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Sep. 20th, 2005 08:29 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
which_chickI'm sure everyone follows interest rate news with the same amount of obsessive interest that I do, but just in case you don't, the Fed added another 25 basis points to the federal funds rate today. I'm currently getting 3.5 (until Sept. 29) on a money market special thingie my bank is doing. However, I'm going to need to do something else with the money here directly because after the introductory rate period ends, it goes to like 2.7% and I can do better than that. 2.7% is not good enough.
Most of the time, when my money isn't out making me richer at a cool 7% APY, it's cooling its heels over at ingdirect.com where it garners a return of 3.30% (as of right now -- they'll probably jack up rates .25% to follow the Fed here directly) and I can kind of live with that, at least as long as inflation doesn't pick up. The Fed's been busy with their 25-basis-points-per-meeting measured rate of increases and their statement from today's meeting leads us to expect more of the same. (The FOMC uses the statement to kind of foreshadow what we should probably expect from the next meeting of the FOMC, so that nobody is unduly surprised. Finance people do not like surprises.)
Now, the problem here is that 3.30% APY isn't all that impressive as a rate of return. I generally loan money at 7% APY, and I like getting that kind of return on it. That kind of return is comfortable. It's a good thing. Higher interest rates do NOT make Baby Jesus cry. Higher interest rates buy me more lattes, a horse trailer, ten bras on a whim, and cute horse sneakers that are taking rather a while to ship to me. :) My FDIC-insured options, right now, for investing my money, are as follows:
ING savings account at 3.30% Advantages: electronically linked to brick-and-mortar bank, do not have to apply for yet another fucking account. Disadvantage is that it's not as good as I could be doing.
ING CD at 4.2% for a year, higher rates if you pick a longer term. Problem there is that I don't like locking up my money for that long what with us getting a new Fed guy along about the end of January. Uncertainty is not a feeling that inspires confidence in investors, even weenie little ones like me. I don't know what rates are going to do and I would feel a lot better if I'd heard more on who our new Fed guy was gonna be. Also, if someone comes along who wants to pay me 7% and all my money is locked up in a CD, I will have ye olde opportunity cost going on there. Ick. I like liquidity.
I note with interest that EmigrantDirect.com offers 4.00% APY for MMAs, rate guaranteed through 12-05. Their online set up an account thing doesn't like me because Equifax can't tell where I live. I believe I'll try the snail-mail application thing to see if that works any better. Fucking Equifax. I've lived at the same address for ten years. It's not MY fault that they can't tell where I live. Assholes.
So, then, I've spent about an hour finding a new home for my money when, at the end of September, the MMA at my bank drops to 2.7%. Is it really worth looking around to find a better rate? Yes. I'll make almost a hundred dollars by moving the money and it's not like shopping for better interest rates bores me. We'll see what the rate at ED does after their initial introductory period. If I link the EmigrantDirect bank to my brick-and-mortar account and ED starts sucking, I can then shift the money to ING by clickiting so that there is not any great time lag involved. (Time lag makes Baby Jesus cry. Money should all the time be working, not dawdling about in transit.) If ING then beats ED, we'll bank with ING and leave like a hundred bucks in ED to keep the account open in case they do better later.
High finance! Yo HO. Yo HO. A pirate's life for me.
Most of the time, when my money isn't out making me richer at a cool 7% APY, it's cooling its heels over at ingdirect.com where it garners a return of 3.30% (as of right now -- they'll probably jack up rates .25% to follow the Fed here directly) and I can kind of live with that, at least as long as inflation doesn't pick up. The Fed's been busy with their 25-basis-points-per-meeting measured rate of increases and their statement from today's meeting leads us to expect more of the same. (The FOMC uses the statement to kind of foreshadow what we should probably expect from the next meeting of the FOMC, so that nobody is unduly surprised. Finance people do not like surprises.)
Now, the problem here is that 3.30% APY isn't all that impressive as a rate of return. I generally loan money at 7% APY, and I like getting that kind of return on it. That kind of return is comfortable. It's a good thing. Higher interest rates do NOT make Baby Jesus cry. Higher interest rates buy me more lattes, a horse trailer, ten bras on a whim, and cute horse sneakers that are taking rather a while to ship to me. :) My FDIC-insured options, right now, for investing my money, are as follows:
ING savings account at 3.30% Advantages: electronically linked to brick-and-mortar bank, do not have to apply for yet another fucking account. Disadvantage is that it's not as good as I could be doing.
ING CD at 4.2% for a year, higher rates if you pick a longer term. Problem there is that I don't like locking up my money for that long what with us getting a new Fed guy along about the end of January. Uncertainty is not a feeling that inspires confidence in investors, even weenie little ones like me. I don't know what rates are going to do and I would feel a lot better if I'd heard more on who our new Fed guy was gonna be. Also, if someone comes along who wants to pay me 7% and all my money is locked up in a CD, I will have ye olde opportunity cost going on there. Ick. I like liquidity.
I note with interest that EmigrantDirect.com offers 4.00% APY for MMAs, rate guaranteed through 12-05. Their online set up an account thing doesn't like me because Equifax can't tell where I live. I believe I'll try the snail-mail application thing to see if that works any better. Fucking Equifax. I've lived at the same address for ten years. It's not MY fault that they can't tell where I live. Assholes.
So, then, I've spent about an hour finding a new home for my money when, at the end of September, the MMA at my bank drops to 2.7%. Is it really worth looking around to find a better rate? Yes. I'll make almost a hundred dollars by moving the money and it's not like shopping for better interest rates bores me. We'll see what the rate at ED does after their initial introductory period. If I link the EmigrantDirect bank to my brick-and-mortar account and ED starts sucking, I can then shift the money to ING by clickiting so that there is not any great time lag involved. (Time lag makes Baby Jesus cry. Money should all the time be working, not dawdling about in transit.) If ING then beats ED, we'll bank with ING and leave like a hundred bucks in ED to keep the account open in case they do better later.
High finance! Yo HO. Yo HO. A pirate's life for me.
