Looking to make Cash from your cash? Try a MoneyMarket

With the current trends these days; high gas prices, insurance rates through the roof, the stock market gone haywire, and the cost of food at an all-time high, we're all trying to save and make just a little extra cash. I mean, otherwise, why would you be here, reading my blog on saving and making money? I could talk to you about stocks and how even with a crashing market this is prime time to make money quick with hedge funds and playing the dips and rises with the market, but not all of us (including myself) have money for doing something such as that. Since that is not an option, I bring to you a far more safe option that is simple and guarantees to add a little bit of proverbial weight to your wallet.

Money market accounts are a great way to make a few extra bucks without tying up your money. Currently, banks like Bank of America and Sovereign are offering no-fee money market accounts for anyone who opens an account up with $5k or more; this means that you are able to withdraw and deposit money into these accounts, which have an interest rate around 2.2% (as opposed to a regular savings account of .3% percent) and an apy of 2.3-2.4% without getting slammed with fees. Of course, if access to the money isn't necessary, I would recommend CD accounts (if you're not interested in stocks, cause that's a whole other can of worms) which give you higher interest and apy rates that don't change. The rates right now are at about 2.7%, which isn't a huge difference, but it does help if you can do it. Only a few years ago I was able to lock in at a 5.6% CD rate and made over $600 doing absolutely nothing. If you are more interested in the CD account; first try to get one the month of your birthday (they'll often times offer a 'birthday' rate which is .5% higher most of the time) and check into Credit Unions, they tend to have slightly higher rates.

I know, I know, you say "what's the point of making an extra 1.9% when I need to make serious money". Well, let's do the math. You have exactly $5,000 to put in the bank. Let's say you put it into a regular savings account. That means in two years (.3%) $1.50 interest a month; $36.00 in two years. Doesn't seem too bad. Now let's do it with a 2.3% Money Market account from Bank of America. That $5,000 is now working for you, making about $11.50 a month; $276.00 in two years! That's an extra $10 a month for doing absolutely nothing. Now with more money, that adds up much quicker.

Okay, so you've got some savings that you want to keep your hands out of (another great thing about CD's), and you want to get a 12-month CD at 2.8% for your $5,000. With compounding interest; there's about $14.00 a month, $168 a year (which would be $336 a year if you re-opened it for another year or made it a 24-month CD). Not bad, not bad.

And remember, almost every bank is FDIC covered (temporarily) up to $250,000; however, in a couple years it will be back down to $100,000 (yes, this might be the stupidest thing you've ever heard of cause it's up there for me too). However, this doesn't affect most of us. This is an easy, safe way to make money with the money you've got. So I suggest everyone go out and do it (if you've got the means, of course)! Save and make some money!

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Blogger said...

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