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Parking for high yields
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June 26, 1998: 11:11 a.m. ET
Some out-of-state banks offer higher interest rates, but at a price
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NEW YORK - At a time when making money on savings is extremely difficult, it may be worth your while to "park" some cash in a high-yielding money market account.
Parking is one way to increase the yield while keeping money available to pay monthly bills and expenses.
For instance, a money market account of $5,000 opened at Key Bank USA in Albany, N.Y., with an annual percentage yield of 5.65 percent, would earn $282.50 in a year. If the money was placed in an average money market account yielding 2.50, the depositor would earn $125.
High-yields for any customer, anywhere
All the banks on Bank Rate Monitor's national high-yield savings index will open money market accounts for customers no matter where they live. These banks offer some of the highest interest rates available on accounts insured by the Federal Deposit Insurance Corp., and have been evaluated for safety and soundness by VERIBANC of Wakefield, Mass.
Out-of-state customers can call these banks and request account applications to mail back, although some banks allow customers to apply by phone, assigning an account number that will be activated once the money has been deposited. Others, including Atlanta Internet Bank and Treasury Bank allow new customers to sign up online.
Within two weeks of receiving the depositor's money, the bank will mail checks plus deposit and withdrawal slips. It will allow money-market customers to make a combination of six no-fee withdrawals during each 30-day statement cycle.
Checks and automatic bill-paying
Typically, a depositor may choose to write three no-minimum checks and have three monthly bills paid directly from the account during each billing cycle. The customer also may decide to have more bills paid automatically and reduce the number of checks written each cycle. In most cases, there is no cost for this service.
However, if depositors write more than three checks per billing cycle, they may be required to pay an additional fee that varies from $5 to $30. If customers wish, they can write checks transferring money from the money market to their home checking accounts.
To earn maximum interest, depositors must maintain a minimum balance, which runs from $100 to $10,000. If the balance falls below the minimum level required, the bank may drop the interest rate to what it pays on a regular savings account or even less. The customer also may be charged a monthly fee for maintaining the account. 
-- by Bank Rate Monitor for CNNfn
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