Best Online Savings & Money Market Account Rates 2026
Best Online Savings & Money Market Account Rates
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Money Market Fund Returns Drop to Record Lows
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Author:Sam Cass
on January 30, 2009
- modified on October 12, 2018
Market market fund rates dropped to record lows this week driven by the drop in short term treasury yields. The top money market fund rate according to BestCashCow is the Vanguard Prime / MMF Investor paying a 7 day trailing yield of 1.64%. That's down from a top rate of 2.56% in June 2008 and 4.36% in January 2008.
The average seven-day yield on taxable money-market funds fell below 0.50 percent for the first time in history, to 0.48 percent for the week ending yesterday, according to data compiled by IMoneyNet of Westborough, Massachusetts. Tax-free and municipal money funds remained at an all-time low of 0.29 percent for the second week.
Money market funds, unlike money market accounts are not FDIC insured, although some money may be insured in the wake of the Fed's action to shore up money market funds. In September of 2008, the Fed announced it was backing money in money market funds that were deposited before September 19, 2008 for a period of one year.
Still, it's hard to get excited about money market funds at these low rates. Investors may want to consider savings and money market accounts that are paying over 2 percentage points more in interest and are FDIC insured up to $250,000 through December 31, 2009 and $100,000 after that.
Author:Sam Cass
on April 10, 2009
- modified on October 12, 2018
Wells Fargo posted a first quarter profit today that exceeded analysts expectations. CFO Howard Atkins came right out and said it was because they are no longer paying high rates on deposits. Bloomberg states:
"Margins are better because of the competitive situation” after many of the “irrational players” were eliminated, Chief Financial Officer Howard Atkins said in a telephone interview. The bank’s net interest margin, the spread between what it pays depositors and receives on loans, was about 4.1 percent in the first quarter, compared with about 3.10 percent in the fourth quarter and 4.7 percent in the same period a year earlier.
Wachovia paid extraordinarily high rates to attract deposits last year, Atkins said. He also said that many of those accounts now are running off, which should benefit Wells Fargo’s profitability later this year.
Wachovia did have competitive rates last year that benefited savers. Since then, the Fed has dropped rates to 0%, bringing down bank deposit rates. As the spread between deposits and mortgage loans has widended, banks have reaped a windfall. Savers are getting a double whammy, paying for saving the bank via TARP and also subsiziding them via low deposit rates. At least mortgage rates have come down a bit although credit rates continue to remain high and even rise.
As a saver, you can make the best of a tough situation by choosing to deposit your money in a bank with a competitive interest rate.
Bank of America (BAC) Becoming Dominant Retail Bank
Author:Sam Cass
on August 24, 2007
- modified on October 12, 2018
Yesterday, Bank of America announced that it was investing $2 billion to acquire a stake in Countrywide Financial. The investment is another example of how dominant Bank of America is becoming in the country's financial system. It already is the largest retail bank in the country, serving tens of millions of customers and has the largest branch and bank network. The company also purchased MBNA last year to have one of the largest credit card portfolios.
Yesterday, Bank of America announced that it was investing $2 billion to acquire a stake in Countrywide Financial. The investment is another example of how dominant Bank of America is becoming in the country’s financial system. It already is the largest retail bank in the country, serving tens of millions of customers and has the largest branch and bank network. The company also purchased MBNA last year to have one of the largest credit card portfolios.
Over the last two years, Bank of America has tried somewhat unsuccessfully to increase its share of the mortgage market. In the first six months of 2007, Bank of America was the fifth-largest originator of home loans in the U.S., with a market share of about 7%, according to Inside Mortgage Finance. The investment in Countrywide is the foot in the door for Bank of America and a chance to gather more knowledge about the business before making a bid for it.
Over the last five years, the company’s stock has shown solid and consistent growth. Bank of America pays a 5% dividend and generated $21.1 billion last year. The bank is flush with cash, has a solid balance sheet and is aggressively pursuing opportunities in attractive markets. I think more than any other bank, Bank of America can truly become the dominant bank in the US.
