Money market accounts

[Texas_triker]

I am a 63 year old woman with $61,000 dollars in a money market account. I keep hearing that we (the general public) need to close our money market accounts, but I need to know what to do with my money after my MM account is closed. Members' help/suggestions would be greatly appreciated.

[Broken Arrow]

Who is saying that your account needs to be closed?

Which institution is the money located at?

Do you know if it's a bank savings account or a mutual fund?

[Texas_triker]

I first heard it from Suzi Orman, on a TV morning show. Heard it again, today, from another financial advisor (didn't catch his name) on another morning show, on another channel.

Am not very educated in money matters. All I can tell you is; I went to a Smith Barney financial advisor at my bank and told her that I wanted to invest the money for my retirement. My papers say; "Citigroup Global Mkts Inc" -- "Annuities"

[kork13]

As for other options besides money market accounts, it depends on how liquid/readily available you want the money to be.

If you need it ready at a moment's notice, my best recommendation would be to deposit in an online savings account. They are (nearly) as readily available as any brick-and-mortar bank, but generally get much better interest rates (3% or more). Poundwise has a string in the Banking and Investing section with rates and links for those.

If you're looking to just keep the money safe and secure, but don't expect to need instant access to it, I'd recommend starting up a CD ladder with anywhere between 6-mo to 2-yr periods. They'll give you even better returns (3.5% at the low end, up to 5% on the high end) , but will lock up your money for their duration. Others here could better (than I)reccommend how to build a CD ladder, or where to go for them.

Just keep in mind the FDIC's $100k limit at any one bank--you don't want to park your $61k in the same bank that you also have $50k in a checking or savings account.

[sofocused978]

Thats funny cuz last saturday Suze said to leave your money alone and that it was better off in a MMA.

[jIM_Ohio]

Comments like this will make the problem worse. This could hurt the bank's liquidity (if there is a run on deposits). That is part of what started the great depression.

Question 1- what bank is your money at? What other accounts do you have with them?
Question 2- what is this money used for? Living expenses, rainy day, emergencies, or long term need?

The CD ladder idea is a good one if you only need the interest from the money, with limited periods where you have access to cash.

For example if you opened 3 20k CDs with a 90 day, 120 day and 150 day duration, then when each CD matured you rolled it into a 90 day CD, you would have a 90 day CD ladder. Every 30 days 20k of your money would be available.

CDs are FDIC insured. Interest rates will probably be about 1-2% for a 90 day ladder.

If you did a 2-3-4 year ladder, you could probably get 3-5% for the longer duration.