ShopSmart: Five Great Financial Freebies

Truly free financial products and services; Plus, not-so-hot giveaways

YONKERS, N.Y., Aug. 13, 2013 /PRNewswire-USNewswire/ -- There are free financial products and services to be had, but consumers may have to shell out money to get some of them. The September 2013 issue of ShopSmart magazine, from Consumer Reports, features an up-close look at five truly free financial products and services including checking accounts and tax filing.

"Beware of the word free, especially when it comes to financial services," said Lisa Lee Freeman, editor-in-chief of ShopSmart. "Free financial advice in particular can really end up costing you."

Five Great Financial Freebies

1. CHECKING ACCOUNTS. Truly free accounts are getting harder to find, but there are still some available without no minimum-balance rules to follow and no monthly fees. Consumers are most likely to get them at credit unions, small or internet banks, and brokerage houses. For example, two online banks, Ally and Schwab, offer free checking accounts plus free checks, zero ATM fees, and interest (though puny) on a balance.
   
2. PERSONAL-FINANCE HELP. Some free budgeting programs can help set short- and long-term financial goals and create a spending plan that will help consumers meet these goals. Mint (mint.com) has ads but it's easy to set up and navigate a plan; Yodlee (yodlee.com) is clunkier but has more features and no ads.
   
3. RETIREMENT MONEY. Some employers match funds that employees contribute to their 401(k).  Consumers whose 401(k) is maxed out should consider a Roth IRA if it is offered by their employer. There is no tax break on investments, but withdrawals, including earnings, are free from federal tax if they are taken on or after the age 59 1/2 and have held the Roth IRA for more than five years.
   
4. TRIP INSURANCE AND OTHER PERKS. Credit cards may offer free trip insurance that might come with other perks, such as price protection (meaning the card issuer will refund the difference if a better deal is found on something recently bought) and coverage of items purchased on the card that are lost or damaged within a limited time. Check the card's terms to see what it offers and read the fine print for restrictions.
   
5. TAX FILING. At FreeFile on the IRS website, there's no charge to prepare and file federal   taxes.  But one version on FreeFile has income limitations that are updated annually. This year it was available to households with a 2012 adjusted gross income of $57,000 or less. Other services, such as Express1040, FreetaxUSA, TaxACT, and TurboTax Federal Free Edition, offer free tax preparation and filing for federal returns that are relatively straightforward. 

Not-So-Hot Giveaways
These financial freebies might sound great but did not live up to the hype based on ShopSmart's research.

1. FREE CREDIT SCORES. Credit Karma is a credit-score reporting service that offers a free TransUnion credit score and a VantageScore; most lenders use neither of them. Credit Karma also makes users agree to allow them to provide "offers", which means promotions from the service's marketing partners.
   
2. FREE FINANCIAL PLANS. Many banks and brokerage companies offer free, promotional financial plans. These plans look good on the outside, but experts found many were confusing, had advice that didn't address the client's needs, and suggested investments that were too conservative. These free plans can be a good starting point but consider a fee-only financial planner for more personalized plans.

About Consumer Reports:
Consumer Reports is the world's largest independent product-testing organization. Using its more than 50 labs, auto test center, and survey research center, the nonprofit rates thousands of products and services annually. Founded in 1936, Consumer Reports has over 8 million subscribers to its magazine, website, and other publications. Its advocacy division, Consumers Union, works for health reform, food and product safety, financial reform, and other consumer issues in Washington, D.C., the states, and in the marketplace.

About ShopSmart magazine:
Launched in Fall 2006 by Consumer Reports, ShopSmart draws upon the publication's celebrated tradition of accepting no advertisements and providing unbiased product reviews. ShopSmart features product reviews, shopping tips on how to get the most out of products and "best of the best" lists. It's ideal for busy shoppers who place a premium on time. ShopSmart has a newsstand price of $4.99 and is available nationwide at major retailers including Barnes & Noble, Wal-Mart, Borders, Kroger, Safeway and Publix. ShopSmart is available by subscription at www.ShopSmartmag.org.

ShopSmart is available 10 times a year. Subscribe at www.ShopSmartmag.org.

SOURCE ShopSmart