You can earn far more from a top-paying savings account than you can from most short-term CDs.

The average return on 12-month certificates of deposit has fallen to a measly 0.77% APY, and the average return on 24-month CDs has plunged to 1.19% APY.

But Colorado Federal Savings Bank is paying 1.70% APY on its savings account.

A minimum deposit of $2,500 must be maintained to qualify for that rate, but the account can be opened online and is available to savers nationwide.

(Fine print: Although accounts can be jointly held, you aren’t allowed to name beneficiaries in the case of death, which is a deal-breaker for some.)

Although the Web site for this online bank based in Greenwood Village, Colo., says this is a fixed-rate account, we checked and that’s wrong.

Like all savings accounts, the rate at Colorado Federal is variable and could be reduced at any time.

But there’s no long-term commitment with a savings account, so if you become disenchanted with your rate, you can always withdraw your money and move on.

The next-best rates on nationally available savings accounts are:

1.60% APY from Bank of Internet, an online bank based in San Diego. You need only $100 to open an account and there are no minimum balance requirements.

1.50% APY from American Express Bank, the online bank owned by the credit card company. No minimum deposit is required.

1.50% APY from Ultima Bank Minnesota, with locations in Fosston and Winger, Minn. A minimum deposit of $1,000 is required and must be maintained to earn interest.

1.50% APY from Dollar Savings Direct, the online division of Emigrant Bank, which has dozens of locations in the New York City area. A $1,000 account balance minimum is required.

Most money markets currently pay less than savings accounts, with one notable exception: the Mega Money Market Account pays 2.00% APY and is available from three jointly owned banks in Oklahoma.

Compare these rates with the best savings rates from scores of other banks in our extensive database.

The future of credit cards is almost here.

The Citi Forward Visa is probably what it looks like. At least on a good day.

Everything changes on Feb. 22, when most of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 takes effect.

It bans many of the industry’s most abusive practices, and card companies have been acting out ever since it was passed — jacking up rates, slashing credit limits, raising fees and imposing tough new repayment terms.

That has turned the Forward card, which was a good but not outstanding offer when it was introduced last spring, into one of the better deals of this brave new world.

Citi has risen to the top of the heap by simply leaving most of the Forward card’s terms unchanged over the past year.

It still has, for example, no annual fee. Most new credit cards come with one since the new laws don’t regulate annual fees.

Cardholders start out with seven months of 0% financing on purchases and balance transfers, which is a little better than the typical six-month no-interest offers these days. (Ignore the “0% APR for 6 months” on the Citi Forward homepage. It is seven months as stated on “terms and conditions.” We checked.)

When the introductory period ends, the card charges an adjustable rate that’s 14.24% APR (prime plus 10.99%). That was a little high last spring, but it’s quite competitive now.

If you stay under their credit limit and pay your bills on time for three straight months, Citi will lower your interest rate by 0.25%.

Do it again and Citi will whack another 0.25% off your rate up to eight times for a total reduction of 2 percentage points.

The card also allows you to earn points in Citi’s “Thank You Redemption Network” — 5 points for every $1 spent on dining, books, movies and music; and 1 point for other purchases.

The extra rewards for entertainment spending indicate that Citi wants to attract younger consumers to the Forward card. That’s good, because they’re the ones having the toughest time finding a good deal on credit cards right now.

You can get 6,000 bonus points for making a modest $250 in purchases in the first three months, and another 5,000 points if you sign up for paperless statements.

Points can be redeemed for cash, a credit on your statement or gift cards.

The redemption rate — 10,000 points for a $100 gift card — means you’re getting a run-of-the-mill rebate of 1% on most purchases, and 5% on your entertainment spending.

Within three days of applying for a mortgage, you’ll get a “Good Faith Estimate” that lays out all of the terms and fees for the loan you want.

But are you getting the best possible deal?

On Jan. 1 the government required lenders to start using a new, standardized GFE that can help you decide.

On the last of the three pages you’ll find two new comparison charts that weren’t on the old GFEs created by banks and mortgage companies.

The first is called the “tradeoff table,” and shows what your monthly payments and closing costs might be for slightly different mortgages from the same lender.

The first option shows what you’d pay with lower settlement charges, which is great if you’re short on cash, but with a slightly higher interest rate and monthly payment.

The second option is for a loan with a lower interest rate, and lower monthly payments, but higher settlement charges.

The “shopping chart” allows you to compare similar loans from different lenders, including the interest rate, monthly payments and closing costs.

You can see even more comparisons like that by searching our extensive database of mortgage rates available in your area.

Even if you’ve already applied for a mortgage, it’s not too late to put the approval process on hold and pursue a better deal.

A loan from Lending Club might be the way to pay off credit card debts, make critical repairs to your home or even finance a wedding or adoption.

You can borrow up to $25,000, and repay the loan in 36 equal monthly payments, with a fixed interest rate as low as 7.89% APR.

If you apply before Feb. 1, you’ll even receive a $100 credit to your account within 30 days of receiving the loan.

Just click here to qualify for this exclusive offer to Bankaholic readers. (Sorry, time’s expired on the bonus but you can still go to Lending Club’s home page to apply for a loan.)

Peer-to-peer, or social lending, allows investors to provide money directly to worthy borrowers.

By cutting out banks — the traditional and rather costly middle-man for most loans — investors can earn a greater return on their savings while borrowers pay less for the privilege of using that money.

Lending Club says its net annualized return for its investors has been over 9.5% since 2007 (including losses from defaults), and borrowers pay up to 30% less than they would for similar loans at traditional financial institutions.

The Web site charges a processing fee that runs from 1.25% to 4.25% of the amount you’re borrowing, which is subtracted from the loan proceeds prior to disbursement.

But there’s no application fee. So if you don’t get your money, you don’t pay a thing.

The online application process is fast — Lending Club claims it takes just 3 minutes — but you’ll need a minimum FICO score of 660 and maximum debt-to-income ratio of 25% (not including a mortgage) to qualify.

Applications are assigned one of 35 grades from creditworthiness (from A1 for the best credit to G5 for the worst) with the grade determining the interest rate.
Information about your loan (without your name, of course) is then posted for investors to review and fund.

Even if you have great credit, investors will only provide a portion of your loan — as little as $25 in some cases — to limit their losses if you default.

Don’t be surprised if it takes scores of investors to fully fund your loan.
That’s how the system works.

The major credit card companies have succumbed to public pressure and stopped taking a cut of some donations earmarked for Haiti disaster relief.

But they’re only waiving the usual 3% transaction fee for a few specific charities, and only for the next few weeks.

If you want to donate with your credit card, here’s where you can give fee-free:

Mastercard Worldwide: American Red Cross, AmeriCares, UNICEF, Save the Children and CARE USA.

American Express: Charities listed by the U.S. Agency for International Aid.

Visa: American Red Cross, AmeriCares, CARE USA, Direct Relief International, Habitat for Humanity, International Rescue Committee, Mercy Corps, Oxfam America, Save the Children, U.S. Fund for UNICEF, and World Vision. Visa will also donate all fees made on donations to other Haiti disaster relief programs to the American Red Cross.

Discover: American Red Cross. If you have over $20 in Discover Cash Back bonuses, you can donate those toward disaster relief, and Discover will match the first $1 million of those donations.

We think it’s way past time for the credit cards to permanently abolish this fee on donations to all legitimate relief organizations.

It’s shameful for financial companies to profit from money intended to help the sick, the injured, the hungry and the homeless.

Why does it take a monumental disaster such as Hurricane Katrina and the Haitian earthquake for the credit cards to (sort of) do the right thing?

You’ve got to watch out for all the sneaky ways stores and Web sites are creating to slip recurring charges onto your credit cards.

I fell for the “free magazines” that Loehmann’s clothing stores are offering.

As I was checking out a cashier said I could sign-up for three free months of the magazines being promoted on a laminated place mat on the counter.

“It’s a really cool offer,” she said.

I like free, and it looked legit, so I signed up. The cashier recorded my choices by scanning the bar codes for the titles I chose.

Stupid me. A few months later, three mysterious $15 charges showed up on my account.

The cashier didn’t mention that those free trials led straight into paid subscriptions, charged to the card I used at Loehmann’s, unless I went online to cancel the deal.

This isn’t a one-time hit either. The subscriptions automatically renew each year until you demand they stop.

I blame myself for neglecting to read the fine print and grilling the cashier about just what I was buying.

But I also blame Loehmann’s for taking advantage of its customers, especially when you’ve got a bag of clothes, a list of errands and a line of waiting customers behind you.

Lenders are offering traditional 30-year mortgages for 4.875% in all but one of the 10 cities we checked in our January home loan survey.

That’s a little higher than we found in our November survey of the best mortgage rates.

But six months ago you couldn’t find a bank or mortgage broker offering these kinds of loans for less than 5.25% in any of the markets we reviewed.

To find the best rates in each city we search the databases at Bankrate.com and Interest.com.

We compare 30-year, fixed-rate loans with no points and fees of less than $2,000 because that’s the best mortgage for most refinancings and purchases.

The best deals we found last week were:

Baltimore: 4.875% from Aurora Financial.

Chicago: 4.875% from Total Mortgage Services.

Dallas: 4.875% from D&H Lending Services.

Indianapolis: 5.00% from Stonegate Mortgage Corp.

Los Angeles: 4.875% from Compass Lending Corp.

Minneapolis: 4.875% from The Money Store.

New Orleans: 4.875% from AimLoan.com.

New York City: 4.875% from Mortgage Capital Associates.

Phoenix: 4.875% from NationsChoice Mortgage.

San Diego: 4.875% from American Interbank Mortgage.

The fine print: These mortgage rates are for conforming loans (less than $417,000), and for borrowers with credit scores of at least 700. For scores from 680 to 699, you’ll usually pay higher fees, up to 1% of the loan value, or a higher rate.

Is one of your New Year’s resolutions to get your financial house in order?

Check out a new book called One Year to an Organized Financial Life: From Your Bills to Your Bank Account, Your Home to your Retirement, the Week-by-Week Guide to Achieving Financial Peace of Mind by Regina Leeds and Russell Wild.

It will change the way you manage your money and set you on the road to financial security.

Leeds (a professional organizer) and Wild (a Certified Financial Planner) pack a lot of information into a book under 300 pages. They never dive too deeply into a sea of financial jargon, either, so if you’re a newbie to this money-saving game, you will understand this book.

The March section is particularly helpful, especially week one, which is about what tax-related information you can save or shred.

June and July are on point in describing how to prepare to retire, and if you’re looking to cut back, flip immediately to April (Spend Less, Save More) and August (Refinance and Downsize Options) – plus September if you have kids (Children and Money).

What don’t we like about the book? It’s big on organizing. Huge. Annoyingly so if you aren’t big on what’s proper feng shui or Zen when it comes to the placement of your desk.

Leeds has written other books, including One Year to an Organized Life and One Year to an Organized Work Life. She views “unorganized people” with the same distain I usually reserve for Bravo’s “Real Housewives.”

January (time to take control) is so full of hanging file folders, slotted tabs and Container Store mentions that we wonder if they’re paid endorsement fees.

And if you’re drowning under financial stress and have no idea how much you have, owe and what interest you’re paying on your debt, advice to re-paint your office and remove family photos from your desk (yes, really), aren’t going to help.

Some of the tips and advice are un-finance related, too, and more comments about lifestyle than money. If I’ve shoved my credit card statements in a drawer for the last three years and had collectors calling me all day, do I really need the advice to drink more water?

Oh, and please disregard the book’s advice to sign up for overdraft protection. Don’t do it. Here’s why.

So here’s what we recommend. Since the month is already half over, read through the January chapter. Maybe it’ll speak to you. Maybe it won’t. Not everyone works in a zone of perfect organization, nor should everyone spend days on making a Zen-approved office.

February is where you should start to pay attention.

The authors also admit that they’re not doing in-depth analysis of these topics, so if you want to know more about a chapter, your best bet is to get an entire book on the subject.

Two we’d recommend are Suddenly Frugal: How to Live Happier & Healthier for Less by Leah Ingram if you’re looking for a book on cutting back, and 10 Laws of Career Reinvention by Pamela Mitchell if you want more information on how to make money from your passions.

It’s come to this: The biggest banks are paying nothing for our savings.

Or at least nothing for the money we put in our savings accounts.

Here’s the return the four largest banks are now offering on their regular savings accounts:

Bank of America: 0.10% on all balances

Wells Fargo: 0.05% on balances up to $25,000

Citi: 0.25% with a $500 minimum balance

JPMorgan Chase: 0.01% all balances

For all practical purposes, that’s zero. Nada. Nothing more than pennies for your hard-earned savings.

Unfortunately, this is the entirely predictable result of the Federal Reserve’s campaign to shower commercial banks with all the free money they could possibly want. (It does that by charging them 0.0% to 0.25% for short term loans.)

The policy made sense when the banking industry on the verge of a calamitous collapse that would have plunged the world into another Great Depression.

It guaranteed a great yield spread between what banks paid for money (including deposits) and what they charged for loans.

And let’s be clear. The Obama administration and Federal Reserve have been willing to do almost anything over the past year to help the banking industry.

They’ve certainly done far more for the banks than they’ve done for the typical family coping with the economic fallout from the financial crisis caused by all of the banks’ irresponsible lending.

What Obama and Federal Reserve Chairman Ben Bernanke clearly didn’t anticipate was the industry’s ungrateful response and the public backlash those arrogant bankers have unleashed.

This policy requires millions of us to sacrifice even a modest return for our hard-earned savings to help a banking industry that slaps us in the face at every opportunity.

The banks won’t help us save our homes from foreclosure by modifying our mortgages. They relentlessly raise the rates on our credit cards to unconscionable heights, cut our credit limits and impose all sorts of fees and penalties if we’re a second late with a payment.

Whatever public support existed for bailing out the banks has been squandered and Obama is going to pay a fearful political price if he and Bernanke continue on the current course.

Flagstar Bank has been doing some really strange stuff with its 36-month CDs.

For much of the fall it was promoting quite a good rate on its Web site: 3.00% APY, with a minimum deposit of only $500.

At one point that would have been good enough to top our rankings of the best 36-month certificates of deposit — if the deal had been available nationwide.

But it wasn’t because Flagstar had the odd policy of paying savers who lived near one of its branches in Michigan, Indiana or Georgia less than other customers — 2.75% APY.

Around Thanksgiving, the bank dropped its rate to 2.85% APY. On Dec. 4, the return fell to 2.60% APY, four days later it hit 1.75% APY and on Dec. 16 it reached 1.50% APY — half of what it had been just three weeks before.

That was a pretty stunning drop even by last year’s dreadful standard for rampant rate-cutting.

Then, on Monday, Flagstar reversed course and increased the yield on its 36-month CDs back to a respectable 2.35% APY.

What other bank in the country is boosting the return on its CDs by almost a point in this market?

Oh, and it’s still screwing the locals. Live near a Flagstar bank and you’ll only earn 2.09% APY.

We’ve asked Flagstar about all of this and were passed around to a couple of spokespeople, the last of whom promised to get back to us.

We’re still waiting for the phone to ring with an explanation for this strange and volatile pricing.

Last month we took a look at all of the “Real Housewives” on Bravo’s reality shows that are having real financial problems because they’re living way beyond their means.

Lynne Curtain, one of these icons for ostentatious spending had been evicted from her Orange County, Calif., home over $12,000 in unpaid rent and damages.

Now the gossip site TMZ.com reports that a judge in Riverside County, Calif., has issued a bench warrant for Curtain and her husband after they failed to appear in court over $1.2 million they had been ordered to pay a former business partner.

Their excuse?

“I just sort of forgot to go because of the Christmas season,” Frank Curtain told Radar.com.

The bench warrant doesn’t mean cops are out to arrest the couple. It won’t become active as long as they remember to show up at another hearing before Jan. 27th.

But can you see my eyes roll from here?

I’m not a rich woman. I make a decent but not exorbitant living. I own a small house. I have some student loans to pay back but I also have modest savings that are growing.

How is it that little ol’ Jen Stryker can be worth more than these Bravo bitches?

Oh, that’s right. Because I live within my means.

It doesn’t matter the size of those means. I am within them: I bought a house I could afford, and I didn’t keep refinancing to use it as a bank. I chose a college with a tuition that wouldn’t put me over my head in debt. I continue to drive a late model Honda Civic with almost 100,000 miles on it.

Do I buy new things?

Sometimes. I probably spent too much at Loehmann’s last weekend. But all my furniture is used, and I still haven’t put new curtains on my windows because the ones that the previous owners left behind are just fine.

Is someone like me — or you, dear reader — supposed to feel sorry for these women? For someone who pays for a facelift when she can’t pay her rent? Or someone who kvetches about selling her cars and jewelry because she doesn’t have cash to pay her mortgage?

Am I callous to revel in their failure? Maybe.

But you won’t get any boo-hooing from me. This is their hole. They dug it. They chose to put the cameras in their faces.

I will watch them try to dig out, and hope that somewhere, the show serves as a lesson that living high on borrowed money does not make you wealthy.

Over the next couple of months the banks will almost certainly report that they were profitable during the final three months of 2009 and are on the road to recovery.

Don’t believe it.

The turnaround banks are touting is only possible because they’re still refusing to acknowledge all of the bad loans on their books.

So far, banks have written off about $600 billion in losses from the housing bubble and recession.

Estimates that we’ve seen from banking industry analysts project their true losses to be anywhere from a merely disastrous $1.6 trillion to a truly staggering $3.8 trillion.

So in the best case scenario, banks have acknowledged only about one-third of the losses they’ve suffered. In the worst case scenario they’ve dealt with a paltry one-sixth of those losses.

The losses banks are refusing to write down dwarf the profits they’ve supposedly made since the financial crisis struck in late 2008.

Allowing overvalued loans to remain on the books was part of the Federal Reserve and Treasury Department’s effort to save the nation’s banking industry from collapse.

But that policy is now working against the government’s push to get banks lending again.

The Fed is providing banks with virtually all of the free money they could possibly want. (It does that by making short-term loans to commercial banks for 0% to 0.25%).

That’s why banks don’t need our deposits and continue slashing interest rates on all types of savings to record low after record low.

Yet the banks will never respond to the Fed’s incentives and make new loans when they still have so many bad loans on their books.

So the Fed needs to get tough and make the banks acknowledge all of their overvalued assets now, even if it means they’ll have a couple of unprofitable quarters this year.

It’s a critical step towards getting the banks to lend again, getting the Fed to stop driving down interest rates, and getting decent returns for millions of savers.

That’s the real road to recovery.

Having money automatically added to your savings account each time you buy something is one way to put something aside for the future.

Now U.S. Bank has come up with one of the best spend-and-save programs we’ve seen.

It’s more generous and flexible than other programs, allowing you to build a bigger balance and rewarding your efforts with up $100 in bonuses.

The “Savings Today And Rewards Tomorrow” or S.T.A.R.T. program is available to anyone with a U.S. Bank checking and money market account.

The program transfers whatever amount you choose — anywhere from 25 cents to $5 — from your checking account to your MMA each time you buy something with a U.S. Bank debit or credit card.

If you have a U.S. Bank FlexPerks Cash Rewards Visa Credit Card or FlexPerks Cash Rewards Visa Check Card, you can have your monthly FlexPerks Cash Rewards deposited in your money market account.

You can also arrange for regular transfers each week or month, corresponding to when you get paid.

There’s no limit on how many transfers you can make or how much you can move each month.

After you’ve accumulated $1,000, U.S. Bank will give you a bonus — a $50 U.S. Bank Rewards Visa Card.

Maintain a balance of $1,000 or more for a year, and you’ll earn another $50 Rewards Card.

Once you’ve signed up for S.T.A.R.T., your monthly bank statement will list how much you’ve saved using the program.

The average return on money market accounts is a pathetic 0.23%. U.S. Bank is paying anywhere from 0.15% to 1.0% on its MMAs, depending on where you live.

But that doesn’t negate the point of these programs, which is turn you into a regular saver even if the process is a little gimmicky.

S.T.A.R.T. allows you to save much more than a typical “Keep the Change” program, which rounds up each purchase to the nearest dollar and transfers the extra coin from your checking to savings account.

It also allows you to set aside more than similar spend-and-save programs such as Wachovia’s “Way2Save,” which limits transfers to $1 per transaction.

We certainly know that store credit cards routinely charge higher interest rates and more costly fees than other credit cards.

But we were still surprised by a “change in terms” letter from the bank that provides cards for many stores, including Victoria’s Secret, Avenue, Limited, New York & Co., Abercrombie & Fitch, JCrew, Express, Pottery Barn and Restoration Hardware.

First of all, World Financial Network National Bank will impose a $1 fee for every paper statement customers receive.

While some banks have begun charging checking account customers who still want to receive statements in the mail, this is the first time we’ve heard of a bank imposing such a fee on credit card customers.

These cards have also been charging adjustable interest rates that ranged from 11.99% to 24.99% APR.

When the changes take effect everyone will pay the maximum 24.99% — 21.74% plus prime (which is currently 3.25%).

That’s much higher than the 13% to 18% APR you’ll pay on the typical adjustable-rate Visa and MasterCard.

Finally, the new agreement says cardholders must still waive their right to take billing disputes to court and settle all disagreements in arbitration.

This comes at a time most major credit cards are dropping mandatory arbitration because it’s so blatantly tilted against the consumer.

Of course you can opt out of these changes by sending World Financial a letter refusing to accept the changes, closing the account and paying off your balance under the old terms.

That certainly seems like the smart thing to do for credit cards with terms as bad as these.

Emotions play a big role in how we spend our money.

Way too big, according to a new book by psychiatrist David Kreuger.

We use money to “alter our moods, increase our self-esteem, and control others,” Kreuger says. “We use money to try to soothe emotional pains and to buy the respect of others and ourselves.”

But, as your mom (not to mention the Beatles) always told you, money can’t buy you love.

Recognizing and overcoming that destructive behavior is what The Secret Language of Money: How to Make Smarter Financial Decisions and Live a Richer Life (McGraw-Hill, $25.95) is all about.

This makes Secret Language the right book for right now: An easy-to-understand financial guide for all of those Americans trying to restore some balance in their lives after pigging-out out on easy credit.

In Krueger’s view, millions of consumers unconsciously try to spend their way to happiness.

When we allow emotions like that to rule our financial lives, we wind up spending more than we make, falling for every scam and speculative bubble that comes along, and plunging into debt.

(For a great example of how this can happen, see our post “Real Trouble For Bravo’s ‘Real Housewives.’”)

He takes money emotions down to the biological level, not necessarily to show us that our brains are to blame (he doesn’t let you blame anyone for your actions except yourself), but how to overcome gut reactions to make sound financial decisions.

The book isn’t perfect, but you can’t argue with its core message.

We know that flies in the face of all conventional economic wisdom.

But for the past year the Federal Reserve has been providing commercial banks with an almost limitless supply of free money in the hope that they’ll make lots of new loans and help boost the economy out of the recession.

(Its rate-setting committee is doing that by charging banks 0% to 0.25% for overnight loans.)

Yet the banks are extending precious little credit to consumers. To small businesses. To anyone.

Could it be that Fed Chairman Ben Bernanke has pushed conventional economic wisdom too far by driving interest rates too low?

The Fed is making money so cheap that banks can turn a profit by simply parking it in Treasuries without making any of the effort, or taking any of the risk, involved in making loans.

If Bernanke made banks pay more for their deposits it might negate that strategy and force them to seek better returns by making more loans.

We know, we know. There are lots of reasons banks are not lending money. It’s risky business in this economy and there are still billions if not trillions of dollars worth of bad loans banks haven’t even begun to deal with.

But before President Obama hauls bank presidents back to the White House for another scolding, maybe he and Bernanke should at least try a modest rate increase.

What do they have to lose? And the millions of savers who have suffered so grievously from the Fed’s cheap-money policy could use the break.

Making your home bigger, or nicer, always makes it more valuable. But some projects payoff better than others.

The average return on improvements has fallen for four straight years, slumping to 63.8% in 2009, which means every dollar spent now boosts a home’s value by an average of 63.8 cents

To determine which projects provide the best return we went straight to the mother lode of data — the brand new cost-versus-value home improvement survey by Remodeling Magazine and the National Association of Realtors.

We used that data to create a list of the 10 best home improvements, based strictly on the percentage of the cost recouped at resale.

We pulled out variations on the same themes, such as one kitchen remodeling project instead of minor, midrange and upscale kitchen renovations, which the annual survey breaks out in great detail. In those cases, we gave you the version that produced the highest rate of return.

Our top 10 home improvement projects, with the national average for cost, resale value and the percentage of the cost that was recouped, are:

Improvement 1. Replacing the entry door with a midrange steel door costs $1,172 and adds $1,470 to your home’s value, or 128.9% of the cost.

Improvement 2. Upscale siding replacement costs $13,287 and adds $11,112 to your home’s value, 83.6% of the cost.

Improvement 3. Renovating an attic into a bedroom costs $49,346 and adds $40,992 in value, 83.1% of the cost.

Improvement 4. Adding a wooden deck costs $10,634 and adds $8,573 in value, 80.6% of the cost.

Improvement 5. Minor kitchen remodeling costs $21,411 and adds $16,773 in value, 78.3% of the cost.

Improvement 6. Replacing windows with midrange wood windows costs $11,700 and adds $9,044 in value, 77.3% of the cost.

Improvement 7. Finishing a basement costs $62,067 and adds $46,825 in value, 75.4% of the cost.

Improvement 8. Midrange bathroom remodeling costs $16,142 and adds $11,454 in value, 71% of the cost.

Improvement 9. Adding a second story costs $156,309 and adds $107,286 in value, 68.6% of the cost.

Improvement 10. Replacing the roof costs $19,731 and adds $13,133 in value, 66.6% of the cost.

A minor facelift would include things such as replacing faucets, adding new flooring, new wallpaper or tile, new towel bar and toilet paper holder, maybe new doors for the shower.

Midrange remodeling adds new vanities and countertops, mirrors, medicine chest and maybe pulling the toilet and doing a new tub surround.

A midrange addition involves building a new bathroom with moderately priced fixtures, such as $165 for a solid-surface countertop with built-in sink as opposed to $500 for a custom-ordered sink that you would expect in a luxury addition.

Discover Card has promoted its 5% Cashback Bonus on “rotating items” for quite some time.

But never knowing what might be eligible for that hefty rebate a few months down the road aggravated more than a few Discover More cardholders.

Now Discover is publishing a calendar of future offers on the Web page where you must sign-up in advance to qualify for each bonus.

Here’s where and when you can earn the 5% rebate during the first nine months of 2010:

January through March: Airlines, hotels, rental cars and cruises.

March: Grocery and drug stores.

April through June: Home improvement, department and clothing stores.

July through September: Gas stations, hotels, movie theaters and movie rentals.

Unfortunately, a significant restriction remains: Cardholders can only earn the 5% bonus on a limited amount of qualifying purchases.

For the current offer of grocery stores, restaurants and movie theaters, the spending limit is $400. For the travel rebate it will be $800.

Cardholders will also continue to earn a 0.25% rebate on all non-bonus purchases until they’ve charged $3,000 each year. Then the non-bonus rebate jumps up to 1%.

Rebates are redeemable in $20 increments for gift cards you can use to shop Discover’s online stores, for Discover Gift Cards or for charitable donations.

Once you’ve accumulated $50 worth of rebates you can have the money direct deposited into your bank account or credited to your Discover Card bill.

We usually write about where to find the best CD rates.

But today we’re going to focus on where to find the worst deals.

We’re talking truly wretched rates such as 0.15% APY on a 6-month CD, or 0.25% APY for a 12-month CD.

Those are the kinds of deals you’ll find these days at the nation’s biggest banks.

JP Morgan Chase is the worst, but Citibank, Wells Fargo, PNC and all the others are nearly as bad.

These banks don’t have to compete for our savings because:

• They can borrow as much money as they need from the Federal Reserve for practically nothing. No, really, the rate for overnight loans is 0% to 0.25%.
• They don’t really need much money because they’re whacking billions from their loan portfolios every month.

That’s why you see one small bank after another take a turn at the top of our CD rankings.

These are banks that are still trying to grow by taking in new deposits and funneling that money to new loans and investments.

But so many savers rush to those small banks that more money than they can wisely use floods into new accounts.

Within weeks, sometimes days, they cut their rates to slow the flow of money into the bank and fall out of the rankings.

The bottom line for savers: We won’t see decent certificate of deposit rates again until the big banks, with their ability to put large sums of money to work, get back in the game.

Yet look at the shameful difference between what the big banks are paying and the best, nationally available deals from the smaller banks that lead our rankings:

Harris Bank is paying 0.15% APY on a 6-month CD. TotalBank is paying 1.65% APY.

JP Morgan Chase is paying 0.25% APY on 12-month CDs. Five small banks, including H&R Block Bank are paying 2.00% APY.

PNC Bank is paying 1.05% APY on a 24-month CD. Frontier Bank is paying 2.40% APY, 2.45% APY or 2.50% APY, depending on the minimum deposit.

Bank of America is paying 1.86% on 36-month CDs. Goldwater Bank is paying 3.03%.

Rates on home equity lines of credit haven’t changed much since mid-October — and that’s a good thing.

Homeowners with pretty good credit and a chuck of equity in their homes should be able to get a HELOC for 5% or less in most parts of the country.

While that isn’t as cheap as they were last spring, when you could get one for 4% or less, they’re still the least expensive consumer loans available.

Here are some of our favorite deals from big and small lenders:

Third Federal Savings & Loan is charging 3.25% for credit lines up to $49,999 and 2.99% for lines of $50,000 to $150,000. These loans are available in 18 states from Oregon to Florida and there’s no annual fee.

BB&T Company, headquartered in Winston-Salem, N.C. with 1,500 financial centers in 11 southeastern states and Washington, D.C., charges 4.25% with a $50 yearly fee and a $5,000 minimum.

US Bank, which serves 24 states nationwide, has rates as low as 3.99% and as high as 9.25% in parts of California, Nevada and Arizona — states that have suffered the steepest declines in home prices. A $90 annual fee is assessed on some loans.

Bank Financial, which serves Illinois, Indiana and Wisconsin, has HELOCs for as little as 4.0% and a modest $20 yearly fee.

Salem Five offers a 3.25% introductory rate that increases to 4.0% after six months in five New England states — Massachusetts, Maine, Rhode Island, Vermont and New Hampshire. The $50 annual fee is waived for some checking account holders.

To qualify for one of these HELOCs you need:

• A credit score of at least 660, with the exceptions of Nationwide Bank and Third Federal Savings, which require a minimum score of 720.
• To retain 20% equity in your home after the line of credit is added on to the balance of your primary mortgage.

Are all the “Real Housewives” on Bravo’s reality shows as rich as they seem, or are some living way beyond their means?

We regularly see these outspoken women from Orange County, Calif., New York, New Jersey and Atlanta shoulder the burden of wealth as they frequent only the best shops, restaurants and spas.

But over the past year, at least a few of these icons for conspicuous consumption have run into financial problems.

One was thrown out of her million-dollar mansion in a foreclosure. Others have been through short sales and mortgage modifications, failing businesses and bad investments. A couple have even been evicted for falling behind in their rent (yeah, some of the homes you see on TV are leased).

Here’s Bankaholic’s unofficial tally of the Real Housewives who have gotten into Real Trouble over the past year:

Sheree Whitfield of Atlanta: Whitfield was banking on a big divorce settlement, which she didn’t get. When ex-hubby and former NFL offensive tackle Bob Whitfield stopped paying the mortgage on her house (which was in his name only) the bank foreclosed and kicked her out. The Atlanta Journal Constitution says the home sold for $1.1 million, less than half of what the Whitfields paid for it in 2000.

Tamara Barney of Orange County: When Barney and her husband met with a real estate agent they bragged about the $400,000 in improvements they made to their home. Yet they owed more than the house was worth and the Orange County Register reported that they recently had to part with it in a short sale.

Jeana Keough of Orange County: A real estate agent and owner of four homes, Keough has been short on cash since business dried up. Now Keough is selling her cars and watches and asking friends for loans. But she was luckier than Whitfield and Barney. After defaulting on the mortgage for her primary home, Keough told the Orange County Register that she got a loan modification. She also opted out of the show this season.

NeNe Leakes of Atlanta: The Atlanta Journal Constitution says Leakes was kicked out of her home in September after falling $6,000 behind in the rent. Leakes says that’s not true. She moved out on her own free will. Her husband, a real estate investor who might not be her legal husband according to some gossip rags, allegedly owes over $100,000 in back taxes, too.

Lynne Curtin of Orange County: This housewife and her family were booted out of their home over $12,000 in back rent and damages. Curtin’s husband blamed their financial problems on a few bad investments in — you guessed it — real estate. Remarkably, none of that stopped Curtin from having cosmetic surgery, paying for it from her “face lift” fund.

Teresa Guidice of New Jersey: Initial reports that Guidice and her family were losing their lavish mansion were wrong. But nj.com says lenders are foreclosing on a half-acre of undeveloped land Guidice bought about five miles away, claiming she still owes $127,500 on the property she bought for $170,000 in 2005.

Watch out for credit cards asking you to “opt in” to over-the-limit fees.

Yeah, it’s seems like a no-brainer to say “no” to that one.

When the Credit Card Accountability Responsibility and Disclosure Act takes full effect on Feb. 22, it will protect consumers from some of the industry’s worst abuses.

Penalties for exceeding your credit limit is one of them.

But we’ve heard of at least one bank that’s using a misleading sales pitch to see if it can get customers to accept this punitive fee.

Credit cards can simply decline any purchase that pushes customers over their credit limit.

But they’ve been more than willing to let cardholders overspend by a few hundreds dollars so that they could impose an over-the-limit fee every month until their balance was back in line.

The Credit CARD Act forbids credit cards from automatically allowing you to go over the credit limit and then hitting you with a big fee.

It requires issuers to contact each cardholder and ask them to “opt in” to the privilege of exceeding their credit limit — and paying a fee for doing so.

That involves so much work, and is such an obviously bad deal for cardholders, that American Express and Discover have already decided it isn’t worth the hassle.

They’re just dropping over-the-limit fees.

But it appears some banks are hitting the phones and asking their customers to “opt in” to over-the-limit fees.

Capital One, for example, is trying to get its sell opting-in as a money saver. If you say “yes,” it will drop the over-the-limit fee from $39 to $29.

In the sales pitch described to us by one unhappy cardholder, Capital One doesn’t promise to accept any over-the-limit charges you might make.

We asked Capital One if there would be any advantages for customers who opted-in to the fee. Would they be able to make more over-the-limit charges than customers who opt-out, for example?

The bank never called us back with an answer. We’ll take that to be a “no” until it does.

If you already opted-in, call Capital One back and opt out. The customer service reps will give you grief but you have the right to change your mind.

Hire a contractor — not a home inspector — to examine any house you’re thinking about buying.

You just can’t count on them to tell you what’s wrong with a home because of the three dirty little secrets about the home inspection business:

Dirty Little Secret 1. The great majority of home inspectors depend on real estate agents to recommend them to their clients. And any inspector who wrecks a deal by pointing out problems with a home won’t get recommended again.

Dirty Little Secret 2. Even when confronted with a problem so obvious that it can’t be ignored, home inspectors routinely decline to estimate how much it will cost to fix.

Dirty Little Secret 3. The standard contract says you can’t hold the home inspector responsible for anything they miss or get wrong. In other words, they don’t stand behind anything they tell you.

So just how valuable is the typical home inspector’s report? Not very.

For about the same amount of money you can hire a licensed general contractor to provide a far more realistic assessment of a home’s condition and how much you can expect to spend on repairs or improvements you’d like to make.

Line one up while you’re looking and have him (or her) ready to step in before you finalize any deal.

If the contractor isn’t sure about something, he can always call in a plumber or electrician he works with to give their expert opinion. (Something else you’ll never see a home inspector do.)

Getting this kind of advice is absolutely essential if you’re buying a foreclosure or short sale that may have been vandalized or neglected, and the repairs might run into the tens of thousands of dollars.

Click here for our latest look at the best mortgage rates.

Hybrids almost always cost more than comparable, conventionally powered models.

But the Toyota Camry Hybrid will save enough in gas to recoup that extra cost in well under two years, which makes it an excellent deal.

Indeed, we can’t understand why anyone would buy a Camry without the gas-saving, environment-friendly hybrid powertrain.

Unfortunately, we can’t say the same about most other hybrids, some of which need more than a decade of savings to recoup their higher initial price.

We got our information from the car-shopping website Edmunds.com, which recently studied the most popular 2009 and 2010 hybrids to see which ones made financial sense.

It compared the sticker prices of hybrid and non-hybrid models, and assumed gas would cost an average of $2.53 a gallon over 15,000 miles of driving a year.

The 2010 Camry Hybrid was the clear winner, needing just 1.4 years to recover the additional $477 it costs over a comparable gas-engine-only Camry.

The top-selling hybrid, Toyota’s 2010 Prius, pays back its $1,489 premium over a Camry (there’s no conventionally powered Prius model) in a respectable 2.1 years.

Although Toyota likes to compare the Prius to the Camry, we think it’s much more similar in size and performance to a compact Corolla than a mid-size Camry.

And when Edmunds compared the Prius to the Corolla, it needed a whopping 11.3 years to recoup its extra cost.

Unfortunately, it’s also typical of pretty much every other hybrid on the market.

The well-reviewed Ford Fusion Hybrid requires 8.1 years to recoup its extra cost over the standard Fusion.

The Lexus’ RX 450h, which TV ads tout as a technological marvel, takes 10.1 years to recover the hefty $5,844 premium over a standard RX 350.

Nissan Altima Hybrid requires 11.4 years and the Honda Civic Hybrid 13.3 years.

You’d have to drive Chevrolet’s 2009 Silverado Hybrid pickup 16.4 years to before the savings on gas would offset its additional, initial expense.

One thing we noticed about the Edmunds report: The new Honda Insight is only available as a hybrid and isn’t compared to any gas-powered car such as the Civic.

As a result, we can’t tell you how the least-expensive hybrid on the market stacks up.

If you have good credit and a down payment (or some equity if you’re refinancing) there’s no reason to pay 5% or more for your mortgage.

The best deals we could find on 30-year, fixed-rate loans in 10 major cities now range from 4.875% to 4.625%.

This the first month that every single city we’ve looked at had a rate below 5%, which is a substantial improvement over the 5.125% to 4.875% range we found in our October survey.

Those results reflect the fact that the average rate on 30-year, fixed-rate mortgages fell to a record low 5.06% last week.

A year ago those loans cost an average of 6.33%, and as recently as June it was still above 6%.

We look for 30-year, fixed-rate loans with no points and fees of less than $2,000. We think that is the best mortgage for the majority of refinancings and purchases.

To find the best rates in each market we search the databases at Bankrate.com and Interest.com.

The best deals we found were:

Atlanta: 4.75% from AMAC (American Mortgage Advisors Corp.)

Charlotte: 4.75% from PrimeLending Services.

Chicago: 4.75% from InterBank Lending.

Cleveland: 4.65% from Third Federal Savings& Loan.

Dallas: 4.875% from American Lending Group, Inc.

Los Angeles: 4.625% from RiteWay Mortgages.com.

New York: 4.75% from The Money Store.

Pittsburgh: 4.625% from Credence Mortgage.

Seattle: 4.75% from AmericanInterbanc Mortgage.

St. Louis: 4.875% from CapWest Mortgage Corp.

The fine print: These mortgage rates are for conforming loans (less than $417,000), and for borrowers with credit scores of at least 700. For scores from 680 to 699, you’ll usually pay higher fees, up to 1% of the loan value, or a higher rate.

Interest rates on the safest and most popular types of mortgages fell to record lows this week.

The average cost of a 30-year, fixed-rate mortgage was 5.06% in Bankrate’s latest weekly survey of major lenders.

That’s the lowest average since the survey began in 1985, whacking seven-hundredths-of-a-point off the previous record of 5.13% set in April.

A look through the databases at Bankrate.com and Interest.com found lenders in every market we checked offering 30-year, fixed-rate loans for 4.75%, with no points and fees of $2,000 or less.

That means your principal and interest payments will be just $522 a month for every $100,000 you borrow.

Pay a point or two, and you’ll be able to cut that to 4.375% and lower your payments to $500 a month for every $100,000 you borrow.

The average cost of a 15-year mortgage also fell to a record low 4.48% in the new survey.

Until the past couple of weeks, the average had never fallen below 4.72%, which it reached in April and September 2003.

Even jumbo loans — 30-year, fixed-rate mortgages for more than $417,000 to $729,500, depending on the market — are cheaper than they’ve been in years.

The average rate has fallen below 6% for the first time since September 2005, reaching 5.95% in the new survey.

Qualify for one of these loans and you’ll never have to refinance or worry about your mortgage again.

They’re safe, totally predictable loans that carry none of the risks associated with interest-only or adjustable-rate mortgages.

You’ll never have to fret about interest rates going up, principal payments kicking in or any other nasty surprises driving up your housing costs a few years down the road.

Check back Sunday for our latest look at the best mortgage rates.

Bank of the West is paying a $100 bonus for opening a new checking account.

Although the offer is available nationwide, we wouldn’t recommend it to anyone outside the 20 states where Bank of the West has more than 700 branches.

That’s because it doesn’t provide free use of ATMs at other banks — a great perk many of the best checking accounts now offer.

Without a Bank of the West machine nearby, ATM fees could gobble up your bonus in a matter of months.

To quailfy you must deposit at least $100 that is not currently in a Bank of the West account, establish a monthly direct deposit of at least $250, or pay 10 bills online, all within the first 60 days of opening the account.

You can choose from one of two types of personal checking accounts, and “Free Checking” seems like the best deal to us. No monthly fee. No minimum balance. Free online bill payment.

The other option is a “Choice Interest Checking Account,” which offers the same benefits, but in order to have the $10 per month service fee waived you have to:

• Establish a monthly direct deposit of at least $250.
• Maintain a $2,500 average monthly balance.
• Maintain a $5,000 average monthly balance in all Bank of the West accounts, including personal savings, CDs and IRAs.
• Make five or more online bill payments per statement cycle.

That seems like a lot of effort to get the miserly interest rates this checking account pays — 0.10% APY on balances below $10,000, 0.25% APY, for balances from $10,000 to $50,000, and 0.50% APY for balances above $50,000.

If you want to earn serious interest on your checking account balance, look into the rewards checking programs from Bank of the Sierra or Royal Banks of Missouri.

Bank of the West’s bonus offer ends Dec. 11.

Congress has extended the popular tax credit for first-time homebuyers and created a new tax break for homeowners looking to trade up.

When President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009 into law last week there was anaudible sigh of relief from the real estate industry.

The first-time buyers’ tax credit that was set to expire Nov. 30 has been credited with causing the modest bump in home sales we’ve seen the past few months.

Under the new law anyone who hasn’t owned a home in the past three years can claim a credit worth 10% of a home’s purchase price, up to $8,000.

Buyers can qualify by signing a sales contract between Nov. 7, 2009 and April 30, 2010, and closing on the purchase no later than July 1, 2010.

The act allows buyers with higher incomes to take advantage of that credit, too.

Under the original law, individual buyers could earn no more than $75,000, or $150,000 for couples filing jointly, to qualify for the full $8,000 credit.

Now, buyers making up to $125,000, or $250,000 for couples, can do so.

The new act also includes a tax credit of up to $6,500 for individuals and families who have lived in their homes for at least five years and want to move.

The deadlines are the same as for the first-time buyers’ tax credit — contract by April 30, closing by July 1.

Both credits require the home to be a principal residence and to cost no more than $800,000.

These tax breaks are particularly valuable because they’re credits, not deductions.

Deductions reduce your taxable income and lower the amount you owe in taxes by about 25 cents to 33 cents per dollar.

Tax credits are subtracted from the amount you owe the government. That means every dollar worth of tax credits lowers your tax bill by a full dollar.

If the credit is more than the tax you owe, you’ll be paid the difference.

Although buyers were able to file an amended 2008 tax return to claim the first-time homebuyers’ credit before the deadline was extended, a spokesman for the Internal Revenue Service told us that may change once details of the new bill’s implementation are worked out.

The IRS is also currently determining whether or not homeowners will be able to file an amended return to claim the new credit for existing homeowners.

With CD and savings account rates plunging to record lows every week, it may be the time to consider a more lucrative alternative — social or peer-to-peer lending.

This is where you loan money directly to worthy borrowers through a Web site, rather than putting your money in a bank and allowing its loan officers to pick the investments.

It’s possible to earn a better return than you’d ever get from a bank.

Lending Club, for example, says the net annualized return for its investors has been over 9.5% since 2007 — and yes, that includes the losses on loans that don’t get repaid.

For the rest of November, Lending Club is also offering a $50 bonus to Bankaholic readers who sign-up to be new lenders. (Use the link above and the money will be placed in your account as soon as you register.)

Then you can start reviewing applications and choose which loans to fund.

You won’t want to risk your hard-earned dollars on just one person. You can invest as little as $25 per loan and spread your money around to scores or even hundreds of loans.

The terms of each loan, including the interest rate, are established by Lending Club based on the creditworthiness of each borrower.

But its rigorous credit policy requires borrowers to have a minimum FICO score of 660 and maximum debt-to-income ratio of 25%, which has led to a low 3% annualized default rate.

Now, let’s be clear. This is not for everyone.

These loans are not insured by the FDIC or anyone else, and you shouldn’t commit more money than you can afford to lose.

Lending Club is pretty up-front about the risk and sets minimum financial standards for all lenders, requiring them to have:

• An annual gross income of at least $70,000 and a net worth of at least $70,000 (exclusive of home, home furnishings and automobiles). California residents must have $100,000 in gross income and net worth.

• Or, a net worth of at least $250,000.

Lending Club also limits investors from lending more than 10% of their net worth through the site.

If you know someone who needs to borrow money, Lending Club says its rates are up to 30% lower than similar loans at traditional financial institutions.

You can land a $50 bonus and top rate with Ridgestone Bank’s checking and savings account combo.

Its Momentum Savings account pays 2.50% APY on balances between $2,500 and $50,000.

That beats the best nationally available savings account rate, 2.25% APY from SFGI Direct, and matches the best deals on 24-month CDs.

To qualify for that rate you also have to open a Momentum Checking account and:

• Make eight transactions per month, which includes any checks you might write and debit card transactions.
• Automatically have at least $100 a month transferred from your checking to your savings account.
• Receive your combined savings and checking statements via the bank’s Web site.

If you don’t make the eight transactions, the interest rate on your savings account falls to 0.25% APY for that month.

Anything over the $50,000 maximum in the savings account earns 1.0% APY.

If this is starting to sound very much like the typical rules on high-yield or rewards checking accounts, that’s because they are.

Think of the Momentum accounts as Ridgestone’s riff on that concept — and the similarities don’t end there.

There are no monthly fees for either account and you can use your debit card free of charge at any MoneyPass ATM. (Click here to see if there’s a MoneyPass ATM near your home or work.)

You can also earn a $50 bonus by adding one direct deposit to your checking account.

Although this offer is available nationwide, you can’t sign up online. You’ve got to call one of the bank’s two branches in suburban Chicago (847-805-9520) or suburban Milwaukee (262-789-1011) to have an application e-mailed to you.

Click here to compare Ridgestone’s deal with the best savings and money market rates from dozens of other banks in our extensive database.