Expert: Paul Henneman - 4/7/2006

Question
Hi Paul,

I want to invest in a second home in Hawaii someday, but don'thave enough money right now.  So where would be a good place to put $70 or $80K in the meantime?

I was at Citibank today, and they have a 0.039% interest rate which yields about $200 plus dollars a month.  That's a money market account with no time constraints.....liquid account.

Looking forward to hearing from you,
Wayne

Answer
Wayne,
  Thank you for your question! Yes, if you are looking for a place to 'park' money for a period of time that is perfectly safe, then a money market account is perhaps the safest thing. Citibank is fine, my favorite money market account is with NetBank (www.NetBank.com)  They are a smaller bank, but are fully FDIC insured up to $100,000 for each account, and offer the highest rates for money market accounts that I am aware of. As you say, the added benefit of this type of account is how liquid it is, you can usually get a debit card and checks to draw off the money market funds very easily.
  The downside is that the interest you will get from even a very good money market account will barely offset inflation each year. So your finds will not grow, consider this a 'maintenance' type of account.

I hope this helps, please do not hesitate to follow up with me if I can be of any further service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
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