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Budgeting Tools to Help You Get Started

ASB July 22, 2021 | 5 min read Personal

Do you want to have more control over your finances? Are you looking for a way to make reaching financial goals easier? There’s no magic wand when it comes to managing your finances, but creating a budget is a good place to start. Learn more about budgeting and what tools you can use to get started.

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THE IMPORTANCE OF BUDGETING

Ask any financial expert and they’ll tell you budgeting is the first step toward financial health. That’s because a budget puts you in control of your money. You’ll know exactly where every dollar you make is going. A budget also gives you the chance to examine your spending habits and be more conscious of when — and why — you spend money. This leads to more control and awareness of your money, making it easy to set and reach financial goals.

HOW TO START BUDGETING

Learning how to budget doesn’t have to be difficult. There are three simple three-steps to follow:

1. DETERMINE YOUR MONTHLY INCOME
Be sure to use your net, or “take-home,” pay and avoid listing overtime or inconsistent wages. The goal in this step is to estimate the income you regularly expect to be in your bank account each month.

2. LIST OUT ALL OF YOUR MONTHLY EXPENSES
Go through bank statements, credit card statements, and receipts for the past several months to figure out where you spend your money. You’ll likely have fixed expenses like rent, insurance, or car payments as well as flexible expenses like credit card bills or spending on entertainment. Try to figure out how much you spend on flexible expenses each month by averaging the amount you spend over the last few months.

3. SUBTRACT YOUR EXPENSES FROM YOUR MONTHLY INCOME
List out the amount of each expense. Any money left over can be used to pay off debt or build your savings. If you are spending more than you make, go back to your expenses and look for areas where you can cut spending or reduce fixed expenses. Aim to bring in more than you spend. Spending more than you make could lead you to rely on credit, like credit cards or personal loans, to make ends meet.

budgeting

5 TOOLS TO HELP YOU START BUDGETING

While creating a budget is simple in theory, it can be complicated in practice. Different financial situations can make it harder to estimate income or expenses, such as working a job with varying shift hours. Luckily, there are a lot of budgeting tools you can use to get started making and maintaining your budget.

1. PEN, PAPER, AND CALCULATOR
The simplest way to start budgeting is to grab a pen or pencil, some paper, and a calculator. A basic handwritten budget can be a good starting point to see where your income is compared to your spending and expenses. Writing out your budget may also make it feel more “real” as opposed to a computer program or smartphone app.

2. SPREADSHEETS
Writing a budget by hand isn’t your only option when forming a basic budget. You can use computer spreadsheets and built-in formulas to easily list your income and expenses. Spreadsheet-based budgets are great for readjusting your budget as needed. You can easily modify the spreadsheet based on your updated spending or income.

3. BUDGETING APPS
Does the idea of writing your budget by hand or organizing spreadsheets make you want to run away from budgeting? You might want to try a budgeting app. There are plenty of free budgeting apps for smartphones and tablets that help automatically create and track your budget. Look for an app that lets you sync outside accounts, like your bank account or credit card. This gives the budgeting app access to view your spending or income so it can automatically update your budget and give you real-time updates on whether you’re on track or not.

4. EDUCATIONAL RESOURCES
Many banks offer free educational resources, calculators, and budgeting tools for their customers. For example, at ASB, we encourage our customers to take our financial health checkup. This short online financial health assessment asks you general questions about your money habits and gives you personalized results on what your next financial step should be. We also have a range of free financial education courses you can use to learn about everything from budgeting to buying a home. You can use this resource to better understand different financial concepts, including budgeting.

5. ONLINE AND MOBILE BANKING TOOLS
In addition to educational materials, most banks have online banking and mobile app access for customers. Online Banking is an important tool to help you maintain your budget. It lets you access your bank account anytime, anywhere, so you can track the money coming in and going out of your account.
 

MAKE A SUCCESSFUL BUDGET BY TALKING WITH A BANKER

Learning how to budget can be intimidating. If you don’t know where to start, consider talking with a financial expert to help you start on the right track. ASB has branches located throughout Hawaii to make it easy for you to meet with an experienced banker. Our team can help you pick the right budgeting tools to better manage your money. Spend time learning about budgeting with a financial expert by making an appointment today.

MAKE AN APPOINTMENT



Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion that it is appropriate for readers. The information that is contained in this material is general nature. Readers should seek professional advice for their respective situations.

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Meet Our Newest Lo‘i Gallery Artists

ASB July 16, 2021 | 5 min read Community

American Savings Bank’s Lo‘i Gallery is proud to introduce three new talented artists, each offering a unique perspective of and homage to the people and nature of Hawai‘i.

Artwork from Yvonne Cheng, Mary Mitsuda, and Peter Shaindlin are on display at the Lo‘i Gallery, located at the ASB campus, through Sept. 30, 2021.

Twenty percent of sales from the gallery will benefit Kupu, one of ASB’s Kahiau Partners. Kupu's innovative, hands-on programs help to inspire and prepare young adults with the knowledge and skills they need to build a greener, more resilient Hawaiʻi.

Other Kahiau Partners include Child & Family Service, Kapiolani Health Foundation, Partners in Development Foundation and Aloha United Way.

Yvonne Cheng artwork

Yvonne Cheng

Cheng’s work is largely inspired by her enrollment in a batik class at the Honolulu Bishop Museum. Her practice in batik involved extensive research into the visual patterns of tapa cloth and other oceanic textiles. Cheng’s natural progression toward pastels, collage, ink drawing, and painting on canvas became part of her exploration with color and the Polynesian figure.

Mary Mitsuda artwork

Mary Mitsuda

Mitsuda creates each painting with a respect to ideas of change and the passing of time. In each of her pieces, she explores differences in nature such as light and dark, growth and erosion, and order and chaos. Layering is an important quality of Mitsuda’s work. Mitsuda alters her creations through successfully layering paint applications until the images are altered to perfection.

Peter Shaindlin artwork

Peter Shaindlin

Shaindlin’s photographs assume an informed, ethereal vocabulary in which he applies abstraction in interpreting the human form. His inspiration is drawn from the Hawaiian ethos of living itself as a point of primal beauty. Shaindlin’s polymathic creative initiatives reflect his commitment to build upon the natural integration of the humanities.

View available artwork for purchase or contact an artist at asbhawaii.com/loigallery.

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Breaking Down Different Types of Bank Accounts

ASB June 22, 2021 | 5 min read Personal

Opening a bank account is one of the most important decisions you can make, so it's important to have all the facts. Lance Masuda, Director of Customer Solutions and Support, breaks down the difference between a checking account, savings account, and CD. Check out the video below to learn more.

Both savings accounts and certificates of deposit (CDs) allow you to put aside money for the future while checking accounts are for more immediate use. This is partially because savings accounts and CDs accumulate interest over time, meaning the money in your account increases, while this is not the case for checking accounts. 

When deciding what type of account to open, it’s good to consider why you’re opening an account in the first place. If you want to save money to put towards a goal, savings accounts and CDs are a smart option; if you want to easily deposit and withdraw money, a checking account may be best. 

Click here to open an account online. You can open any type of account and even create a joint bank account. If you’d prefer to do it in person, you can also visit one of our branches. After opening your account, you can use tools like online banking and your bank’s mobile app to manage your money, create a budget, and track your goals. You can also add your debit card to your virtual wallet so you always have it with you.

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Online Banking vs. Traditional Banking: What's the difference?

ASB June 10, 2021 | 5 min read Personal

The rise of technology in recent years has also led to new ways to bank — online via web browsers and smartphone applications. Online banking has become a convenient way to manage your money and accounts anytime, anywhere. Let’s take a look at the difference between online banking and traditional banking to see what the right fit is for you.

HOW DOES ONLINE BANKING DIFFER FROM TRADITIONAL BANKING?

Internet banks may have fewer fees, but you won’t usually get personalized service. Traditional banks provide one-on-one customer service, but you may have to complete your banking during business hours. Some traditional banks, like American Savings Bank, offer combined elements of online and traditional banking to give customers a hybrid option that serves all their needs.

If you’re thinking about opening a new bank account, it can be difficult to choose between personal customer service from a traditional bank or the convenience of an online-only bank. The good news is there are options to get access to both a friendly banking team and useful online banking tools through banks like ASB.

budgeting

WHAT ARE THE PROS AND CONS OF ONLINE BANKING?

Online banking has gained popularity recently as many banking customers have become more tech-savvy. Using an online-only bank can help startup businesses reduce banking costs or help a busy family manage their money on the go. This convenience comes at a price, as most online-only banks have limited customer service options. Some can only be contacted through email. That means if you’re having issues with a product, you’ll have to wait until the customer service team gets back to you. Read on to find the advantages and disadvantages of online banking.

Pros of Online Banking

  • Easy to sign up or apply for new accounts online.

  • Offer extensive mobile apps to manage almost every aspect of your account from almost anywhere.

  • Low fees or no fees for services like checking and savings accounts and some loan products.

  • Most online-only banks use an ATM network so you can still access cash from your account.

  • Typically have better interest rates on savings accounts than traditional banks.

Cons of Online Banking

  • No access to in-person help and limited customer service options.

  • Difficult to deposit cash without branch locations. You may need to put money into a non-online bank and then transfer it to your online-only bank.

  • Limit access to products. For example, online banking might offer checking and savings accounts, but not Certificates of Deposit or personal loans.

  • There’s not much you can do if technological issues cause your bank to go offline, whether it’s planned maintenance or an unexpected website crash.

  • Potential limits on daily cash withdrawals.

WHAT ARE THE PROS AND CONS OF TRADITIONAL BANKING?

Sometimes it just makes more sense to talk with someone face-to-face. Traditional banks have physical locations that you can visit and get instant support from in-person interactions with a teller. However, using a traditional bank might mean you have higher fees on your account. Some traditional banks also offer limited online banking options. If you can’t complete a task over the phone or online, you’ll have to go to a branch during business hours to manage your account. Read on to find the advantages and disadvantages of traditional banking.

Pros of Traditional Banking

  • Simply stop in on your lunch break or on the way home if you need a quick answer to a question.

  • The banking team often gets to know their customers for more personalized and friendly service.

  • Easy to manage cash deposits by going to a local branch.

  • Fast cash withdrawals from branch ATMs, drive-thru, or inside the branch with few limitations.

Cons of Traditional Banking

  • You may not have online banking access or the online features are outdated.

  • Fees tend to be higher than online banks.

  • You may earn less interest on money in a savings account.

  • Opening an account can take longer and you may need to complete a paper application.

  • If there’s something you can’t manage online, you’ll have to wait until you can get into a branch for service.

budgeting

HOW TO GET THE BEST OF BOTH WORLDS

Not every traditional bank uses outdated online interfaces or mobile apps. At ASB, we know how important it is for our customers to be able to visit us in person or get their banking done online. We combined the best elements of online-only banks and our brick-and-mortar traditional branches to give you the most options to fit your unique needs.

While some traditional banks offer only limited online solutions, ASB has robust digital banking solutions to help you bank from anywhere. Our mobile app lets you bank on the go. You can manage your accounts and even deposit checks with the click of your smartphone camera. Our website, on the other hand, lets you apply for many of our banking products right from the comfort of your home. Apply online for a mortgage or personal loan without the need to schedule an appointment and visit a branch.

As a leader in providing financial education to our Hawaii community, we added resources to our website to make understanding your finances easier than ever. Start by taking our interactive Financial Checkup. Answer a few questions to get personalized recommendations for setting your financial priorities.

When you do need to visit a branch, our convenient locations across the islands mean you’re never far from our helpful and friendly banking team. Stop by today to get personalized customer service you won’t get from an online bank.

LEARN MORE ABOUT BANKING WITH ASB

Are you ready to get more out of your bank? As a local bank serving communities across Hawaii, ASB is committed to helping Hawaii residents manage their finances via both online and traditional banking. Whether you need a checking account for your business or a mortgage to buy your dream home, ASB has both online and traditional banking tools and resources to meet your needs. Find your local branch and make an appointment today to learn more about banking with ASB.

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What is a Certificate of Deposit and What Are its Pros and Cons?

ASB April 13, 2023 | 4 MIN read Personal

Savings accounts aren’t the only option you have when saving for the future. A Certificate of Deposit (CD) can also help you reach your goals. CDs come with fixed interest rates, so you’ll know exactly how much you’ll earn on each deposit. You may even get a better interest rate than a regular savings account.

At American Savings Bank, we’re here to provide you with a safe and secure way to grow your savings. Read on to learn more about CDs and how to get started saving today.

budgeting

What is a certificate of deposit (CD)?

A certificate of deposit (CD) is a type of savings account with a set interest rate and a specific withdrawal date. This means you’ll earn a fixed amount of interest, compounded daily, over a set number of days, months or years. When your CD reaches the end of the set period, called the maturity date, you can withdraw your initial deposit and the interest you’ve earned.

ASB and other banks offer fixed interest rates on CDs because you agree to keep your money in the CD account until the scheduled date of withdrawal. Unlike a normal savings account, your CD interest rate does not fluctuate. Keeping your money in the account for a set term also makes it easier for banks to offer higher rates than regular accounts.

It’s important to be careful with CDs, as taking your money out before the maturity date could result in early withdrawal penalties. It’s best to plan ahead when opening a CD: consider using a separate savings account as a rainy day fund in addition to your CD, so you’ll still have access to cash in case of an emergency.

Common Certificate of Deposit (CD) Terms:

  • Rate: The fixed interest rate you’ll earn during the length of your CD.

  • Term: The set period of time you agree to keep money in your CD.

  • Maturity Date: The scheduled end of your CD term. You can withdraw your money without early withdrawal fees starting on this date.

  • Minimum Deposit: The minimum initial deposit to open a new CD.

  • Principal Deposit: This is the amount of your initial deposit into your CD. You can usually deposit any amount over the minimum required deposit.

  • Withdrawal Penalty: The fee you may incur for withdrawing money from your CD before its maturity date.

  • Jumbo CD: A special type of CD designed for large deposits.

  • Annual Percentage Yield (APY): The rate of return taking into account the effect of compounding interest.

mom and daughter

Pros and Cons of Certificates of Deposit (CD)

Like any type of financial account, CDs come with advantages and disadvantages. It’s a good idea to weigh the pros and cons of a CD before you open an account.

Pros:

  • Higher Returns: CDs generally have a higher rate of return than a regular savings account.

  • Fixed Interest Rate: The interest rate of a CD is fixed, meaning it won’t change over the course of the term.

  • Safe Investment: A CD is often one of the safest investments you can make. They provide a guaranteed return and are federally insured.

  • Range of Terms: Most CDs offer a wide range of terms.

Cons:

  • Limited Access to Cash: Your money will need to stay in the CD account until the maturity date to avoid paying an early withdrawal fee.

  • Risk Rising Interest Rates: You could end up with a below-average interest rate if rates increase during your CD term. However, having guaranteed earnings could outweigh the potential rise in interest rates.

When should you get a CD?

CDs are a low-risk savings option that can help most people save for the future. You might want to consider using a CD, instead of a traditional savings account if you:

  • Have a Specific Savings Goal: Are you saving for a new car, down payment on a home or just a new set of furniture? A CD is an easy way to save for the future while earning fixed interest on your savings.

  • Won’t Unexpectedly Need the Money: A CD is a good option for saving if you already have a separate savings account for emergencies.

  • Are Risk-Averse: You could potentially see higher returns by investing your money into stocks or bonds. However, those investments could be volatile and risky. Investing in a CD is a safe option for risk-averse investors.

Wondering how much you could earn from a CD? Try our CD calculator to get a better idea of the growth potential of your initial deposit.

Ready to open a CD? Apply online today or make an appointment with one of our helpful bankers to get started!

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ASB Is Proud to Celebrate National LGBTQ Pride Month

ASB June 01, 2021 | 5 min read Community

Happy National LGBTQ Pride Month! We’re proud to support the LGBTQ community all year long – including during National LGBTQ Pride Month every June and Honolulu Pride Month every October.

At ASB, individuals from all backgrounds, interests and sexual orientations are accepted and supported. And, it’s just as important to create a safe space and inclusive environment that encourages people to talk about and celebrate each other’s unique differences.

“I grew up on the mainland in California and my sexuality and race were always at the forefront of every conversation I had, whether with old friends or new acquaintances,” said Nicholas, a teller at the Kehalani Branch. “I now live on an island that has not only embraced my sexuality but has helped me to accept who I am. Ever since I became a part of ASB I have seen so much support for those of us in the LGBTQ+ community, which let me tell you, was surprising but also refreshing. Thank you, ASB, for accepting me for me!”

“Honestly, throughout my life, I’ve never really been proactive in my LGBTQ pride and always sat in the background - watching everyone else make strides forward,” says Ty, a digital marketing manager. “What’s great about ASB is that they give teammates an opportunity to grow and develop. These opportunities not only help me to grow professionally, but also helping me to step into who I’ve always wanted to be – a proactive LGBTQ member who has healed from past trauma, now ready to support those around him.”

ASB is proud to be a workplace where teammates feel welcome and empowered to be their most authentic selves. Stay tuned for more information on how we plan to celebrate Honolulu Pride Month in October.

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Comparing Mortgage Rates in Hawaii

ASB May 27, 2021 | 5 min read Personal

Shopping for a home in Hawaii? Comparing mortgage rates is an important step in the home buying process. A lower interest rate could potentially save you thousands over the life of the loan.

Interest rates aren’t the only thing to consider when shopping for a mortgage, however. In this article, we’ll take an in-depth look at what you need to apply for a mortgage and how to compare rates from different lenders or loan programs.

What is a mortgage rate?

Mortgage rates are simply the interest rate charged on a home loan. Your rate could be fixed, meaning it doesn’t change over the course of the loan. You can also choose an Adjustable Rate Mortgage (ARM), which has a fixed rate for a set number of years before switching to a variable rate that fluctuates based on a benchmark rate.

In addition to the interest rate, you need to be aware of the Annual Percentage Rate (APR). An APR is a broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate, any points, mortgage broker fees and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.

Mortgage lenders like American Savings Bank publish current rates to give you an idea of what type of mortgage rate is available. It’s important to remember these rates are not guaranteed. If you qualify for a home loan, your rate will likely be different based on personal factors such as your credit score.

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Determine your preferred type of home loan

In addition to personal factors, the type of loan you use to purchase your home can affect your mortgage rate. Common types of home loans in Hawaii include:

  • Conforming Loans: This type of loan often has the most competitive interest rates and is best for Hawaii residents with established credit. The home you want to buy must meet certain eligibility requirements.

  • Jumbo Loans: Home prices in Hawaii are higher than elsewhere in the US. If you need financing over the maximum limit for conforming loans, a Jumbo Loan can help you purchase your dream home.

  • First Time Home Buyer Loans: Buying your first home is one of the biggest financial decisions you’ve probably ever made. Luckily, mortgage programs for first time buyers make it easy to get into your first home in Hawaii. Many first time home buyers can get a low down payment requirement, but you may have to pay for mortgage insurance.

  • VA Loans: Are you an active-duty military member or veteran? The US Department of Veterans Affairs (VA) provides a mortgage program to eligible service members and certain surviving family members. Benefits of a VA loan include no monthly mortgage insurance, financing for the VA funding fee, and low or no down payment requirements.

  • USDA Loans: The US Department of Agriculture offers home loans in eligible rural areas of Hawaii through the Rural Development loan program. These fixed-rate mortgages don’t require monthly mortgage insurance and can be used to finance the entire purchase price of your home.

Gather the right documents

Lenders will ask for documentation when you apply for a home loan. Even if you’re only looking for a pre-qualification offer, most lenders will want to see proof of income. Common documents you might need to get a quote for a mortgage include:

  • Recent tax returns

  • Two or more years of W-2s

  • Bank statements

  • Investment accounts statements, including brokerage accounts and retirement accounts like a 401(k)

  • Debt records if you have other loans, like a car loan or student loans

You’ll also need to check your credit score. Your credit score is one of the biggest factors in your ability to secure a home loan and can have a big effect on the rate you receive if you’re approved. If your credit score is lower than you hoped, consider trying to increase your credit score before you apply for a mortgage.

mortgage rate graphic

Shop for mortgage offers

You’ve decided on a loan type, collected the right financial documents, and know your credit score. It’s time to start applying for mortgage offers.

The easiest way to do this is to look for lenders who offer online mortgage applications, like ASB. Online applications make it easy to apply for multiple lenders without visiting each in person. You’ll likely get mortgage offers faster, making it easier to compare the rates offered by different lenders. If you get stuck or have questions, mortgage loan officers are often just a phone call away to help guide you through the application.

Does Shopping for a Mortgage Hurt my Credit Score?
Shopping for any type of loan — including mortgages — can potentially lower your credit score. The good news is this decrease is usually a temporary drop that corrects itself in a few months for most people.

The reason your score might drop is that lenders often request a hard inquiry, or pull, of your credit report. Hard pulls could drop your credit score, but most credit scoring models count multiple hard pulls for the same types of loan as one inquiry.

That means you should apply to multiple lenders at one time, instead of waiting a few months between applications. For example, you apply to three different lenders within one week. Your credit report will likely only have one hard inquiry reported. However, you should avoid applying for multiple types of loans — such as a car loan and mortgage — at the same time.

How to compare mortgage rates in Hawaii

Mortgage lenders are legally required to provide you with a Loan Estimate within three business days of your application. The Estimate is a three-page document that lists the loan amount, interest rate, and fees associated with the loan.

Loan Estimates are the easiest way to compare mortgage rates and costs in Hawaii. As a standardized form, the Loan Estimate from each lender will have the exact same information. This gives you a simple way to compare rates between lenders side-by-side.

While the Loan Estimate is just an estimate, lenders aren’t allowed to change certain information on it. This means you’re unlikely to see major differences between your Loan Estimate and the final mortgage terms.

Get Pre-Qualified for a mortgage in Hawaii

Ready to start shopping for the best mortgage rates in Hawaii? The home loan team from ASB is your expert resource on financing a home in Hawaii. We’ll help you compare loan programs to find the one that works for your unique financial situation. Learn more and connect with a loan officer by getting pre-qualified or applying for a home loan from ASB.

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Checking vs. Savings Accounts: Differences Explained

ASB July 17, 2024 | 5 min read Personal

Two of the most popular types of bank accounts are checking and savings accounts come with features that can benefit your financial health. Unsure what the difference between checking and savings accounts is, or what’s right for you? We’re here to help you learn more and show you how to get started with a new account.

What is a checking account?

A checking account is a bank account that allows you to access your money with a debit card, checks, online banking or an ATM. Checking accounts are designed for frequent transactions like paying bills and withdrawing cash. You can also set up direct deposit to your checking account from your employer.

What is a savings account?

A savings account is a bank account that is designed for saving money over time rather than frequent transactions like a savings account. Savings accounts typically have higher interest rates than checking accounts to encourage saving rather than spending.

Differences between checking and savings accounts

The main difference between a checking account and a savings account is that Checking accounts are often used for convenient access to funds via a debit card, ATM or check while savings accounts are primarily for saving money. Most money won’t stay in the checking account for long because you’re using it to pay your bills and other expenses or transferring it for savings. Savings accounts, on the other hand, are usually used to save money for financial goals. This could include both short-term and long-term goals, like a new pair of shoes or a down payment on a house. 

Checking and savings accounts usually have different restrictions and benefits based on the account type. For example, funds in most savings accounts are relatively harder to access for payment purposes compared to funds in most checking accounts. However, most checking accounts don’t earn interest, while almost all savings accounts earn interest on the money you deposit.

mother budgeting

Pros and cons of checking accounts

Exploring the pros and cons of each type of account can help you get a better idea of what’s best for you. Let’s explore the pros and cons of checking accounts first.

PROS:

  • Easy Access to Your Money: Want to use your funds right away? Most banks, like American Savings Bank, give you different ways to access your funds. At ASB, your account comes with a contactless debit card that can be used to make purchases at stores and online or withdraw money from an ATM. You also receive access to checks and mobile payment services via Online Banking to make it easy to use your account.

  • Track Your Spending: Online Banking makes it easy to keep an eye on your spending and manage your budget. Simply log into your account to see your expenses – you can even filter by time period!

CONS:

  • Little to No Interest: The majority of checking accounts don’t earn interest. If you leave your money in the account and don’t touch it, the balance is unlikely to grow over time.

  • ATM Fees: You may have to pay a fee if you use your debit card to withdraw money from an ATM outside of your bank’s network. You can avoid this fee by using an in-network ATM or signing up for a checking account that reimburses your ATM fees.

Pros and cons of savings accounts

Savings accounts are great if you want to grow funds for a rainy day, or long-term savings.

PROS:

  • Earn Interest: Most savings accounts earn interest on the balance. Your money will grow over time — especially if you never touch it. The more you save, the more you’ll earn, getting you closer to your savings goals!

  • Good Money Management Habits: Having a savings account helps you to save more by giving you a safe place to deposit extra money, accessible in an emergency or for your next big purchase.

CONS:

  • Limited Access to Funds: Due to the nature of savings accounts, savings accounts usually have fewer ways of accessing the money in your account. Most savings accounts don’t come with a debit card or checkbook. You also probably won’t be able to make online purchases. The good news is that limited access to your money could help you save more in the long term.

mother budgeting

Are checking and savings account safe?

Both checking and savings accounts keep your money safe. Banks that are FDIC-insured have insurance backed by the federal government. That means your money is safe and insured up to a certain amount. Even if the bank closes or runs out of money, your money is safe in a checking or savings account. 

Other types of accounts don’t have FDIC insurance to protect your money. Stocks and other investments, for example, are not FDIC-insured. Your investment accounts could potentially lose money during a recession or other turbulent financial times.

Checking Accounts vs. Savings Accounts: Which is Best for Me?

The right account for you depends mostly on what you plan to use the account for. 

A checking account might be the best choice if you:

  • Plan to use your account for everyday expenses like groceries or gas.

  • Need a payment account for monthly bills like rent or car insurance.

  • Want convenient access to your money using checks or a debit card.

You might want to open a savings account if you:

  • Want to save for a future purchase, such as a new car or education costs.

  • Have regular deposits that you can earn interest on, such as from your paychecks.

  • Don’t want to be tempted to use money in the account.

Many individuals open both checking and savings accounts to get the benefits of both. Having both types of accounts lets you access your money when you need it while also earning interest on long-term savings. Consider opening a checking and savings account together if you:

  • Need easy access to your money but want a safe place for long-term growth.

  • Want to link your bank accounts for easy transfers between checking and savings.

Need help picking the right account?

It’s not always easy to find the right account for your financial situation. Make an appointment with an ASB banker to see which account fits your needs best and get started with opening one today.

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The Ins & Outs of Business Loans

ASB May 17, 2021 | 5 min read Business

Are you a business owner? A business loan can help you to cover unexpected expenses, explore a new market or grow your company. No matter what your dreams are for your business, we’re here to help make them possible. Read on to learn about the different types of loans available to help you finance your business’ needs.

business owner

Does your business need a loan?

Most businesses will need a loan at some point to help with a major financial milestone. Business loans can be used for just about anything. Here are a few common scenarios where these types of loans can help:

  • Starting Up: Starting a business is exciting, but it can also be expensive. A business loan can help you to set up your business licenses, secure a commercial lease and cover other start-up expenses.

  • Expansion and Growth: Is your business growing? Whether you’re considering opening a new location or want to move to a larger office space, a business loan can help you to manage the upfront costs, such as signing the lease on a new location.

  • Managing the Unexpected: Say your equipment breaks down due to a natural disaster such as a hurricane or major storm. It could take you weeks, or even months to get everything fixed and back to normal. This could cause your business to come to a standstill. Business loans make it easier for you to get the cash you need in emergency circumstances, such as covering a major repair or replacement of important equipment.

  • Get Up and Moving: Depending on the type of business you own, you may require a company car to complete your work. Even a used car can be a big expense for your business. Financing the purchase with a loan can help you to spread the cost of the vehicle over time so your cash flow isn’t disrupted.

Types of business loans

Now that you know when and why you might need a business loan, learn how to pick the right loan for you and your business. Different loans serves different purposes to help you meet your business needs.

BUSINESS TERM LOAN
A Business Term Loan is an installment loan you can use for almost any business expense. Installment loans have a fixed interest rate, fixed payments, and predictable payments. This makes them perfect for fixed assets like new equipment, consolidating business debt, or getting more working capital to expand your business. At ASB, we offer loans starting at $10,000 with no annual fee and competitive rates.

SBA LOAN
The Small Business Administration (SBA) offers loan programs for small business owners to help you finance the things your business needs. ASB helps qualified business owners, who have an operating history for at least 1 year, apply for and secure SBA loans up to $50,000.

SAVINGS SECURED LOAN
Need a business loan, but worried you don’t have a strong enough business credit score to qualify for a loan? You can use the money in your business savings account as collateral to get a Savings Secured Loan. Depending on how much your business has in savings, you could get up to 90% of your savings balance as a business loan. You’ll enjoy a fixed interest rate and terms up to 60 months.

business owner

How to choose a business loan

There are many factors to consider when researching business loans, including:

  • Repayment Term: This is the length of time you’ll have to pay back your loan. Longer terms usually have lower payments, but you’ll likely pay more in interest over the life of the loan. Be sure to consider your future business plans, like goals for expansion, when deciding on the length of your loan.

  • Interest Rate: This is the amount of interest you’ll pay on your loan. Many business loans feature fixed interest rates, making it easier to calculate how much total interest you’ll pay for the loan.

  • Funding Timeline: How long will it take for your lender to deposit your loan funds? Some loans can be funded faster than others, so be sure to talk to your business banker about your funding timeline.

  • Loan Fees: Business loans often include fees to cover the costs of reviewing your application and funding the loan. Common loan fees include application fees, loan origination fees, and annual fees to cover administrative costs of the loan. Certain business checking accounts, like ASB’s Biz Plus and Biz Deluxe checking accounts, may waive certain fees if you meet eligibility requirements.

  • Loan Amount: How much money does your business need? To calculate an appropriate loan amount, consider how you plan to use the funds. For example, if you want to renovate your office space you should secure quotes from contractors or renovation companies before applying for a loan. This will give you a better idea of the cost of the renovation and how much money you’ll need to borrow.

  • Collateral: Collateral is a business asset you pledge to your lender in case you can’t pay for your loan. Common types of collateral include business vehicles, inventory, real estate, or cash in your business savings account. An unsecured loan is a loan without collateral. Secured loans, however, require collateral.

Take the next steps

When your business needs capital, finding and selecting the right business loan can be a challenge. Our Business Banking team is here to help, with the knowledge and experience you need to find the right loan for your business goals. Make an appointment and meet with one of our business bankers today!

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