Do You Plinqit?

By Celeste Lohrenz

We all know we should be saving money.  From the time we got our first summer jobs during high school, our parent’s almost certainly tried to convince us to put most of it in the bank.  Even though we know we should be saving, most of us probably didn’t do it as well then, and probably aren’t doing it as well as we should or would like to now.

Almost 60% of Americans have less than $6,000 saved (42% have less than $1,000).  Only 14% of people under 54 see retirement savings as a priority, even though we should be saving 10-17% of our income in order to retire at our current standard of living – that’s if we start saving at the age of 25.

Without a plan for saving consistently, it’s hard to cover any larger expenses, including emergencies, college tuition, weddings, a new home, vacation, and many other things.  It’s important to start saving early for all of these things so that when they happen, you’re prepared.

One of the best things you can do is automate your savings.  For your retirement account, you can have contributions deducted from your paycheck and deposited into your account.  For other saving needs, have you considered Plinqit?

Plinqit is a digital savings tool offered by The Milford Bank and HT Mobile Apps to make saving easier and more fun.  You simply set up your Plinqit account and define specific savings goals.  You can even set up five different goals, so you can track progress towards each individual target separately.  Your Plinqit account is connected to your checking account, so once the saving goal is set up, you don’t have to do anything other than watch it grow.

In addition, you can earn small bonuses by watching videos or reading articles designed to help increase your financial education, so you you’ll learn more about money while earning, too.  You can also earn bonuses by reaching your savings goals and referring others to use Plinqit.

Plinqit is free to use, and you can download a mobile app to your Apple or Android device to manage your account easily.

Most importantly, though, using an automated tool can help you save more effectively without having to remember to add to a separate account manually.  Once you set it up, it just happens and your vacation, emergency, or other savings will grow.

If you have questions about Plinqit, savings accounts, or any other financial needs, our banking experts are here to help.

Student Loans 101

by Jorge Santiago

College is expensive. In the 2020-2021 academic year, the average private college’s tuition and fees was $35,087; public colleges averaged $21,184 for out-of-state students and $9,687 for in-state students. Multiply that by at least four years, and the total cost of a degree is one very few students — or their families — can afford out-of-pocket.

That’s where student loans come in. Student loans create opportunities for students who might not otherwise be able to afford their education, which can in turn lead to more stable, gainful, and fulfilling employment.

But student loans are just that — loans that must eventually be paid back. If you’re one of the 47.9 million Americans carrying a combined $1.71 trillion in student debt, you probably already know that repayment can be a strain. And if you’re considering applying for college loans, you should understand your options before taking on student debt.

So let’s get back to the basics. Here are four questions everyone with student debt — or considering taking out student loans in the future — should know how to answer:

What types of student loans are available?

Types of federal student loans

As their name suggests, federal student loans are offered through the federal government via the Department of Education’s Office of Federal Student Aid (FSA). Three different types of federal student loans are available: Direct Subsidized, Direct Unsubsidized, and Direct PLUS.

  • Direct Subsidized Loans are available for undergraduate students with financial need (the difference between your school’s cost of attendance and your household’s expected contribution). Interest rates are fixed for life when the loan is first disbursed and are generally lower.
  • Direct Unsubsidized Loans are available for both undergraduate and graduate students, regardless of financial need. Interest rates are fixed for life when the loan is first disbursed and are generally higher.
  • Direct PLUS Loans are available to parents financing their child’s education, and to graduate or professional students funding their own education. The application process requires a credit check, but borrowers with low credit scores can still qualify if they have an endorser or can document extenuating circumstances. Interest rates are fixed for life when the loan is first disbursed and are generally the highest rate compared to other federal student loans.

Types of private student loans

Private student loans are offered through financial institutions like banks and credit unions. The terms of private student loans are controlled by the lender, so there are lots of different options available. Private loans often entail higher interest rates and stricter eligibility criteria, but they can be a helpful tool for borrowers who have already maxed out their federal aid.

 

How does student loan repayment work?

Federal student loan repayment

If you have federal Direct Unsubsidized or Direct Subsidized Loans, your loans will be in deferment while you’re still in school and for six months after you graduate or withdraw. After this grace period ends, you’ll be responsible for making monthly payments through your loan servicer (FSA will assign your servicer — a third-party company that manages student loan billing — after your first loan is disbursed).

Direct PLUS Loan borrowers can expect a very similar process, with the exception that you must request deferment through FSA or your student loan servicer. Otherwise, you’ll have to start making payments while you are or your child is still in school.

All federal student loan borrowers will have the opportunity to select a repayment plan when they first start making payments and adjust their repayment plan later on. There are eight different federal student loan repayment plans available, including income-driven repayment plans, which cap monthly payments to a manageable percentage of your discretionary income.

Private student loan repayment

Private student loan repayment varies based on your lender’s terms. Some require payments while you’re still in school or immediately after graduating, some manage repayment through a servicer or in-house, and repayment plans vary. If you’re considering private student loans, be sure you understand the lender’s repayment policies.

Can I get my student debt cancelled, paused, or forgiven?

If you have private student loans, your options for getting your loans cancelled, paused, or forgiven are limited.

But if you have federal student loans, it’s possible — provided you meet certain eligibility requirements.

You may be eligible to have your federal student loans partially or totally cancelled if:

  • Your school closed while you were a student or shortly after you withdrew or graduated
  • You develop a total and permanent disability
  • You were defrauded by your school
  • You declare bankruptcy

You may be eligible to have your student loans paused if you apply for and are granted temporary deferment. You might qualify for deferment if:

  • You’re enrolled in a graduate fellowship
  • You’re undergoing cancer treatment
  • You’re serving in the Peace Corps
  • You’re on active military duty
  • You’re receiving welfare assistance
  • You work full-time but earn 150% below the poverty line

You may be eligible to have your student loans forgiven through special forgiveness programs if:

  • You’re a teacher
  • You work at a nonprofit organization
  • You work for a federal, state, local, or tribal government agency
  • You’ve been on an income-driven repayment plan for at least 20-25 years

How can The Milford Bank help me manage my student loans?

When it comes to student debt, you don’t have to go it alone. The Milford Bank is excited to launch a new partnership to give our customers tools that make managing their student loans easier than ever before. Stay tuned for an announcement soon!

How to Recognize Scam Calls and Keep Your Money Safe

By Tina Mason

On any given day, you probably get phone calls from numbers you don’t know.  Those dreaded spam calls continue to become more frequent and the total number grew by 18% globally last year.  In the U.S. that growth was even more significant, with Americans receiving an average of 28 spam calls a month (up from 18 a year earlier).

What’s worse is the situation is expanding.  What was once limited mostly to landlines has expanded to mobile phones.  In fact, 46% of Americans said they get spam calls on their cell phones every day in February of this year.

The problem is these calls aren’t just a nuisance; many are from scammers trying to con people into giving up their money.  Unfortunately, it’s working – Americans lost nearly $20 billion due to phone scams in 2020.

The good news is you can avoid falling victim by staying informed about the latest scams (the FTC regularly updates its site with common scams), by knowing how to identify them, and by simply following some best practices.

Auto warranty scams – This one has been going on for years.  It usually starts with a pleasant recorded voice introducing him- or herself and claiming to be from the “Vehicle Service Department” or something similar.  The recording continues to explain that your vehicle warranty is about to expire unless you extend it with them immediately.  They might even have specific information about your vehicle they have obtained through any number of ways.  The warranty these scammers are offering is usually a service contract of some kind that could actually cost you more than you would pay for vehicle maintenance and repairs.

Pyramid sales schemes – These may seem like legitimate business opportunities selling products from your home.  But when you look at them carefully, you’ll see your compensation is based on how many new sales people you recruit, not how much product you sell.  In addition, you will typically be required to buy a certain amount of product, even if you already have enough inventory on hand.  Ultimately, you’re more likely to lose time and money than make a living.

COVID-19 scams – There are several kinds of scams trying to leverage the coronavirus pandemic.  Some try to sell you a vaccine.  If you haven’t yet been fully vaccinated, remember that the COVID-19 vaccine is being administered for free.  You can find a local vaccination site here.  Another scam involves scammers posing as FEMA workers reaching out to cover costs associated with family members that may have died due to COVID-19.  Unless you have already registered with FEMA for their funeral assistance program, they will not reach out to you.  If you get a call or email from someone claiming to be with a government agency, it’s most likely to be a scam you don’t want to get involved with.  And no, your social security number will not be suspended – yet another government-related scam that has been around for a long time.

Utility scams – Have you gotten a call from someone claiming to be with your electric, water, or gas company, claiming your service is going to be cut off unless you make payment immediately?  Again, almost certainly a scam.  Your actual utility companies may threaten to cut you off if you are delinquent on your bills, but they will send notifications – you can also verify your account through their website if you’re not sure.  Or, simply call them if you think you may have missed a payment – in which case you may have to pay a late fee, but they probably won’t threaten to cut off your service yet.

Payment options – One of the things to note is most scammers don’t use the normal payment methods when they try to get you to pay them.  Having you send a check or pay online on your oil company’s site doesn’t get them any money.  They will often ask you to use Western Union of other money transfer services, or some ask you to add money to a reloadable gift card.  More tech-savvy scammers may also want you to pay with cryptocurrency.  They use these methods because they are mostly untraceable making it almost impossible to recover the money.

The bottom line is this: Legitimate businesses will identify themselves clearly and won’t threaten you on the phone.  Most will also work with you to arrange payment plans if you’re experiencing difficulty.

If an offer seems too good to be true – like winning a large cash award from a drawing you didn’t enter, or a get-rich-quick job offer – it probably is.  Never agree to anything before you have done your research.  In fact, many people today don’t even answer phone calls from numbers they don’t know.  That way, they can just delete the phony voice mail messages and, if they think it could possibly be real, can look up the correct phone number (never call back a number given on a voice message you think could be fraudulent) and call the bank, store, service provider, government agency, or whoever the caller claimed to be with.

The same goes for emails.  Don’t click on links, don’t call numbers on emails because they could be fake, and assume offers are fraudulent unless they come from one of your trusted relationships.  Even then, take care to look carefully at email addresses, names, other personal details, as well as grammar and spelling.  Most fraudulent of phishing emails have mistakes in them that should raise a red flag.

Again, if you have any uncertainty, look up phone numbers yourself and make a few phone calls to verify the legitimacy of any call or email you get.  It may take a few extra minutes, but that small effort could keep you, your family, and your money safe.

But, if you make a mistake and think you have fallen victim to a scam, the first thing you should do is contact your bank so they can help you with your bank accounts and make sure your funds aren’t accessible to scammers.

Celebrating Home Owners: Are You Ready to Buy?

June is National Homeownership Month, celebrating a key part of what many people see as part of their life dreams.  And why not?  Home ownership can be a great investment with many benefits.

Long term cost savings – By paying your monthly mortgage, you are creating your own nest egg, instead of paying off someone else’s mortgage or generating revenue for them.  In many cases, mortgage payments, especially for first-time buyers, can be very close to or even lower than monthly rent.

Equity – As you pay down your mortgage, you build equity in your home, increasing your net worth and your future ability to obtain home equity loans for other expenses, including home improvements (which can further increase the value of your investment).

Improving credit – As long as you make your monthly payments on time, you can improve your credit rating, making it easier to secure other loans for future expenses.

It’s yours – When you own property, the decision on how to use it is yours, not your landlord’s.  You can decide how to decorate, renovate, add on to create more living and entertaining space, and generally use your property however you want.  The financial benefits are great, but this may be the greatest benefit of all.

Of course, if you’re a first-time home buyer, you’ve got a lot to think about, including securing a mortgage, which can be an uncertain prospect.  But, working with the right bank can make it a much easier and satisfying process – especially those with special first-time buyer programs.  The Milford Bank offers a program that includes a reduced interest rate, application fee refund, pre-qualification certificates, and low down-payment options, which take the hassle out of buying your first home.

In addition to financing, you have many other things to think about when buying a home – especially for the first time.  This includes location, school system, style, property size, and of course home features.

To help you consider what is most important to you, here’s a list of the most commonly desired features by home buyers today.  Each of these features was listed by at least 80% of people as being either a must-have or desirable feature.

  • Laundry room
  • Exterior lighting
  • Ceiling fan(s)
  • Energy efficient windows
  • Patio
  • Double kitchen sink
  • Walk-in pantry
  • Front porch
  • Energy efficient appliances
  • Hardwood floors
  • Full bath on main level
  • Energy efficient lighting

As you get start with the home buying process, make sure you’re buying a home that you’ll be happy with.  It’s not a bad idea to think about the future and your ability to renovate or add on.  You’ll have question, naturally, especially when it comes to the mortgage.  Don’t hesitate to call on our mortgage specialists to answer them so you have an enjoyable experience.

Why Small Businesses and Community Banks are a Perfect Match

By John Darin

May is Small Business Month, celebrating the importance of small businesses to our national and local economies.  Small business owners and their entrepreneurial spirit are a cornerstone of our economy and our local communities.  In Connecticut, they comprise 97% of business and employ half of the state’s workforce.

Small Business Month also recognizes that small businesses have unique needs.  Every business needs a bank and there are certainly several national brands to choose from.  But, just as there are many options for your personal banking, there are local alternatives that may be beneficial for small businesses.

Community banks were instrumental in helping small businesses make it through the COVID-19 pandemic.  Early during the pandemic, when the first round of Paycheck Protection Funding was exhausted, the U.S. Small Business Administration approved more than 1.6 million loans to support small businesses, totaling more than $300 billion.  About 60% of those loans were handled by community banks.

Like small business, community banks are important to the success of local communities and can offer benefits that large national brands can’t.

Personalized service –  When you go into or call a local bank, you’re getting attention from the same people every time – not a call center agent located across the country.  You’ll save time because your bankers know you and your business, creating deeper bonds because they see your business as a personal relationship, not an account number.  As a result, they will go the extra mile to give you personalized attention.

Faster action – Time is money.  As a business owner, getting answers from your bank quickly is important.  Because community banks aren’t spread across the country, their decision-making process is often simpler and faster because it happens locally.

Lower fees – Many community banks offer lower fees or better terms and interest rates than their national counterparts.  For small businesses, every dollar saved or earned makes a difference.

Local for local – Local banks are proud of their local communities and tend to be very active in local activities.  They know the local business and support various organizations and events that support the local economy and benefit both businesses and residents.  This helps build their communities and create a better place to live and work, which help attract new residents and businesses.  As a small business, the local community is important to your success, and community banks play a big role.

Know your customer – Every business is unique.  Personal attention combined with local intimacy also gives community banks a chance to really know their customers and their business banking needs.  As a result, they are able to provide a higher level of care and service that caters to each individual business.  That knowledge can also play into your bank’s decision-making because they are able to factor in what they know about your business, you as the business owner, and the local community.  It becomes about more than just entering data into a formula.

Small Business knowledge – Community banks understand small businesses.  Remember that they are, in fact, small businesses just like you, so they have an inherent first-hand knowledge of what it takes to succeed as a small business.  That knowledge translates into a service mentality designed to help small businesses succeed, rather than trying to force them into cookie-cutter approach designed for large enterprises.

Business services – Community banks have built service portfolios to meet your business needs. They aren’t a one-trick pony and offer a variety of business banking services.  From commercial loans and business lines of credit to retirement and employee benefits management to online banking and much more, don’t think that just because they are smaller, your community bank isn’t well-equipped to serve your business needs.

As a small business, you know you have specific banking needs.  You also know the large national brands aren’t as agile or flexible when it comes to meeting your needs – they can’t be.  So, when you think about your financial needs, remember there are local alternatives to those big brands that can be a much better fit for you.  Find out exactly how The Milford Bank can help your business by getting to know one of our local professionals today to learn how they can help make running your business a lot easier.

Get Rid of Your Old Electronics Safely

Recycling is an important part of our daily lives.  In fact, it’s the law, and there is a list of items that are designated for recycling only in CT and may not be placed in the garbage.  There are many reasons, but among the biggest is the fact that landfills are filling up and could be gone within the next two decades.  There are also environmental hazards associated with landfills when toxic chemicals leak into the soil and air when items aren’t disposed of properly.

Using recycled materials avoids environmental damage from mining, drilling, and harvesting trees. E-recycling, in particular, has become increasingly important – and a major problem.  Often, as people replace old electronics and simply throw their old ones away.  In 2019, the U.S. created almost 7 tons of e-waste (that’s 46 pounds per person), but recycled a mere 15%.  The value of the raw materials in that e-waste is about $7.5 billion.

According to the EPA, recycling 1 million laptops saves enough energy to power more than 3,600 homes for a year.  Recycling also creates jobs.  It’s estimated that, for every landfill job, there are 35 jobs in recycling processing and recycling-based manufacturing.  So, the more we recycle, the more jobs we can create.

One of the problems is people don’t always know where or how to recycle their old electronics.

Every year, as part of its ongoing commitment to the community, The Milford Bank promotes recycling with its Shred & Recycle Days.  The event gives residents an opportunity to easily and safely discard their old e-waste and documents.

The next Shred & Recycle Day is coming soon, from 9:00am to noon (or until the trucks are filled) on Saturday, May 8, 2021, at The Milford Bank location at 295 Boston Post Rd, Milford.

Financial Literacy: Teach Your Children to Save

One of the greatest gifts you can give your child is a financial education.  We all want our children to succeed in life, which means helping them become financially stable.  Once they reach college age and leave the comfort and safety of your home, a solid understanding of banking and financial best practices is critical to helping them avoid getting into debt at an early age.

More than three-quarters of adults live paycheck-to-paycheck, and 40% say they wouldn’t be able to cover a $400 emergency expense.  Looking towards the future, a third of Americans have no retirement savings, and almost a quarter have less than $10,000 saved for retirement.

Saving isn’t easy.  Neither is avoiding debt.  But it can be easier if children learn about banking and finance from an early age.  Currently, fewer than half of U.S. states require high school students to pass a personal finance course as a graduation requirement.  But, parents have to manage finances every month, which gives them an opportunity to teach their children good financial habits.

The American Bankers Association (ABA) understands that financial literacy is critical for children, and since 1997, the ABA Foundation has sponsored its Teach Children to Save program to promote financial literacy to millions of elementary and middle school students.

Today, April 22, is this year’s Teach Children to Save Day.  It’s a free national program that is designed to help young people develop savings habits at early ages and covers topics like saving, financial decision making, interest, banking careers, and more.  The goal of the program is to help children understand the value of saving and develop the knowledge, tools, and skills to make informed financial decisions throughout their lives.  The ABA has created a series of interactive resources for you and your children of all ages (including high schoolers and young adults) to help build their financial literacy.

The Milford Bank also supports financial literacy for children and offers its own Centsible Kids program designed to teach smart money habits to your kids.  The Centsible Kids program includes a free, kid-friendly mobile app – available for both iOS and Android devices – that encourages your children to become financially literate at an early age.  Key features of the Centsible Kids app include:

  • Games that teach financial knowledge and skills
  • Enabling kids to track spending, saving and giving goals
  • Foster positive family conversations around money
  • Allows safe tracking of money virtually without connecting to your actual bank accounts.

We know children pick up habits very quickly.  That means they will pick up good financial habits just as quickly as they will pick up bad ones.  So why not put them on a path to financial success early by helping them develop good savings and spending habits, encourage giving, and giving them a chance to practice their math skills in the process?

To learn more about the Centsible Kids program and app, contact any office of The Milford Bank.

When Should You Open a Savings Account for Your Child?

By Celeste Lohrenz

You’ve had your baby shower, the nursery is set up, the closet is full of onesies, and you’ve got what seems like a year’s supply of diapers and formula, which will actually only last you a month, and your baby is due any day.  The only thing you haven’t thought about is your baby’s long-term financial future.  But, maybe you should.  After all, it’s never too early to start planning by opening a baby savings account.

If you’re wondering when it’s a good idea to open an account for your child, the answer is it’s never too early.  Why?  There are several great reasons to start early, and as soon as your baby is born, you’ll have all the information you need to open an account.

Start small

There’s no question a baby will have a significant impact on your budget for more than two decades, so you may not have much to save.  You don’t have to put away a lot.  Compound interest works best the longer an account is open, so starting early is the key.  Even if you put away only $10 each week, the account will grow consistently.  By the time your child reaches legal adulthood, the account you started at birth could have $10,000 or more, depending on the actual rate of return.

Financial literacy

As your child grows, the savings account can become a teaching moment.  By teaching your child to save early – like setting aside a portion of allowances or birthday money – you’ll be providing invaluable financial education around saving, budgeting, interest, and balancing.  From an early age, your child will see the long-term benefit of regular contributions.  It will not only help them understand how and why to save, but also benefit them once they enter the workforce, when they can start contributing to their own retirement accounts. Financial literacy is important, and more than half of young adults say the most valuable course they wish they had been able to take in high school is money management.  So why not put your kid on the right track?

Automatic deposits

Since your child won’t be accessing the account for years to come, you have a long runway for building a great financial base.  At the same time, since you’re not withdrawing funds, it can be easy to forget to contribute to it regularly.  Consider setting up small automatic deposits into the account to ensure it grows consistently and, if you find you can spare more, you can always increase the deposits or add additional funds on a one-off basis.

Choosing the right account

There are many types of accounts with different interest rates and minimum balances.  Check with your local bank to see what options they offer.  Some have special programs for children savings accounts that are affordable for parents and geared towards building children’s financial literacy as they grow.

529 Plans

An alternative to a savings account that is specifically earmarked for education expenses, including college tuition, is a 592 plan.  At a time when student loans are at an all-time high, starting a college fund early can be a great way to at least partially fund your child’s education.  These plans come with the additional benefit of tax-free interest, as long as the funds are used to pay for education-related expenses.

Your child will most likely have a piggy bank at some point, and that’s a great way for them to save some spending money to buy a special toy or video game.  But for the longer term, and to really teach them about banking and the value of saving, a savings account it the smarter option.  In fact, as they accumulate cash in their piggy bank, you can even encourage them to deposit a portion into the savings account.

As parents, your goal is to set your children up for success.  Making sure they have a solid understanding of banking will benefit them for their entire lives, and starting a savings account early comes with a bonus of a potentially large savings account to help them get started on their own or to help pay for college tuition.

While it’s never too early, it’s also never too late to open an account for your child.  For more information on what your best options are, contact your local bank’s financial experts.

Setting Your High School Senior Up for Financial Success

By Tina Mason

Now that we’re in the second semester of the school year, the college applications have been submitted and high school seniors are waiting anxiously to receive a response.  Soon, they’ll take another step on the the path to their future and before you know it, parents will be be packing up cars to take them to college.

During the past four years, seniors have focused on school work and probably some extracurricular activities – sports, music, drama, or others – to prepare for the next stage of their life journeys.  Most likely, worrying about money hasn’t been a huge priority, which means you probably need to make it one now.  You don’t want to send your soon-to-be college freshman off to school without a solid financial understanding because, much like the college decision itself, understanding financial basics will have a long-term impact.

Here are a few things to keep in mind that you may want to talk about or do with your senior. (If you don’t have a senior, starting when they’re younger certainly doesn’t hurt.  If they’re old enough to have money, they’re old enough to understand banking.)

Savings and Checking Accounts

If you haven’t already opened savings or checking accounts in your child’s name, this is a good time to do it.  Your child will want access to funds and you want them to build financial awareness.  You can always add yourself to the account so you can stay involved with finances to whatever degree makes you comfortable.  Check with your local bank about rates, fees, and other benefits to determine which accounts are best for you.  That includes finding out about ATM fees.  Some banks charge high fees for using other ATMs, while others don’t.

Credit Cards

If you haven’t already, it’s also not a bad idea to open a credit card for your child to start building a credit history.  Make sure you explain how and when credit cards are to be used – and set very specific guidelines if you are paying the bills for now.  Regardless of who is managing payments, be sure to talk about how late and missed payments, balances, and other variables impact credit scores.  You may also want to warn them that college students tend to be heavily targeted with credit card offers claiming to offer unique or exclusive benefits.  Make sure they understand that, while credit cards can be valuable financial tools, they also carry risk if not managed properly, leading to debt.

Emergency Funds

While your child may not be financially independent, going off to college and living away from home does mean unexpected situations can arise.  This is a great time to help young adults understand the value of an emergency fund and you might even want to start one for them.  If they are working during school, adding just a few dollars from each paycheck, or they could dedicate a portion of birthday or holiday gifts to their funds.  It will help them learn at an early age that saving doesn’t have to be difficult, and they’ll have an emergency fund to fall back on if needed.

Budgeting

Budgeting and saving go hand in hand, so this is also a great time to make sure your children – even if they’re not yet heading off to college – about budgeting.  Most students have very limited sources of income.  The good thing is they also don’t have the same level of expenses they will have when they graduate and head off into the working world.  Teaching them to budget appropriately today will build a foundation for their financial stability in the future.

Privacy and Security

Your children have grown up in a digital world and cyber security is probably not a new topic for them.  As they enter the world of banking, it’s a good idea to highlight the need to keep all financial information secure and private.  They should never share their PINs or credit card numbers with anyone, for instance, even if they are doing it with the best of intentions, such as trying to help a friend in need.  There are many digital banking tools that make managing money convenient, but make sure you talk about appropriate password usage, two-factor authentication, which P2P apps are safe to use.

It’s never too early to start teaching children about banking and finances.  But, as you get ready to send yours off to college for the first time, they will be exposed to a new level of freedom.  Making sure they have a solid financial understanding is important and can help keep them from getting into risky financial situations and high debt.

If you have questions about which accounts are best suited for your children, contact your local bank’s staff for advice and information.

Why Mutual Banks Make Sense

By Jorge Santiago

Mutual banks have been around since the early 1800s.  There are currently about 470 in business across the country and nearly all of them are also classified by the FDIC as community banks.  They were initially created to provide savings opportunities to the working class, something they couldn’t easily get from commercial banks that focused on business customers.  Mutual banks offered individuals a safe place to deposit funds and earn interest, with a tradition of providing quality service to their customers.  Those values remain core to mutual banks today, which lead to several benefits that are passed on to customers.

Corporate Structure

The basic idea behind mutual banks is they are not controlled by stockholders or other direct owners.  Rather, their customers – the depositors that bank with them – are considered mutual owners.  As a result, mutual banks don’t make decisions based on shareholder interests, but focus on how they can deliver maximum value to their customers and support the communities they serve.

Customer Security

Nearly all mutual banks – like The Milford Bank – are insured by the FDIC, and on average, mutual banks have a Tier 1 capital ratio (an indicator of capital security) well above the minimum level and are considered “well capitalized” by the FDIC.  In addition, mutual banks are traditionally conservative when it comes to investments and spending, looking for safe opportunities and avoiding high-risk investments.  It’s one of the reasons mutual banks were almost the only banks that successfully navigated the Great Depression and why they continue to provide a safe banking option today.

Customer Service

Mutual banks have a longstanding reputation for quality service that stems from their focus on depositor value rather than corporate ownership.  Because customers are viewed as owners, serving their needs and delivering a high level of personalized service is their top priority – including a broad service portfolio, convenience, local access, and banking expertise.

Product Breadth

Today, mutual banks offer most of the same services private customers can get from larger commercial banks.  They are investing in digital banking technologies to make banking easier and more convenient, including tools to encourage saving.  They have knowledgeable local staff ready to provide valuable banking information and advice to help customers make responsible financial decisions.

Commitment to Community

Mutual banks are localized, which means they have a vested interest in their local communities.  Not only do their employees live and work in those communities, but so do their customers.  As a result, mutual banks tend to be very active in their communities.  Many offer special events in their towns – like The Milford Bank’s annual Shred & Recycle Days and the Milford Moves 5k – and regularly support local organizations and businesses through a number of initiatives.  Mutual banks espouse community values that reflect their dedication to their customers.  The Milford Bank, for instance, supports more than 100 local organizations throughout the year with not only financial support, but also time dedicated by its team to help these community groups.

When deciding where to put your money for safekeeping, you have options.  By nature, mutual banks can offer benefits that many larger corporate financial institutions cannot.  If you want to know exactly how you local mutual bank can support your banking needs, give them a call or go visit one of their offices for some firsthand detail.  Ultimately, the most important factor is that your money is safe and you have access to the services and expertise you need, when you need it.  As a client, that’s the commitment you’ll get from mutual banks.