Everyone knows how hard it is to get a decent rate in today’s market. Only a handful of banks offer savings rates greater than 1% APY and CD rates over 2%. So when you see a higher-than-average-rate, it's hard not to jump at the chance to get a good return for your money. After all, deposits are FDIC insured up to $250,000 so you won't lose your money even if the bank fails, as long as you deposit your money in a product that carries FDIC insurance like regular savings accounts and CDs. However, if the bank is in poor financial health, should you still deposit your money there?

The FDIC assures consumers that no depositor has ever lost a penny of insured deposits since the FDIC was created in 1933, so you can be sure that the money you invested in FDIC insured accounts will be protected. However, it may take a few days for you to get your money back.

Depending on how the FDIC chooses to resolve the bank failure, one of two things could happen. The preferred and most common method of resolution involves a healthy bank acquiring the failed bank. In this scenario, the insured deposits of the failed bank become deposits in the acquiring bank and your money is available immediately. When there is no bank acquirer for the deposits, the FDIC will pay the depositor directly by check up to the insured balance in each account. Federal law requires the FDIC to make payments of insured deposit “as soon as possible.” Most payments usually begin within a few days after the bank closing. While the FDIC notes that every bank failure is unique, they follow standard policies and procedures so that most deposit insurance payments are made within two business days of the bank failure.

The reality is that it is safe to deposit money in a bank which is at risk of failure as long as you stay well within FDIC coverage limits. It however is important for consumers to be aware of their bank’s financial health and to understand exactly what their FDIC insurance coverage is. For more information on matters related to holding deposits in a bank that faces possible FDIC seizure, please read this article.

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We all know that PayPal is an easy way to make purchases and to send money from person to person. When you use your debit, credit card or PayPal credit account to make a personal transfer (if you send money to your child, for example), PayPal receives a fee of 2.9% + $0.30. Now, banks want to get in on that market.

Last week, a press release from clearXchange announced Bank of America, Chase and Wells Fargo are forming a partnership so that consumers can make person-to-person payments electronically amongst the three banks. In the press release, Mike Kennedy, EVP and Head of Payments Strategy at Wells Fargo, indicates they launched the venture because they “want our customers to be able to easily send money to anyone without having to establish a new account outside their primary bank.” The banks are endeavoring to make transferring money between their banks even easier than using PayPal as well: the only thing someone has to know is the email address or mobile phone number of the person they want to send money to, and the banks will take care of the rest.

The LA Times reports that Bank of America and Wells Fargo are already testing the payment option in Arizona, and Chase will soon join them. The new service will be free to customers while it’s being tested, and the banks will later separate fee structures. After the network goes national, other banks will be invited to join.

This isn’t the first time PayPal has gotten competitors; in 2007, Amazon launched Amazon Payments. PayPal soon responded by launching PayPal X, so that its platform is opened up to developers to build person-to-person payments on multiple platforms, not only PayPal. It will be interesting to see how PayPal will respond this time, after the new bank partnership goes national.

We all know how hard it is to build a nest egg, especially in today’s economic climate. Not only is it difficult to set aside money for savings, the money you do set aside earns very little interest in most secured investments. That’s why it’s so nice to see a savings account that offers an APY that’s competitive with most of the 5-year CD rates available on the market today.

The NUVO Growth Savings account, offered by NUVO Bank and Trust Company, currently earns 2.02% APY on balances up to $24,999 and 0.753% on $25,000 and over. If you have $100,000 or more to invest, any amount over $100,000 earns 1.070%, but you should keep in mind FDIC insurance limit is $250,000. If you have more than $250,000 to invest, you may want to consider alternatives for amounts higher than that limit.

This account only requires an opening deposit of $10, but if you want ATM fees waived, you need to have direct deposit or maintain an average account balance of $1,000 or more. However, there are no minimum balance requirements you have to meet in order to avoid a monthly service charge; all checking and savings accounts with NUVO are free.

These accounts are also 18/65 eligible, which is a requirement for Massachusetts state-chartered banks. There is no income or asset limits to qualify for an 18/65 account. These accounts guarantee minors and seniors aged 65 and older free personal checking and savings accounts, with no minimum balance. Additionally, if you meet the requirement for one of these accounts, you also receive free basic checks imprinted with your name, unlimited check writing, and unlimited deposits and withdrawals. However, the bank can still charge you for using ATMS.

NUVO bank is a new bank that was just founded in 2008. It is headquartered in Springfield, Massachusetts and focuses on financial services to individuals and small-to-medium sized business. NUVO Bank & Trust Company is state-chartered and a member of the Federal Deposit Insurance Corporation (FDIC).