Try money market accounts , which comfortably average over 2 percent today, or pick a high yield MMA or perhaps a Money Market Mutual Fund, because in both cases there are yields to be had of over 5 per cent. The latest data from the Federal Deposit Insurance Corporation shows personal savings accounts virtually neck and neck with certificates of deposit as America's preferred savings vehicle. But the money markets are gaining as people see them more and more as a way to add earnings to liquidity. To get some perspective on the rate differentials, let's run the numbers on Joe Average. What you're going to see is a lot of money is moving into mutual funds where households are willing to get more return by taking on more risk.
Savings are nothing more than a place to set it aside.
That's why the savings totals stay up no matter what the interest rates are. Keith Leggett, a senior economist with the American Bankers Association , tends to agree. Number one, they are FDIC-insured, so the consumer doesn't have to worry about risk. Second, although savings accounts tend to pay low interest, they do provide the consumer with liquidity. That is an important asset when compared to CDs, where you have your money tied up for a period of time.