Safest, Highest Interest Place to store money

[inquisitive]

I realized I have a fair amount of money in my money market bank account that could be earning a higher rate of return elsewhere. What's the safest place I could keep it? My thoughts are a CD or a mutual fund. If a mutual fund I'm thinking a no load bond fund because I'd really like to treat it as a bank account and am interested in safety more than the return. Are there any safe bond funds where I can be sure the account won't decline?

 

[LOL!]

IAre there any safe bond funds where I can be sure the account won't decline?

Not that I am aware of. Bond funds pay more interest because of higher risk.

You have to ask yourself why you need to have no risk where "the account won't decline." Could you accept a 1% decline? a 5% decline? a 10% decline?

You could purchase individual US Treasury bonds. If you had to sell them before they matured, you might lose money. But if you hold them until they mature, you won't lose money per se, but you might lose purchasing power.

 

[inquisitive]

I have investments in stocks and bonds, so I am not interested in investing more due to risk. My main thought is that I have extra money sitting in a money market bank account that could be better utilized. Maybe a CD would be the best place.

 

[Gotadimple]

If you don't want to lose principle then CD's are the safest, followed by bond funds. You may also be able to get a few basis points more on CD's by using the bidding at Moneyaisle.com. I found out from a bank that I have CD's with that it is better to go through the auction then direct with them as they do bump up the APY a bit.

Rita

 

[Meadbh]

If you don't need liquidity, consider CDs with longer terms (and higher interest rates), or set up a CD ladder.

 

[Dennis]

Ditto on what Meadbh said..
and Treas. are terrible for now..but Saved my Butt in 08' with VFITX and VUSTX..

I decided on 3 places for my $ for annual Bills I need for the next 3yrs I keep in Reserves..
Started out in Jan,09' with :
Yr #1 - 6 mos In my Bank MMkt and 6 mos CD's
Yr#2- In VFSTX
#3 - FFRHX ( Just took out my CB and move it into VFSTX and letting The Gains ride for now)

Dividends on my Bond funds are doing very well, so I don't anticipate needing to sell shares , but who knows..

08' it was VGBX , VFITX, VUSTX

I have most of my Retirement $ in Bonds an some Very Conservative Bal. Funds.that is currently a 20/80 mix..or so it says..

FYI? Just picked up PIMCO's New Bond funds> PGSDX and PUBDX for a Few Bucks to see how they do.. I'm opptimistic PUBDX will outperform my VBMFX going fwd. and PGSDX should give my TGBAX a run for his $ too..

Wm. Larkin over at Cabot Mgmnt. , Scott Burns & Paul Merriman have done very well by me...

Keeping Fingers Crossed..
;-)