As we approach the end of 2022, I want to share some good news: Yields on savings accounts have risen considerably since the start of the year. You can see this visually in this month’s Illustrating Trends Dispatch, available exclusively on AAII.com (“Savings Account Yields Are the Highest Since 2008”).

Greg McBride, chief financial analyst at Bankrate.com, provided the charts and gave some advice: shop around. He’s right. The national average yield on savings accounts was 0.16% at the start of November. Though considerably higher than it was in January, it’s still low.

The best yields can be found online. AAII members, for instance, can find special rates through an affinity program we have with Discover. These rates are higher than what Discover offers to the general public.

My checkbook is probably getting dusty because I do so much of my banking online. But if you prefer to visit physical branches, see what rates your bank and other area banks are offering. Check out credit unions, too. You may be able to lock in a higher rate on a certificate of deposit (CD) for money you want to keep in a cash-equivalent vehicle.

Regardless of whether you choose to bank virtually or in person, verify that the bank is insured by the Federal Deposit Insurance Corp. (FDIC) and the credit union is insured by the National Credit Union Administration (NCUA). Your broker should be insured by the Securities Investor Protection Corp. (SIPC).

The implosion of cryptocurrency exchange FTX serves as a reminder why. FTX was a largely unregulated exchange operating in a still new industry. Initial reports describe client funds as being mishandled and corporate controls failing. Yes, CEO Sam Bankman-Fried, you screwed up.

There is a big difference between having the technical expertise to build a trading platform and knowing how to properly manage client assets. Banks, credit unions and brokers have rules and departments set up to make sure that client money is handled properly. The reports we saw at press time about FTX suggest this was far from the case. Just because you can build it does not mean you know how to manage it.

When we discussed cryptocurrency exchanges in the August 2022 AAII Journal (“How to Buy, Sell and Store Cryptocurrency” by Steven Ehrlich), FTX was assigned the lowest ranking for “jurisdiction.” FTX was just one of two exchanges that didn’t have a high regulation ranking from Forbes. Those warning signs proved worth paying attention to.

Watch for Tax-Filing Fees

In our latest tax guide, we make mention of the fees for filing taxes. While I am a longtime TurboTax user, I print my state tax return and mail it in.

TurboTax charges $25 per return to file state taxes. This is on top of the fee for the program itself. If your refund is large enough, the $25 may be worth it. For me, it isn’t.

Earlier this year, I filed my mother-in-law’s state taxes online directly through the Illinois Department of Revenue. Though the interface needs some work, the process wasn’t overly painful. Plus, it was free. Regarding the time involved, I don’t think it will take much longer the second time around than it will for filing by paper—especially since all the math has already been done by TurboTax. Your state may differ, so perhaps give it a test run.

Keep an Eye on Congress

Three bills, collectively known as the SECURE Act 2.0, could be passed during the lame duck session of U.S. Congress as a reconciled bill.

SECURE Act 2.0 would impact various aspects of retirement savings accounts. (Benefits Pro counts more than 80 provisions between the three bills.) Current provisions include raising the age for beginning required minimum distributions (RMDs) up to age 75, requiring 401(k) catch-up contributions be made with aftertax dollars, indexing the IRA catch-up contribution to inflation (long overdue) and allowing student loan payments to count toward eligibility for employer matching contributions in 401(k) and similar plans.

Passage is not guaranteed, but the legislation did have bipartisan support as of press time.

Happy Holidays

Finally, on behalf of everyone at AAII, have a happy holiday season,