Released: May 08, 2006

Where to stash your cash

Source: By Jean Chatzky, Today Show [MSNBC]

For years, whenever I wrote an article about where to stash your cash, park your emergency fund — choose your euphemism — it would immediately take on a depressing pall. Those days are finally over.

Greg McBride, senior analyst with Bankrate.com, said it’s now, “a great time for cash investments.” This is for two reasons. The Federal Reserve Open Market Committee’s string of 1 percent interest rate hikes — the latest of which was presided over by new Fed Chairman Ben Bernanke in late March — boosted the prime rate to 4.7 percent. That’s lifted a lot of cash investments already. Simultaneously, though, McBride notes, these short-term rate hikes will help keep inflation low, so the higher return you receive on your money will translate into more buying power.

So, where in this new-and-improved market should you put your money? That depends on a few factors, including what you’re planning to do with the money, how much convenience you demand and how much shopping around you’re willing to do. The latter has rarely been more important.

According to research from Bankrate.com, which publishes up-to-date charts on the best savings and loan rates in the country (all kinds), the average saving account rate at large banks is still an anemic 0.54 percent. However, with a few clicks of the mouse, you can find 10 accounts with yields of 4.6 percent or better

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