American Flag

Online Savings & Money Market Account Rates 2021

Online Savings & Money Market Account Rates

Recent Articles

SmartyPig $100 Gift Card Giveaway on Twitter

Rate information contained on this page may have changed. Please find latest savings rates.

SmartyPig is running a second $100 Gift Card Giveaway Using Twitter. Answer a question and you might be selected to win the dough.

SmartyPig, a social networking piggybank is running a small promo on Twitter where you can win one of three $100 gift cards.  The contest happens tomorrow, June 12.  Here's how it works:

  1. Follow SmartyPig on Twitter
  2. They’ll ask the $100 question on Thursday, June 12th.
  3. Answer the question.
  4. Tune in to their Blog to see if you have won.

How are they picking the winner?

Below is what they have to say:

This is how we’ll choose the winners:

  1. After 10 minutes, we will be picking 20 random people with a number generator from the pool of correct answers.
  2. We will then pin those 20 names into the 20 slots of a dartboard.
  3. While blindfolded, we will throw darts and three lucky winners of a $100 SmartyPig gift card will be chosen.
  4. We’ll post the process here on our blog, so everyone can see it!

Good luck!



Are all US Government Money Market Funds Created Equal?

Rate information contained on this page may have changed. Please find latest savings rates.

Here is why they are not.

For those with too much money to run around and try to open FDIC-insured accounts at all of the highest-paying online savings accounts, money market accounts are the best way to protect your money.   These funds are not foolproof and in a real economic crisis where the underlying assets decline in value dramatically or default, money market funds could and have lost value.

Currently, the best money market rates on this site are paying just under 3%.

I have a friend who is convinced that we are headed towards a credit crisis of epic proportions and who is willing to get a lower return  by investing in so-called US government money market funds.  These are money market funds that invest only in US government securities and therefore have all of their assets backed by the full faith and credit of the US government.  They are presumably still safer than (or at least as safe as) municipal money market funds discussed on this website, but have a higher return (offset, at least to some degree, by the absence of the positive municipal tax attributes).

Currently, I understand that the the best rate of fthe US government money market funds is approximately 2%.

My friend recently discovered that these funds aren't as safe as he had thought when he opened the prospectus for a Western US government money market fund that he had invested in.  It turned out that this fund, which was being hawked by certain large investment banking firms, has large exposure to government agencies such as Freddie Mac, Fannie Mae and even Sallie Mae. 

Why get 2% return to take risk that is probably as great as those taken in a standard money market fund?

If you invest in a US government money market fund, you should be especially careful in the current environment to invest only in a fund that buys US Treasuries, not these risky agency bonds.

Failure in Auction Rate Security Market and What It Means

Rate information contained on this page may have changed. Please find latest savings rates.

The tremors of the housing market and credit credit crisis hit another type of investment this week, the auction rate security market. The Wall Street Journal and several other business magazines have reported auction rate security failures for both Georgetown University and Nevada Power. On the surface, a failure in the $300 billion auction market sounds like a big problem. Is it?

Accrued Interest states that:

"Well, it turns out to not be a very big deal. Issuers will wind up having to pay a fee to their investment banker to refinance the debt, but that's manageable. Some issuers may use this occasion to call their variable rate debt and sell fixed rate debt instead, given that interest rates are low. Assuming the debt is indeed refinanced, the ARS holders who are currently "stuck" will get taken out when the bonds are called."

The comment thread that follows the article is equally instructive and demonstrates the confusion that even experienced traders and investment advisors have with auction rate securities. It appears that:

  • Not all auction rate securities are backed by liquidity insurance. This means that you might be holding an auction rate security that you might not be able to sell. Some might have it and you'd have to check the specific of your auction rate security to know.
  • Most of the payments and principal are protected. Most auction rate securities are issues by municipalities, colleges, or other institutions with high credit ratings. The vast majority are also backed by insurance which protects the principal and interest.
  • If an auction fails, the rate on the ARS goes to the maximum, providing a nice return to holders. Some auction rates securities are resetting with yields as high as 12%.
  • The issuer of the auction rate security is ultimately on the line to pay the 12% and they will not be happy. Most have call-provisions and look for them to call the bond if the auction market continues to fail. Thus, if there are above market returns, they shouldn't last long.

Be sure to check with a qualified professional before making any decision regarding auction rate securities.

Please visit the Auction Rate Security section for more information.