Good Returns Maybe

By Dian Vujovich

I’m still in touch with few of my clients from my days as a stockbroker. The one thing they question me most about is where to get some decent yields on money market accounts or certificates of deposit. They remember the double-digit return days on fixed-income products as if it were yesterday. But it sure isn’t.

That said, read a story the other day from SmartMoney.com that featured some banks offering yields above the puny 0.next-to-nothing percent. I don’t know any of these institutions personally, nor the specific terms involved, but thought I’d pass the info on in case you’d like to check any of them out.

Before doing so, for those who had taken the we’re-all-broke stance in recent months due to the markets’ unraveling and recent government spending programs, we aren’t. Through it all, and it all isn’t finished yet, many more people have been working than have lost their jobs and plenty of money has been sitting on the sidelines waiting to be invested or collecting in personal accounts waiting to be spent.

Take our savings rate, for instance. It fell to 4.6 percent in June from its 14-year high in May of 6.2 percent. This, according to the Commerce Department. Or the huge success of the cash-for-clunkers program. Funny how so many people could suddenly afford car payments who just a few weeks ago had no money. But hey, most of us lie about the amount of money we have or don’t have anyway so none of this should be surprising,

Enough of my commentary. As of Aug. 4, the average bank money-market account was yielding 1.21 percent and the average six-month certificate of deposit 1.37 percent, according to Bankrate.com. But, there are some interest-paying checking accounts that pay as much as 4.51 percent APY and savings accounts with over 2 percent APY. They do, however, all come with strings attached. Like, having a direct deposit account, or paying your bills on-line or having to make a certain amount of debit-card purchases a month, etc.

You can read all about them and the entire SmartMoney.com story, along with seeing two excellent charts about what various banks are offering, at http://tinyurl.com/nf4q27.

Check it out. But before you do, consider the following quote from that story:
“Before you start chasing yields, make sure it’s worth your time and effort. “The difference between a 1% and 2% yield for the whole year is just $100 on a $10,000 deposit,” says Michael Kresh, a fee-only financial planner in Hauppauge, N.Y. “You have to think how much time you want to spend for that extra $100.”