Today I noticed that the Emigrant Direct online savings rate is now an even 3%. So it appears that rates may be on the rebound for those of us who are stashing cash away for a rainy day.

Saving Emigrant Direct, savings

Last week I started increasing my position in the Reserve Yield Plus Fund (RYPQX: web, prospectus, fact sheet, Y!).  Two weeks ago I finally started buying in to the fund, which is a no-load fund and does not impose the typical $9.99 transaction fee from Ameritrade.  At the beginning of this month, I received the distribution for those shares, pro-rated for the previous month.

The distribution totaled $0.09 for 250 shares held over 3 trading days in the month of May.  Doing the math, this translates into about a 4.4% return on my money annually.

So now that I know how the system works, I’ll continue to put my extra money into the fund to beef up our savings.

I’ll leave the $20,000+ in the Emigrant Direct account, as it’s a bit more liquid than RYPQX.  Remember, if you need the money out of RYPQX, it trades like a mutual fund.  This means that you’ll have to wait till 4pm for the transaction to take place, plus an additional 3 days for the money to settle in the account.  Add to that the transaction time to get the money from the brokerage to your local bank, and you’ll looking at about 7 days before you have your hands on the money.

In comparison, the Emigrant Direct account moves money back and forth in about 2 days.

Investing, Saving Emigrant Direct, RYPQX, savings

As expected, Emigrant Direct has followed suit on lowering interest rates for its online American Dream Savings Account to 4.30%.  I can’t say that I didn’t see this coming, but the dropping rates are driving me to start maneuvering money back into the stock market.

I’m starting to rethink my goal of having $50,000 in the account to generate some secure passive income.  While it’s still a good goal to have, the money I have allocated for that account may work harder elsewhere, like in high yield ETF’s.

I’ve already got the mandatory 6 months worth of expenses stored up in savings, and am now strategizing on how to put my money to work.

What do you think? Is Emigrant Direct still a good place to store savings?

Banking, Saving Emigrant Direct, interest rates, savings