Resources and Useful Tips
This section of our website is dedicated to educating our members on various financial products and services that Polish & Slavic Federal Credit Union offers.
EXPLANATION OF SELECTED FINANCIAL TERMS
The new www.psfcu.com website makes the PSFCU’s financial services available to anyone who prefers the convenience of new technology or who cannot visit our branches in person (for reasons such as moving far away). With online access, a user name and password, you can manage your finances any place and any time, and all your transactions are secure and fraud-protected. You can use e-statements, which replace cumbersome paper printouts, check your current account balance, transfer funds between accounts, see whether deposits and payments have been finalized and see copies of cleared checks. You can also order new checkbooks, make loan payments and pay your monthly bills online.
With online banking, our Credit Union is always at your fingertips!
Direct Deposit (ACH), which our Credit Union features, can effectively eliminate your monthly (or more frequent) visits to branches just to deposit your payroll or Social Security check, or for any other recurring payments. Direct deposit saves time because you no longer have to wait for the mail or for a check to clear - all you have to do is give the payer (such as your employer) fund transfer instructions, which you can obtain at Member Services. Online Bill Payment is a reverse operation: payments are transferred from an account at our Credit Union to the recipient’s account for such things as your electric and gas bills or your loan payments. You don’t have to write out checks, address envelopes or put on stamps. Payment is made electronically and at a specified time, which also lets you avoid late payment penalties and helps you manage your money.
Both accounts let you save funds for a peaceful retirement, while at the same time enjoying tax breaks. By making contributions to a Traditional IRA Account, qualifying persons can deduct their amount (maximum amount is limited by federal law) from their taxable income, which reduces their overall tax burden. In some instances, the deducted contribution can lower your tax bracket, which serves as an additional benefit. Tax on savings and accrued interest is deferred until funds are paid out (upon reaching the age of 59 and one-half years), when a lower tax bracket usually applies. Contributions to a Roth IRA cannot be deducted from your overall taxable income, although the accrued interest can be non-taxable. Unlike the Traditional IRA Accounts, withdrawals of your own contributions to Roth IRA accounts aren’t subject to early withdrawal penalty. Person interested in an IRA account should consult their tax advisor.
Entrepreneurs (business account holders at our Credit Union) can take advantage of two reputable retirement programs: SEP IRA (The Simplified Employee Pension Plan) and SIMPLE IRA (The Savings Incentive Match Plan for Employees). Both programs are offered to sole proprietorships, partnerships, type S or C corporations and non-profit organizations. They both give you the opportunity to open retirement accounts for the business owner and employees under the plan you select. With the SEP IRA program, an employer is solely responsible for making contributions, for which he may receive tax breaks, and he is required to contribute to the SEP IRA for every qualifying employee. In order to qualify for the SIMPLE IRA program, an employer may not have more than 100 employees. The employer and his employees are all responsible for making contributions (partial contribution is made by the employer and the remaining part is withheld from employee wages). A SIMPLE IRA gives employees the opportunity to allocate a part of their wages (before taxes) toward their retirement program, while the employer can obtain tax breaks on contributions. All employers interested in a SEP or SIMPLE IRA plans should consult their tax advisor prior to opening the account.
Member Business Services, which our Credit Union has began offering recently, are similar in many ways to the financial services we offer to all our Members. Businesses may open an interest-bearing business share draft/checking account (not offered by many banks); they can obtain a Business VISA credit card (with a limit up to $50,000 and interest rates much lower than those of similar cards at other banks), as well as a line of credit that provides funds to cover your current business expenses. Our Credit Union also offers business loans for such purposes as the purchase of company or delivery vehicles, taxi medallions or an array of equipment needed in your business.
You can avoid penalties for returned checks or failed direct payment (ACH) by opening a Checking Line of Credit, which Our Credit Union offers to individuals and businesses alike. When you write a check (or authorize a direct payment from your checking account) for an amount greater than your account balance, you “activate” the obtained line of credit, whose approval, amount and interest rate depend on meeting certain specific conditions. Overdraft protection is another safeguard: in this case, the overdrawn amount is taken from your savings account, provided that there are sufficient funds. Overdraft protection may cover up to six checks per month. Naturally, our Credit Union regulations let you write more checks over a month’s period; the limit only applies to overdrawn checks.
The descriptions of numerous credit and savings offers at our Credit Union often include two financial terms that are often confused. The Annual Percentage Rate (APR) represents the actual yearly cost of funds over the term of the loan. It includes any fees or additional costs associated with the transaction and is therefore a more complete measure of a loan’s cost than the interest rate alone. The loan’s interest rate, not its APR, is used to calculate the monthly principal and interest payment. APY (Annual Percentage Yield) chiefly refers to the interest rate on savings. It reflects the annual interest rate as well as the fact that the accrued interest also “earns” interest on itself. For example, in the first month, money deposited into an account “earn” a specified amount of interest depending on the annual interest rate, then in the next month, the initial principal amount plus the first month’s interest “earn” more interest, and so on. As a result, the APY is usually greater than the annual interest rate, and its annual amount depends on the frequency and manner in which interest is credited.
Property owners may obtain a convenient source of additional funds, which our Credit Union extends against the equity in your home or apartment. The Preferred Home Equity Line of Credit - HELOC -allows you to obtain credit of up to $250,000 and, combined with the unpaid balance of your first mortgage, may not exceed 70% of the current value of your home . Unlike an ordinary mortgage loan, you do not need to use the entire amount of credit extended: if necessary, you can draw money from your line of credit for the initial 10 years (Draw Period - minimum payment of interest only is required) and subsequently pay it off over a period of up to 15 years (Repayment Period). Interest paid on the loan may be tax-deductible and the PSFCU, unlike many other banks, charges no fees for the loan application or closing costs (except for mortgage tax in NY). Money from the Preferred Home Equity Line of Credit may be used for any purpose, which is an enormous advantage in itself. Please consult your tax advisor concerning the possible tax deductions on paid interest. Please note that PSFCU requires reimbursement of closing costs if HELOC is paid off and closed within 3 years of the closing date.
Aside from our popular fixed-rate mortgage loans, you can also take advantage of other credit options our Credit Union has to offer. Our Credit Union offers an ARM Loan (Adjustable Rate Mortgage), with a variable interest rate, which in some cases is a better solution because it offers a low initial interest rate and monthly payments. After a certain period of time (e.g. 12 months), the interest rate may increase or decrease (as a result of general financial market conditions), so you must be prepared for the possible increase in your monthly payments. A Balloon Loan is a form of credit in which after a certain period of time you have to refinance the loan or pay off the unpaid loan balance in one lump sum (“balloon”) payment
AnnualCreditReport.com - official site explicitly directed by Federal law to provide free annual credit reports.
FreeCreditReport.com – check your credit score and monitor your credit report.