I'm amazed that Chase is only showing 2-3% for their "Premier" savings accounts.

CDs are almost neer a good thing.

Even if you waste time on the calculus and it turns out that you're
making 0.1% more in interest, the fact that you can't withdraw whenever
you want should be the deciding factor.

Just find a good money market account that has checkwriting
capabilities.

--Mike...


Shhhh wrote:
- quote -

"MoneyMan101" <info[at]websitemarketingcorp.com> wrote in message
news:1168558080.495959.201970[at]p59g2000hsd.googlegroups.com...
- quote -

Not to nitpick... but ING is only paying 4.5% right now. and in order to
qualify for the 5% at citi bank you have to have a citi bank checking
account.

Hope this helps,
Shhhh

If response to your questions, if you want your funds to stay "very
liquid" then I would suggest some of the Awesome savings plans
available online right now through ING Direct or CitiBank or
whatever... There are no fees to maintain or withdraw funds from the
account, and right now they are paying 5% or better..

You can attach the account directly to your current ckecking account,
and add more funds at anytime to make saving that much easier.. If
and when these rates fall back to normal (around 2-3%) then I would
shop for a fund or something like that..


This way is very safe, very secure, easy to manage, and right now pay
as well as any short term CD...

Best withes, and good luck in the financial jungle out there!


Jon Davidson
http://www.worldfinancialguide.com

Logan Shaw wrote:
- quote -

Flexibility. As you pointed out, you can pull your money out of a
money market fund at any time and not suffer any penalty. Many money
market funds will give you check writing privileges. You don't have to
worry managing the CD ladder, yourself. The money market fund also
pools your money together in one place. This may get you a better
interest rate. If you build a CD ladder, you may have enough money in
total to get the higher rate, but the individual CDs are smaller and
won't qualify.

As an aside, most money market funds are heavily invested in CDs.
Vanguard's prime money market fund, for example, hold 53% CDs. If
you're invested in such a fund, your return should be somewhat closely
tied to the return on CDs.

On the other hand, CDs are FDIC insured. I think you can typically get
a higher rate of return from CDs. As Elle pointed out, the yield curve
is currently inverted, so you can take advantage of that when puchasing
CDs.

One last thing to consider if you're in a high tax bracket: tax-exempt
money market funds. Vanguard has 6 such funds. One is exempt from
just federal taxes and the other 5 are exempt from state and local
taxes in CA, NJ, NY, OH, and PA (they're exempt from federal taxes,
too). USAA has tax-exempt funds for FL and VA, as well. The rule of
thumb I've heard is to go with the tax-exempt funds if you're in the
28% tax bracket or higher.

--Bill

The "yield curve" is unusually shaped right now: It's
inverted. This means MMF pay about the same as bonds with a
maturity of five years or so. How long this will continue is
anyone's guess, but historically, this doesn't last more
than a couple of years.

Whether one wants to buy some slightly higher yielding CDS,
or build a ladder going out, say, five years, is a matter of
personal preference. The five-year ladder might lock in good
rates if and when MMF rates fall. Of course, all could rise,
too.

An excellent interactive graphic explaining yield curves
appears at:
http://www.smartmoney.com/onebond/in...ory=yieldcurve

Hope this is the right newsgroup to ask about this in.

Like many people, I maintain something like 2-3 months' salary in a
fairly liquid place in case I lose my job, have an unexpected expense,
etc., etc. However, currently, it's in savings account which earns a
pitiful amount of interest. The plan is to move it somewhere smarter.

I've heard it said that a Money-Market Mutual Fund is a good place to
keep money like this, but I'm not sure I see the advantage of doing
this over just keeping it in a ladder of CDs. Yeah, I can withdraw
without penalties at all (right?) with a MMMF, but it's not hard to
pretty well minimize the penalties on withdrawing from a CD either.
(For instance, at my credit union, absolute worst case is losing
3 months' of earnings, and you can do better than that if you don't
withdraw the whole amount, etc., etc.)

So, looking at bankrate.com, it seems I can get 5% or so from one
of the better MMMFs, but can't I get pretty comparable returns from
CDs as well? If so, what is the advantage to a MMMF?

- Logan