ShopSmart's Best and Worst Financial Freebies

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Free financial products may sound like an Internet chain letter scam, but they really do exist, says ShopSmart Magazine.

The September 2013 issue of ShopSmart magazine, from Consumer Reports, looks at 7 financial freebies, five of which are truly free and helpful to households, while two of which are "not-so-hot" giveaways.

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Free checking accounts

Truly free accounts are getting harder to find, ShopSmart says, but there are still some available without no minimum-balance rules and no monthly fees. Many credit unions, Internet banks, and brokerage houses offer these. Two online banks, Ally and Schwab, offer free checking accounts plus free checks, zero ATM fees, and some tiny amount of interest on a balance.

Read More: Top Birthday Freebies

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Free personal finance help

Free online budgeting programs can help set short- and long-term financial goals and create a spending plan to help meet them. Mint.com has ads but it's "easy to set up and navigate a plan," ShopSmart says, while Yodlee.com "is clunkier" but has more features and no ads.

Read More: 5 Occasions When You Should Wait to Get a Mortgage

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Free retirement money

Employer-matched 401(k) funds are a no-brainer to get free money. But if you maxed out your 401(k), you should consider a Roth IRA or, if your employer offers it, a Roth 401(k), ShopSmart says.

"You get no tax break when you invest, but withdrawals - including earnings - are free from federal tax if you take them on or after you reach age 59 1/2 and have held the Roth IRA for more than five years," ShopSmart says. The are rules on how much you can contribute annually and income limits as well.

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Free trip insurance and other perks

Some credit cards offer free trip insurance and other perks, such as price protection and coverage for lost or damaged items within a specific time frame. But be sure to check the policy's terms and fine print about what's covered and what's not, ShopSmart advises. Bankrate.com has tools to select cards based on their perks.

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Free tax filing

FreeFile on the IRS website is indeed free to file your federal taxes, but one version 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.

"FreeFile also has a free fill-in-the-blanks version for all incomes, good for those who don't need guidance," ShopSmart says. "Other services, such as Express1040, FreetaxUSA, TaxACT, and TurboTax Federal Free Edition, offer free tax preparation and filing if you have a federal return that's relatively straightforward."

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Free credit scores

Not all credit report sites are equal.

Credit Karma is a credit-score reporting service that provides a free TransUnion credit score and a VantageScore, but "most lenders use neither of them," ShopSmart says.

"So you get what you pay for. And as another part of this 'bargain,' you must agree to let Credit Karma provide you 'offers,' which means promotions from its marketing partners," ShopSmart says.

Annualcreditreport.com provides a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act.

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Free financial plans

ShopSmart staff went to branch offices of banks and brokerage companies to ask for free financial plans, but paying a financial planner may yield better personalized advice.

"One tester was happy with his Schwab plan, which included a review of his investments, spending records, and expected retirement income," ShopSmart said. "A Fidelity plan included a discussion of asset allocation, investment risks, expenses and costs, and how various decisions could affect returns."

But financial planners who reviewed the plans said they were confusing, didn't address the clients' needs and suggested investments that were too conservative for that group, ShopSmart said.

Read More: Top Birthday Freebies

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