The spreads between saving and lending has created a substantial profit margin for many banks. These banks are looking to draw in more savings and checking account holders to take advantage of this spread and increase their profits. As a result, many are paying above-average interest rates on not only savings accounts, but also checking accounts! This article will take a look at some of the best deals around.

The first step for consumers may be to check out web sites like CheckingFinder.com, which offer consumers a way to locate and sign-up for high yield free checking accounts. Often times, these checking accounts do not charge any fees or have any minimum for opening. However, some may require you to use your debit card at least ten times, have direct deposits setup, or access online banking at least once.

Increasingly, these high yield checking accounts are being used by local community banks to help beat out larger national competition. In 2007, just 350 banks and credit unions were offering these types of accounts. Now, that number has jumped to 526 institutions with 912,000 accounts and around $9 billion in deposits, according to an article on Yahoo! Finance.

The interest rates being paid are substantial too – rates in the author’s area vary from 4.10% to 5.15% APY. That’s not bad for a free checking account…

There is an old standard set in the United States called the 28/36 rule, and many financial advisors are recommending it for their clients. The rule states that households should spend no more than 28% of their gross income on housing costs – including mortgage, property taxes and insurance – and less than 36% on all debt – including car payments, student loans, credit cards, and medical debt.

The idea behind the 28/36 rule is to encourage people to take things more slowly and reform their lives now before their problems get too large. According to the Census Bureau, many people are spending much more than that with 38% of homeowners spending more than 30% of their monthly gross income on housing costs. Worse, about 12% of homeowners spent more than half of their income on housing.

Such huge spending on housing and debt servicing costs leave little room for food, gas, transportation, utilities, child care, and other expenses that can affect households. The advice may seem elementary to some people, but many people have strayed far from the basics and the lessons may be necessary to embrace before things get much worse down the road.

Many Americans may find their tax bill excessively large this year given the sharp reduction in their net worth. As a result, many may want to get on a payment plan in order to ration the money that they have while still making payments on their tax bill. Luckily, the IRS offers payment plans and installment agreements that can make this process relatively easy for individuals.

The first thing to remember is that tax extensions are not the same thing as payment plans! Extensions allow individuals more time to file their returns, but still require individuals to make payments on the returns on time. As a result, those looking for payment plans to ease their financial burdens must follow a different process that we've outlined below.

Individuals have two options depending on how much money they owe the government. The first option is the Online Payment Agreement (OPA) for those that owe less than $25,000 in combined tax, penalties, and interest. Individuals can either complete the agreement online or fill-in a Request for Installment Agreement (or Form 9465, in IRS-speak), which is also available online.

Individuals with more than $25,000 in combined tax, penalties, and interest may still qualify for an installment agreement, but a Collection Information Statement (or Form 433F) may need to be completed first. Individuals will receive a written notification telling them whether the terms of the installment agreement have been accepted or if they need to be modified.

The Federal Reserve cut rates last year in an effort to reduce consumer interest rates on mortgages and loans. The result was lower rates for most loan and savings products, but there appears to be one exception to the rule. Credit card rates continue to increase as credit card issuers take any actions they can to recoup losses that they face from delinquent accounts.

Low-rate credit cards now average 11.62% while balance-transfer cards are at 13.15% and cash-back cards are at 13.82%. In November, Citigroup raised rates for 20%of its accountholders by an average of 3% (around the same time that it received $300 billion in government funding). Worse, these rate hikes are taking place across the board regardless of credit score. Most of these accounts carried low rates for years, which caused many consumers to be caught off-guard.

According to many experts, raising rates during these tough times could be a double-edged sword for companies. Raising rates may help their bottom-line in the short-term, but long-term the higher rates may cause an increase in defaults, where the credit card issuers get nothing. Higher rates can even push the most financially-stable consumers closer to financial ruin as many small businesses use credit cards for working capital loans.

Millions of Americans failed to qualify for Obama’s program to help troubled homeowners, despite the fact that many of them are in a substantial amount of trouble with their mortgage. Many no longer have enough income to pay their loans while others can only afford the payments but don’t qualify for refinancing because the value of their home is far below the balance of the loan.

Many Americans are now questioning the wisdom of making monthly payments on a loan that may take 10 to 15 years to get back to the value it had just a year or two ago. While many people have a fear of giving up on a contract, it isn’t as disastrous as it sounds these days. It is almost always preferable to negotiate a better deal on an existing mortgage, but lenders are not likely to sue if you walk away.

One option for many Americans is a short sale – that is, the process of selling a home for less than its worth with the lender’s permission. Other lenders are more forgiving and will let you hand over the deed for your house in exchange for an agreement not to start foreclosure proceedings. And as a final option, foreclosure is a last option or homeowners unable to make their payments.

Other implications of abandoning a mortgage include a higher tax burden (since the abandoned debt is taxed as income) and a lower credit score that could stay with you for a few years. However, the benefit of not massively overpaying on an asset could make it worthwhile in the long-run.

Print newspapers and magazines rely heavily on advertising fees in addition to subscription fees to subsidize the cost of printing and distributing the news each day and week. Unfortunately, the economic slowdown has virtually stopped advertising and forced many newspapers and magazines to shut down their operations after hundreds of years of business.

The Seattle P-I is one of these newspapers that may experience this fate. The 148-year-old newspaper will switch to an online only format and reduce its staff to just 40 employees - 20 reporters and 20 salesmen. However, many are skeptical that an online newspaper can generate enough revenues to support a building and staff of that magnitude.

The failure of Seattle P-I follows that of several other newspapers. Even large publications have sustained huge losses, such as the New York Times. The times has seen its stock price drop from around $25 per share in the middle of 2006 to nearly $4.00 per share in recent days. Eventually, these large newspaper operations are hoping that advertising will pick up once more and sustain them.

Most of the United States has been hit hard by an economic recession and jobs can be difficult to come across. However, there are a few pockets where jobs are expected to pick up strongly. Here are a few places to consider living before you give up on finding any employment in the United States:

1. Yakima, Washington – Yakima is known for its apples and hops for beer, and last year’s harvest created a huge demand for workers. Packing and juicing companies employed people year round and the city is expected to see its net employment jump 21% during the year.
2. Kennewick, Washington – Kennewick may be one of the smartest cities in the United States with the most Ph.D.’s per capita, but the region’s farmland has also provided 19% more jobs this year growing potatoes, corn, asparagus and wheat.
3. Amarillo, Texas – Those looking for a more exciting job may want to check out Amarillo, where employment will growth 15% in 2009. Pantex is the largest employer there, with more than 3,000 people refurbishing nuclear warheads. There are also many jobs in the medical services and food processing industries.
   

Americans are saving more money than ever before as the economic crisis continues to weigh on households. The average household saved 5% of their disposable income in January, which pushed the personal savings rate to a 14-year high. Many experts consider this a healthy change for a nation that has traditionally seen a negative savings rate over the past several years.

The move to save is good news for banks, who are using consumer deposits to bolster their balance sheets. Remember, banks make money via the interest rate spread between what it pays depositors and charges those who take out loans. Right now, loans happen to be very expensive, so many banks can afford to dole out more cash to depositors to attract them for the long-term.

Many banks are now offering cash sign-up bonuses of up to $100 and attractive rates that surpass the current record-low federal funds rate of 0% to 0.25%. In fact, some banks are offering interest rates that can exceed 6% APY! Southern Missouri Bank, Kansas State Bank, Rocky Mountain Bank, and First Robinson Savings Bank are all offering these attractive yields.

Meanwhile, cash bonuses are increasingly being paid to consumers just for opening an account. Compass Bank is offering $100 while others like Citigroup and HSBC are offering $25 or more to setup an account at their banks. Even highly-accessible online-only banks are offering relatively high rates of 2.55% to 2.65% on many accounts. Combined, these are great deals for consumers!