Why You Need Cash & Where To Get Better Yields

Описание: In today’s super volatile markets, cash is king. No one knows day to day if the stock market is going to soar or plunge. But money funds and cash remain quite stable and can earn a decent yield if you know where to look.

It is important to have access to some liquid funds in today’s very uncertain world. But that doesn’t mean you have to earn nothing just so you can get access to your money easily. You’re probably very dissatisfied with the puny yields the banks are paying these days. The average is about 0.1% and it’s not likely to rise any time soon. There are two alternative places to put your cash where it earns much more than that.

Banks and credit unions are insured, and you can get into a savings account or money market fund at either of them. Each of these accounts is insured against the bank’s default up to $250,000 per account. The best rate that I have been able to find anywhere in the country is my affiliate Consumers Credit Union which pays 5.09 percent on deposits up to $10,000. A website that you can always check to find the highest rates is www.bankrate.com. Lately the top rate was BMO Harris paying 1.75% with a minimum of $5,000 on deposit, Marcus by Goldman Sachs, paying 1.55% with no minimum and Capital One paying 1.5%, also with no minimum. Savings accounts also can offer decent rates but you can’t write checks on them like you can with a money fund. Bankrate’s latest listings show the top two savings accounts are at HSBC Direct and CIT Bank, both paying 1.7%.

Consumers Credit Union: https://tinyurl.com/y729t32c

The other alternative is a money market mutual fund issued by mutual fund companies and brokerage firms. They buy short term securities such as Treasury bills and commercial paper issued by highly rated corporations so their yields always are reflecting what is happening now in the money markets. They are insured against default by the Securities Investor Protection Corporation, known as SIPC, up to $500,000. The highest money market fund yield I know of is the 1.5% currently being paid by my affiliate Ally Invest. You can find out more about them by clicking on the link in the description below. A website where you can always check the highest money market fund yields is Crane Data which publishes Money Fund Intelligence. The top two rates right now are the Wells Fargo Prime Fund, paying 1.12% and the Vanguard Prime Admiral fund, paying 0.88%.

Now is a good time to hold onto enough cash to pay your bills and build up a rainy day fund. By putting money into insured savings accounts and money market mutual funds, you can still earn a decent yield at the same time.

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As a personal finance expert, Jordan recognizes quality solutions, forming affiliate relationships to help improve people’s financial lives.