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Money-Market Funds: How Low Can They Go?

Sunday, April 10, 2011 - 12:16 PM
Money market fund yields may go even lower (unless they are already at zero). According to the Wall Street Journal:
In recent days, yields on money-market funds have come under renewed pressure because of a new FDIC fee that makes it more expensive for banks to lend securities.

Unless you're using the money market fund as a temporary holding account for your trading, it makes more sense to have that money in a savings account instead. Savings account rates may be low, but they're a lot higher than money market fund yields. For example, Vanguard's largest money market fund, the Vanguard Prime Money Market Fund, has a current 7-day yield of 0.07%.
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
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