Where to Earn the Most on Cash
Surprise! Boring bank savings accounts are paying more than money-market mutual funds. But you must go online for the best deals.
(MONEY Magazine) – What's New
When rates rise, money funds usually lead. Not today. As banks expand online in a bid for more deposits, they are creating Web-only savings and money-market accounts with yields that rival, or beat, those of funds. Better yet, many high-yield savings accounts don't require big balances.
• Find a high rate. Check out the money-market account deals below or search bankrate.com and fatwallet.com/c/52.
• Protect yourself. If the bank is unfamiliar, look for an FDIC icon on the website to ensure that your money is federally insured.
• Have two accounts. Top savings accounts from HSBCdirect.com and EmigrantDirect.com yield 4%, but you can't write a check to get at your money. To do so, you must transfer funds electronically to your checking account, which can take up to four days.
These savings deals are best for now. But money-market yields move up as interest rates rise, so funds may catch up with banks if the Fed hikes rates again.
SAVINGS NOTES AND SOURCES: CD and money-market account data as of Nov. 15 from 100 Highest Yields ($124 for 52 issues; 800-327-7717). Average tax-exempt and taxable money-market fund yields for the week ended Nov. 15 from Money Fund Report (imoneynet.com); all have a minimum investment of $10,000 or less and assets of $25 million or more. Average bond fund yields for the month ended Oct. 31 from Lipper; all are medium- and high-quality funds without sales loads and with average maturities of three years or less.  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 Nov. 15 from Bankrate.com and are variable unless otherwise indicated. Survey does not include Internet-only cards or AmEx Blue.  Visa only.  Fixed rate.  MasterCard only.  Platinum and gold cards.