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Best Online Savings & Money Market Account Rates 2024

Best Online Savings & Money Market Account Rates

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Nationwide Bank Offers $25 Money Market Bonus on 3.52% APY Account

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Nationwide bank is offering a $25 bonus to open a money market at the bank. The bank's current rate of 3.52% APY is competitive and the bank has a soundness rating of 4 stars according to Bauer Financial.

Nationwide bank is offering a $25 bonus to open a money market at the bank. The bank's current money market rate of 3.52% APY is competitive and the bank has a soundness rating of 4 stars according to Bauer Financial.

The $25 promotion is scheduled to end on October 3, 2008. You can get it by using the promo code of MM080716 when opening an account. You can also call the bank to confirm its existence.

View the best money market and savings rates in the United States.


Putnam closes money market fund; Columbia, Dreyfus act to save $1 a share net asset value

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More turbulence in the money market fund world as fallout from the Lehman collapse continues. Putnam closed its $12.3 billion Putnam Prime Money Market Fund while Dryfus and Columbia (a division of BofA) injected funds to keep the net asset value at $1.

The collapse of Lehman sent additional shock waves through the money market fund world. Yesterday, the Primary Fund (RFIXX), one of the largest and oldest money market funds suspended redemptions for seven days while it tries to bring its net asset value back to $1. Its $785 million holding of Lehman Brothers Holdings debt broke the buck.

Investors began pulling cash out of money market funds and iMoneyNet show that assets dropped to $3.35 trillion from $3.44 trillion, a fall of $89.2 billion, one of the largest single day drops in the history of money market funds.

This run has hit the $12.3 billion Putnam Prime Money Market Fund particularly hard and forced it to close the fund.

"Constraints on liquidity in money market instruments created the risk that in order to process redemptions, the fund would realize losses in selling its portfolio securities," Putnam said in a statement. "The Trustees determined to close the fund to ensure equitable treatment of all fund shareholders."

It is unclear when shareholders will receive their money, and whether the payouts would maintain the fund's $1 a share net asset value. If not, shareholders will receive less than they invested.

In addition, both Dreyfus and Colubmia (a division of Bank of America) stated that they will have to invest in select money market funds to keep the net asset value at $1 and protect shareholder money.

Dreyfus posted a statement on its website:

"Overall, our exposure to Lehman is limited, accounting for less than 1% of the complex's money fund assets. For the four funds with exposure to Lehman, here is what we have done. The Bank of New York Mellon Corporation ("BNY Mellon") entered into support agreements with Dreyfus Liquid Assets Inc., Dreyfus BASIC Money Market Fund Inc., Dreyfus Worldwide Dollar Money Market Fund, Inc. and Dreyfus Cash Management Plus, Inc., pursuant to which BNY Mellon will support the value of Lehman notes held in the Funds. These agreements are intended to ensure that a decline in the value of the Lehman notes will not result in a decline in the share price of the funds below $1.00."

In a statement posted on its website, Columbia writes:

"Bank of America and Columbia Management have taken a number of steps to manage the money market
mutual funds during this unprecedented period, such as providing capital support to the funds, purchasing
certain assets from the funds, and other measures to seek to ensure that the retail money market funds
continue to transact at $1.00 per share.** As we have stated previously, Bank of America may provide
additional support in the future to the money market mutual funds, but it is under no obligation to do so."

It's clear from this statement that if WaMu or other banks go under, money market funds will continue to face losses. Money market funds generally hold short duration bonds and securities that are considered extremely safe. But as we've learned, what was once considered safe no longer is.

One option for investors looking to part some cash in a safe place is to consider FDIC insured savings and money market accounts, or Certificates of Deposit (CDs). Money market accounts, unlike money market funds are FDIC insured, as are certificates of deposit.


Washington Mutual Is Rumored to Be for Sale

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Washington Mutual, a rate leader in the savings and CD space lately, is rumored to be up for sale. The bank has suffered severe losses to its option rate adjustable mortgage portfolio and needs additional capital. It's been offering great rates lately so let's root for it staying independent.

Washington Mutual's online 3.75% APY online savings account as well as some of their CD offers have been highly competitive on BestCashCow over the last couple of months (these rates have since fallen). The bank has used high rates to attract deposits and help fund itself in the face of billions in writedowns in its option rate adjustable loan portfolio. The company's stock has sunk to $2 a share from a 52 week high high of $39.25. The NY Times reports that:

"Its plummeting stock price and the downgrade to junk bond status have also weighed on the bank. And it is paying higher deposit rates than many of its peers to attract customers, Bert Ely, a banking consultant, said."

News is emerging that WaMu is exploring its options and may either sell itself or seek additional capital. Potential suitors interested in buying the bank include Wells Fargo, JPMorgan Chase, and HSBC.

Another option is to raise more capital. That now seems more feasible since one of its investors, TPG Capital agreed to fortego an anti-dilution provision that hampered WaMu's efforts to raise additional money. The anti-dilution agreement would have required a portion of the new capital raised to be paid to TPG Capital, preventing another company from wanting to participate.

From a selfish standpoint I'd like to see WaMu stay independent. As we saw from Countrywide, once it was purchase by Bank of America, their competitive rates dropped like a rock. Cash hungry banks are good for depositors, as long as they don't go under.