Welcome to Get Smart About Investing. Did you know that most large banks are only paying 1% to 2% interest on savings accounts? Maybe you have some cash sitting around as an emergency fund, or for an upcoming home purchase, or maybe you’re just not sure what else to do with it? Anyone with spare cash today should be earning a minimum interest rate of 4-5%. If you’re not, you are missing out.
Do some research and shop around. Money market funds can be great and usually pay 1%-2% higher than most bank savings accounts. No one in the history of this country has ever lost any money in a money market fund, so, needless to say, they are extremely safe. And don’t forget about new on-line bank accounts. They have the same FDIC insurance of the big banks without any of the overhead, so they can also pay you a much higher interest rate.
I’m Greg McGraime and Now You Know!