Emigrant Direct now at 4.65%

[Outtahere]

I just logged to for hubbys peace of mind to see if the money is still there : and I found they just raised the rate from 4.5 to 4.65.

 

[justin]

9 more basis points and they'll be on par with Vanguard Prime Money Market at 4.74%. Anybody getting more than that from a money market right now?

 

[cute fuzzy bunny]

I moved everything over to vanguard's MM too. Finally scuttled the last of my CD's as well, since the money market rates caught up with them.

Even if I could get 10-20bp more, Its too convenient to have all my money in the same place.

By the way, vanguards "advantage" banking has worked out just fine for me so far since i switched from my old credit union. Checkbook, atm/visa debit card, everything goes through the banking "account" then settles with your choice of money market, doing the transactions as though they were "sweeps". Seems this gets past the limit on monthly money market withdrawals. So ALL of my cash is in the money market for the longest period of time and no fiddling with moving cash back and forth between the money market and checking acct.

Only catch so far is that only "pnc bank" atms are fee-free and there arent any of those near me, so I do a 'cash back' at the supermarket while i'm there. And deposits have to be done by mail and checks written to you have to be "signed over" to vanguard.

 

[JonnyM]

The other guys seem to be following suit.

Our CaptialOne account is at 4.55 Percent
Our HSBC account is at 4.65 Percent

I'm waiting for my CD Ladder at the Credit Union to expire so I can "boost" my long term savings rates in these Money Markets. It seemed like a good idea at the time, but the CD rates just aren't keeping up!

 

[d]

while not the equivalent of a MMF or MMA, 3 yr CDs are returning >6% ...

 

[Cut-Throat]

I moved everything over to vanguard's MM too. Finally scuttled the last of my CD's as well, since the money market rates caught up with them.

Even if I could get 10-20bp more, Its too convenient to have all my money in the same place.

By the way, vanguards "advantage" banking has worked out just fine for me so far since i switched from my old credit union. Checkbook, atm/visa debit card, everything goes through the banking "account" then settles with your choice of money market, doing the transactions as though they were "sweeps". Seems this gets past the limit on monthly money market withdrawals. So ALL of my cash is in the money market for the longest period of time and no fiddling with moving cash back and forth between the money market and checking acct.

Only catch so far is that only "pnc bank" atms are fee-free and there arent any of those near me, so I do a 'cash back' at the supermarket while i'm there. And deposits have to be done by mail and checks written to you have to be "signed over" to vanguard.

Are you saying that you cannot do a 'Direct Deposit' to Vanguard? or an on-line transfer of funds?

 

[poboy]

Can only speak for myself, I do online transfers to vanguard mm from my checking account. Unsure if other posters maintain local banking accounts or not. Money can flow both ways with the options I have with vanguard.

 

[lazyday]

When comparing yields, don't forget that Prime money market is not FDIC insured. Not that Prime is risky, but the extra safety in FDIC insurance is worth some basis points to me.

If there's a 50% chance that sometime in the next century, both of the below occur at the same time:
-prime money market loses 30% of its value before you get your money out
-you get to keep 100% of your FDIC deposit

then you could calculate that's worth... um, so many basis points.
(I'm lazy, remember )

Also add in the lower risk of losing 90% in prime and 0% in FDIC.

FDIC or Nxxx insured CDs at 6% sound like a great deal, if you're sure you're happy with the interest rate risk, and the CD terms. (don't mind losing easy access to the money, early w/d penalties, etc)

 

[d]

6% sound like a great deal, if you're sure you're happy with the interest rate risk

while its possible, at the moment i think it unlikely that MM rates will average in excees of 6+% over the next 3 yrs.  it's possilbe, of course; i've still got a bunch with VMMP (and elsewhere) to handle that and all but a worst-case possible short-term liquidity crisis.

 

[lazyday]

at the moment i think it unlikely that MM rates will average in excees of 6+% over the next 3 yrs.

I guess I mostly agree, but might see it as more likely than you do.
I do think 6% or more today seems like a good risk (if you like CDs) considering that's significantly more than a 3 year Treasury.

Another option is TIPS, which at 2.4%+ for 10yr seems like a good risk to me, compared to 4.5-5% short term money today, at least for a portion of my FI.
But I'm not really in the CPI conspiracy camp.

 

[d]

10 yr TIPS ... but now you're going well beyond short term (not that a 3yr CD is all that short!)

 

[lazyday]

True.

Though at least the inflation portion of the risk of a longer term bond has been removed with TIPS. (In theory--untested--and if believe the CPI-U)

 

[lazyday]

Here's what I mean by "untested"

Yeah, but it's all during times of declining inflation. The first TIPS, the first securities came out in the U.K. in like 1980. Ever since then inflation's been going down. So suppose inflation is flat or goes up, what do I know? I don't know. That's my problem. I'm just not brave enough to try to figure out what that real yield is going to do. And I think it's important because if that real yield changes a lot it can kill you.
http://socialize.morningstar.com/Ne...nv.asp?forumId=F100000015&convSeqNumber=50559

 

[cute fuzzy bunny]

Are you saying that you cannot do a 'Direct Deposit' to Vanguard? or an on-line transfer of funds?

You may in fact do that. You just cant stick a check into an ATM machine or walk into a branch unless its PNC bank (and even then i'm not sure), and they have no branches anywhere near me.

 

[justin]

When comparing yields, don't forget that Prime money market is not FDIC insured. Not that Prime is risky, but the extra safety in FDIC insurance is worth some basis points to me.

FDIC only covers the first $100,000 in the account. And if you're losing 30%-100% in the Vanguard money market, I don't think the $100,000 will be worth much either, unless they pay you in guns, bullets, canned food and bottled water.

I'm actually invested primarily in the admiral Treasury money market, where most or all of the money is invested in federal obligations. Not FDIC insured, but about as safe since the fed govt backs up the underlying investments.

Just mailed off for checking access. We'll see how that goes.

 

[lazyday]

FDIC only covers the first $100,000 in the account.

I think that's $250,000 in certain retirement accounts, nowadays, probably including IRAs.
Can also put $100K (or 250k) into each bank. Emm Direct, HSBC Direct, ING, etc.

If I had over 100K in cash, I'd buy individual Treasuries, either in brokerage account or directly from the government. And perhaps those 6% cd's.


>And if you're losing 30%-100% in the Vanguard money market, I don't think the $100,000 will be worth much either, unless they pay you in guns, bullets, canned food and bottled water.

Maybe. Depends on situation. There was deflation in the great depression.


> I'm actually invested primarily in the admiral Treasury money market, where most or all of the money is invested in federal obligations.

Sounds pretty safe to me. I don't have an issue comparing yield of FDIC account to yield of a VG Treasury fund. It's prime money market vs. FDIC, without noting the difference, that I was a little concerned with.

 

[Danny]

I've been buying cds through my brokerage accounts - $100,000 FDIC on each bank thats issues I believe - even though brokerages say they have extra insurance that would cover over $100k in cash/mmf - I just don't have enough confidence to keep over 100k in their mmf.

That being said what is the procedure with a bank failure and fdic coverage? - long protracted process to get your money?...do you really get
up to $100k from FDIC? are they funded enough to cover a really big mess - if not then congress rides in like say in 3 years and tidies things up?

 

[lazyday]

long protracted process to get your money?

The truth is that federal law requires the FDIC to pay the insured deposits "as soon as possible" after an insured bank fails. Historically, the FDIC pays insured deposits within a few days after a bank closes, usually the next business day. In most cases, the FDIC will provide each depositor with a new account at another insured bank. Or, if arrangements cannot be made with another institution, the FDIC will issue a check to each depositor.

http://www.fdic.gov/consumers/consumer/news/cnspr06/leadstory.html

In a really huge disaster, who knows how soon "possible" would be though.

Probably more answers here:
http://www.fdic.gov/deposit/deposits/insured/yid.pdf
from this site: http://www.fdic.gov/deposit/deposits/insured/index.html

 

[MJ]

Since I sold my house several months back, I have been parking my money looking for investment opportunities. Since I "FDIC" maxed out my various MM accounts. for 4 weeks, I was buying 4 week term bills through Treasury Direct. It's paying about 4.74% state tax free. Each week I decide if I need any part of the maturing bill money if I don't, the money get's re-invested for another 4 weeks. One to four week delay is liquid enough for now and and it's treasury bills.

 

[mathjak107]

collecting from the fdic is no different than any other insurance company..it can take a while and if they run out of money you may have to wait for legislation to refill it...want to know the safest deal either treasuries or a us treasury money market.....only the treasury can print more if they run short.....

 

[justin]

Sounds pretty safe to me. I don't have an issue comparing yield of FDIC account to yield of a VG Treasury fund. It's prime money market vs. FDIC, without noting the difference, that I was a little concerned with.

The VG Treasury fund has an additional benefit that usual FDIC bank accounts don't have - state tax-free income. Almost all of my interest from VG Treasury MM is free from state income tax. That pushes the effective yield for me over 4.9%, which is why I chose it over FDIC bank accounts.

On a different note, I think worrying about risk w/ the VG prime MM versus FDIC insured accounts is like splitting hairs.

 

[Helen]

The VG Treasury fund has an additional benefit that usual FDIC bank accounts don't have - state tax-free income.  Almost all of my interest from VG Treasury MM is free from state income tax.  That pushes the effective yield for me over 4.9%, which is why I chose it over FDIC bank accounts.   

I checked the VG website but could not find tax information. Are any other MM funds besides the Treasury fund state tax free ? I live in Oregon with a 9% state tax rate.

Thanks,

-helen

 

[mathjak107]

fidelity us treasury mm is too

 

[justin]

I checked the VG website but could not find tax information. Are any other MM funds besides the Treasury fund state tax free ? I live in Oregon with a 9% state tax rate.

VG has the treasury MM, the treasury MM admiral class and the federal MM. The Treasury produces income that is almost completely state tax free. The federal MM produces income that is ~30-40% free from state income tax.

I don't know where it is located, but VG has a document on their website somewhere that lists all their mutual funds and shows what percentage of dividends are from federal government obligations (which are exempt from state income taxation).

Treasury is ~100% from federal obligations, and Federal MM is ~30-40% from federal obligations IIRC.

 

[lazyday]

worrying about risk w/ the VG prime MM versus FDIC insured accounts is like splitting hairs.

Ignoring the very unlikely, usually works quite well.

As long as we're not around for a "hundred year flood," then it will be just splitting hairs.