Is Your Cash Sitting Pretty? - maximizing savings yield - Brief Article - Statistical Data Included

Kiplinger's Personal Finance Magazine, April, 2001 by Joan Goldwasser

SAVINGS | How to BOOST THE YIELD on your rainy-day fund.

AS THE ECONOMY Slows and the specter of layoffs looms, it's a good time to take stock of your rainy-day money. Is it working as hard for you as possible?

Probably not, if it's in a checking or savings account. A money-market fund probably pays more and, even without FDIC insurance, money funds are extremely safe.

Top-paying Strong Investors (recent 30-day yield, 6.3%) keeps payouts high by absorbing management fees and severely limiting check-writing privileges to no more than three checks, regardless of how long you own the fund. The number-two fund this month, Transamerica Premier (6.2%), allows unlimited check writing with a $250 minimum per check.

Your bank or broker may offer an attractive yield if you meet minimum deposit requirements. For example, depositing $20,000 in any combination of cash and securities at SunTrust gets you a free checking account tied to one of five money-market funds. The top yield was recently 5.6%.

If racking up frequent-flier miles is a priority, two funds--American AAdvantage Mileage fund (5.9%) and the Warburg Pincus WorldPerks fund (5.8%)--award miles based on the amount deposited in the fund.

Yield Benchmarks

                                RECENT    MONTH-AGO   YEAR-AGO
Bond & Treasuries               YIELD       YIELD      YIELD

U.S. series EE savings bonds   5.54%(*)   5.54%(*)    5.19%(*)
U.S. series I savings bonds    6.49       6.49        6.98
One-year Treasury bills        4.69       4.96        6.14
Five-year Treasury notes       4.81       4.95        6.71
Ten-year Treasury notes        5.03       5.78        6.61

(*) For bonds purchased after May 1,1997; 5.36% for bonds purchased earlier.

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