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Money Funds Make a Comeback.Navigation: Main page Author: Gengler, Amanda Section: planSAVINGS AND CREDIT
After three years of barely-there returns, money-market mutual funds are posting yields worth paying attention to What's New In recent months, yields on money market funds have risen dramatically. Average rates are now approaching 3%, up from just 0.5% in June 2004, while the top-yielding funds are paying 3.5%. As interest rates generally continue to rise, money fund yields should go even higher. Best Strategies• Favor taxables over tax-frees… if you're in the 33% bracket or lower (income under $326,450 for singles and married couples). Yields on taxables are rising faster, making them a better bet. • …and money funds over bank money-market accounts. Over the past four years or so, top bank saving vehicles have yielded more than top funds. Now the trend seems poised to reverse. • Be a cheapskate. Look for funds with expense ratios below 0.6%, the money fund average. High fees reduce total returns. OutlookRates on money funds should average 3.75% by the end of the year, with top-earning funds pushing 4%. Yields could go as high as 5% in 2006. SAVINGS
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
BANK MONEY-MARKET ACCOUNTS
AVERAGE 0.70% --
MyBankingDirect.com (New York) 3.75 $5,000
866-285-1856
KeyDirect (Ohio) 3.68 50
800-872-5553
UmbrellaBank.com (Alabama) 3.64 1,000
866-242-9175
Resource Bank (Virginia) 3.62 10,000
877-726-5463
UFB Direct (California) 3.60 1
888-580-0049
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
TAXABLE MONEY-MARKET FUNDS
AVERAGE 2.90 --
PayPal Money Market Fund[1] 3.52 1
402-935-7733
MFS Money Market Fund[1] 3.32 1,000
800-225-2606
Transamerica Premier Cash Reserve Inv.[1] 3.30 1,000
800-892-7587
Scudder Money Mkt. Series Prime Rsrv. AARP[1] 3.30 10,000
800-253-2277
McMorgan Principal Preservation[1] 3.26 5,000
800-831-1994
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
TAX-EXEMPT MONEY-MARKET FUNDS
AVERAGE 1.93 --
Vanguard Tax-Exempt Money Market Fund 2.46 3,000
800-851-4999
Alpine Municipal Money Market Fund Inv.[1] 2.44 2,500
888-785-5578
Scudder Tax-Exempt Money Fund 2.18 1,000
800-621-1048
Fidelity Municipal Money Market Fund 2.16 5,000
800-343-3548
American Century Tax-Free MM Fund Inv. 2.15 2,500
800-345-2021
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
TAXABLE SHORT-TERM BOND FUNDS
AVERAGE 3.13 --
Scudder Short Term Bond AARP 4.75 1,000
800-253-2277
USAA Short-Term Bond 4.38 3,000
800-531-8181
Vanguard Short-Term Bond lndex lnv. 3.96 3,000
800-851-4999
Wells Fargo Adv. Short-Term Bond Inv. 3.92 2,500
800-222-8222
Vanguard Short-Term lnvest.-Grade Inv. 3.84 3,000
800-851-4999
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
TAX-EXEMPT SHORT-TERM BOND FUNDS
AVERAGE 2.39 --
Scudder Short Term Municipal Bond Inv. 3.23 1,000
800-621-1048
Wells Fargo Adv. S/T Municipal Bond Inv. 3.16 2,500
800-222-8222
Pimco Short Duration Municipal Income D 2.78 5,000
800-426-0107
Wells Fargo Adv. Ult. S/T Muni. Income Inv. 2.75 2,500
800-222-8222
USAA Tax Exempt Short-Term 2.66 3,000
800-531-8181
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
SIX MONTH CDs
AVERAGE 2.53% --
Ascencia Bank (Kentucky) 4.05 $500
877-369-2265
Corus Bank (llinois) 4.04 10,000
800-989-5101
Bank of Internet USA (California) 4.00 1,000
877-541-2634
KeyDirect (Ohio) 4.00 5,000
800-872-5553
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
ONE-YEAR CDs
AVERAGE 2.92 --
Corus Bank (Illinois) 4.42 10,000
800-989-5101
Ascencla Bank (Kentucky) 4.40 500
877-369-2265
UmbrellaBank.com (Alabama) 4.38 1,000
866-242-9175
Transportation Alliance Bank (Utah) 4.37 1,000
800-837-4136
LEGEND FOR CHART:
A â€" YIELD
B â€" MIN. INVEST.
C â€" TELEPHONE
A B
C
FIVE YEAR CDs
AVERAGE 3.80 --
Transportation Alliance Bank (Utah) 4.76 1,000
800-837-4136
KeyDirect (Ohio) 4.76 5,000
800-872-5553
ING Direct (Delaware) 4.75 1
877-469-0232
Eastern Savings Bank (Maryland) 4.75 1,000
800-787-2265
CREDIT
LEGEND FOR CHART:
A â€" RATE
B â€" ANNUAL FEE
C - TELEPHONE
A B
C
CARDS WITH THE LOWEST RATES
Wachovia Bank (North Carolina)[1] 6.25% $98
800-922-4684
Pulaski Bank & Trust (Arkansas)[2] 6.99 35
800-980-2265
Amalgamated Bank of Chicago (Illinois)[3] 8.75 37
800-723-0303
NO-FEE CARDS WITH THE LOWEST RATES
Firstrust Savings Bank (Pennsylvania)[2] 9.90 0
800-220-2265
Malvern Federal Savings Bank (Pennsylvania)[2,3] 9.90 0
610-644-9400
State Farm Bank FSB (Georgia)[1] 10.49 0
877-734-2265
PREMIUM CARDS WITH LOW RATES
AmSouth Bank (Alabama) 7.90 0
888-462-7627
Amalgamated Bank of Chicago (Illinois) 10.50 0
800-723-0303
Simmons First NationaI Bank (Arkansas) 11.25 0
800-636-5151
AVERAGE FOR ALL CARDS 13.55 --
SAVINGS NOTES AND SOURCES: CD and money-market account data as of Aug. 16 from 100 Highest Yields ($124 for 52 issues; 800-327-7717). Tax-exempt and taxable money-market fund data as of Aug. 16, from Money Fund Report (imoneynet.com); all have a minimum investment of $10,000 or less and assets of $25 million or more. Bond fund data as of July 31 from Lipper; all are medium- and high-quality funds without sales loads and with average maturities of three years or less. [1] Manager absorbed all or some operating expenses. CREDIT NOTES AND SOURCES: All rates subject to change. Credit-card rates are for standard cards as of Aug. 16 from Bankrate.com and are variable unless otherwise indicated. Survey does not include Internet-only cards or AmEx Blue. [1] Visa only. [2] Fixed rate [3] MasterCard only. [4] Platinum and gold cards. ~~~~~~~~ By Amanda Gengler in the Fair Use guidelines of the 1976 U.S. Copyright Act. info [at] singlearticles.com Powered by CommonSense |
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