MAS o Menos

Ameritrade was so proud to announce that they were going to give me Money Market rates on my cash balance that they sent me a congratulations letter in the mail. As an investor that always tries to keep a portion of my portfolio in cash (when a sale comes, you need liquidity), this came as good news. Before I got too excited, I sent an email to Ameritrade asking what interest rate they would be paying me. Here was their response:

Dollar Range                      Interest Rate

$.01 - $4,999                         0.10%

$5,000 - $24,999                      0.40%

$25,000 - $99,999                     1.65%

$100,000 - $199,999                   2.40%

$200,000 and above                    2.90%

No offense Ameritrade, but those rates suck. My little old checking account pays 3.50% on a $10,000+ balance. And yesterday I learned that PayPal will let you park as little as $1 in their Money Market account and it pays 5.02%.

UPDATE (Feb 2007): PayPal accounts are not FDIC insured. Find a high interest savings account or CD for safer investing.

Tags: ameritrade, fixed-income