MoneyAisle on CBS Chicago

MoneyAisle's ability to provide great High-Yield savings and CD Rates was featured in a "Stretch Your Dollar" segment on Chicago's CBS affiliate last night. You can see what the windy city had to say about our service by clicking this link.

Here's an excerpt:

"I wanted to get the best return," Leamy said.

And he did.

Leamy received a 2.86 percent rate on a $5,000, six-month CD from Troy, Michigan's Flagstar bank.

CD Rates News: Feb. 25

We're back with another roundup of some of the best stories and blog posts around the Web concerning CD rates, Certificates of Deposit, and all things involving saving.

Before we begin, I'd feel remiss if I didn't point out that MoneyAisle.com's CD Rates page contains a new table which features what the national average currently is for CD Rates (provided by our friends at TheStreet.com) contrasted with some of the great rates MoneyAisle's users have gotten by running a reverse auction and having banks bid higher rates against each other. Check it out here: http://www.MoneyAisle.com/cd-rates/

On to the news:

From the
Bradenton Herald:

Create a Strategy for Maturing CDs

Create a fixed-income “ladder.” To combat interest-rate concerns, you might want to build a fixed-income “ladder” by buying several CDs or bonds with varying maturities - short-term, intermediate-term and long-term. When market rates are low, you’ll still have your longer-term vehicles earning higher interest rates. And when market interest rates are high, you can reinvest the maturing short-term bonds and CDs at the higher rates.

(note: you can build a fixed income ladder in one step using MoneyAisle's CD Ladder feature)

From the Money Talks Blog:

Savings Tip Of The Day - Questions To Ask Before You Invest In A CD

Are There Any Call Features?
Callable CDs give the issuing bank the right to terminate the CD after a set period of time, but they do not give you that same right. If the bank calls or redeems your CD, you should receive the full amount of your original deposit plus any unpaid accrued interest.

CD Rates News: All Stanford Edition

The big story in CD Rates news this week is The SEC's case against Stanford's Certificates of Deposit, and how that is affecting investors. The fact that Stanford's CDs were not FDIC-insured should have been a tip-off to consumers. One of the safest ways to protect your money is by making sure your money is in FDIC-insured CD accounts. If you need to deposit more than the FDIC limit of $250,000 (set to revert back to $100,000 at the end of the year) then a tool such as MoneyAisle's CD Laddering will let you split your deposits across several FDIC Member banks.

On to the news roundup:

The Miami Herald:

Miami broker: Stanford raised red flags early on

Miami broker Charles J. Hazlett was one of the top producers at Stanford Group's Miami office in 2002. He even won a 700 Series BMW for selling $10 million in certificates of deposit in a single quarter that year.

But when the broker began questioning his managers about how the affiliated bank's high-rate CDs were invested, his relations with the firm soured, he says. He resigned under pressure after one year.

Bloomberg.com:

FDIC Insurance, Market Rates Key to Protect CDs, Advisers Say

Any CD sold by a bank or broker that investors are considering should be insured by the FDIC, said Jeanie Wyatt, a certified financial analyst at San Antonio, Texas-based South Texas Money Management. When U.S. investors put their money with an offshore bank, their investments become out of reach of FDIC protection and SEC oversight, Wyatt said.

FOX Business:

Robert Allen Stanford Caught

And now the same questions are emerging as those that arose with Madoff: What were the fire-engine red flags investors missed in the Stanford fraud case? And why didn’t market regulators at the SEC catch Stanford, given that problems about his operations flew across their radar screen as early as 2001, says the Wall Street Journal?

CD Rates in the News: Feb 18

Hello all, I've found some more interesting articles about the state of investing, particularly in CDs (Certificates of Deposit) and wanted to share the latest CD Rates news. Enjoy! If you come across an interesting article, I'd love it if you'd leave a link in the comments below.

The Wall Street Journal's financial blog, The Wallet, has an informative article called How to Know if a Certificate of Deposit Is Safe. There's a lot of information, but the bit that stood out to me was:

Even more importantly, look for those four magic letters: FDIC. Don’t settle for “guaranteed” or “insured,” says Richard Ferri, CEO of Portfolio Solutions, an investment management service. “You’ve got to get into the details. Who are they insured by? The FDIC or Bill’s Bike Shop down the road?” A smooth-talking financier can tinker marketing of products to give the illusion of safety, but if it doesn’t have the FDIC guarantee, leave it aside.

Rest assured, every bank in the MoneyAisle network is Member FDIC.

Meanwhile, in a similar vein, BusinessWeek takes a look at one bank that is not a member of the FDIC, and what that can mean for your investment.

Is Millennium Bank Too Good to Be True?

But a closer look at Millennium Bank and its purported parent company, United Trust of Switzerland, raises some serious questions. First, there’s the investment strategy. Millennium offers precious few details about how it manages such outsize returns. The firms’ Web site indicates that Millennium—“free from the limitations” of those pesky regulators, the FDIC—can invest in a wide range of assets, including foreign stocks, real estate, and debt. Trouble is, those categories of investments aren’t exactly doing that well these days. Millennium Bank did not return calls for comment.

This article illustrates some of the reasons why MoneyAisle only deals with FDIC-Member banks. We know you work hard for your money, and FDIC protection (up to $250,000 per individual account) is the best way to make sure your investment is safe regardless of the ups and down of the market.

CD Rates in the News: President's Day Edition

Here are some of the latest news stories involving CD Rates.

From Business Week:

Ex-Employees at Heart of Stanford Financial Probe

One settled a whistle-blower suit and dozens have talked to regulators as part of the investigation into Stanford Financial's high-yielding CDs

From Boston.com:

FDIC Insurance for New 1-year CDs

One year certificate of deposits (CDs) are very popular investments, but if you are considering the purchase of a very large (greater than $100,000) one year CD, you need to be aware that the new $250,000 FDIC insurance limit on non-IRA accounts is due to expire on 12/31/09. So, if you open a one year CD now, that CD will not mature until February 2010 -- two months after the higher limits are set to expire.

From TheStreet.com:

Setting the Strongest CD Laddering Strategy

There are plenty of reasons to set up a CD ladder -- a series of certificates of deposit with different terms set to mature at regular intervals. It can provide a guaranteed income stream, along with the security of FDIC insurance, so there's no risk of losing your money. A downside of CDs, however, is that you can't touch your cash until the CD matures. A CD ladder gets around this by providing access to a portion of your money at set intervals.

CD Laddering at MoneyAisle Reviewed by Netbanker

Jim Bruene, over at the excellent Netbanker blog, has published a review of MoneyAisle's CD Laddering capabilities.

So it makes sense (MoneyAisle would) be first to market with an automated CD laddering tool. But what makes it especially impressive is that MoneyAisle users can run up to 30 simultaneous auctions placing funds in up to 30 different financial institutions

You can read the full review here, and if you would like to try CD Laddering for yourself, just register for an account at MoneyAisle and see how you can build an entire investment portfolio for yourself almost instantly.

Find out more on MoneyAisle's CD Laddering page.

Money Market Funds in the News

Here's some of the latest news involving money market funds:

From MSNBC:

Shares of investment manager Federated Investors Inc. fell nearly 10 percent Tuesday as other asset managers dipped with the markets generally. An analyst downgraded the company's rating concluding that managing money market funds is becoming increasingly risky.

From Smart Money:

The sweep problem isn’t limited to big, national brokerages. Independent financial planners often promote themselves as champions of the little guy. But critics say that they, too, often let their clients leave their money in low-paying sweeps. Every independent adviser uses a brokerage for client accounts, and Dennis Houlihan, a financial adviser in Fort Wayne, Ind., says his brokerage, TD Ameritrade, discourages him from using anything for cash other than its proprietary sweep account. Houlihan acknowledges that he could steer his clients’ cash to higher-yield accounts or funds outside the TD umbrella. But like many investors, he doesn’t want the logistical headache. “I’m managing wealth; I’m not managing money markets and checking accounts,” he says. “Besides, do you really want five statements coming to you?” Lately, for yield, he’s been putting his clients in short-term corporate bonds, including mortgage lender Countrywide’s.

From the Associated Press:

Rates on commercial paper — short-term debt companies sell to money market funds and other investors — have tumbled. The rate on 30-day paper sold by highly-rated financial companies was 0.42 percent last week, compared to over 4 percent late last year.

CD Rates and Savings Accounts: MoneyAisle on CNN

Check out this video of savings guru Clark Howard on CNN Headline News discussing how to get great rates on CDs and High-Yield Savings accounts using MoneyAisle.com.

MoneyAisle's Ability to Get Consumers Great High-Yield Savings Account and CD Rates in the News

There have been a few interesting articles and interviews about the great CD and savings account rates at MoneyAisle over the past few days - I wanted to use this space to share them with all of you.

Want the Best CD Rates? Hold an Auction.

The Wallet blog at the Wall Street Journal featured MoneyAisle today.

An excerpt: "When I searched for the highest 5-year CD rate for $5,000 in New York City, MoneyAisle yielded a 3.35% CD from Katahdin Trust Company, which I never heard of before. The same search conducted on Bankrate turned up a 2.66% CD from MetLife Bank. In this scenario, by my calculations, I’d earn an extra $200 by going with the Katahdin CD."

Community Banks Go After Bigger Rivals

Bloomberg.com included MoneyAisle in an article about how some banks are offering better rates to increase their deposits. An excerpt: "Another way for consumers to find higher-yielding accounts is to visit http://www.moneyaisle.com, a Web site that auctions investors’ money to the federally insured bank that provides the highest rate. A recent search conducted on the Web site showed a winning bid of 3.25 percent for $20,000 in a high-yield savings account. "


In the Downturn, Find the Inefficiencies and Create New Businesses

Our CEO (and my fellow blogger) Mukesh Chatter was interviewed by Beet.tv. Click the link above to check out the video!

Poll: Economic Crisis Sends Investors to Seek Safety in Certificates of Deposit

MoneyAisle recently conducted an online survey of our users to see how different consumers were reacting to the current economic crisis.

Out of over 1000 respondents, we learned some interesting statistics. In light of the economic climate, 71 percent said they were more likely to invest in a CD, while 23 percent said they were equally likely to invest in a CD as before. Less than 2 percent say they are less likely to invest in a CD.

I've been reading a lot of anecdotal evidence that consumers are investing in safer asset classes during these uncertain times, and it was enlightening to get some hard data behind these stories. 89% of poll respondents said that when they look to invest for safety, they invest in CDs.
The combination of FDIC insurance (up to applicable limits, although with features like MoneyAisle's CD Ladder builder, you can spread your money across several FDIC-insured accounts so that all of your deposits are protected), a guaranteed rate of return, and a lack of risk are making high-yielding CDs the most attractive option for savvy investors during this difficult time.

New York Times columnist Paul Lim recently pointed out in one of his articles that S.& P. 500 returns over the past 10 years were, on average, negative. When you compare those negative returns to putting your money in high-interest-rate-paying CDs over the past 10 years (and rolling the money over to yet more high-interest-rate-paying CDs at their maturity) you are likely to have earned a completely risk free 4-5%+ on an annualized basis.

If you're curious to see other results from the poll, you can see a news release on the subject here. I'd be interested to hear your thoughts on the matter.

Which Direction are Interest Rates Headed?

Recently we have seen rates on certificates of deposit, savings accounts and home loans go down. This is partly the result of the government trying to un-freeze the credit markets by lowering rates. The Federal Reserve has been actively driving down interest rates to help the economy. Last week, the Federal Open Market Committee (FMOC) decided to keep the Fed Funds rate at a target range of 0% to .25% for some time, saying, "The Committee continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."

The U.S Treasury Department has been dolling out billions of dollars to banks large and small since the Troubled Asset Relief Program (TARP) started late last year.As a result, banks have used this money to fund their reserves instead of competing with each other for depositors funds by raising deposit rates or by offering promotional CDs and savings accounts. In November 2008, you could find several banks offering 5 year CD rates of 5.00% and over, now most offer 5 year CD rates in the 3.00% to 4.00% range.

The Fed has also been printing tons of money and buying large quantities of agency debt and mortgage backed securities to drive mortgage rates down. When the Fed announced they would purchase $500 billion in mortgage-backed securities, rates on home loans immediately dropped 1.00%.

So where are rates headed?

Rates on deposits and home loans should stay low for awhile, at least until the economy starts recovering sometime later this year. All this money being printed and pumped into the economy, the record low interest rates and the pent up demand by consumers on purchases should lead to higher rates in the future. It may also lead to much higher rates if the economic pendulum swings too far in the opposite direction. The way the economy is now, we would all love to be on the other side of the pendulum.

Today's guest post is by Brian McKay of Monitorbankrates.com.