Good Options for Rainy Day Money
Last month I emphasized the importance of an emergency fund and recommended money market funds from Fidelity or Vanguard as good options for those with the minimum required deposits of $2,500 and $3,000 respectively. However, I've since learned of some alternatives that offer similar yields of around five percent for much lower initial deposits. According to the May issue of Kiplinger's Personal Finance magazine, the AARP Money Market fund (you don't have to be "older" to be eligible) requires just a $100 initial deposit. Transamerica's Premier Cash Reserve also offers an attractive return with a $1,000 minimum.
In addition, the article pointed out that a number of online banks are offering attractive rates on money market and regular savings accounts. Those mentioned included HSBCDirect.com , E*Trade.com , Emigrant-Direct.com , and INGDirect .
Matt's View
An emergency fund used to be the necessary but boring part of wise money management. Today, it's still necessary, but with rates topping five percent building an emergency fund is getting downright exciting.
This article filed in: Saving
Managing Money by The Book
- "Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock." - Matthew 7:24-25
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