How far has your high yield MMA/Savings account dropped its APY in the last 6 months?

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I crafted up a list of high yield MMA and Savings accounts back in December showing the rates of the best MMA/Savings accounts out there and I chose UFB Direct as my Emergency Fund of choice. Unfortunately, (or maybe fortunately) they haven’t even received my initial test payment of $0.14 that I sent from my Bank of America account over a month ago. So I haven’t put any money into the account, which has dropped from 5.22% on the day I got it, to 5.21% the next day, 4,90% a week later, last week at 4.50% and when I logged on today, we’re sitting at 4.00%.

I’ve had enough. I know the economy is fighting off a recession, and the feds keep cutting the rate back, but I like my money to work for me! I know even at 4%, it is far better than the local branch offering 0.75%, so I can’t complain on that front, but I can make up for it by continuing to invest in my 401k and ROTH to maximum levels. We’re in a bit of a slow spell right now in the market, but don’t let it get the best of you. Especially if you’re young.

We’ve got time on our side, as every generation has its slump in the market. I’m not going to worry about it and just think of it in a “glass half full” mentality. Things will be looking up in the future, and I don’t plan on getting out of the market anytime soon. As long as I continue to get raises this should work itself out and I’ll be better off for it by buying in when the stock was low.

What is your horror story from your Emergency fund? How far has it dropped?

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Tags: 401K, Compensation, Debt, Emergency fund, Financial Education, Investing, Mutual Funds, Net Worth, Portfolio, ROTH IRA //

7 Comments

  • User Gravatar Free From Broke
    February 7th, 2008 at 4:52 am

    I think ING is down to the 3.4% range. Still better than my BofA savings account by light years but not as good as six months ago. I missed out on grabbing a CD the day the Fed cut rates. Let’s hope they raise it back up a bit.

  • User Gravatar MoneyAnswerTree
    February 8th, 2008 at 6:09 am

    Why do people think ING is great? They consistently have lower rates than most online banks.

    My GMAC MMA, is down to 4%. When I opened it was 5.35%.

  • User Gravatar hank
    February 8th, 2008 at 10:05 am

    No kidding guys - looks like WAMU is still battling at 4.25% though. I’m thinking of dumping my 4.0 who has dropped like a rock…

  • User Gravatar Andy
    February 9th, 2008 at 5:46 am

    Remember bank’s have to make money too. With Prime dropping 2.25% over the past four months, you are actually lucky it hasn’t dropped faster. You should be thanking Countrywide and E*Trade for keeping the overall rates up. I wouldn’t be surprised if deposit rates continue to decline into the next year.

    My bank is at 3.75%

  • User Gravatar hank
    February 9th, 2008 at 9:20 am

    @Andy - touche! Good point. Thanks for showing the other side of the coin!

  • User Gravatar MoneyAnswerTree
    February 11th, 2008 at 6:53 am

    Everything is going down. You can’t just jump ship. My GMAC account went down to 3.5%. Best investment when they are dropping rates is getting short term CD’s. Lock in a higher rate and hope it rides out the wave. Not much we can do but it’s still better than local banks.

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