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 of 59 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.