Stocks the easy way
FOR PEOPLE BUILDING a nest egg, the stock
market poses a challenge. On one
hand, stocks can offer enticing
yields. On the other hand,
they are risky investments,
and buying them has
traditionally meant going
through a broker, paying high commissions and
making investments in
large lump sums.
Costco can’t answer
the question of whether
you should invest in
stocks. But Costco can
make it easy and affordable
for you to invest in stocks if
you choose to do so. Here’s a look.
Through ShareBuilder Online Investing, Costco members can establish
dollar-based investing plans—that is, you can
invest any dollar amount in the stocks you
want from ShareBuilder’s pool of 6,000 stocks.
There are no account minimums to get started
and no inactivity fees. You do all transactions
online, and you can set up a weekly or
monthly automatic investment plan to build
your shares over time.
“It’s a hassle-free way of building your
stock portfolio,” says John Gleason, Costco
member services manager. “Once your plan is
set up, everything happens automatically. You
can start or stop your plan, or make investment changes, anytime you want.”
Starting a ShareBuilder plan involves
three easy steps: Select your favorite stocks
and the amount you want to invest, decide
how often you want to invest and provide a
funding source. Most people fund an account
directly from a checking or savings account.
An option worth considering this time of
year is establishing a custodial account for a
child as a holiday gift. They’re easy to set up
and a great way to start a college savings plan.
Whether it’s a custodial, joint or individual
investment account, Costco members reap
special benefits for opening a new account: All
members receive a $55 bonus for each new
funded account. Also, Executive Members
receive a 25 percent rebate per quarter on automatic investment fees ( 10 percent for Business
and Gold Star members).—Tim Talevich
How $100 today
and $50 per
work for you
Here is a look at what $100 today and $50
a month in a stock market account could be
worth. This is a hypothetical presentation
based on a fixed 10 percent rate of return
and is not a guarantee of future performance.
Actual investment returns will vary with
stock selection and changing market conditions. Calculations do not include tax or inflation considerations.
ShareBuilder is a registered broker-dealer and member
NASD/SIPC and is not affiliated with Costco.
Myths, truths of savings
SURPRISINGLY, THE STANDARD savings
account remains one of the most popular
places for Americans to stash their money. It’s
not clear why, but it may be a result of myths
about better savings options, such as money
market accounts. Let’s bust a few of them.
Myth 1: It’s better to have a savings
account than a money market account because
you have access to your money whenever you
In reality, you can tap into money market
accounts in a variety of ways, including checks,
ATMs and online transfers. It’s true that federal
regulations restrict the number of times you
can withdraw from a money market account.
But unless you’re tapping your account very
frequently, this shouldn’t be an inconvenience.
Myth 2: Savings accounts earn about as
much in interest as money market accounts.
In reality, money market accounts have
outpaced traditional savings accounts in
interest earnings, especially during the past
Myth 3: Savings accounts are safe, but
money market deposit accounts aren’t.
In reality, both types of accounts are
FDIC-insured up to $100,000 per depositor.
Myth 4: You must have deep pockets—
For more information on these investment
options, and to open an account:
ShareBuilder: Go to costco.com and
select “Services,” “Financial” and
“ShareBuilder Online Investing.”
Money market accounts: Call toll-free
1-866-630-7953. For more details, go to
costco.com and select “Services,”
“Financial” and “Money Market Accounts.”
Yield (AP Y)
2004 2005 2006
*As of September 25, 2006, if the daily balance of this money
market account was $100 or more, the APY was 5.14%; if not,
the APY was 0.00%. Minimum deposit amount is $5,000. Terms
and conditions of this offer are subject to change without notice.
Rates are variable and are subject to change. This product is
offered by Capital One, F. S.B and Capital One Bank, members
FDIC. **National average of APYs for money market accounts
as published by BanxQuote.com as of September 25, 2006.
$10,000 or more—to start a money market
account, and you must be willing to put that
money away for a long time.
In reality, you can open money market
accounts for much less than that. The longer
you leave the money in the account, the more
Costco and Capital One have teamed up
to offer a money market account program
through Capital One. The minimum deposit
is $5,000. A new feature of the program is
online transactions, which make it easier
than ever to transfer money to or take money
from an account. (Withdrawal limits apply.)
Money market accounts have been especially attractive during the past several years
because of rising interest rates. And Capital
One’s money market rates have been better
than the national average for money market
accounts, as the accompanying chart shows.
The service is available to all members.
Executive Members who sign up for their first
account will receive an interest bonus.—TT