Fed Rate Cuts and our MMA
Here we go again, with more Fed Rate Cuts. My financial acumen isn’t great enough to tell you whether this particular rate cut is a good thing or a bad thing for our economy.
In my own tiny universe, I see this rate cut as a negative. Since I can’t fully understand the greater economic implications without further study, all I can see is that my Money Market Account (MMA), in which I keep my emergency fund is becoming less and less useful.
I don’t expect stellar returns since we’re using the MMA merely as a parking spot for our cash so that it is liquid enough to be used in an emergency. However, when I opened it, it was at a modest 4.5% APR. We’re already down to 3.05% and now I expect it to drop even more.
So, the question I’d like to answer soon, is: Is there a better place to park this money? Some possible options:
- CDs: Since I want immediate liquidity CDs don’t seem to be a good option (and their interest rate isn’t great either!).
- There are some “High Interest Checking Accounts” but they have somewhat onerous usage requirements like requiring 10-12 uses of their debit card and 1 automatic deposit per month. I don’t think we want to do that at this point. This is supposed to be an emergency fund account, not a highly used checking account.
Do you have any ideas for other options?
