The Best Money Market Deal
This isn’t a great time for cash investors when you figure the rate of return you’ll get after the inflation bite. But currently, bank products are the best of the lot, says Greg McBride, senior financial analyst at Bankrate.com, who also writes a Fed blog.
“Investors are focused on hunkering down and preserving principal that they’re looking at cash regardless of its after-inflation return,” says McBride. “If you’re going to do that, look at CDs, bank savings accounts, and money market accounts.”
Consider that the top-yielding money market accounts offered by banks are paying 3.5 percent and higher; meanwhile, the highest yielding money market mutual funds are paying roughly 2.5 percent. Not only are the bank money market accounts paying more, they offer the protection of FDIC insurance (on deposits up to $100,000 per person, per institution, and $200,000 for deposits on joint accounts).
Of course, many major fund shops have signed up for the Treasury’s guarantee program (click here for a list), but the temporary program applies only to balances held as of September 19.
And don’t forget CDs. A five-year version currently pays around 4 percent and offers risk-free FDIC protection.
Tags: banking | money market funds
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Reader Comments
Bank Safety
I have a money market account with Zions Bank n Salt Lake City. What is the sfatey rate for this bank? At what point should I consider moving this money to a safer institution ?
money market funds and accounts
What is safe and offers a high yield along with consistent returns in this upside down turbulent economic climate we find ourselves in? Money Market Funds/accounts are two ways to go. This along with CDS treasuries passbook savings accounts. In todays global economic climate how well positioned are we as investors/traders to weather all of these calamities? As somewhat of a pessimist I can't help but think that we aren't going to pull out of this monster of a mess. This is my opinion and for what it is worth we all agree that the gravity of the situation has worsened to the point of near collapse.
I am happy that the treasury and federa reserve along with other government agencies injected all of these billions of dollars to regenerate the economy. It never occurred to anybody that the investors etc. lost faith in all of those responsible parties for the mess we are in but question there integrity and character. Where is all of this leading too recovery or ruination?
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