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Is a Money-Market Account a good investment?

Discussion in 'The Okie Corral' started by Glock13, Apr 18, 2012.

  1. Glock13

    Glock13

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    The wife and I have each have Traditional IRAs as well as her 401K. We also have money set aside in savings for an emergency fund. I have read that the best thing to do with your emergency fund is put it in a Money Market account so you can see some growth as well as be able to take it out if needed. How are money markets performing these days? Am I better off just keeping it in savings?
     
  2. .264 magnum

    .264 magnum CLM

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    MMAs tend to pay a little more than savings accounts. They are FDIC insured the downside is usually the number of transactions per month is limited. They can be useful but often pay almost nothing more than savings.

    Check savings account rates versus MMA rates versus short term CD rates and decide ask about CD rates with early exist clauses.
     

  3. jpa

    jpa CLM

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    Another big thing about MMAs is that they usually require a hefty minimum balance. Most I've seen were $5k minimum deposit and the more you deposit, the higher the yield.

    Personally, if you need stable savings, open a brokerage account and invest in a very conservative fund with low fees and no minimum hold period. You'll still beat the return from a MMA.
     
  4. Glock13

    Glock13

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    Yeah, that's kind of what I have been reading. Was considering a CD as well.
     
  5. 220-9er

    220-9er

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    Check into one of the online banks (FDIC insured) like ING. They pay better than local banks. You link them to your regular checking account and transfer money in or out as needed.
    I wouldn't consider a money market account an investment. Just a safe parking place for some cash. Nothing that's FDIC insured is paying a very good rate right now though so anything that claims different has a catch somewhere.
     
    Last edited: Apr 18, 2012
  6. Dennis in MA

    Dennis in MA Get off my lawn

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    Near-zero rates just because of the investments they have to invest in have near-zero rates.

    I'd be surprised if there was a "safe" MM fund that the issuer isn't losing money on, expense-wise today. It's that bad. 90-day T-bills are paying 0.07% interest - ANNUALLY. For every 10,000 invested, it pays $7 in interest. Even if they pay you $3 of that, the other $4 doesn't cover their costs.
     
  7. tongix

    tongix

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    One word, SCAM ! Better get a second job or work extra than hoping to make money from these sneaky money making schemes.
     
  8. Glock13

    Glock13

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    Through my current bank, I can do a 5-year CD at 1.66%. Not a super investment, but seems quite a bit better than just keeping it in savings.
     
  9. tongix

    tongix

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    Again , i say , do not fall to this schemes . I had fallen into these dirty and snakes before . Enough said.
     
    Last edited: Apr 18, 2012
  10. Glock13

    Glock13

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    How is a CD a scam?
     
  11. Dennis in MA

    Dennis in MA Get off my lawn

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    It's made with Soylent Green, that's how. :rofl:
     
  12. jpa

    jpa CLM

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    Is the CD breakable? What's the penalty if he needs to withdraw early? I think his concern was that he needs something with a little bit of liquidity in case he needs the money for something unexpected. If you're gonna lose part of your principal and all the earned interest, I don't think that's a good investment for his purposes.

    Soylent Green is made of peoples! :)
     
  13. southernshooter

    southernshooter

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    Look at Federal credit unions. They have different rules to go by and have slightly better interest rates.
     
  14. devildog2067

    devildog2067

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    1) A money market account is not a scam. If you got "cheated" on one that means you did not understand how it worked.

    2) He's not "hoping to make money" and he certainly doesn't seem to be trying to get rich quick. He has some cash and is trying to figure out where the best place to park it is. It's a good problem to have, and a second job isn't going to fix it.
     
  15. Glock13

    Glock13

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    Exactly!
     
  16. Wolfgang

    Wolfgang Millennium Member

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    How you get cheated on a MM? You put money in, you get it out. You get less than you put in?