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What's happening in short-term interest rates? While long-term rates are expected to continue upward in 2014 as the Fed cuts back its bond buying, short-term rates remain in the doldrums.
And with unemployment high and inflation low, the Fed has said it has no intention of raising these rates until at least 2015. Yet more than $900 billion remains parked in retail money funds paying 0.01% on average.
You can do better.
1. For cash you may need to tap
Online savings accounts, such as ones from GE Capital and Barclays, pay 90 times what a money fund does. And federal deposit insurance guarantees your money is safe.
Recent yield of:
Average money fund: 0.01%
Top online savings account: 0.9%
2. For cash you're investing
Find a long-term CD with a lenient early withdrawal penalty, says Ken Tumin of DepositAccounts.com. Barclays' online five-year CD claws back just six months of interest. In a year you can cash out and still be ahead of what you could have earned elsewhere today.
What you earn per year
5-year CD: 2%
If you bail out after one year: 1%