Find A Safe Place To Keep Cash
Gone are the days of investing every available dollar you have into every available investing vehicle. Times like these call for a measure of cash reserves. So where is the safest place to keep your cash, while waiting for the markets and the economy to turn around?
The safest place to keep your cash in still a bank deposit backed by the Federal Deposit Insurers Corporation or the FDIC. The FDIC insures savings, checking, and money markets deposit accounts, and CDs
While saving accounts offer the most flexibility, don’t expect to break the bank with interest perks. However you do have the freedom of withdrawing your money at any time. This is an important component for many people.
Getting the best cd rates is not all that difficult, but you might pay a penalty if you need to take the money before the fixed term is up. Many banks are hungry for new deposits and are extremely competitive with cd rates. Remember as long as the account is FDIC insured, the bank offering the cd matters less than the interest rates it is paying. You’re looking for safety.
Alternatively while money market funds are not FDIC insured and carry a measure of risk on their own, many investors are committing a portion of their cash portfolios to these funds. Money market funds are mutual funds that are required by law to invest in lower risk securities,
The last couple of years should have shown us all, where there is money there is a risk of losing it. While these investing vehicles may not seem attractive, they are generally safe. Investing money requires risk. One would be wise to spend some time to understand the risks and make decisions accordingly. The economy is in reset mode, and many investors should be as well.
Written by on June 11th, 2009 with
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