Would you switch money markets now?

[disneysteve]

My money market fund has been consistently paying top rates for several years. Some other place might be a couple of ticks higher but nothing significant enough to make me want to move the money. Now, however, with recent rate cuts, my fund is down to 3.76%. I just looked at the list on this board and see that many are still higher. The question is do you think those higher rates are going to last or will they continue to slide for a while? Is it worth opening a new account and transferring money at this point, or might I be wasting my time and just see the new rate drop in the near future?

I'm not one to chase the highest rate. I'm happy to be in the top 5 or 10, but 3.76% just isn't there anymore.

[aida2003]

guess what you're still good. Our Presidential Bank premier savings % went down from almost 5% to 3.5% after both Fed cuts.
I'm wondering myself whether it would be better to decrease savings and get a CD instead (didn't check theck their % though).

It also tempts me to pay down mortgage more, but then I'm kind of wary when I think of "House rich, but cash poor."

[negreenfield]

I personally have an account with UFBDirect and Countrywide. Luckily for me Countrywide is the highest besides OneUnited so I'm ok.

If I were you I would maybe wait it out just a bit longer and see what happens, maybe lock into a CD that's 4.5% or higher if there are still any around.

I'd post the rate chasing calculator for those interested in the same thing but I don't have the post count to do it yet.

[buzz]

Rate Chaser Calculator

[negreenfield]

That's the one, hehe, thanks

[Snave]

Disney Steve,

I've gatherered you are a doctor from a few threads and I also have seen froma couple others that you probably have a few dollars banked (the post about paying off a 150K mortgage lead me to this), so my question is "how much do you have/need in a money market account? You shared the funds that you are in on one discussion, so I know you invest savvily (is that a word?), so do you keep so much in a money market for emergencies? While I doubt I have as much as you, my wife and I decided that only a few months in a money market was all we needed. We have plenty of money invested in mutual funds that we could get our hands on if there was an emergency. I have yet to come across that big of an emergency that we would need 6-9 months of expenses in the money market account. So, why not put more in a mutual fund? If you did that, then a 1/2% up or down on a money market really wouldn't be a big deal.

[disneysteve]

Snave - Great post. You make some excellent points. We've got about 15K in our MMF. I also see no point in keeping 6 months worth of expenses there earning 4% (or less now). Like you, we have plenty of other assets we can draw from if needed.

A 0.5% difference in interest is $75/year on 15K. While $75 isn't something to throw away, it also isn't something to go jumping through hoops to chase down. I'll probably stay where I am.

[Aleta]

Right now, I don't think anyone can judge when to take money out unless you're talking alot of money. Years ago when I was investing in CD's; I had to look at the amount of time of cashing in a CD and driving it to another bank and waste more time on the application and gas. Now, with online CD's, you don't have to do that which is great.

Also, you have float time with transfers that can cost you money in how long it takes to get to the other bank.

As for the emergency fund, the amount and time depends on many things. That is always different for people.

I wouldn't worry too much about the rates unless it gets so low that it isn't worth having it there. I like my money market account because it is in my same primary bank which makes it easy to transfer from account to account. I also have a mutual fund money market.

[dalekeener]

New to this forum..Looking for a good money market fund to open ....what would be some recomendations??

[Ima saver]

I use the vanguard money market fund.