THE DOWNLOAD MONEY MATTERS
Make sure the account is FDIC- insured, meaning that your money is backstopped up to $250,000 (per depositor per insured bank) if, in the worst-case scenario, the bank goes belly up.
investments in the fund. Still, they are very low risk — so much so that many consider them as good as “cash.” Like high-yield checking and
savings accounts, money market funds may have minimum balance requirements that you have to maintain in order to avoid fees or earn the high interest rate. The fees on money market
was offering 4% with no minimum balance.
3
TRADITIONAL ACCOUNTS VS. MONEY MARKETS
Money market funds are investment products similar to savings accounts in that they are highly liquid and have higher interest rates than standard checking or savings accounts. But unlike high-yield checking
and savings accounts, money market funds are a type of mutual fund, so they aren’t FDIC-insured — although they are insured by the Securities Investor Protection Corp. (SIPC) up to $500,000 in the event the brokerage firm goes under. Money market funds are
investments like any other mutual fund. They invest in very safe instruments like ultra-short-term U.S. Treasury securities and federal agency notes. Instead of having a specific
interest rate set by the bank, money market fund returns are based on the
funds, called expense ratios, are typically quite low. But some money market funds have other fees for maintenance, transactions, overdrafts, and more. As of June, the Vanguard Treasury
Money Market Fund had an average annualized yield of 5.07% and a wafer-thin expense ratio of 0.09%, with a minimum deposit requirement of $3,000. If the idea of a money market fund
sounds interesting, but you’d prefer to keep your short-term savings in a bank instead of a brokerage firm, consider a money market account. Money market accounts are FDIC-
insured savings accounts that invest in the same types of instruments as money market funds, with yields that are usually just slightly lower. The biggest difference between the
two is that money market accounts sometimes offer debit cards and/ or check writing privileges, whereas money market funds don’t typically have these features.
SECURE YOUR FUNDS Avoid stashing money in payment
apps like Venmo, PayPal, and Cash App. It’s a bad idea, warns the Consumer Financial Protection Bureau, because these funds are not FDIC-insured and wouldn’t be protected if the app were to go out of business. The agency says money received from friends, family, or business associates, should immediately be transferred to a bank account, where deposits up to $250,000 are insured.
FRAUD ON MENU Beware of scammers stealing credit
card data from OpenTable users. You may receive a call from a restaurant asking you for your credit details either before or after you’ve made a reservation. Usually, the scammer will claim they want to refund you for an overcharge. Don’t fall for it. Instead, hang up and call the restaurant directly, not at the number that called you. If you do get such a call, notify OpenTable at
phishing@opentable.com to prevent this fraudulent activity in the future.
STUDENT RATES RISE Interest rates on new federal student
loans are expected to exceed 5% for the first time in five years. For the 2023-2024 academic year, undergraduate loans are expected to top 5.5%, but since student borrowers paid less than 3% in 2020, it’s going to feel like a big bump. Loans for graduate school will likely hit 7.05%, and parent PLUS loans will top 8%.
HOP AND A ‘SKIP’ Need a new way to find cheaper
airplane tickets? “Skiplagging” is a way to do it, but it’s frowned upon by airlines. With skiplagging, you book an itinerary where the stopover is actually your intended destination. Rather than continuing on the flight after the layover, you simply leave at the stopover, and your seat stays empty for the last leg of the trip. If attempting this, carry all luggage onboard, as checked bags will go to the final destination. Opt for a one- way flight, as airlines may cancel round- trip tickets if you miss a leg. Beware that airlines may penalize or revoke your frequent flyer miles or elite status if they catch on.
SEPTEMBER 2023 | NEWSMAX MAXLIFE 73
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