CHICAGO — If the crazy ups and downs in the stock market these days have you feeling a little dazed, you have lots of company. For many savers and investors, trying to find a safe haven for whatever cash is left in their portfolios has become a top priority. Unfortunately, investing cash these days is no less daunting than investing in the stock market.
If you have a brokerage account, there’s a good chance that your broker has recommended that any cash in your account be swept automatically into a money market fund. These so-called “sweep” accounts currently hold billions of dollars — money that is probably doing a lot more good for the brokerage firms than for their customers. Money market funds, on average are paying about 0.03% interest (that’s three one-hundredths of 1% — a paltry $30 interest per year for every $100,000).
Most banks offer money market deposit accounts, which are similar to money market funds but differ in several important ways.