Put Your Cash Assets in Safer Accounts
Money market accounts and certificates of deposit balance safety and return
When it comes to your cash assets, the last thing you want to worry about is risk. Bank products, such as money market accounts and certificates of deposit, currently strike the best balance between safety and return, says Greg McBride of Bankrate.com. Both types of accounts are covered by the Federal Deposit Insurance Corp., which guarantees up to $250,000 per person, per institution.
Today, the top-yielding bank money market accounts are paying 3.2 percent and higher (meanwhile, the top-yielding money market mutual fund yields 2.6 percent). With CDs, you trade access to the money for a fixed interest rate over a set period of time. Shop around for the best yields and you can get 4 percent or more on everything from one- to five-year CDs. Just be willing to lock up your cash.
Reader Comments
Best interest rate this year.
Goid is up about 11% this year. I believe it may gain 3%-5% more by year end.
The more money Obama prints the better it gets.
He and his congress can make gold illegal, but I don't think they can devalue it
like they have the US$.
CDs and Money Markets Limited Guarantee
If CD's and Money Markets are guaranteed only until the end of this year, what do non-savvy investors like myself do with the money? It sounds somewhat precarious to leave it in these accounts which is where I put all of my retirement investments. So, what's the alternative, if any? Sounds like mattress-stuffing isn't so far-fetched, after all. Or, at least a fire-proof safe. Any ideas?
minutemanII
This is the very reason I only invest in short-term CD's (5-7 months and whenever my bank has a promotional offer) and Absolute Money Markets which I also use as a backup checking account. I've rolled over my IRA into a money market account and even after paying a stiff penalty, I don't regret the move, since many have now lost their savings and retirement funds. If worse came to worse, I'd pay the penalty for the CD early withdrawal in an emergency.
Granted, the interest rates are wanting, since the rates have lowered drastically, but none of these funds are subject to the whims of Wall-Street. As to the FDIC, don't count on it if our government collapses and we go off the deep end, no bank will have ready cash for withdrawal, with or without penalties. One still needs a cash reserve for emergency use which this article neglected to mention. I admit to not being particularly financially savvy, but my savings are intact and not locked-in for years to come.
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