Money Markets

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Investnewbie01
Posts: 70
Joined: Tue Jun 06, 2017 12:33 pm

Money Markets

Post by Investnewbie01 » Fri Mar 01, 2019 9:54 pm

Hello
Appreciate views on where to invest say 10k as a reserve. Normal savings in my bank pay a whopping 0.04%, so shoe box under the bed is attractive! CD,s tie up the money for too long so was thinking of putting in a Money Market where rates approach 2%,slightly better.
Views on this suggestion please?
Thank you

Jack FFR1846
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Re: Money Markets

Post by Jack FFR1846 » Fri Mar 01, 2019 9:57 pm

Redneck Bank pays 2.5% in their Megamoney account up to $50k.
Bogle: Smart Beta is stupid

Nicolas
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Re: Money Markets

Post by Nicolas » Fri Mar 01, 2019 10:00 pm

I would put it into VMMXX Vanguard Prime Money Market which has a current compound yield of 2.49%. In fact I’ve invested in it myself.

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ResearchMed
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Re: Money Markets

Post by ResearchMed » Fri Mar 01, 2019 10:05 pm

Nicolas wrote:
Fri Mar 01, 2019 10:00 pm
I would put it into VMMXX Vanguard Prime Money Market which has a current compound yield of 2.49%. In fact I’ve invested in it myself.
Yes, this has become a very attractive place to put money, with excellent liquidity.
And there are now quite a few other MM funds at other vendors that are offering similar returns.

It's been quite a change, and rather quickly, from the ultra-low interest rates recently.

RM
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retiringwhen
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Re: Money Markets

Post by retiringwhen » Fri Mar 01, 2019 10:47 pm

ResearchMed wrote:
Fri Mar 01, 2019 10:05 pm
Nicolas wrote:
Fri Mar 01, 2019 10:00 pm
I would put it into VMMXX Vanguard Prime Money Market which has a current compound yield of 2.49%. In fact I’ve invested in it myself.
Yes, this has become a very attractive place to put money, with excellent liquidity.
And there are now quite a few other MM funds at other vendors that are offering similar returns.

It's been quite a change, and rather quickly, from the ultra-low interest rates recently.

RM
Where can I get a money market account with a 2.5% yield right now?

I found some second tier bank offering a promotional rate of 2.47%.

Ally is at 0.9% for a $10K deposit.

Fidelity's retail Prime is SPRXX is running 2.26% due to its much higher ER.

For taxable money market, you can't beat VMMXX almost ever outside some temporary promotions.

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ResearchMed
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Re: Money Markets

Post by ResearchMed » Fri Mar 01, 2019 10:55 pm

retiringwhen wrote:
Fri Mar 01, 2019 10:47 pm
ResearchMed wrote:
Fri Mar 01, 2019 10:05 pm
Nicolas wrote:
Fri Mar 01, 2019 10:00 pm
I would put it into VMMXX Vanguard Prime Money Market which has a current compound yield of 2.49%. In fact I’ve invested in it myself.
Yes, this has become a very attractive place to put money, with excellent liquidity.
And there are now quite a few other MM funds at other vendors that are offering similar returns.

It's been quite a change, and rather quickly, from the ultra-low interest rates recently.

RM
Where can I get a money market account with a 2.5% yield right now?

I found some second tier bank offering a promotional rate of 2.47%.

Ally is at 0.9% for a $10K deposit.

Fidelity's retail Prime is SPRXX is running 2.26% due to its much higher ER.

For taxable money market, you can't beat VMMXX almost ever outside some temporary promotions.
Not sure I understand your question.

As mentioned above, the Vanguard Prime MM fund's current rate is just about 2.5%.

RM
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DonIce
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Re: Money Markets

Post by DonIce » Fri Mar 01, 2019 11:02 pm

You can get 2.4-2.5% in FDIC insured savings accounts at various banks. That's the same as you can get on money market funds.

https://www.bankrate.com/banking/savings/rates/

If you're comfortable with some low level of risk you can get around 2.8-3% in various very short duration bond ETFs.

HAWK23
Posts: 113
Joined: Sun Feb 25, 2018 3:59 pm

Re: Money Markets

Post by HAWK23 » Sat Mar 02, 2019 8:37 am

CIT Bank has been great - 2.45% on accounts holding at least 25K. Or in my case, 2.45% if you transfer a minimum 100$ into the account once per month if your account is below 25K. I just set the automatic transfer to send 100$ to the savings builder account once every month to maintain the 2.45%. If I need the 100$ back I can always just transfer it back with no effect on the 2.45% rate.

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midareff
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Location: Biscayne Bay, South Florida

Re: Money Markets

Post by midareff » Sat Mar 02, 2019 8:43 am

retiringwhen wrote:
Fri Mar 01, 2019 10:47 pm
ResearchMed wrote:
Fri Mar 01, 2019 10:05 pm
Nicolas wrote:
Fri Mar 01, 2019 10:00 pm
I would put it into VMMXX Vanguard Prime Money Market which has a current compound yield of 2.49%. In fact I’ve invested in it myself.
Yes, this has become a very attractive place to put money, with excellent liquidity.
And there are now quite a few other MM funds at other vendors that are offering similar returns.

It's been quite a change, and rather quickly, from the ultra-low interest rates recently.

RM
Where can I get a money market account with a 2.5% yield right now?

I found some second tier bank offering a promotional rate of 2.47%.

Ally is at 0.9% for a $10K deposit.

Fidelity's retail Prime is SPRXX is running 2.26% due to its much higher ER.

For taxable money market, you can't beat VMMXX almost ever outside some temporary promotions.
Ally is 2.2% for a savings account.

Topic Author
Investnewbie01
Posts: 70
Joined: Tue Jun 06, 2017 12:33 pm

Re: Money Markets

Post by Investnewbie01 » Sat Mar 02, 2019 11:27 am

Excellent thank you for all the his advice great!
If I go to a bank savings account should it be insured? I note he 2 highest rated banks don’t appear to be?

Nicolas
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Joined: Wed Aug 22, 2012 7:41 am

Re: Money Markets

Post by Nicolas » Sat Mar 02, 2019 11:40 am

Investnewbie01 wrote:
Sat Mar 02, 2019 11:27 am
Excellent thank you for all the his advice great!
If I go to a bank savings account should it be insured? I note he 2 highest rated banks don’t appear to be?
If I’m opening a bank savings account, whether locally or online, I would insist on FDIC insurance. Or if at a credit union, NCUA insurance. All or almost all local banks and credit unions have it. Some online banks have it, not sure what their proportion is. I use a local credit union (NCUA), the online Synchrony Bank (FDIC) and Vanguard Prime MM (not insured, but safe).

jharkin
Posts: 2362
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Location: Boston suburbs

Re: Money Markets

Post by jharkin » Sat Mar 02, 2019 11:44 am

retiringwhen wrote:
Fri Mar 01, 2019 10:47 pm
ResearchMed wrote:
Fri Mar 01, 2019 10:05 pm
Nicolas wrote:
Fri Mar 01, 2019 10:00 pm
I would put it into VMMXX Vanguard Prime Money Market which has a current compound yield of 2.49%. In fact I’ve invested in it myself.
Yes, this has become a very attractive place to put money, with excellent liquidity.
And there are now quite a few other MM funds at other vendors that are offering similar returns.

It's been quite a change, and rather quickly, from the ultra-low interest rates recently.

RM
Where can I get a money market account with a 2.5% yield right now?

I found some second tier bank offering a promotional rate of 2.47%.

Ally is at 0.9% for a $10K deposit.

Fidelity's retail Prime is SPRXX is running 2.26% due to its much higher ER.

For taxable money market, you can't beat VMMXX almost ever outside some temporary promotions.
https://www.bankrate.com/banking/savings/rates/

Hundreds of online and Brick and Mortar banks offering 2% + on MM and CDs ranging from 2.7 (12mo) to 3.5 (60mo).


Not hard to find at all......

Topic Author
Investnewbie01
Posts: 70
Joined: Tue Jun 06, 2017 12:33 pm

Re: Money Markets

Post by Investnewbie01 » Wed Mar 13, 2019 6:22 pm

Update in addition to the excellent Vanguard Prime money account can also use the settlement account, ( used to buy & sell) no minimum and pays an attractive 2.34%

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smarcus3
Posts: 260
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Location: USA

Re: Money Markets

Post by smarcus3 » Wed Mar 13, 2019 7:34 pm

Vmmxx is hard to beat for ease of use and yield.
This is my personal opinion. I'm an engineer not a financial advisor.

sport
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Location: Cleveland, OH

Re: Money Markets

Post by sport » Wed Mar 13, 2019 7:41 pm

Investnewbie01 wrote:
Wed Mar 13, 2019 6:22 pm
Update in addition to the excellent Vanguard Prime money account can also use the settlement account, ( used to buy & sell) no minimum and pays an attractive 2.34%
I believe the settlement fund must be the Vanguard Federal MM fund, not the Prime MM fund. 2.34% is the yield of the Federal Fund. The Prime Fund has a higher yield.

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jeffyscott
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Location: Wisconsin

Re: Money Markets

Post by jeffyscott » Wed Mar 13, 2019 9:29 pm

sport wrote:
Wed Mar 13, 2019 7:41 pm
Investnewbie01 wrote:
Wed Mar 13, 2019 6:22 pm
Update in addition to the excellent Vanguard Prime money account can also use the settlement account, ( used to buy & sell) no minimum and pays an attractive 2.34%
I believe the settlement fund must be the Vanguard Federal MM fund, not the Prime MM fund. 2.34% is the yield of the Federal Fund. The Prime Fund has a higher yield.
In a taxable account, there will be less state income tax on Federal. When I compared estimated after tax yield, Prime, Federal, and Treasury money market all ended up about the same at my effective marginal state income tax rate of 7.5%.
Time is your friend; impulse is your enemy. - John C. Bogle

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Taj_Mahalo
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Re: Money Markets

Post by Taj_Mahalo » Thu Mar 14, 2019 7:32 am

Jack FFR1846 wrote:
Fri Mar 01, 2019 9:57 pm
Redneck Bank pays 2.5% in their Megamoney account up to $50k.
I thought this was a joke until I looked it up. I still ended up laughing from their website.
Income is not wealth. Wealth is not income. Both are equally as important and either is capable of producing the other.

50/50
Posts: 39
Joined: Wed Mar 13, 2019 9:16 am

Re: Money Markets

Post by 50/50 » Thu Mar 14, 2019 9:37 am

Barclays has an on line savings account @2.2%, no minimum to open, FDIC insured.

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