Money Market Rates 101

Here at Money Market Rates 101, we like to keep you up to date on the latest available returns.  Today, we’re looking at money market rates at USAA.

United States Automobile Association is a premier financial services company that offers a number of saving accounts at different Annual Percentage Yields. USAA Money Market rates are on par with the general market standards. In fact, the company offers better APY as compared to other companies and financial services institutions.

Money market rates at USAA vary on the total amount of money deposited in a savings account. The company offers two broad categories of savings account. The first one – USAA Savings – is related to personal banking. This account can be opened with a deposit of $25 with a variable APY of 0.60%. APYs for amounts greater than $25,000 is currently placed at 0.80%. Similarly, Performance First accounts start with a basic investment of $10,000 at 0.70% APY and can go upwards of $50,000 at 0.80% APY. USAA rates for money markets, especially APY, varies as per the changing. The company offers free funds transfers to any other bank in the US.

The company offers tiered rates service that are directly related with the extent of savings. Additionally, it does not charge any monthly service fees and allows its customers to draw cash from any ATM; the company will refund the fee in case the other bank charges some amount.

Online banking facilities are available with the company. Additionally, customers can also check their balance and other financial information by using the iPhone applications.

Ally Bank (formerly GMAC Bank) has a lot to offer anyone looking for high yield returns.  Ally Bank Money Market accounts are popular because they have some of the highest yields in the industry and some of the best options and offers to go with that.  We here at Money Market Rates 101 are going to show you what they’re offering right now and how it can help you.

The Ally Money Market rates come with no minimum deposit or balance requirements to avoid fees.  You can start with $1 or $100,000, it’s up to you.  Their return is good with rates at Ally Bank being 1.55% annual percentage yield (APY).  That rate is variable, of course, with the market, but is consistently high.

Other inclusions in the Ally Bank Money Market account include a check card, fifty free checks, no ATM fees (they even pay the fees from other ATMs - up to four per month), interest is compounded daily, and you get six transactions per cycle (month) without a fee.

Although rates at Ally Bank are consistently higher than the national offers and averages, these are not gimmick rates to get someone in the door before dropping it a month or two later.  The Ally Money Market rates are consistently high all the time.

Using a calculator, since the interest compounds daily, it’s easy to see that at 1.55% APY $50,000 gains $775.94 in the first year.  Those are great rates.

Definitely worth considering, in our book.  Ally Bank is FDIC insured to the fullest extent of the law.

There are a lot of funds to consider and we here at Money Market Rates 101 hope that our information helps make the decision easier for you. Today, we’re going to look at Fidelity Money Market Fund offers and show you how rates at Fidelity are doing.

First, be aware that money market funds aren’t necessarily the highest returning funds out there.  They are, however, considered to be the most stable with generally higher returns than most certificate of deposit and other savings investments in like amounts of time.  They are also liquid, so they can be “cashed out” quickly.

While rates at Fidelity in these funds are low, they got a lot of attention when the financial crisis began to tank most market investments quickly.  The Fidelity Money Market Fund, however, lost little and actually showed gains during the otherwise down market.  So while Fidelity Money Market rates aren’t high, they are steady.

Like most money market funds, these funds are liquid, so they are not a fixed investment.  The rates at Fidelity in these funds are usually higher than comparable certificate of deposit or high yield savings are.  They are not, however, FDIC insured as are banks.

Rates of return vary, but the taxable funds are most common because they are the easiest to get into.  Municipal and State funds are usually tax-free and are therefore popular long-term retirement funds.  Whatever your Fidelity Money Market Fund choice, talk to your financial adviser before making a decision.

There are a lot of ways to invest money at Vanguard.  We here at Money Market Rates 101 want to show you the best rates at Vanguard right now.  Finding the greatest return from your Vanguard Money Market Fund is the surest way to keep steady, healthy, high returns.

The most common and widely used fund is the Vanguard Prime Money Market Fund (VMMXX).  The income from this fund, however, is taxed at both state and federal levels, so it is not considered a good retirement fund.  It does have some of the best Vanguard money market rates, however.

The Prime Fund is a low-risk investment fund with some of the steadiest rates at Vanguard.  It requires $3,000 minimum to invest and has an expense ratio of 0.28%, one of the lowest for this category.  It’s shown steady increases in growth since 1999 with a growth averaging 3.34% annually over the past ten years.

The popular Treasury Fund in the Vanguard Money Market Fund portfolio is closed to new investment right now and has hit some real rocky roads this year as the U.S. Treasury continues to keep interest rates low, thus making Treasuries less appealing.

If you live in California, New Jersey, New York, Ohio, or Pennsylvania, a state-specific Vanguard Money Market Fund might be right for you.  These are good retirement funds, buying bonds from those states and keeping them tax-exempt on returns so your retirement money is not taxed.  These kinds of funds are often called “double tax free” funds.

Other rates at Vanguard can be gained by investing in AMT (tax-free) Vanguard Money Market Fund offers.  These have specific rules, however, and may not have the kind of Vanguard money market rates you’re looking for.

None of these investments, of course, are insured by the FDIC, being market investments and not bank offers.

There are four basic accounts for Fidelity MMA rates and we here at Money Market Rates 101 are going to look at them and then compare them to yesterday’s post that shows the national best rates right now.  Those of our readers who are interested in Fidelity money market rates and those who wonder what a local bank has over national offers will see how this can pan out.

By far the best money market rates at Fidelity are the special offer on balances over $50,000 which have a 2.00% annual percentage yield (APY) which beats the national best at UFB Direct with a 1.85% APY.  Of course, you’ll need that $50,000 to get this rate.

Other Fidelity money market rates are at or around national average right now and the minimum to open a MMA at Fidelity is $2,500 which pays a 0.75% APY, as do most Fidelity MMA rates right now.

A $10,000 balance can get you money market rates Fidelity of 1.00% APY and a corporate MMA can yield 1.25% APY on that deposit.

If you’re local to a Fidelity Bank, you should consider an account there if you need the convenience of a local branch, have the money to get that special rate, or are otherwise already attached to Fidelity.  It’s a very good, solid, respectable local bank and is, of course, FDIC insured to the fullest extent of the law.

Today we’re looking at the best money market rates around the country.  Our job here at Money Market Rates 101 is to show you what’s out there so you can see what’s available and how it compares to what you might have now or what you might consider getting.  You never know if your money market rates best.

Ranking by annual percentage yield (APY), a look at national money market rates shows that there’s a fair amount of competition right now.

UFB Direct has a 1.85% APY with a $500 minimum balance to avoid fees.  This is an online-only offer.

Flagstar Bank (MI) has a 1.81% APY with only $1 to open and no fees as a good alternative.

Heartland Bank Direct has a 1.76% APY offer with a $500 minimum to avoid fees and this is also an online-only deal.

Ally Bank (formerly GMAC) offers a 1.73% APY offer on savings (not MMA) to best many money market rates right now and they have no balance requirements.

Two other banks offer that same APY, Bank of Internet (CA) and Beverly National Bank Online (MA), both as online-only offers and with a $100 and $1,000 minimum deposit requirement respectively.

There are a lot of good money market rates available and some of the best money market rates might be right in your neighborhood.  Rates change often, of course, and both savings and money market accounts are variable, so rates are not guaranteed to hold steady.

Finding the best money market rates is getting more difficult as bank interest rates decline nationwide.  I hope that this article helps you to find the best money market rates.

The best money market rates nationwide are currently,

Best Money Market Rates

Darby Direct, Vidalia, Ga. 3.00%
Centennial Bank, Fountain Valley, Calif. 2.28%
GMAC Bank, Midvale, Utah 2.25%
Corus Bank, Chicago 2.19%
iGObanking.com, Lake Success, N.Y. 2.12%

Darby Direct Bank has been having great bank rates for many of its personal banking accounts.  Darby Direct CD rates are very good and it money market rates are the best in the nation at 3%.  If you are looking for the best money market rates, Darby Direct Bank is a great choice.

GMAC Bank also has the best bank interest rates on both its money market account and its GMAC CD rates.  GMAC Bank is trying to encourage more people to open GMAC bank accounts by luring them in with the best bank rates.  This is a great way for you to capitalize on their rates.

For those interested in safe investments, the Vanguard Admiral Treasury Money Market Fund (VUSXX) can’t be overlooked.  We here at Money Market Rates 101 are all about finding the latest and greatest for you, our reader.  The Vanguard Admiral fund is one of the more popular money market funds available.

Currently, this fund is closed, but will likely reopen soon as these funds usually do.  The fund’s administrator (Vanguard) closed the fund to new investors when the markets began to drop earlier in the year.  The Vanguard Admiral Treasury fund seeks to keep a minimum share price of $1 (or 1:1) and invests entirely in short-term government obligations such as Treasury bills.  The minimum investment is fairly high, but the expenses are only 0.15% (as of 12/29/08).

Performance for these low-risk Vanguard Admiral treasury Market Fund investments are about 0.44% (SEC).  Since inception, the Vanguard Admiral Treasury fund has pulled an average of 3.79%.

As of March 9, the fund’s reinvestment limit for current participants will drop to $10,000 per day, which will mean anything more than that to be reinvested will cash out.  Institutional investors in the Vanguard Admiral Treasury Money Market Fund will be locked out on that day as well.  The Vanguard Admiral fund, like all similar funds, are linked to the Federal Reserve’s interest rates, which are extremely low right now, so the yield of the Vanguard Admiral Treasury fund is currently very low.

Of course, like most investment funds, the Vanguard Admiral fund is not FDIC insured and investments are not guaranteed.  The Vanguard Admiral Treasury funds pay dividends monthly.

As we talked about earlier, money market funds are different than money market savings accounts, but so long as we are looking at them, we should definitely look at Fidelity money market funds.  Our goal here at Money Market Rates 101 is to ensure that you have the best information available as quickly as we can get it to you.

Fidelity is a large investment bank that holds a lot of assets and investment funds.  Those who trade with Fidelity will be interested to know what money market funds at Fidelity have to offer.  Three types of Fidelity money market investments are available: standard money market funds, national municipal funds, and state municipal funds.

Some individual state investments can have a slightly higher payoff than others, so investing directly into funds from them can give a higher yield.  Of course, this has a higher research requirement and usually a longer term for maturity, but they can be worthwhile.  For the most part, however, money market funds at Fidelity are in two basic types: taxable and municipal.

Fidelity money market funds in the taxable category are often used to soothe volatile retirement investments or hold money in the short term for instant removal for other investment opportunities.  Fidelity money market investments in this taxable arena are currently producing 0.92% annual percentage yields (APY), but are taxable.

Fidelity money market funds in the municipal funds arena (usually non-taxable) have a lower return rate, but are not taxed.  Currently, money market funds at Fidelity in this municipal fund are paying out 0.14% APY.  Both this and the above example assume $2,500 (minimum) to $5,000 investment.

Investments over $25,000 yield 0.97% in taxables and 0.34% in municipals in those same Fidelity money market funds.

Of course, money market funds are not FDIC insured, as they are investments, but for those who use Fidelity money market funds to hold their cash between investments, they can be a great way to hedge your portfolio.  Of course, rates change daily and the Fidelity money market is no different.

Vanguard money market rates are definitely worth looking into, especially if you’re an investor with Vanguard funds already and need a way to hold your money until the next opportunity comes along.  We at Money Market Rates 101 thought we’d look them over and see what they have to offer right now.

As mentioned in the last post, Vanguard money market accounts aren’t like normal money market savings accounts and are not FDIC insured as they are considered investment accounts.  Be aware of that as you move forward.  That said, however, Vanguard money market rates are very good and are a relatively safe way to store money until it’s reinvested into the market.

Currently, most Vanguard money market funds are invested in Treasuries, US Agency funds, and high quality commercial paper.  They are trading for $1 with a minimum investment of $3,000 and are currently giving a yield of 0.76% (compounded).  This is higher than the typical savings account.

Vanguard rates are variable with the market, of course, but Vanguard money market rates are relatively steady due to their low-risk investment hedges.  Of course, Vanguard money market rates will change over time and quickly, so check the current Vanguard rates before investing.

We definitely think that, for the investor, Vanguard money market funds are definitely worth looking into.