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“We engage in the folly of short-term speculation and eschew the wisdom of long-term investing.  We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity.”

– John C. Bogle, Enough: True Measures of Money, Business and Life

The idea of investing to achieve our goals CAN BE very straightforward.

Focus on the long-term, diversify, and do not use products with high fee structures.

The world of investing does not need to be complex and stressful. However, there are some investment firms that seem to do a pretty good job of making it seem so complex that most of us could not figure it out on our own, and this is just simply not true.

Long-term investing can and should be easy to understand.

investing vs speculating

Trading Options

I’ve had several people talk to me about trading options recently.

Perhaps because of recent congressional hearings or perhaps because now even the more conservative retail investment firms are running TV commercials talking about trading “iron condors”.

My opinion is, for the large majority of retail investors, options involve more risk than upside and should be avoided.

Ask yourself, “Who is on the other side of that trade? For me to win my bet, who has to lose?”

Then perhaps ask if you feel you have better information than the large Wall Street firms?

wall street buildings

“Wall Street investment banks are like Las Vegas casinos: They set the odds. The customer who plays zero-sum games against them may win from time to time but never systematically, and never so spectacularly that he bankrupts the casino.”

– Michael Lewis, The Big Short: Inside The Doomsday Machine

It is important to understand the difference between investing vs speculating.

Do you understand the investment you are considering, and why it is going higher or lower?

Do you have experience in the industry and know who is taking the other side?

We have numerous media outlets that now focus on short-term trading, which is fine, as long as we understand that this is speculation, not investing.

investing vs speculation

Investing should not be stressful! 

We should feel good about putting our money to work for us. And if we have a long-term approach it doesn’t take a lot of work on our part. As long as we understand our goals and match our investment strategy to meet those goals, it becomes a straightforward endeavor.

And stay away from get-rich-quick schemes and short-term speculation that is difficult to understand. Knowing the difference between investing vs speculating is empowering.

In the profound words of John C. Bogle…

“The obvious conclusion: investors win; speculators lose.”

– John C. Bogle, Enough: True Measures of Money, Business and Life

If you’ve ever opened a savings or checking account at a banking institution, you’ve likely stumbled across the phrase “FDIC insured”, but what does that mean for you and your assets?

What Does it Mean to be FDIC Insured?

The term FDIC-insured means that your banking institution, whether brick-and-mortar or online, is insured by the Federal Deposit Insurance Corporation (FDIC).

If your bank is federally insured, more specifically, backed by the FDIC, your money remains protected in the event your banking institution goes under. Accounts covered by FDIC insurance are covered for up to $250,000, which means the FDIC pays customers of failed bank associations up to this insured limit.

Although bank failure in the U.S. has been particularly rare in recent years, it’s better to be safe than sorry. Choosing a financial institution with FDIC insurance, such as Marygold & Co. is one of the best ways to ensure protection for your money.

history of FDIC

The History of the FDIC

The FDIC is an independent federal agency established in 1933 by the U.S government in response to the bank failures that occurred during the Great Depression. Triggered by the stock market crash of 1929, people quickly rushed to banks to withdraw their assets, which further plummeted the already broken financial sector. When banks couldn’t pay customers back their deposits, Americans were quick to lose confidence in the banking system.

The main purpose of the FDIC was to promote public confidence in the banking system and to minimize the economic impact of a possible bank failure. To this day, the independent agency provides federal protections for the money customers deposit in banks. Since its founding in 1933, the FDIC claims that not one penny of insured deposits has been lost.

How Does the FDIC Work?

When you deposit your money at the bank, they then invest that money to earn revenue. These investments include loans to other clients, stocks, and other types of investment. Banks tend to play it on the safer side when investing. However, each bank is different, and with any investment comes the chance of losing money.

If a financial institution’s investment results in a big enough loss, they might be unable to meet the demands of customers who want to withdraw their money. When this bank failure occurs, the FDIC steps in.

FDIC insurance

What Does FDIC Insurance Cover?

If your bank goes under and is unable to return your cash deposits, the FDIC will reimburse you the amount of your held assets, even if the bank completely becomes, oddly enough, bankrupt.

The FDIC covers your common depositor’s accounts, but it’s important to note that not all financial products are covered. Here is what’s covered and what’s not:

Covered accounts:

  • Checking Accounts
  • Savings Accounts
  • Money Market Accounts
  • Certificates of Deposit
  • Retirement Accounts
  • Trust Accounts

Ineligible for insurance:

  • Mutual Funds
  • Annuities
  • Life Insurance Policies
  • Stock & Bond Investments
  • Municipal Securities
  • Safety deposit boxes and their content

FDIC Limits

The standard coverage limit is $250,000 per account holder in each ownership category included in the list of covered accounts above.

If you hold accounts in more than one ownership category, you may be qualified for a coverage larger than $250,000. For example, a couple with a joint FDIC-insured savings account are eligible for insurance up to $250,000 each. Additionally, if one of those individuals is the holder of a separate FDIC-insured depository account, that individual is also entitled up to the insured federal limit for that account.

Where Does the Money Come From?

The FDIC is funded by premiums paid for by financial institutions in return for deposit insurance coverage. Virtually every bank and savings institution in the country is insured by the FDIC, totaling trillions of dollars in deposits within the U.S financial system.

FDIC insured bank

What Else Does the FDIC Do?

In addition to protecting cash deposits, the FDIC also provides oversight for banks and thrift institutions to ensure activities promote safe banking environments. They are also responsible for sourcing other banks to take over the accounts of failed institutions.

Does the FDIC Protect You From Identity Theft?

Although customers are insured up to $250,000 on eligible depositor’s accounts, the FDIC does not protect against identity theft or the losses that accompany it. To protect yourself against identity theft and fraud, it’s best to practice safe online banking methods such as using a secure network and having a strong password.

Safe and Covered

Marygold & Co. delivers a digital alternative to physical branch banking that allows clients to control their finances and earn interest anytime, anyplace, and with no minimums or credit checks.

Additionally, FDIC-insured debit and savings accounts through Marygold & Co. are available to anyone in the United States, helping clients all over the country send, receive, spend and save money securely and safely through their mobile devices.

**Marygold & Co. is a financial technology company and not a bank. Depository services provided by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”). Deposits insured by the FDIC up to the allowable limit. LendingClub Bank is not an affiliate of Marygold & Co. (“Marygold”) and is not responsible for the products and services provided by Marygold. The content on this page is for informational or advertising purposes only and is not a substitute for individualized professional advice.

Life and surprise expenses don’t always align with payday. It is important to be proactive in order to protect yourself (and your bank account) from unforeseen circumstances. Marygold & Co. banking services enable you to get your direct deposit paid up to two days earlier, certainly helping with those unexpected bills and expenses. But how does early direct deposit work?

how does early direct deposit work

What is Early Direct Deposit?

Early direct deposit allows you to access your paycheck funds faster than most traditional banks.

The overwhelming majority of Americans receive a direct deposit of their paycheck. Depending on your payroll company, direct deposits are sent via ACH to your bank account up to two days early along with a designated posting date. Most institutions hold these funds until the paycheck posting date while actually earning interest on those funds.

Marygold & Co. will credit customer direct deposits on the date funds are received providing access to pay up to two days early.

Advantages of Early Direct Deposit

Direct deposit is already fast, convenient and the safest way to get paid. Getting paid early makes it that much better!

With early direct deposit, if your Marygold & Co. account receives your paycheck early, so do you.

Setting up direct deposit is easy and receiving your paycheck early with Marygold & Co. is automatic. With direct deposit, you can truly “set it and forget it.” Once you set it up, you’ll never again worry about accessing your paycheck funds.

With early direct deposit, your money can be earning interest up to two days earlier. This interest affords you more spending power for free.

How Do You Get Started?

  • Fill out your employer’s Direct Deposit Forms.  

Marygold & Co. customers can automatically access these forms for over 80,000 employers right from their app.

  • Send Payment Instructions 

Ask your employer to send payroll instructions to their bank.

  • Pass Payment Information 

Once your employer’s bank receives payment instructions it sends these data files to an Automated Clearing House. This starts a bank-to-bank electronic transfer from the employer’s bank to yours.

  • Organize Payment Information

The Automated Clearing House will organize all of your payments so that each payment is correct and sent to your bank.

  • Process the Payment

Once your bank receives its payment instructions, it starts the payment process.

mobile banking deposit

Is Direct Deposit Safe?

Yes! Direct deposit is an electronic payment.

It actually passes through fewer hands than other deposit methods.

CreditRepair.com notes that direct deposit is the safest way to receive funds.

The United States Department of the Treasury and the Federal Reserve Bank dispel myths that point to a lack of safety of direct deposits.

Does Direct Deposit Work for Weekend Payments?

Direct deposit processes on business days. This excludes weekends and bank holidays.

What Happens if my Payday is a Holiday?

Direct deposits are usually paid on the banking day before the holiday. So, if Christmas fell on a Friday, your direct deposit would most likely occur on the Thursday before.

mobile banking savings account

Can My Direct Deposit Go Into My Savings Account?

Your direct deposit can typically be directed into the account of your choice and/or be split between accounts, like Marygold & Co. Money Pools.

How does Early Direct Deposit Differ from a Wire Transfer?

Wire transfers cost $35 nationally and $45 internationally. Direct deposits are free and are processed via Automated Clearing House (ACH).

Fastspring.com explains the difference between the two. Direct deposits are processed overnight. Wire transfers are processed and deposited instantly, however international wire transfers do take a little longer. So, early direct deposit is much faster than direct deposit but not as fast as a wire transfer.

Marygold & Co. Early Direct Deposit

Banking with Marygold & Co. gives you the most for your hard-earned dollars. Marygold & Co. offers fast, convenient mobile banking that includes early direct deposit and interest-earning APY. Marygold & Co. bank accounts are provided by Radius Bank, Member FDIC, a pursuant license from Mastercard International.  Deposits are guaranteed by FDIC insurance up to the maximum allowed for every client’s account.

For more information on Marygold & Co.’s early direct deposit and free, convenient mobile banking services, check out our other blogs.