Are you wondering where to park your cash for good? Well, a number of nervous investors are seeking options to park their cash safely. Following are the options, some are better than others.
Return on cash hasn’t been attractive for a long time, but many banks are now offering good returns for the last few months to attract investors. Similarly, certain checking accounts have raised the rate of interest to about 3 percent while money market accounts are offering as high as 1.15 percent.
In the meantime, a number of banks have modified their terms and conditions on certificate of deposits (CDs) by eliminating penalties on early withdrawals and have allowed the rate of interest to rise for consumers who keep their funds locked.
The campaign initiated by the banks is aimed at winning back savers. Since bonds and stock market investments are risky, near-cash investments seem to be one of the few safe areas for consumers to put their money.
In these risky times, a small but guaranteed return with a protection of up to 250,000 dollars per individual, per institution by the Federal Deposit Insurance Corporation (FDIC) looks appealing and safe. In addition to this, consumers can also receive extra coverage by having a separate retirement account as well as a joint account, both of which are separately insured.
Following are some of the options for people who are still seeking a temporary holding tank or thinking where to park your cash.
CDs (Credit Default Swap)
In recent times, many banks have taken steps to modify CDs to make them attractive to investors. This includes eliminating penalties on early withdrawals and increased rate of interest on consumers funds who put their money locked in.
For instance, PNC Bank and Bank of America now provide certificate of deposits which enable consumers to withdraw their money as and when they like without paying any fee. These are best investments for those who want to play absolutely safe.
Rewards Checking Accounts
Though the checking account rewards programs are being winded down by several large banks, but a number of local institutions, including credit unions and commercial banks are now providing an attractive return of 3 percent.
However, this offer is meant for people who use their checking accounts frequently. In order to qualify for this yield, checking account holders have to make a mixture of certain number of direct withdrawals or deposits as well as a dozen debit card transactions each month.
Money Market Accounts
The returns are not appealing but this option is the best for people who are looking for ease and flexibility. Highest yields are offered by online banks from 1 percent to 1.15 percent. In addition to this, tempting deals are also offered by banks, particularly for consumers having large balances.