An absolutely safe way to store $100,000 of your Money in the bank, that pays a nice yield is in a Money Market
Savings Account, also known as a Money Market Deposit Account. They are insured up to $100,0000 (if
a retirement account, up to $250.000) by Federal Deposit Insurance Corporation if in a bank, and if in a Credit
Union by National Credit Union Share Insurance Fund. With a spouse you can also have a joint account also
insured.
With your Money Market Savings Account or Money Market Account, there is a minimum balance, but the money
market account pays about twice the interest rate that a Passbook Savings Account or a Statement Savings Account
pays. The rates are set by the bank or credit union to reflect the directions of overall interest rates and can change
on a daily basis although most banks change only weekly. The money market savings account has advantages
of liquidity, security, and accessibility. You don't have to worry about the vagaries of the stock market,
about price/earnings of different companies, about income statements, and balance sheets. No second guessing
is required - Should I have gone to large income producing stocks, or small-cap stock, or midsize-cap stocks,
should I invest internationally, or domestically? Or should just go gamble a lot of loot on Junk Bonds.
Unlike the other money making funds of stocks, bonds, or mutual funds which invest in stocks, bonds, commercial
paper, REITs ( Real Estate Investment Trusts) mortgages, Treasury Bills or Corporate Bonds, you can be assured
if you have the protection in knowing if you should need the money in the bank, it will be there. If you have more to
invest than the insured amount you can open up new accounts at other banks or credit unions. which are then
insured up to $100,000 or if a retirement account up to $250,000.
In fact, you may wish to consider a credit union. Credit unions are groups of people with some common bond
who form a cooperative. They may work at the same company or belong to the same branch of the military, or
take part as members of the same church or religious community. Since the members are the owners, the
profits come to them. Often Credit Unions offer beneficial compounding and a good rate of return on your
money, than other banking institutions. The more often interest is compounded, the faster the interest grows.
You may wish to consider using one of the large online banks and make deposits in you Money Market Savings
Account through cyberspace. You can find online banks advertised on various money and financial
websites.
After you build up a nice, safe nest egg, and if you have a tolerance for risk and you want your money to work
for you in more diversified ways; you may wish to put your money on Wall Street by starting some money
making funds, the most common of which are mutual funds. They are made up of all combinations of stocks,
treasury bills, commercial paper, junk bonds, Fannie Maes, etc., and you can choose between investing
in managed funds wihch usually have a large management fee or an index fund wich is indexed according
to the S&P or NASDAQ or some other index, which often perform well and have low management fees.
My name is August and I am a baby boomer. I've been retired for 4 years. I enjoy gardening, reading, and studying investments and finance. Please visit my website, Money Saving and Funds and my blog, Money Market Savings Account
No comments:
Post a Comment