Who needs Money Market accounts any more?
Who needs Money Market accounts any more?
I have closed my Vanguard Money Market account (and the one at Ally) and now just sweep all my taxable VG distributions to my checking account.
Is there any good reason to have a money market account to hold cash?
What riles me is the second business day rule on transactions. If I send a transaction from my checking account to my AMEX charge card now (3 am Saturday) it will be processed instantly. If I send the same transaction from a MM account it will process sometime on Tuesday night, if Monday is not a holiday.
L.
Is there any good reason to have a money market account to hold cash?
What riles me is the second business day rule on transactions. If I send a transaction from my checking account to my AMEX charge card now (3 am Saturday) it will be processed instantly. If I send the same transaction from a MM account it will process sometime on Tuesday night, if Monday is not a holiday.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I get 6.8% in my Money Market rather than 0% in my chequing account...
Re: Who needs Money Market accounts any more?
I have some cash in CapOne360 MoneyMarket
1%
1%
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
-
- Posts: 2728
- Joined: Mon Nov 10, 2014 10:34 pm
Re: Who needs Money Market accounts any more?
Some decade when interest rates go up they might seem more attractive. I don't use one now.
Re: Who needs Money Market accounts any more?
My mother, who is 91, has arthritis and likes the large checks Vanguard uses for its Money market accounts.
Re: Who needs Money Market accounts any more?
I use a MM @ Ally to escrow monthly for property tax, EFTPS quarterly payments and car/condo insurances. I don't really need it and could combine it with an Ally savings account but, it makes calculating and automating how much I need to escrow each month for those four components much easier.
Re: Who needs Money Market accounts any more?
Where is that MM account?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I am going to bet it's not in the USA.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
I think of my checking account as a firewall to my mm account. If someone were to get hold of a blank check the most they'd get is what lies in my checking account.
Re: Who needs Money Market accounts any more?
Good betLeeraar wrote:Where is that MM account?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I am going to bet it's not in the USA.
L.
Re: Who needs Money Market accounts any more?
So if people are not using money market accounts or checking accounts like Ally for their emergency fund, what are they using?
'
'
Re: Who needs Money Market accounts any more?
Is it US dollar denominated?SAB wrote:Good betLeeraar wrote:Where is that MM account?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I am going to bet it's not in the USA.
L.
- zaboomafoozarg
- Posts: 2430
- Joined: Sun Jun 12, 2011 12:34 pm
Re: Who needs Money Market accounts any more?
Is that different than the VG money market fund, VMMXX?
Because I had to use that as a sweep fund for ETFs at VG.
Because I had to use that as a sweep fund for ETFs at VG.
Re: Who needs Money Market accounts any more?
I use a combination of prepaid cards (5%+) and Ally (1%).brak wrote:So if people are not using money market accounts or checking accounts like Ally for their emergency fund, what are they using?
'
Re: Who needs Money Market accounts any more?
Only plus for it for me is no frequent trader penalty. But then I don't move funds around much any more. The yield is rising, though:
.
.
- FrugalYankee
- Posts: 39
- Joined: Mon Mar 28, 2016 7:08 pm
Re: Who needs Money Market accounts any more?
It was worth it when the accounts were paying 5% dividend. When ever rates go back up it will be worth it again. I agree that in this rate environment it is not worth the hassle.
As for the amount time it takes for transactions, often it depends on how the money is transferred. If you "pull" the money from your bank there is a delay. If you "push" the money from your bank it will be available sooner.
As for the amount time it takes for transactions, often it depends on how the money is transferred. If you "pull" the money from your bank there is a delay. If you "push" the money from your bank it will be available sooner.
Re: Who needs Money Market accounts any more?
Now dAys most "money market" funds with a $1 stable NAV are just a short term govt fund, because they are now required to hold 99.5% of them.
Re: Who needs Money Market accounts any more?
Either that, or the poster got his decimals all mixed up and he really getting 0.68 %SAB wrote:Good betLeeraar wrote:Where is that MM account?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I am going to bet it's not in the USA.
L.
Re: Who needs Money Market accounts any more?
I use VFSUX, Short Term Investment Grade Bonds for my emergency fund, and I carry around $ 20,000 in my checking account.
The way I see it, is there is a lag somewhere. I have only mutual funds (no ETFs), and the distributions are swept to my checking account at BofA. That may take a day or so longer than if they were swept to a MM account at Vanguard. The delay is when I get paid.
However, when I make a payment from my checking account, it is instantaneous. I can pay my AMEX charge card at 11 pm on Friday night, it goes straight through. If I do the same thing from a MM account, it will go through sometime before start of business on Wednesday. I'd far rather have the lag when I get paid than when I make payments.
L.
The way I see it, is there is a lag somewhere. I have only mutual funds (no ETFs), and the distributions are swept to my checking account at BofA. That may take a day or so longer than if they were swept to a MM account at Vanguard. The delay is when I get paid.
However, when I make a payment from my checking account, it is instantaneous. I can pay my AMEX charge card at 11 pm on Friday night, it goes straight through. If I do the same thing from a MM account, it will go through sometime before start of business on Wednesday. I'd far rather have the lag when I get paid than when I make payments.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
- quantAndHold
- Posts: 10141
- Joined: Thu Sep 17, 2015 10:39 pm
- Location: West Coast
Re: Who needs Money Market accounts any more?
Your bank apparently has some sort of deal where they do instant transfers to AMEX. Your money market is using the ACH system, which takes 1-3 days, depending. That's not a product of it being a bank or money market, it's a side deal your bank has made with Amex. Other banks won't necessarily have that (mine doesn't), and money markets won't necessarily not have that.
While that sounds cool, I wouldn't switch banks to get that. It's not that important to me.
While that sounds cool, I wouldn't switch banks to get that. It's not that important to me.
Re: Who needs Money Market accounts any more?
IMO, it's a scam.
Vanguard holds the money for payments from a MM account for one minute less than they are legally allowed to, which is after the close of business two business days after you make the request.
When I make an electronic payment from my checking account, it goes immediately. There's no special deal. It's the difference between real checking accounts and MM accounts.
L.
Vanguard holds the money for payments from a MM account for one minute less than they are legally allowed to, which is after the close of business two business days after you make the request.
When I make an electronic payment from my checking account, it goes immediately. There's no special deal. It's the difference between real checking accounts and MM accounts.
L.
Last edited by Leeraar on Sat Apr 02, 2016 11:05 am, edited 1 time in total.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
If this riles you so much, I'd hate to hear about your biggest problem!Leeraar wrote:What riles me is the second business day rule on transactions. If I send a transaction from my checking account to my AMEX charge card now (3 am Saturday) it will be processed instantly. If I send the same transaction from a MM account it will process sometime on Tuesday night, if Monday is not a holiday.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
Re: Who needs Money Market accounts any more?
No, I have time-sensitive tuition bills to pay and charge cards that often exceed $10,000 per month, since I travel a lot on business.celia wrote:If this riles you so much, I'd hate to hear about your biggest problem!Leeraar wrote:What riles me is the second business day rule on transactions. If I send a transaction from my checking account to my AMEX charge card now (3 am Saturday) it will be processed instantly. If I send the same transaction from a MM account it will process sometime on Tuesday night, if Monday is not a holiday.
This is not a continuing irritant, since I simply closed my MM accounts.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
Current rates in South Africa are in this range. Some web-sites indicate the current inflation rate there is 5% - 7%.SAB wrote:Good betLeeraar wrote:Where is that MM account?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I am going to bet it's not in the USA.
L.
The closest helping hand is at the end of your own arm.
Re: Who needs Money Market accounts any more?
At Vanguard, a Money market account is a requirement as the "settlement account" for brokerage transactions/holdings. This includes brokered CDs.
Re: Who needs Money Market accounts any more?
I can’t imagine doing without the money market fund I have at Vanguard. Dividends from my other Vanguard funds are paid into it. I keep about two percent of my assets in it as an emergency reserve. I can write checks on it whenever I need to. And it’s paying slightly more (0.42%) than my local checking account (0.0%). What’s not to love about that?
- zaboomafoozarg
- Posts: 2430
- Joined: Sun Jun 12, 2011 12:34 pm
Re: Who needs Money Market accounts any more?
Agreed.John151 wrote:I can’t imagine doing without the money market fund I have at Vanguard. Dividends from my other Vanguard funds are paid into it. I keep about two percent of my assets in it as an emergency reserve. I can write checks on it whenever I need to. And it’s paying slightly more (0.42%) than my local checking account (0.0%). What’s not to love about that?
Just because money markets don't work for OP doesn't mean they aren't good for most people.
So to answer OP's broad and generic question of "Who needs Money Market accounts any more?" - plenty of people.
Re: Who needs Money Market accounts any more?
This depends entirely on the bank. When my mother's bank was Wachovia, electronic payments for bill pay were sent the same day. When Wells Fargo took over, however, the funds were debited on day 0 but not transmitted until two business days later. Thus, your assertion that there is something different about Vanguard and bank checking accounts is not correct; it all depends on the bank.Leeraar wrote:IMO, it's a scam.
Vanguard holds the money for payments from a MM account for one minute less than they are legally allowed to, which is after the close of business two business days after you make the request.
When I make an electronic payment from my checking account, it goes immediately. There's no special deal. It's the difference between real checking accounts and MM accounts.
L.
Re: Who needs Money Market accounts any more?
My assertion is that there is a difference between Money Market accounts and regular checking accounts. I proved it to myself by experimenting with my Ally accounts. Perhaps checking accounts also have a grace period they could invoke, but mine goes instantly.Geologist wrote:This depends entirely on the bank. When my mother's bank was Wachovia, electronic payments for bill pay were sent the same day. When Wells Fargo took over, however, the funds were debited on day 0 but not transmitted until two business days later. Thus, your assertion that there is something different about Vanguard and bank checking accounts is not correct; it all depends on the bank.Leeraar wrote:IMO, it's a scam.
Vanguard holds the money for payments from a MM account for one minute less than they are legally allowed to, which is after the close of business two business days after you make the request.
When I make an electronic payment from my checking account, it goes immediately. There's no special deal. It's the difference between real checking accounts and MM accounts.
L.
For example, I have used my checking account to send money via Western Union to someone in South Africa, and they had it in half an hour. That was the time it took for them to get the confirmation e-mail and go to the bank.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
And the South African Rand ZAR has lost much more than half its value vs. the US dollar USD over the last five years.123 wrote:Current rates in South Africa are in this range. Some web-sites indicate the current inflation rate there is 5% - 7%.SAB wrote:Good betLeeraar wrote:Where is that MM account?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
I am going to bet it's not in the USA.
L.
http://www.xe.com/currencycharts/?from= ... AR&view=5Y
Good luck with that bet!
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
Money market funds and Money market accounts are often confused (as I did myself on my previous response )
As best I understand, the term Money Market Account (at a bank or credit union) is not the same at different institutions. Neither does it have a rigid definition. Usually, it means a very liquid account at a bank or credit union, with limited number of withdrawals per month and usually paying a higher return. It often has a higher minimum balance or minimum to earn interest of dividends.
As best I understand, the term Money Market Account (at a bank or credit union) is not the same at different institutions. Neither does it have a rigid definition. Usually, it means a very liquid account at a bank or credit union, with limited number of withdrawals per month and usually paying a higher return. It often has a higher minimum balance or minimum to earn interest of dividends.
- nisiprius
- Advisory Board
- Posts: 52107
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Re: Who needs Money Market accounts any more?
So-called "money market deposit accounts" (MMDAs) were created during the 1980s, as part of the early beginnings of deregulation.
They're just a kind of bank account. As far as I know, they have no link whatsoever to money market mutual funds or to the money market. The name was intendedto convey the impression that they would compete with money market funds. At that time, there were still regulations limiting bank interest rates, and the law creating MMDAs gave banks permission to pay higher interest rates, while being required to impose some restrictions like those mentioned by dm200, in order to separate and distinguish them from savings accounts.
As I recall, they actually paid rates that were almost competitive with money market funds for a couple of years... and then very quickly slumped and started to pay significantly less.
I've always thought the name was completely deceptive and should have been allowed.
They're just a kind of bank account. As far as I know, they have no link whatsoever to money market mutual funds or to the money market. The name was intendedto convey the impression that they would compete with money market funds. At that time, there were still regulations limiting bank interest rates, and the law creating MMDAs gave banks permission to pay higher interest rates, while being required to impose some restrictions like those mentioned by dm200, in order to separate and distinguish them from savings accounts.
As I recall, they actually paid rates that were almost competitive with money market funds for a couple of years... and then very quickly slumped and started to pay significantly less.
I've always thought the name was completely deceptive and should have been allowed.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
- quantAndHold
- Posts: 10141
- Joined: Thu Sep 17, 2015 10:39 pm
- Location: West Coast
Re: Who needs Money Market accounts any more?
The US ACH system is an overnight, batched system that was developed in 1972. It takes 1-3 days to send a payment, depending on whether both ends of the system are ACH processors or not. Banks generally are. Brokerages aren't, but their money market accounts are usually connected to a bank that is. A company that isn't hooked into the ACH system has to send or receive payment through a third party ACH processor, which requires an extra stay overnight someplace.Leeraar wrote:
My assertion is that there is a difference between Money Market accounts and regular checking accounts. I proved it to myself by experimenting with my Ally accounts. Perhaps checking accounts also have a grace period they could invoke, but mine goes instantly.
L.
Wire transfer is instant, but expensive. My understanding is that most of the cost is related to fraud concerns. Once the money goes through the wire, it's impossible to suck it back the other direction. Western Union is a wire transfer. Your test with WU would not be conclusive.
The US ACH system is being slowly migrated to something called SVP, which is a "same day" version of ACH. Eventually, once the stars align, we will all have instant payments from anyone who is hooked up to the system, to anyone who is hooked up to the system. Currently, some are, some aren't. Your bank and Amex apparently are. Vanguard, being a low cost provider of services, is probably a late adopter. I'm cool with that.
Re: Who needs Money Market accounts any more?
My point is that WU was able to get the money to their satisfaction from my bank account within seconds.quantAndHold wrote:The US ACH system is an overnight, batched system that was developed in 1972. It takes 1-3 days to send a payment, depending on whether both ends of the system are ACH processors or not. Banks generally are. Brokerages aren't, but their money market accounts are usually connected to a bank that is. A company that isn't hooked into the ACH system has to send or receive payment through a third party ACH processor, which requires an extra stay overnight someplace.Leeraar wrote:
My assertion is that there is a difference between Money Market accounts and regular checking accounts. I proved it to myself by experimenting with my Ally accounts. Perhaps checking accounts also have a grace period they could invoke, but mine goes instantly.
L.
Wire transfer is instant, but expensive. My understanding is that most of the cost is related to fraud concerns. Once the money goes through the wire, it's impossible to suck it back the other direction. Western Union is a wire transfer. Your test with WU would not be conclusive.
The US ACH system is being slowly migrated to something called SVP, which is a "same day" version of ACH. Eventually, once the stars align, we will all have instant payments from anyone who is hooked up to the system, to anyone who is hooked up to the system. Currently, some are, some aren't. Your bank and Amex apparently are. Vanguard, being a low cost provider of services, is probably a late adopter. I'm cool with that.
All of this is possible, it is just that MM funds hold the money as long as they are allowed to. Cue violins and singing choirs with complaints about regulation. Do we need the Feds to change the regulations on how long they can take to respond, or, can one imagine, they will respond in the time that technology allows them to?
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Who needs Money Market accounts any more?
VMMXX is so last decade. Even we dinosaurs park our mad money at 1% plus. I moved my last centavo from VMMXX many years ago.
Re: Who needs Money Market accounts any more?
I don't understand all the nuances of this but:Leeraar wrote:My point is that WU was able to get the money to their satisfaction from my bank account within seconds.
If I initiate a transfer from my bank to Vanguard Brokerage Service those $'s are available to buy "something" within minutes.
Similarly if I initiate a "cash" transfer from Schwab (margin account) to my bank before or some time after closing hours the money is in the bank by daybreak the next business day. The same xfer at Vg (not margin) has the $'s in my bank as a "pending" transaction the next business morning.
If I needed the money in real time I could use a wire xfer but I've never had to do that.
As an "it hasn't changed" much here's a true anecdote from some ten or twenty years ago. I walked into the local branch of a regional bank the week before Christmas in a snowstorm dressed like a "not business person" with a $100k certified check payable to Mrs. Doc with the intent of opening an account for her. The teller took the check and then said "wait a minute". Doc goes "oh sith". The teller came back a short time later and said "I just wanted to tell you that those funds are available for immediate withdrawal" and the bank manager would like to see you. The bank manager wanted to give me a bottle of champaign. True storey but before all the new bank regs.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Re: Who needs Money Market accounts any more?
Any where I could read more about SVP? Googling it leads to a bunch of other stuff.quantAndHold wrote:The US ACH system is an overnight, batched system that was developed in 1972. It takes 1-3 days to send a payment, depending on whether both ends of the system are ACH processors or not. Banks generally are. Brokerages aren't, but their money market accounts are usually connected to a bank that is. A company that isn't hooked into the ACH system has to send or receive payment through a third party ACH processor, which requires an extra stay overnight someplace.Leeraar wrote:
My assertion is that there is a difference between Money Market accounts and regular checking accounts. I proved it to myself by experimenting with my Ally accounts. Perhaps checking accounts also have a grace period they could invoke, but mine goes instantly.
L.
Wire transfer is instant, but expensive. My understanding is that most of the cost is related to fraud concerns. Once the money goes through the wire, it's impossible to suck it back the other direction. Western Union is a wire transfer. Your test with WU would not be conclusive.
The US ACH system is being slowly migrated to something called SVP, which is a "same day" version of ACH. Eventually, once the stars align, we will all have instant payments from anyone who is hooked up to the system, to anyone who is hooked up to the system. Currently, some are, some aren't. Your bank and Amex apparently are. Vanguard, being a low cost provider of services, is probably a late adopter. I'm cool with that.
- abuss368
- Posts: 27850
- Joined: Mon Aug 03, 2009 2:33 pm
- Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
- Contact:
Re: Who needs Money Market accounts any more?
I closed our Prime Money Market account many years ago. We simply have a savings account.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Who needs Money Market accounts any more?
In my opinion, "deceptive" is a bit strong, but I do agree that the term may be misleading or, perhaps, meaningless.I've always thought the name was completely deceptive and should have been allowed.
- abuss368
- Posts: 27850
- Joined: Mon Aug 03, 2009 2:33 pm
- Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
- Contact:
Re: Who needs Money Market accounts any more?
I fondly recall the days of Vanguard's Prime Money Market Fund paying 5% - 6% or more!
John C. Bogle: “Simplicity is the master key to financial success."
- quantAndHold
- Posts: 10141
- Joined: Thu Sep 17, 2015 10:39 pm
- Location: West Coast
Re: Who needs Money Market accounts any more?
How much did you pay for that Western Union? I can do a wire transfer from any of my Vanguard accounts, too. I did it a few months ago. I fail to see the problem.Leeraar wrote: My point is that WU was able to get the money to their satisfaction from my bank account within seconds.
All of this is possible, it is just that MM funds hold the money as long as they are allowed to. Cue violins and singing choirs with complaints about regulation. Do we need the Feds to change the regulations on how long they can take to respond, or, can one imagine, they will respond in the time that technology allows them to?
L.
-
- Posts: 64
- Joined: Tue Jul 02, 2013 9:42 pm
Re: Who needs Money Market accounts any more?
It looks to me like the system has been all but abandoned.Aish wrote:Any where I could read more about SVP? Googling it leads to a bunch of other stuff.quantAndHold wrote:The US ACH system is an overnight, batched system that was developed in 1972. It takes 1-3 days to send a payment, depending on whether both ends of the system are ACH processors or not. Banks generally are. Brokerages aren't, but their money market accounts are usually connected to a bank that is. A company that isn't hooked into the ACH system has to send or receive payment through a third party ACH processor, which requires an extra stay overnight someplace.Leeraar wrote:
My assertion is that there is a difference between Money Market accounts and regular checking accounts. I proved it to myself by experimenting with my Ally accounts. Perhaps checking accounts also have a grace period they could invoke, but mine goes instantly.
L.
Wire transfer is instant, but expensive. My understanding is that most of the cost is related to fraud concerns. Once the money goes through the wire, it's impossible to suck it back the other direction. Western Union is a wire transfer. Your test with WU would not be conclusive.
The US ACH system is being slowly migrated to something called SVP, which is a "same day" version of ACH. Eventually, once the stars align, we will all have instant payments from anyone who is hooked up to the system, to anyone who is hooked up to the system. Currently, some are, some aren't. Your bank and Amex apparently are. Vanguard, being a low cost provider of services, is probably a late adopter. I'm cool with that.
http://www.digitaltransactions.net/news ... -the-Lurch
http://www.pymnts.com/in-depth/2014/nac ... -payments/
While faster ACH-type processing seems inevitable in the long run, this particular SVP system seems to have lost momentum by my reading.
Re: Who needs Money Market accounts any more?
I forget what I paid WU, but it was maybe a few percent to send $500. It was much cheaper than my bank would charge for a foreign wire transfer. My point though is not WU. It is the speed of the transaction from my checking account.quantAndHold wrote:How much did you pay for that Western Union? I can do a wire transfer from any of my Vanguard accounts, too. I did it a few months ago. I fail to see the problem.
My point is simply this: If you request a transfer from a MM account today (Sunday) to your checking account, you will not see the money available to you until Wednesday, after close of business Tuesday. If I transfer money from my BofA checking to my child's checking at another bank, it is available almost immediately, 24/7.
I personally cannot do the tests any more, since I have closed all my MM accounts. But, if you have a MM account, try it for yourself.
Given the minimal returns from MM accounts these days, and the possibility of "breaking the buck", and the untimeliness of their transactions, and that they may not be FDIC insured (my GMAC / Ally Demand Note account was not), I think MM accounts are an idea whose time has passed.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
-
- Posts: 487
- Joined: Sun Aug 24, 2008 8:20 pm
Re: Who needs Money Market accounts any more?
I just looked up Western Union's website. It says if you pay using a credit or debit card the receiver will get the money in minutes. If you pay using a bank account the payment will take 4 days to process. I'm guessing you paid WU using your debit card. If so, this means the payment from you to WU was processed over MasterCard/Visa/AmEx/etc. and not over ACH. Credit/debit card transactions are processed sychronously in milliseconds. ACH is batch-processed overnight.Leeraar wrote:I forget what I paid WU, but it was maybe a few percent to send $500. It was much cheaper than my bank would charge for a foreign wire transfer. My point though is not WU. It is the speed of the transaction from my checking account.quantAndHold wrote:How much did you pay for that Western Union? I can do a wire transfer from any of my Vanguard accounts, too. I did it a few months ago. I fail to see the problem.
My point is simply this: If you request a transfer from a MM account today (Sunday) to your checking account, you will not see the money available to you until Wednesday, after close of business Tuesday. If I transfer money from my BofA checking to my child's checking at another bank, it is available almost immediately, 24/7.
I personally cannot do the tests any more, since I have closed all my MM accounts. But, if you have a MM account, try it for yourself.
Given the minimal returns from MM accounts these days, and the possibility of "breaking the buck", and the untimeliness of their transactions, and that they may not be FDIC insured (my GMAC / Ally Demand Note account was not), I think MM accounts are an idea whose time has passed.
L.
Anakin
-
- Posts: 487
- Joined: Sun Aug 24, 2008 8:20 pm
Re: Who needs Money Market accounts any more?
I transfer money over ACH between my own bank accounts sometimes, and I have never seen the money get transferred immediately, 24/7. It always takes 2 to 3 business days. Perhaps your bank is offering you complimentary wire transfer services.Leeraar wrote:I forget what I paid WU, but it was maybe a few percent to send $500. It was much cheaper than my bank would charge for a foreign wire transfer. My point though is not WU. It is the speed of the transaction from my checking account.quantAndHold wrote:How much did you pay for that Western Union? I can do a wire transfer from any of my Vanguard accounts, too. I did it a few months ago. I fail to see the problem.
My point is simply this: If you request a transfer from a MM account today (Sunday) to your checking account, you will not see the money available to you until Wednesday, after close of business Tuesday. If I transfer money from my BofA checking to my child's checking at another bank, it is available almost immediately, 24/7.
I personally cannot do the tests any more, since I have closed all my MM accounts. But, if you have a MM account, try it for yourself.
Given the minimal returns from MM accounts these days, and the possibility of "breaking the buck", and the untimeliness of their transactions, and that they may not be FDIC insured (my GMAC / Ally Demand Note account was not), I think MM accounts are an idea whose time has passed.
L.
Anakin
Re: Who needs Money Market accounts any more?
I've found Prime useful at least from a mental accounting perspective. It takes distributions from my taxable S&P 500 account, with a monthly deposit of my guesstimate difference between the distributions and next years Roth IRA limit. Every January I fund the IRA and move the difference back to the 500 account. It's not the most efficient system, but it's worked pretty well and also serves as an extra emergency fund stash on top of my credit union savings.
"You can't latte yourself to bankruptcy. The bladder won't allow it." |
-Katherine Porter
Re: Who needs Money Market accounts any more?
In my role as managing (part time) an organization, I use the ACH system regularly.
I think it is important to distinguish between the capabilities of the ACH system AND what/how particular organizations choose to do (or not do). Even before this, new "same day ACH", credits and debits by ACH could commonly be done effective the next business day. I have done this regularly for many years. There would be some kind of cutoff time for next business day, such as 4 pm (or so).
As large as Vanguard is, I have to believe that multi-day delays in ACH debits and credits are something Vanguard chooses to do (or not do).
I think it is important to distinguish between the capabilities of the ACH system AND what/how particular organizations choose to do (or not do). Even before this, new "same day ACH", credits and debits by ACH could commonly be done effective the next business day. I have done this regularly for many years. There would be some kind of cutoff time for next business day, such as 4 pm (or so).
As large as Vanguard is, I have to believe that multi-day delays in ACH debits and credits are something Vanguard chooses to do (or not do).
- quantAndHold
- Posts: 10141
- Joined: Thu Sep 17, 2015 10:39 pm
- Location: West Coast
Re: Who needs Money Market accounts any more?
Having had a B of A Prima checking account in the recent past, I am quite certain that transfers to an outside bank take 3 days, unless you pay them money. Within B of A is faster, of course.
-
- Posts: 1290
- Joined: Mon Jan 20, 2014 11:14 am
Re: Who needs Money Market accounts any more?
agree totally with this.John151 wrote:I can’t imagine doing without the money market fund I have at Vanguard. Dividends from my other Vanguard funds are paid into it. I keep about two percent of my assets in it as an emergency reserve. I can write checks on it whenever I need to. And it’s paying slightly more (0.42%) than my local checking account (0.0%). What’s not to love about that?
also agree with nisiprius that a money market at a bank is nothing more than a name for an account that they can choose to pay a bit more interest on. i remember when first national bank of atlanta created their first money market account (1980 give or take) and paid an initial rate of 21% to create a buzz. they weren't making that on any short term investments!
Re: Who needs Money Market accounts any more?
Nobody today is getting 6.8% on a dollar-based money market account. Where do you keep your time machine?SAB wrote:Me.
I get 6.8% in my Money Market rather than 0% in my chequing account...
Re: Who needs Money Market accounts any more?
True enough, but the biggest difference between them and a plain-vanilla savings account is that the MM accounts impose a limit on monthly withdrawals (only 6 allowed)miles monroe wrote:....... a money market at a bank is nothing more than a name for an account that they can choose to pay a bit more interest on.
Since I have to regularly make transfers to checking account I have to keep this silly rule in mind