Is the Million Dollars in the right account?

[Ashles]

Is it just me or should the million dollars be racking up interest quicker than it is?

If I had a million dollars I'm sure I'd have it in an account where it was earning better interest than it is judging by the published Goldman Sachs account on Skeptic Report.

The Randi million-and-a-bit (http://www.skepticreport.com/images/investmentaccount.gif)

Surely it should be earning about 80,000 a year in the right account?

[CurtC]

If you know of a way to earn 8% interest on a super-low risk account right now, please tell me as well as Randi about it. The account earned $1,329.40 in one month, which is about a 1.5% annual rate. This is very much in line with what you can get now on a very low risk account that you can get to the money at a moment's notice (certificates earn higher, but require a committed time, which wouldn't work for this account).

[Ashles]

Well the very first hit I got on Google was for this savings account:

ING Savings Account (http://www.ingdirect.co.uk/html/aboutsavings/aboutoursavingsaccount.html)

It pays 5% and has no access restrictions.

Am I missing something here? It seems pretty good.

[Ashles]

Oh just checked that's only open to UK citizens.

Here's another list (http://www.find.co.uk/banking/High_Interest_Savings_Accounts/)

Even after tax they still work out over 3.5%.

[MRC_Hans]

Ashless, I get emails every day (or did till my ISP installed a spam filter) promising me loans of up to 400,000$ at interest rates down to 2.5% with no credit verification required. Would you believe that, too?

1.5% for a no-risk account with immidiate withdrawal possibility and free verification to any idiot who wants to see if the money is really there is about as good as you get in the real world.

Hans

[Hellbound]

Ashles,

The only problem I'd see with a savings account is that most banks only insure the savings for a maximum of $250,000 (150,000 FDIC, and another 100,000 supplementary at many banks). That could become an issue if a robbery or fraud occured, or something similar. Not likely, but still a concern. Just my two cents worth :).

[Ashles]

For the 8% accounts I wasn't thinking about the instant access requirement.

Having checked some US banks your interest rates seem to kind of suck.

However HSBC have an Instant Access Savings account that offers 2.65% and is open to US residents. I've explained the amount and they said that was fine.

Wouldn't that still be better?

[Matabiri]

Originally posted by Ashles
Having checked some US banks your interest rates seem to kind of suck.

However HSBC have an Instant Access Savings account that offers 2.65% and is open to US residents. I've explained the amount and they said that was fine.

I've got some savings in dollars, and the only way to get decent rates is to convert them to a different currency, at least according to the Lloyds. I'm hoping the exchange rate will shift a little in the right direction sometime soon...

[The Don]

Just be aware that any interest can be more than offset by exchange rate movements. Especially as the dollar is low. If you were to use $9000 to buy £5000 ($1.80/£) and were to put it in an account earning 5% for a year you'd have £5250. If in this period, the dollar were to move to $1.60/£ (its average over the last few years) and you were to repatriate the money you'd only have $8400.

Unfortunately the international flow of money more or less ensures that stable currencies with high interest rates also are high relative other currencies. Moving money around chasing good interest rates is very risky unless you really know what you're doing.

[CurtC]

The 1.5% annual number I came up with before was by taking the performance in this particular 30-day period and extrapolating.

However, the combination of interest and dividend income actually added up to around a 3.5% annualized rate, but the change in market value of whatever securities are in that portfolio knocked that down. For any other 30-day period, this might not be there, and the rate Randi gets over a whole year could well be much higher than the 1.5% number.

[Ashles]

but the change in market value of whatever securities are in that portfolio knocked that down
That doesn't sound like a super low-risk account.

I think Randi should shop around some more. There are always new accounts and with a million dollars companies are quite eager to accomodate you.

Maybe anyone bored here can phone around.
It's certainly fun phoning a bank and asking about their interest rates for over a million dollars. I phoned HSBC (that's how I found out about the above acount) and their tone certainly changes when you mention the magic 'm'-word.

[sf108]

ING Direct is the best low-risk cash trusts around. It's currently around 5 - 5.25% in Australia. Good investment if you got a spare million bucks and don't want the risk involved. Not sure how long is the minimum deposit term...but usually less than 12mths.

[Wudang]

Originally posted by Ashles
That doesn't sound like a super low-risk account.


Oh yes it does :( . I have a spread from high risk to low risk portfolios (OEICs) and they all show as much interest as a homeopath has in evidence. Mind you I'm accumulating shares like stink.