Financial Information
Vanguard Prime Money Market vs. Bank of Internet Savings?
Question : Vanguard Prime Money Market vs. Bank of Internet Savings?
Vanguard’s site says the compound yield for their Prime MM is 0.26%. Bank of Internet is offering a savings account with an APY of 2.5% Is it possible to compare these two numbers or are they completely separate things? I’m just looking to get the most out of my savings wherever I put it.
And isn’t 0.26% kind of small?
internet savings accounts
Best answer:
Answer by DER
Yes .26% is very small.
Check CDs at your local banks. In my area they’ve been around 1.75 to 2% and they are 100% safe
And who the heck is Bank of Internet??????
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#3 written by Twitter Bird 1 year ago
Money Market Funds are not insured and funds could fall below $ 1 value. Money Market Accounts and Savings Accounts are FDIC insured. You will see rates from .001 to about 2% annual interest right now. There are a few banks offering 3-4% but they may be unstable banks. Try visiting bankrate dot com to review available savings rates while also looking at the stability of the bank you are interested in.
On a $ 10K deposit .26% is $ 26 per year in interest while 2.5% is $ 250. -
#4 written by David H 1 year ago
Go to Dinkytown.net and play with the financial calculators there.
What ever the case go for compounding. Some accounts only give you interest on the original deposit, timed accounts usually do this. You want an account that will pay you interest on all the funds in the account on a daily basis.
What would you want… $ 1,000,000 or .01 cents that compounds daily for 30 days.
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#5 written by Kay 1 year ago
You are comparing money market rate with savings rate; like in comparing apples and oranges.
If you are interested in higher savings rate, you need to compare the rate in various banks and savings bank online or otherwise. If you can park your money without having to withdraw in the near term, you could look into Time Certificate of Deposit, CD’s.
The other option is bonds such as US Treasury, Municipal bonds and/or corporate bonds.
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The Prime MM yield is based upon earnings from investments the fund manager purchased.
Bank of Internet makes a decision based upon how much money it needs in deposits and sets a rate that will attract those deposits. Bank of Internet saves on its operating expenses by not having any branches so it can offer higher rates.