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Posted by AsymF on June 3, 2008, 7:28 pm
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>
>
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> >> > We are trying to find a good place to invest around $30 - 50K a month
> >> > that has to stay pretty liquid in money that we have available.
> >> > Currently it is in an E*TRADE business checking account earning 3%
> >> > interest approximately.
>
> Is it really their checking account? (See below, where you say it is a
> savings account.) Reason for question: their checking account currently
> pays more (3.25%) than their savings account
(3.15%).https://us.etrade.com/e/t/banking
>
> >> You may have trouble doing much better than that.
> >> [...]
> >> [T]he current yield of the taxable funds is in the 2.2% range and the
> >> tax-exempt ones are in the 1.7% range.
>
> >> So if you're really getting 3% in a checking account, you might want to
> >> leave it there. But do check that that's really the rate.
>
> Top MMF rates, from iMoneyNet show somewhat higher yields, but still well
> below what you're doing with the bank. About 2.7% taxable, 2%+
muni.http://www.imoneynet.com/retail-money-funds/index.aspx
>
> > Located in NC.
>
> > Yes, it is an E*TRADE Complete Savings account.
>
> Note that savings accounts, while generally liquid, do come with
> restrictions. No more than 6 third party payments per month (that includes
> checks, phone transfers, online transfers, bill pay). Bank has right to
> hold your money up to seven days. Checking accounts are much less
> restricted. Probably doesn't matter, but since you mentioned liquidity for
> business account, I felt it worth mentioning.
>
> If you're putting $30K/month into an account (i.e. building at that rate),
> then you need to be concerned with the safety of your money. FDIC insurance
> typically covers only
$100K.http://www.fdic.gov/deposit/deposits/insuringdeposits/index.html
>
> For large amounts, I am more comfortable with MMFs than with banks. Banks
> can and do fail, and you can easily lose money if you've got more than $100K
> in a bank. MMFs, while not insured, have been supported by the fund family,
> because the fund family has too much at stake to let the value drop under $1
> ("break a buck"). So I'm comfortable putting more than $100K into a MMF
> like Dreyfus or Fidelity (they have some of the top paying funds right now,
> according to iMoneyNet). Otherwise, you might split the money across
> multiple banks so that it is all insured.
>
> Mark Freeland
> nNeE...@nyc.rr.com
Yes, sorry, meant "savings" not "checking". Regrettably E*TRADE does
not allow corporations to hold an interest checking account or we
would have done that as opposed to a savings account. Wish we could
find a corporate checking account with that kind of savings accounting
beating interest!
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