You'll earn more putting your cash in an online savings account than parking it in a money fund.
And with unemployment high and inflation low, the Fed has said it has no intention of raising these rates until at least 2015. Yet more than $900 billion remains parked in retail money funds paying 0.01% on average.
You can do better.
1. For cash you may need to tap
Online savings accounts, such as ones from GE Capital and Barclays, pay 90 times what a money fund does. And federal deposit insurance guarantees your money is safe.
Recent yield of:
Average money fund: 0.01%
Top online savings account: 0.9%
2. For cash you're investing
Find a long-term CD with a lenient early withdrawal penalty, says Ken Tumin of DepositAccounts.com. Barclays' online five-year CD claws back just six months of interest. In a year you can cash out and still be ahead of what you could have earned elsewhere today.
What you earn per year
5-year CD: 2%
If you bail out after one year: 1%
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|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.28%||4.41%|
|15 yr fixed||3.30%||3.33%|
|30 yr refi||4.31%||4.39%|
|15 yr refi||3.35%||3.31%|
Today's featured rates: