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How to Avoid a CD Early Withdrawal Penalty

A CD early withdrawal penalty could cost you a good chunk of cash, but if you understand the terms and how this savings tool works, you can avoid getting hurt.

The basics

Banks issue CDs for a set amount of money and a set amount of time. (Credit unions do, too, but they call them “share certificates.”) Some have minimum opening deposit requirements, but the best ones don’t. As with any savings account, you’ll also want to look for CDs with high interest rates.

Banks pay interest on your deposit on a regular basis — typically monthly — until the CD matures. That period of time is called the term length, and it usually ranges from six months to five years. You might be able to find some as short as four weeks or as long as 10 years, though. Generally speaking, the longer the term length, the higher the rate.

» MORE: NerdWallet’s best CD rates tool

About CD early withdrawal fees

The earlier you withdraw money from your CD, the less interest you’ll earn. And in most cases, you’ll also have to pay some sort of penalty. That could be a specified number of months’ worth of interest.

Say you have a two-year CD and you cash it after seven months. You might have to forfeit six months of interest for early withdrawal, leaving you with very little in the way of a return. You probably won’t be able to avoid this fee, even if you need to withdraw only a small amount, as many banks stipulate that no partial withdrawals are allowed.

There may be exceptions to this rule, but either way, you should understand your CD’s withdrawal conditions, just in case the need arises. These aren’t always the same across the board, so be sure to reach out to your credit union or bank before signing on any dotted lines.

» MORE: What is a CD?

Some options offer more flexibility

Avoiding CD early withdrawal fees starts long before you even have one. For starters, you shouldn’t open a CD unless you can afford to hold the money for the full term length.

Though most CDs carry very basic terms, you’ll find a variety of options available at certain banks and credit unions. Some allow penalty-free withdrawals, although they typically come with lower rates than standard CDs do.

Consider CD laddering

If you want to lock in the higher rates of a five-year CD but don’t want to tie your money up for so long, CD laddering might be right for you. Instead of putting $5,000 in a five-year CD, you’d put $1,000 each into a one-, a two-, a three-, a four- and a five-year CD. Once the shortest certificate matures, you’ll have the opportunity to reinvest your earnings in a long-term CD or move the money back into your checking account.

CD laddering can provide a time cushion between maturity dates, and it gives you more immediate access to your savings in case of a sudden emergency. Plus, your CDs won’t be locked in for just one rate of return, a good thing if interest rates start to climb.

Next steps

Now that you know how CDs work — and how to avoid early withdrawal fees — find one that has the best rates.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @tonystrongarm.

Updated Feb. 23, 2017.

How to Put More in Working-Class Pockets

The American working class lost a shocking amount of wealth in recent decades as wages stagnated. Despite campaign promises, making up that lost ground will be no easy feat.

Creating more well-paying jobs would help, but that could take years. Tax cuts could mean bigger paychecks for higher earners but won’t immediately help the many working people who don’t pay federal income taxes — people in the bottom 40% of incomes receive more back from the federal income tax system on average than they pay in, thanks to tax credits.

Expanding those credits, on the other hand, quickly could make a real difference in people’s lives and help return some of the income that’s been sacrificed to changing economies and technology.

Specifically, we could follow President Ronald Reagan’s lead and increase the Earned Income Tax Credit.

Support from both sides

A quick history: The credit, created in 1975 to help lower-income workers offset Social Security taxes, was greatly expanded under Reagan, who championed it as a way to reduce poverty while making work more attractive than welfare. Because the credit is refundable, low- and moderate-income working people can get money back from the government in the form of a refund even if their tax liability is zero.

The credit continues to have broad bipartisan support. Last year both President Barack Obama and House Speaker Paul D. Ryan, R-Wis., proposed expanding the credit for low-income workers without children.

“There’s agreement on both sides of the aisle that this [increasing the credit] is a reasonable thing to do,” says Roberton Williams, senior fellow at the Tax Policy Center.

Lawmakers understand that the credit, while helpful, has been no match for the income and wealth losses workers suffered as globalization and technology wipe out better-paying manufacturing jobs. The working class — defined as households earning between $23,300 and $40,500 in 2013 — lost more than half of its wealth between 1998 and 2013, according to Federal Reserve statistics. The whopping 52.7% drop in this group’s median net worth compares with a 19.1% drop for middle income households and a 20.7% decline overall.

Working-class debt levels rose 47.9% during this period while their financial assets — primarily money in bank and retirement accounts — shriveled by 56%. The wealth loss started long before the latest recession and continued afterward.

“Globalization has been a very good thing for our country economically but some people lose, and some people lose big, and it’s not their fault,” says Chuck Marr, director of federal tax policy for Center on Budget and Policy Priorities.

The cost of making work pay again

Helping workers restore this lost ground won’t be cheap, of course. Neil Irwin, senior economics correspondent for The New York Times, reports that it would cost about $1 trillion over the next decade. Irwin asked the Tax Policy Center and the Center on Budget and Policy Priorities to figure the cost of expanding the credit to replace all the income lost by the bottom 20% of earners since 1979.

Because the credit rises along with wages until reaching a plateau and phasing out, expanding it enough to restore the income of the bottom 20% would also replace about half the income lost by the next 20% of earners, Marr says. Marr offers examples of how it could work:

  • A single parent with one child and $16,000 in income currently pays $1,224 in payroll taxes (primarily for Social Security and Medicare) and zero federal income taxes. Under expansion, his earned income credit would increase by $3,103 to $6,476.
  • A married couple with two children and $32,000 in income currently pay $2,768 in income and payroll taxes. Their earned income credit would increase by $5,126 to $8,953.
  • For a family of four, the credit would not phase out until the household earned nearly $70,000.

A trillion dollars is a lot. But President Donald Trump’s proposed tax cuts, which would primarily benefit corporations and wealthier people, would reduce federal revenue by $4.4 trillion to $5.9 trillion over 10 years, according to Tax Foundation estimates.

Expanding the credit would be one way to assure that working people, and not just the well-off, have a path toward creating more wealth.

Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of “Your Credit Score.” Email: Twitter: @lizweston.

This article was written by NerdWallet and was originally published by The Associated Press.

Tap, Shop, Walk. Could Amazon Go Change the Way We Buy?

At a grocery store in Seattle, shoppers grab their food, and instead of waiting in the checkout line, they just leave. No, they’re not shoplifting. They’re at Amazon Go.

The first-ever Amazon Go store is an 1,800-square-foot supermarket without cash registers or check stands. Business Insider called it the “grocery store of the future.”

Shoppers must come armed with an Amazon account, a supported smartphone and the free Amazon Go app as they take advantage of what Amazon has dubbed “Just Walk Out Technology.” Shoppers tap their phones on a turnstile on the way in. The technology detects when products are taken off or put back onto the shelf and tracks the selected items in a virtual cart. After shopping, customers head out the front door with their chosen products. Amazon bills their account and sends a receipt.

Amazon Go is limited to employees of the online giant during its testing stage, but the company says it plans to open the store to the public “in early 2017.” Potential shoppers can sign up to be notified when the store opens.

An Amazon spokesperson declined to comment on future locations or offer further details about Amazon Go. For now, industry observers and hopeful shoppers watch and wait as the experiment unfolds.

Ready, set, Amazon Go?

In a survey of 1,000 Americans by Shorr Packaging Corp., 84% of respondents said they see Amazon Go as a type of grocery shopping experience that they would enjoy more than traditional grocery shopping.

“It seems like people are open to the disruption in the grocery industry,” says Kyle Olson, senior content manager at Digital Third Coast, a company that collaborated with Shorr on the survey.

But not everyone is ready to ditch traditional checkouts. Twenty percent of respondents said they feel they would be losing out on something by shopping at an Amazon Go store versus a traditional grocery store; drawbacks cited in the survey included the lack of ability to use coupons, lack of product selection and lack of social interaction.

Baby boomers were less likely than other generations to embrace the no-checkout technology; over 30% said they would be somewhat likely or not likely to shop at an Amazon Go store if they lived near one.

Millennial respondents were five times more likely than baby boomers to be “extremely likely” to shop at an Amazon Go store if one opened up nearby, according to the survey. “Millennials in general are used to online shopping environments and having our credit card information saved so we can purchase something quickly, or using our phones at checkout if we are at a brick-and-mortar location,” Olson says. “We’re fairly technologically ready in that sense.”

The challenges ahead

Not all industry observers expect Amazon Go’s retail experiment to be an overnight success.

Bob Phibbs, CEO of New York retail consultancy firm The Retail Doctor, suspects Amazon will try to license the technology behind the retail experience. But he’s skeptical that it’ll work immediately on a large scale, saying it’s a “far cry” from a boutique test to a supermarket that’s completely automated.

And accuracy will be essential, James Tenser, principal of content marketing advisory firm VSN Strategies, said in an email. “Ninety-nine percent is not good enough for a retailer anticipating tens of thousands of transactions.”

While the technology works on a small scale, there’s a lot to figure out before the no-checkout, no-line approach catches on at every grocery store, says Mark E. Bergen, chair in marketing at the University of Minnesota’s Carlson School of Management.

“I think all of us are ready for shorter lines, more efficiency and using technology to our benefit,” Bergen says. But shoppers may not embrace all the practical realities of this type of retail experience.

No checkout? You’ll have to bag your own groceries. No cash register? That could make it difficult to stock items that aren’t easily trackable. And no cash payments? Shopping will occur via an app where Amazon can gather a lot of data about you and your eating habits.

Right now, Amazon Go is a single store. There’s much to be perfected before complete automation is possible (and profitable) on a larger scale.

“Everyone in retail has already been paying attention, will look to see how this works and see if there are elements of what they do that they can automate,” Bergen says. “Then it’ll all be around competing on experience and price.”

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @courtneynerd.

5 Ways to Boost Your Chances of a Mortgage Preapproval

Let’s be real: Rejection hurts. It’s particularly hard if you’re denied for a mortgage preapproval, which is one of the biggest hurdles in the home-buying process.

Mike and Brittany Delgado know the feeling all too well.

In 2013, the couple tried to get a mortgage preapproval and were denied. Why? Mike’s credit report showed no history or FICO score.

“This was a surprise to us,” says Brittany Delgado, adding that her husband had paid off old debts, but the couple had never taken steps to re-establish his credit.

“Our lender outlined exactly what we needed to do and told us to start small — finance some furniture or a laptop — and make payments on time to build the credit back up. She warned us it would take a while.”

The Delgados’ experience is reflected in the results of NerdWallet’s Home Buyer Reality Report 2017.

“According to our research, borrowers who don’t understand the mortgage process or don’t know enough about their own credit history tend to hit obstacles or be rejected when applying for mortgages,” says Tim Manni, mortgage expert at NerdWallet.

“Educate yourself early about how to address the major issues that will prevent you from qualifying for the right loan or the best mortgage rates.”

To avoid getting denied on a mortgage preapproval, here are five steps to take before you fill out an application:

  1. Know where you stand. Review your credit report and check your FICO score to uncover any issues and determine if you need to build your score first. Calculate how much monthly debt you are carrying and how much you owe overall.
  2. Move quickly to fix mistakes. Contact the credit reporting agencies immediately if you see any incorrect or false information on your reports. Mortgage companies generally want loans to close on time, so they’ll pay credit agencies to update your credit report quickly with a rapid rescoring service, says Joey Abdullah, a mortgage planner with Fairway Independent Mortgage Corp. in Arvada, Colorado.
  3. Tackle debt head-on. Pay all of your bills on time and, if possible, in full every month. Learn which debts to pay down first to better your score quickly. For example, addressing delinquent collection accounts first usually has a more immediate impact on your credit score than paying down credit cards, says Steven Bogan, regional managing director of Glendenning Mortgage Corp. in Toms River, New Jersey. After you pay off delinquent accounts, make sure you have some good credit to show. If you don’t have an open credit card or loan, establish a new line of credit to build a positive payment history for your mortgage preapproval.
  4. Show consistent income over time. Your mortgage lender will want two years’ worth of tax returns and bank statements to show consistent income deposits. This can trip up a lot of borrowers, Abdullah says. First of all, if you earn most of your income from hourly wages, commissions or bonuses, or if you’re self-employed, you’ll need to provide two years of income documentation to your lender, Abdullah says. Expect to show your bank statements, pay stubs, tax returns and other financial paperwork. “Mortgage companies don’t go off your reality, and we don’t look at gross income but rather usable income [from tax returns],” Abdullah says.
  5. Rein in spending, create a budget and stick to it. It’s crucial to control your monthly spending and avoid large purchases (like a car) to lower your debt-to-income ratio and qualify for better interest rates. Don’t forget about those inevitable maintenance and repair costs that come with homeownership; having a budget, as well as an emergency fund, is important for the long haul.
Bottom line if you fail a mortgage preapproval

Even if you are denied a mortgage, don’t lose heart, says Brittany Delgado. It took her husband two years to build up his credit. First, he financed a laptop and paid it off over 12 months. Then, he opened a credit card with a small limit, which was increased after several months of on-time payments.

Those efforts paid off. The couple was easily preapproved in 2015 for a USDA loan for a newly built home outside of Austin, Texas, where they now live with their two young sons.

“We had always dreamed of being homeowners, and we didn’t want to pay rent forever,” Delgado said. “It’s why we uprooted our family to come to Texas from California, leaving our family and everything behind. Always keep the big picture in mind.”

Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @debbie_kearns.

Most Expensive Mistakes We Made for Love

If love means never having to say “I’m sorry,” try telling that to your bank account. If you’ve ever demonstrated your affection through lavish gifts or pricey big gestures, then you know the heartache of seeing your balance dwindle and your debt rise. You’re not alone. Below, our Nerds share tales of financial woe from exuberant spending on the objects of their affection.

Be sure to follow us on Twitter and Facebook for more stories of sweetheart spending gone overboard.

Negin Ebrahimi, Strategic Partnerships Nerd

Negin frequently flies from San Francisco to New York, where her boyfriend lives. For nearly a year, the couple has taken turns visiting each other every four to five weeks. Negin says she uses airline points as much as possible, but she’s spent the equivalent of $2,500 on flights alone. She says she’s trying to make enough flights in a year to reach premier airline status.

Did you change any spending habits as a result?

Since I know I’ll have a recurring monthly flight expense, I have really limited my shopping purchases and don’t dine out as often, opting to cook at home instead. Healthier and cheaper, it’s a win-win! I also don’t take many other weekend trips or vacations outside of going to New York.

How does your significant other respond to your gesture?

Every time I fly back I am greeted by a bouquet of flowers — so cheesy, right? But because we don’t get to see each other that often, every time one of us visits it feels like a mini-trip, and we are super excited to be reunited. We really try to take advantage of every minute of the weekend to make up for lost time.

What did you learn from the experience?

I’ve learned to take advantage of credit card points and sign-on bonuses, something I had no clue how to navigate before. I’ve gotten a lot more savvy out of necessity! It also really helps to plan trips far in advance so you get the best rates — spontaneous weekend flights to New York will cost an arm and a leg. TSA pre-check was one of the best travel investments I made, second only to my noise-canceling headphones. Romantically, I’ve learned that seeing your significant other, even if only for two days, is totally worth a six-hour red-eye flight.

Jessica Aragon, Mortgage Partnerships Nerd

Jessica wanted to surprise her partner for their anniversary with a stay at a cool, artsy bed-and-breakfast in Monterey, California. But when the couple arrived, their room at the B&B was not ideal. Jessica couldn’t get a refund on the room and could tell her partner was uncomfortable. She wanted their anniversary to be stress-free, so she laid out $500 for an upscale room at a new hotel. The new place was still within walking distance of downtown Monterey, complete with oceanfront view, king-size bed, Jacuzzi-style jet tub, breakfast room service, balcony and fireplace.

What was the total cost of your purchase?

About $250 for the first bed-and-breakfast and about $650 for the luxury hotel room.

What was the response to your gesture?

She told me not to book the new hotel spot if it was going to be expensive and if the B&B wasn’t able to refund me. Once she walked into our room and walked through the bathroom, saw all of the bells and whistles, as well as the view and balcony, she was in disbelief and said it was too nice and too expensive and kept thanking me.

Did you change any spending habits as a result?

I learned to plan ahead in advance for what makes my significant other feel safe, as well as how much we should pay for our sanity. And that I shouldn’t make impulsive purchases over $200. Also, planning better with all factors of area, reviews, and not trying just to get the best deals all of the time because it might bite me anyway.

Would you do it again?

In a heartbeat. We lived like queens for a night and we are still together four years later and I haven’t spent that much money since.

Camille Brown, Marketing Nerd

Camille fell hard for her now-boyfriend during her freshman year of college after they had the same class. But they didn’t connect until three years later. He asked her to be his date at a party, and she was determined to make a good impression. So, Camille used the last cash she had in her emergency fund to buy the perfect outfit and accessories, plus pay for beauty costs. She assumed she wouldn’t need to replenish her fund for a few months, but a day later her laptop broke down, and she racked up credit card debt to replace it immediately. Her boyfriend was flattered but didn’t think a date with him qualified as an emergency expense.

What was the total cost of your purchase?

I spent about $500 on the outfit and $1,500 total (including credit card interest) on the laptop replacement. Since I was supporting myself through college at the time, I had to work overtime in three jobs for the next two months to pay back my credit card bills and build up my emergency fund again.

Would you do it again?

Ha! Not a chance. The thrill I got from that new outfit was not worth working overtime for two months during my senior year of college.

What did you learn from the experience?

I’ve learned to always have an emergency fund and to use it only for true emergencies; otherwise you’re just tempting fate. Romantically, I’ve learned that I should never let my insecurity get the better of me on a first date. My boyfriend would have been thrilled if I showed up to the party in sweatpants, because he wanted to spend time with me. That’s why he asked me out in the first place. I let my insecurity go to my head and ended up paying for it — literally.

This photo was taken on our first Valentine’s Day together, two months after that first date. I’m wearing an outfit that’s entirely secondhand, have wet hair, no makeup on, and I feel like a million bucks.

Love got you in debt? CREATE A PAYOFF STRATEGY

If you’ve racked up debt from spoiling your significant other (or yourself), you can still improve your finances. To make monthly payments more manageable, consider consolidation in which you roll your debt onto a new credit card or loan at a lower interest rate. Consolidation works best as part of a larger plan to pay down your debt.

By consolidating with a personal loan, you’ll get a lower interest rate that can help you pay off your debt faster. Use a personal loans calculator to see how different interest rates might impact your monthly payments, according to your credit rating and loan amount.

Another way to consolidate is by using a 0% balance transfer credit card. This method allows you to move the debt on a high interest credit card to a new card that offers no interest for a limited time. This option is best if you plan to accelerate your payments during the promotional 0% annual percentage rate period.

Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @AnnaHelhoski.

How to Handle Your Home During Divorce

By Shawn Leamon

Learn more about Shawn on NerdWallet’s Ask an Advisor

The marital home is many couples’ most valuable asset, so deciding what to do with it during divorce can be difficult. You and your soon-to-be ex have two basic options: sell the home, or one of you stays in it. If you stay, there are two ways to handle the mortgage.

Each option has pros and cons, so you’ll have to weigh what’s right for you carefully.

Sell the home and pay off the mortgage

If you sell your home and pay off your mortgage, you can put both behind you. You can also use the profits to pay down other shared debts. However, if your home appreciated substantially while you owned it, you might owe capital gains taxes on the proceeds.

And depending on the state of your local housing market, you might not be able to sell your home for a profit. If you still owe a balance on your mortgage after the sale, you and your soon-to-be ex-spouse will need to decide how to best pay it off, unless the bank approves a request to release you from liability.

» MORE: How to sell your house

One spouse keeps the home

Perhaps you want to retain some sense of normalcy for your kids, or you have an underwater mortgage. If selling your home isn’t the ideal solution, one of you might want to take it over, along with the mortgage payments. Here, you (or your soon-to-be ex) have two ways to approach this choice.


If you refinance the mortgage, the new home loan will be in your name only with new terms based on your creditworthiness alone. The interest rate and monthly payments on a refinance could become more expensive. Your ex might need to sign a “quitclaim deed,” which would remove his or her property rights.


You can also try to assume the existing mortgage without refinancing. In other words, you remove your ex’s name but keep the same loan terms. If you go this route, the lender will still need to determine your individual creditworthiness.

In this case you would also need a quitclaim deed; otherwise your ex-spouse would still have rights to the home. For instance, in the event of the sale, he or she would be entitled to a portion of the proceeds. More importantly, as a practical matter, almost no bank would allow one person to assume a mortgage without also having sole ownership of the home.

The ease with which this can be done varies. Sometimes it can be done for a few hundred dollars. In some cases, such as with expensive homes in restrictive condo buildings, it can cost tens of thousands of dollars.

Know your options

It can be tough to keep a clear head during this emotional, tumultuous time, but you should still be making rational decisions about your finances. Understanding your options can help you and your soon-to-be ex-spouse make the right financial decisions.

Shawn Leamon is the host of the “Divorce and Your Money” podcast and managing partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

Know Your Rights if the IRS Breaks the Rules


Most people know that breaking tax rules, even accidentally, can bring serious consequences like an audit. It may seem like a one-way street, but the IRS has to follow rules, too. Here’s what three tax attorneys say you should know.

There is a Taxpayer Bill of Rights

The Taxpayer Bill of Rights, which the IRS adopted in 2014, summarizes taxpayer rights scattered throughout the tax code, making it easier to understand what the IRS can and can’t do.

The Taxpayer Bill of Rights groups taxpayer rights into 10 basic tenets. Under them, taxpayers have the right to:

  • Be informed.
  • Receive quality service.
  • Pay no more than the correct amount of tax.
  • Challenge the IRS’ position and be heard.
  • Appeal an IRS decision in an independent forum.
  • Finality.
  • Privacy.
  • Confidentiality.
  • Retain representation.
  • A fair and just tax system.

It’s often helpful to refer to these rights when talking with the IRS, says Glen Frost, a tax attorney in Columbia, Maryland. When talking with the IRS, Frost says he often points out that it’s the taxpayer’s right to be heard, for example.

» MORE:  What’s the best tax software to use?

You can push back

IRS disputes can be intimidating. Frost says he’s seen even certified public accountants become submissive around IRS agents. But the Taxpayer Bill of Rights provides the grounds to challenge the agency’s position.

“The first principle here is, these aren’t rights that are granted by the IRS, but they’re simply recognized by the IRS, and they all come down from the law that’s either made by Congress or made by the courts,” says Fred Daily, a tax attorney in St. Petersburg, Florida.

Taxpayers have the right to retain representation. Taxpayers also have the right to talk to an IRS supervisor — a move that might save hours of time and frustration, Frost adds.

» MORE: Try NerdWallet’s federal income tax calculator

There are limits

The Taxpayer Bill of Rights may help you navigate disputes, but it’s not necessarily a tool for things like resolving problems with a specific employee, for example, says Alvin Brown, a tax attorney in New York City.

“The [Taxpayer] Bill of Rights is incomplete, and it needs some more backbone. It needs more structure, more specificity,” Brown says.

Other options for taxpayers include filing a complaint with the Treasury inspector general for tax administration, an IRS watchdog, or turning to the courts, he says.

» MORE:  7 mistakes that may result in a tax penalty

Tina Orem is a staff writer at NerdWallet, a personal finance website. Email:

This article was written by NerdWallet and was originally published by USA Today.


Introducing Mom and Dad to Mobile Banking

If you’ve had to introduce Mom and Dad to one of your surlier significant others — you know, the one who just couldn’t drop politics at the door — then introducing them to mobile banking should be painless, right?

Not necessarily.

People who don’t use mobile banking have their reasons: They don’t see the need for it, they’re happy with their current setup, or they have security concerns, to name just a few.

That’s according to a Federal Reserve Board report that also found that only about 1 in 5 respondents age 60 and over with a mobile phone and a bank account used mobile banking in the 12 months before the survey was taken.

Here’s how you can teach your parents about a technology that is bound to make their lives a bit — and maybe even a lot — easier.

Emphasize convenience

The Fed found that people shun mobile banking largely because they think their banking needs are already being met. In other words, they just don’t see the point.

If your parents are reluctant to take the mobile-banking step, point out the advantages, starting with convenience: Mobile banking makes it significantly easier to monitor balances in checking and savings accounts, deposit checks and communicate with your bank.

Antonia Donato’s mother, Katherine, was one of those who thought mobile banking was pointless.

“She just couldn’t understand why it was necessary to use a smartphone for paying for things, checking account balances and monitoring activity,” says Donato, a 28-year-old public relations professional in New York.

Her mother “was very set in her ways” and worried that “mobile banking would be more of a burden than a convenience,” she adds.

Luckily for Donato, one text message was all it took to help her mother see the light.

At dinner one night, her mother observed how Antonia received a text from her bank regarding a potentially fraudulent charge in her account. Antonia immediately replied saying that she recognized the transaction and that no further action was necessary.

Katherine “was amazed,” according to her daughter, and never looked back. Today, she uses mobile banking “for everything, from paying her bills to checking her account status,” Antonia says.

» MORE: How — and why — to stop wasting your time banking offline

Depositing checks and saving money

AJ Saleem, the 30-year-old director of a tutoring and test prep company in Houston, recently introduced his parents, both in their 60s, to mobile banking. Like Donato’s mother, Saleem’s parents were reluctant to give the technology a go.

“I managed to get them over the hump by showing them how to deposit a rebate check,” Saleem says, adding that since his parents were busy preparing for the holidays, they had less time to go to a branch location.

The mobile check deposit feature was a welcome addition. Saleem’s parents now use mobile banking for paying bills and monitoring their transactions.

Aside from convenience, don’t forget to explain to your parents how mobile banking might even help them save money. Here are a few examples:

  • Easy account access can help prevent overdraft fees.
  • Automated bill pay can help prevent late fees.
  • Text and email alerts can make it easier to fight fraud, or minimize losses if you’ve already been targeted.
  • Mobile check deposit feature saves you a trip to the bank.

» MORE: How to write a check like a Nerd

Worries about security

Security concerns are another reason many don’t use mobile banking. If your parents are in this category, you can reassure them of the extensive security measures that banks take. You don’t have to launch into a super technical rundown of mobile security features, but it could be helpful to explain the basic measures.

Alliant Credit Union, for example, uses fingerprint login and a backup PIN for its mobile app, and it will automatically log out if you leave the app, said Angi Milano, Alliant’s mobile channel manager. Other financial institutions are incorporating many of the same features.

The user-experience question

Another reason Mom and Dad might not be using mobile banking? Small screens and other usability issues. The good news is that Alliant and others are trying to make the experience as seamless as possible.

“Completing transactions is intentionally simple,” Milano says of Alliant’s app. “We even made the font sizes within the app responsive to the user’s general phone settings, to address various vision needs for app users and improve the overall experience.”

Of course, some mobile apps are better than others. Some might not incorporate responsive font sizes, for example. If that’s the case, you may want to introduce your parents to online banking, which may be easier for them to navigate. Though a slightly more extreme measure, switching banks because of a poor mobile app is also an option.

» MORE: NerdWallet’s best banks and credit unions for mobile banking

Mobile banking can be intimidating and can trigger a flurry of concerns. As valid as some of those may be, they shouldn’t stand in the way of your parents giving mobile banking a shot.

It’s a technology that really can help lighten the load, and though it won’t solve all of life’s problems, it’s a step in the right direction.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @tonystrongarm.

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