Current Rates

Like many Americans, I know you are scouring the internet and soliciting friends advice on what to do with your money in these financially uncertain terms. As we have seen banks are unwilling to share their current profits with consumers.  CD rates are below 1% in most cases, with inflation sure to be above 3%.   Of course banks provide more than just interest rates.  They provide safekeeping and easy access to your money.  However, with banks failing and more than 300 still on the FDIC watch list, how safe is your money?  Which brings us back to the age old question “should I keep my money in the mattress?”  The short answer is NO! (maybe  a safe deposit box).  The most important advice I can offer you is to keep your emergency funds and cash that you will need over the next year liquid.  There are still some online banks offering somewhat respectable rates on money markets.  Do not tie up your money in a CD for a 1% Rate.  You could make your measly 1% doing almost anything else with the money.  But also keep in mind, rate is not everything.  If you cannot access your money for 3-5 business days, then it does not really help to even have your funds liquid if an emergency were to arise.

Choose a handful of banks to split up your money for two simple reasons.  First, if you have a relationship with more than one bank then you have a chance to pit them against each other to earn your business.  If you are doing your business in person at a local branch this can be of some use since the bankers are usually on a compensation plan.  Secondly, even if your bank is FDIC insured it could take year for you to recover your money.  You wouldn’t want to tie up your cash at just one institution.  Lastly,  Make sure you are aware of any corresponding fees or minimum balances that will eat away at your profits.

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