I'm looking to get a MMA account for an emergency savings fund. My credit union offers then with 0.90% APY and Dividend rate for under $9999 and 1.04% for over 10k and 1.19% for over 99k. Is this good?

Comments

fastcars1 t1_je9bvfs wrote on March 30, 2023 at 11:02 AM

No. Capital One gives 3.4 for everything in a savings account. Others are higher. SPAXX is 4.4.

TwstdSista t1_je9c567 wrote on March 30, 2023 at 11:05 AM

Not really. Your can get 4% ish in a high yield savings account, money market fund, CD or even T bills.

nonearound OP t1_je9cetv wrote on March 30, 2023 at 11:08 AM

So I'm not sure if my understanding of how this works is right. Say I put 10$ in an account with a 4% yield does that ill get 40 cent return on that investment?

[deleted] t1_je9ctxd wrote on March 30, 2023 at 11:12 AM

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TwstdSista t1_je9cwkg wrote on March 30, 2023 at 11:13 AM

Annualized - yes. Which means 40 cents over the course of 1 year, or 3 cents per month. On $10k that would be $33.33 per month. While $10k at 0.90% would be $7.50 per month.

nonearound OP t1_je9tdii wrote on March 30, 2023 at 1:40 PM

That still seems kinda low to me, no? Is there another type of savings account that could yield more results?

TwstdSista t1_je9tvjm wrote on March 30, 2023 at 1:44 PM

There are some 5% CDs out there. And money market funds are yielding around 4.5%. I'm not sure how much T bills are earning these days, but it's probably right in between. I don't think you can get a better rate on cash right now (in the US).

[deleted] t1_je9u0qn wrote on March 30, 2023 at 1:45 PM

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antialiasedpixel t1_jeaareq wrote on March 30, 2023 at 3:46 PM

That’s the whole “takes money to make money” concept. It’s a snowball where it goes really slow at first, but as you build up more and more the interest/growth really takes off. Generally cash savings/CDs are not going to make you a lot as they are very safe. Stocks can make more, but even then, on average take about 7 years to double your money. So 10k would be $20k if you put in no extra after around 7 years.

burner46 t1_jeamdhp wrote on March 30, 2023 at 5:00 PM

What do you think is a reasonable rate of return for a no risk investment?

[deleted] t1_je9crxk wrote on March 30, 2023 at 11:12 AM

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[deleted] t1_je9nas9 wrote on March 30, 2023 at 12:52 PM

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HorizontalBob t1_je9spjh wrote on March 30, 2023 at 1:35 PM

Most banks and credit unions offer very little return on CDs, money market, savings and checking. If they offer high yield like 3%+, look at the limitations and requirements. Those may be perfectly acceptable to you or not.

It's not a hard and fast rule, but I tend to look at it as banks/credit unions and financial institutions. The financial institution side is were you'll grow your money.