Moving a little more cash to Sovereign Bank

Now that the taxable-equivalent yield on Fidelity FTEXX is back down to 3.50%, this morning I went ahead and moved some parked cash from FTEXX over to Sovereign Bank where I will now have enough cash to hit the next rate tier of 3.25% APY in a money market deposit account. Sure, I will earn a little less for the cash I am moving from FTEXX, but my existing cash at Sovereign will now earn 3.25% APY rather than only 2.75%. The FTEXX yield also appears to be on a downward trend anyway.

Part of the money I am moving is for my estimated taxes that will be due in January 2009. I am much happier to keep it somewhere other than my main transaction account since "out of sight, out of mind" works best for me so that I will not be tempted to spend any of the "extra" cash (need a fancy new computer or iPod touch?) or think that I have a larger cash cushion than I really have.

I am still quite comfortable keeping my cash and stock at Fidelity, but Sovereign is in fact offering a better deal and I will also get a significant new-account bonus after 90 days. Having full FDIC protection is a nice bonus, but was not a primary factor. I still have about half of my cash at Fidelity.

-- Jack Krupansky