a form of fraud in which a target or targets are contacted by criminals through email, telephone or text message as well as through human interaction and malicious websites. It’s happens by someone posing as a legitimate institution, new employees or even repair personnel. The fraud is an attempt to lure individuals into providing sensitive data and attempt to trick them into divulging personal information. Examples include:
- Personally identifiable information
- Credit card details
- And more
The information is then used to access important accounts, steal your money, use your name to open credit cards or loans and more.
Avoid being a victim
Though hackers are constantly coming up with new techniques, there are some things that you can do to protect yourself and if you’re a business owner, your organization:
- Be suspicious of unsolicited calls, visits or emails asking about personal information.
- Be aware of emails that contain a strong sense of urgency.
- Do not reveal any personal information or information regarding your organization unless certain of legitimacy.
- If uncertain about legitimacy of email try to contact the company or individual to verify.
- Pay close attention to website URL’s. The URL of a website that is illegitimate could have some variation of spelling, or a domain that is uncommon.
- Slow down and thoroughly read emails.
- Avoid clicking on any links or attachments in an email you are uncertain about. It’s better to go to the site yourself by typing the URL into your browser.
Tip: hovering your mouse pointer over a link will show you (either as a tool tip or in the status bar) where the link really goes or the real URL.
What to do if you think you are a victim
Phishing attempts are getting very, very sophisticated. If you believe sensitive information has been released
- Contact the appropriate people. Ex: financial institutions, administrators, supervisors, etc.
- Be prepared to change any passwords that may have been compromised.
- Be conscious regarding the number of applications that share the same password. Password manager (Keeper App).
- Avoid revealing personal information to people you are unfamiliar with.
- Slow down and read carefully, it is better to always act with caution.
- Don’t go clicking around.
As many things in life, prevention is easier than recovery. Pay attention, remain skeptical, and avoid the problem in the first place.
Social networking has changed the way we interact with friends, family and associates. While social networks play a significant role in our lives, they are also a high risk for security threats. Social media security should be taken seriously, you should always proactively secure your social media accounts. Here are steps to take that can help keep your accounts from being hijacked.
Make the most of your device lock screen
- Set your computing devices to lock quickly
Make sure you have a strong, unique password and two-factor authentication. People can gain access to your accounts by acquiring credentials and trying them across different services
- Use different password combinations across all your accounts
- Pick up a password manager (example: keeper app)
- Use strong unique passwords with numbers and special characters
- Acquire a second code or “factor” to prevent attackers
- To add two factor authentications on Facebook, go to settings> security and login> two-factor authentication
- To add two factor authentications on Twitter, go to settings and privacy> account. In the security subsection click on review your login verification methods.
When you first set up your twitter if you do not (protect) your tweets your personal profile and all tweets are open to a wide range of people and services.
- This allows all tweets to be documented by the library of congress where they are documented for historical purposes.
- Use Facebook’s remote-control features. Settings on Facebook can be arranged to send notifications regarding unrecognized logins. To use them go to settings> Security and log in, there you can see all devices on your account
Limit third party permissions
- Check to see what outside services have access to your social media information (especially Facebook)
- Consider limiting the amount of personal data you put on social media
- Make sure to shut down old accounts that are no longer in use