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A new place for cash with good yields
Guest Blogger John Carrig 
is answering a question today. John, who is a certified financial planner, is the head of Gold Coast Financial Planning in Boca Raton.
With CD rates so low, what other insured alternatives do investors have?
Many individuals have placed funds in low yielding insured money market or checking accounts.
They want safe, secure, insured places to put their money.
There's a new option for those who put safety first with their money.
Some financial institutions are marketing a hybrid checking account that offers expanded benefits along with safety features. Sometimes called a rewards checking account, these can offer higher-than-usual rates, low or no fees and complete liquidity. But they also come with some restrictions.
Who offers them? Mostly community financial institutions (banks and credit unions) that want to attract new accounts.
Are they really safe? The majority of community banks and credit unions are not only stable, but they are still lending and fully insured by the FDIC or the National Credit Union Administration.
The hybrid checking account comes with strings attached. Keep reading to see the pros and cons:
Pros:
Better rates than standard bank accounts. As of October 14, 2009, rates were as high as high as 6.01% - Average 3.5% to 4.5%
Same federal insurance offered on other accounts, up to $250,000.
100% liquidity, no fees for early withdrawal.
No monthly service charges.
Electronic banking and statement.
Debit card comes with account.
Free on-line banking.
Cons:
May require a monthly ACH (automatic) deposit.
Possible minimum number of debit card transactions required, usually 10 per month.
May require a minimum number of bill payment online transactions.
High interest rate may apply to deposits up to a certain level, say $25,000 or $50,000. Above that amount the normal interest rate (around 1.4 percent) hat type of account will be paid.
Possible limits. May be available to only individuals living in a certain geographic area, typically states in which the financial institution has branch offices,
Need to monitor rates because these attractive offers change frequently.
To learn more about financial institutions offering this new type of checking account visit
http://www.money-rates.com/rewardschecking.htm
and
https://www.checkingfinder.com/.
Still worried?
Even though the deposits are federally insured, the unknown banks might be of concern. The safety ratings can be found on the Bank Rate Monitor website:
http://http://www.bankrate.com/rates/safe-sound/bank-ratings-search.aspx
Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
