BEST MONEY MARKET INTEREST RATES VS. US TREASURY RATES
You can see by the chart below that one year US Treasury rates have been below .5 of a percent for quite some time now and they are projected to stay that way for much of, if not all of 2010.
Buying US Treasury notes used to be the thing to do to get a safe guaranteed interest rate if you didn’t want to put your money in something more risky such as stocks. Retirees and people who live off a fixed income were candidates to buy Treasury’s and now with rates so low, what can you do?
When you buy a US Treasury you are loaning money to the government. In today’s political environment, that alone may be reason enough for some to not buy them. But with interest rates so laughably low, why not look for other sources of interest.
For a 1 year Bank CD you can now get about double what the Fed is paying you and if you put your money in a credit union you might even be able to get triple the rate. There are many credit unions that anybody can join so they are worth looking into.
The best money market interest rates are also comparable to what Treasury bills are paying and with them, your money is not locked down at all. Of course the more money you have will give you better rates for money market interest but if you have more than $30,000 or so, you should be able to get a rate that is similar to a US 1 year Treasury bill.
Money market accounts historically paid low rates but now with rates so low everywhere, they are not that bad and sometimes better than other options. Again, the more money you have means the better rate you can get and it all comes without having to commit the money for any period of time as you always have access to it without penalty.
