Saturday, August 18, 2007

PayPal money market fund yield rises to 5.04% as of 8/18/2007

[Gentle reminder: I may suspend this weekly post in the near future, but I haven't decided for sure yet.]

Here are some recent money market mutual fund yields as of Saturday, August 18, 2007:

  • iMoneyNet average taxable money market fund 7-day yield rose from 4.73% to 4.76%
  • GMAC Bank Money Market account rate remains at 5.16% or APY of 5.30% (only $500 minimum)  -- Note: This is an FDIC-insured bank account
  • Vanguard Prime Money Market Fund (VMMXX) 7-day yield remains at 5.11%
  • Vanguard Federal Money Market Fund (VMFXX) 7-day yield fell from 5.08% to 5.03%
  • AARP Money Market Fund 7-day yield remains at 5.07%
  • TIAA-CREF Money Market (TIRXX) 7-day yield rose from 5.02% to 5.03%
  • PayPal Money Market Fund 7-day yield rose from 5.03% to 5.04%
  • ShareBuilder money market fund (BDMXX) 7-day yield fell from 4.49% to 4.47%
  • Fidelity Money Market Fund (SPRXX) 7-day yield rose from 5.04% to 5.07% ($25,000 minimum)
  • Fidelity Cash Reserves money market fund (FDRXX) 7-day yield rose from 5.02% to 5.05%
  • Fidelity Prime Reserves money market fund (FPRXX) 7-day yield rose from 4.48% to 4.51%
  • Fidelity Municipal Money Market fund (FTEXX) 7-day yield rose from 3.22% to 3.26% or tax equivalent yield of 5.02% (up from 4.95%) for the 35% marginal tax bracket and 4.53% (up from 4.47%) for the 28% marginal tax bracket -- this may be the best rate that most of us can get for "core cash" in a checking-style account
  • Fidelity Tax-Free Money Market fund (FMOXX) 7-day yield rose from 3.17% to 3.22% or tax equivalent yield of 4.95% (up from 4.88%) for the 35% marginal tax bracket and 4.47% (up from 4.40%) for the 28% marginal tax bracket
  • 4-week (1-month) T-bill investment rate fell from 5.08% to 4.65%
  • 13-week (3-month) T-bill investment rate fell from 4.91% to 4.76%
  • 26-week (6-month) T-bill investment rate fell from 4.93% to 4.91%
  • Treasury I Bond composite earnings rate (semiannual compounded annually) for new I Bonds is 3.74% (down from 4.52%), with a fixed rate of 1.30% (down from 1.40%) and a semiannual inflation rate of 1.21% (down from 1.55%) -- updated May 1, 2007, next semiannual update on November 1, 2007
  • NetBank 6-month CD APY rose from 5.25% to 5.40%
  • NetBank 1-year CD APY rose from 5.20% to 5.35%
  • highest 6-month CD APY rose from 5.43% to 5.50%
  • highest 12-month CD APY is at 5.65%

Note: APY yield is worth somewhat less than the same 7-day yield. See my discussion and table for Comparing 7-day yield and APY.

Update: Although I do believe that I have solved the mystery of the apparent shortfall of the PayPal dividend for July, I still have not gotten confirmation from PayPal customer service. I have gotten back two more responses, each was relatively standard, vague language that doesn't even begin to cut to the heart of the problem. As I say, I think I understand what may have happened and I'll simply keep an eye open when the August dividend gets paid in two weeks. I'm keeping my cash there intact, but not adding more until I can get a credible response from PayPal customer service.

Right now, Fidelity Cash Reserves (FDRXX) is my preferred parking place for the bulk of my cash. Actually I'm not that far away from being able to achieve the minimum for the Fidelity Money Market Fund (SPRXX) which usually has a slightly higher yield. It is a single click (well, maybe it is five or six clicks, but no more than a minute) away from my main Fidelity count which I use as my checking account. The convenience and fairly decent return are worth more than the hassle of using other, more offbeat or less accessible funds. The Vanguard and AARP funds look attractive, and the GMAC bank money market is tempting but I'm unsure about the association with GM/GMAC and whether the rate might be more of a teaser.

DISCLAIMER: I am not an investment adviser, so my opinions and the data presented here should not be considered as advice for where to invest your money. You should examine this and other available data before deciding how to invest your money. And, seriously, past returns should not be construed as a guarantee or even an "indication" of future returns.

-- Jack Krupansky


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