On February 6, 2019, from B….C……DDS
Question:
Are money market funds the best way to “park” cash temporarily?
Monday Morning Millionaire Program Answer:
Money market funds are a convenient but not great way at this time, to “park” cash temporarily. They can offer better rates because usually, they don’t allow withdrawals more often than six times a month. You can withdraw money from a savings account any number of times. In my core portfolio, I personally park money (the equal of five years’ income) in TDB166.
As our table below shows, traditional banks rarely offer good return rates for our savings. Most of the time, they don’t even equal the inflation rate. An interesting aside, writing in his book The Battle for Investment Survival, Gerald Loeb says that knowledgeable savers would gladly pay a fee to any bank which would guarantee the preservation of the purchasing power of our savings if they felt that there was any hope of the bank staying solvent. Since successful investors keep a significant percentage of their portfolios in cash or near-money, getting a decent return is critical.
| Bank | Savings APY | Min Balance |
| Scotiabank Momentum Plus Savings Account | 1.05% | $0.00 |
| BMO Smart Savings | 0.80% | $0.00 |
| TD ePremium Savings | .90% | $10,000.00 |
| TD Bank | 0.05% | $0.00 |
| Ally Bank | 2.00% | $0.00 |
| Bank of America | 0.01% | $0.00 |
| Capital One 360 | 1.00% | $0.00 |
| Chase Bank | 0.01% | $25.00 |
| Citibank | 0.04% | $0.00 |
| Citizens Bank | 0.01% | $0.00 |
| Fifth Third Bank | 0.01% | $0.00 |
| HSBC | 0.01% | $1.00 |
| KeyBank | 0.02% | $2,500.00 |
| M&T Bank | 0.02% | $1.00 |
| PNC | 0.10% | $2,500.00 |
| Regions | 0.01% | $0.00 |
| SunTrust | 0.01% | $0.00 |
| Synchrony | 2.20% | $1.00 |
| U.S. Bank | 0.01% | $0.00 |
| Wells Fargo | 0.01% | $0.00 |
