Selecting a Money Market Account

[Intuit]

Well, it looks like I need to add yet another financial spoke to my wheel of FIRE. I am looking to place $25K into a MMA for my easy access Oh S*** use. Of course ideally this money will not be touched so I want it to work for me while getting dusty. Anyone have suggestions on the best place to open a MMA? I have a Fidelity Mutual 401K and they have quite a few MMA's to choose from. This one, Fidelity Institutional Money Market: Money Market Portfolio Class I (FMPXX), shows an annual return of about 5% which I thought was great for a savings account. Looks very accessible, $2500 min deposit, $500 min check amount. Thanks for any input.

 

[brewer12345]

If this is really Oh s! money, you might want to make sure that you have immediate access, even if it means giving up a fraction of a % a year. At the least, make sure that any MMA you choose offers check-writing privileges, and you might want to see if you can have money wired from your MM account (for a fee) if it were absolutely necessary.

 

[Intuit]

Brewer, you are right, quick access is a must and this one does have the checking part covered. I have a local savings account that I can access for emergencies. This is more for a safety net in case of job loss or similar situation. Thanks.

 

[brewer12345]

Brewer, you are right, quick access is a must and this one does have the checking part covered. I have a local savings account that I can access for emergencies. This is more for a safety net in case of job loss or similar situation. Thanks.

In that case, why not pick something that pays higher yields but is still accessable if you really need it? Instead of a MMA for my Ohs! reserves, I use 5 year CDs. They pay significantly more yield and if you need the money, you cash them in early. Just make sure the cash-in penalty is 6 months interest or less. Naturally this only applies if you are unlikely to need the money.

 

[grumpy]

If you own a house you might want to consider setting up a home equity line of credit for your Oh S*** coverage. That way you can keep the $25K in a higher yielding investment. There should be little or no cost to set up the HELOC and most will give you checks to use to draw on the funds in an emergency.

Grumpy

 

[califdreamer]

N2Fire,

Hope you don't mind if I ask a question on your thread. What's the best MMA deal for absolutely liquid cash? I've seen Emigrant Direct and ING mentioned here. A friend told me Countrywide Mortgage has an attractive one (I didn't even know they dealt in MMAs).

Thanks all!

 

[Ol_Rancher]

I have been happy with Corus Bank. Service is great and rates have been consistantly high with frequent updates on MMA after FED acts. One year CDs are usually best in nation.

http://www.corusbank.com/

 

[ctbktb]

We recently found Superior Savings. They have a MMA with an APY of 4.50% on deposits >$25K. As I recall, there is a penalty if you close the account within the first 6 months.

http://www.superiorsavings.com/

Good luck,

CTB

 

[Intuit]

Grumpy,
That might fit other's financial plan, I already have a LOC established with a 2nd mortgage. I prefer to stay our of debt and would like to have about $25 - $40 K sitting in an accessible fund, earning a decent return rather than incurring intrest expense. Regards.

Califdreamer,
No problem, I'm here to learn from the pro's.

N2FIRE