I think the ~0.75% APY for most MMF's is highway robbery. But with the banking sector a shambles what does one do to park cash? TIA, Yadda
- posted
14 years ago
I think the ~0.75% APY for most MMF's is highway robbery. But with the banking sector a shambles what does one do to park cash? TIA, Yadda
Why is it highway robbery? If you want to park cash for short term, that's the rate you have to deal with. You can do a search and find the highest MMF rates and chase after it.
Yes, the rates on these nearly risk free assets is low. It is not robbery that these funds are not able to pay a higher rate.
What happened is that "investors" are willing to lond money on a "nominal risk free basis" almost for free, but demand high return for anything that involves some degree of risk.
Historically, I parked my cash for years in the Vanguard treasury money market fund, until the latest change in "investment climate".
Now, I park my cash in Vanguard Short-Term Investment-Grade Fund Investor Shares, symbol VFSTX. I moved into it on 3/17/2009.
My other bond investment, which cannot be used as a cash parking vehicle, but is another sort of fixed income investment, is Vanguard High-Yield Corp Fund Investor shares, VWEHX, which is a junk bond fund. We put out money into it on March 18. It has a 9.28% yield, but, obviously, is composed ot much lower quality instruments. Since March, we had a 12.61% gain on it already.
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With one-year Treasuries under 1% you're going to have to look elsewhere for better yields than on liquid fixed accounts.
That's not to say that MMFs are not good, but the benefit is not yield
- it's safety.
-HW "Skip" Weldon Columbia, SC
Yeah, but banks are loaning out at ~4%. So they clear 3%? When markets were more normal, clearance was 2%.
You can do a bit better than that just with online banks. You can get from 1.5% - 2%. Basically all I look for that is a place to keep the emergency money. I'd rather have it in interest-bearing checking anyway, just for the increased liquidity.
Brian
I use G. E. Interest Plus, geinterestplus.com, which is now paying about
2.75% and has check>> I think the ~0.75% APY for most MMF's is highway robbery. But with the
That'd be at the pretty high end right now.
E*Trade Bank Max Rate Savings: 0.95% ING Direct (as of 3/21/09): 1.5% FNBO Direct (1st natl of Omaha):1.65% HSBC Direct 1.55%
This is a pretty nice and generally up-to-date summary:
There are a few above 2%, but several of them are variants of AllyBank -- formerly known as GMAC, which I'd stay away from.
I just glanced at bankrate.com. My reserve is in American Bank checking, currently 1.6%.
Brian
I have been moving money to several local credit unions. even with credit unions, you have to shop around.
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