Searching for Yield - Best Savings Account News

From 17KGET.com

Q: How do I go about finding the best CD rates? -- C.M., by e-mail

A: The two major Web sites that provide yield information are www.bankrate.com and www.banxquote.com. In early July, Banxquote was showing that the best yield on a one-year bank CD was 5.50 percent, while the national average was only 3.73 percent.

The difference is a big incentive to do some real comparison shopping when looking for yield investments. When you drill down to look for yields on bankrate.com, for instance, you'll find that the Internet-based banks tend to offer the high yields, while the big brick-and-mortar banks are offering yields that can be half, or less.

You should also compare CD yields with yields on comparable Treasury obligations and U.S. Savings Bonds. The Bloomberg Web site, www.bloomberg.com, shows that a six-month Treasury bill was priced to yield 5 percent. That's well over the national average yield on bank CDs.

You can learn about Savings Bond yields (and Treasury obligations) at www.savingsbonds.gov. Currently, EE Savings Bonds are yielding 3.40 percent. Purchase is easy, can be done in small amounts and interest is tax-deferred -- but the 3.4 percent yield won't induce many people to move cash out of their money market mutual funds.

Fidelity Government Money Market Fund (ticker: SPAXX) recently had an effective seven-day yield of 5.08 percent, while Fidelity U.S. Government Reserves (ticker: FDLXX) was yielding 5.14 percent. Its most conservative money market fund, Fidelity U.S. Treasury Money Market Fund (ticker: FDLXX), was yielding 4.61 percent.

If you are interested in another route to tax-deferral, try www.annuityadvantage.com. It provides yield information on single premium-deferred annuities, including those structured like CDs.