Paypal Money Market Account

[Bionix]

Has anyone upgraded their paypal account to a money market account. I'm looking into it, any advice?

 

oh, btw the current yield is 5%.. I'm assuming that's compounded quarterly?

 

Basically, I have $5000 I want to invest in the best way possible. I want something very secure as I can't afford to lose it.

[Dr_Frankenstein]

looks quite good had a look at the site and its backed by Barclays so your money should be pretty safe

The 5% is yearly not quarterly and looking into the actual small print there is a 1.10% fee so you actually earn 4% not 5%

[lost]

paypals just a whore

why not check out ingdirect? i think they offer something over 5% (the CD thingy) and their orange saving is 4.5% check it out probably better then the paypal .

 

http://home.ingdirect.com/

[DECwakeboarder]

ING Direct or Citibank is what I would recommend. I know that Citi has a 5% E-Savings account thing and I don't believe there are any charges for that.

[LoArmistead]

Invest $4,000 of that into a Roth IRA. From there, you can continue to invest up to $4,000 ($5,000 starting in 08) into it every year until you retire, at which time all the money that you have accrued + interest will be tax-free, and you will be a multi-millionaire. Basically if you invest the full $4,000 into the IRA from the time you are 18 to the time you are 65, that would be a total of $188,000 out of your pocket over your lifetime that you have invested. You could easily pull $1.5 - $2 million out of the IRA when you retire. It don't get much better than that! :thumbs-up:

 

If you are wanting something that is short term with a faster ROI, then I guess a money market account wouldn't be a aterrible idea, though I think setting up a nice retirement account is the best investment anybody can make.

 

EDIT: And one thing I noticed about that paypal money market account. It's not FDIC insured, which makes me think it's actually a money market mutual fund of some sort... In that case, I would say go through an insured financial institution and use a Certificate of Deposit for a Money Market Deposit Account. The return on investments for those tend to be higher over a period of time, and with fewer account maintenance fees. Not to mention, the government's got your back up to $100,000, whereas with this paypal money market account, if whoever they investd your money into goes bankrupt, that money is gone.

[UMTopSpinC7]

Yeah if paypal is giving 4% you can definitely do better than that.

[UMTopSpinC7]

Invest $4,000 of that into a Roth IRA. From there, you can continue to invest up to $4,000 ($5,000 starting in 08) into it every year until you retire, at which time all the money that you have accrued + interest will be tax-free, and you will be a multi-millionaire. Basically if you invest the full $4,000 into the IRA from the time you are 18 to the time you are 65, that would be a total of $188,000 out of your pocket over your lifetime that you have invested. You could easily pull $1.5 - $2 million out of the IRA when you retire. It don't get much better than that! :thumbs-up:

If you have time a Roth IRA is a very good way to save for retirement. The fact that it is tax free is a major bonus, especially if you have a large amount of money in the account.

 

EDIT: If you do consider an IRA you want to be fairly certain you wont need the money anytime soon because there are penalties for taking money out before retirement age (59 1/2). There are some penalty-free withdrawal situations but generally you shouldn't count on getting the money till you retire.

 

EDIT: And one thing I noticed about that paypal money market account. It's not FDIC insured, which makes me think it's actually a money market mutual fund of some sort... In that case, I would say go through an insured financial institution and use a Certificate of Deposit for a Money Market Deposit Account. The return on investments for those tend to be higher over a period of time, and with fewer account maintenance fees. Not to mention, the government's got your back up to $100,000, whereas with this paypal money market account, if whoever they investd your money into goes bankrupt, that money is gone.

Yeah I completely agree with that. I would go that route. I know at my bank if you have 10,000 or more you can get a MM account that yields about 5.6%.

 

If you work for a fairly large company you should check to see if they offer any sort of ESPP or 401k matching.

Edited December 14, 2006 by UMTopSpinC7

[Verran]

4% is nothing spectacular. Heck, you can get close to that by just leaving it in your savings account, and with no risk and no hassle. IRA/401k is a great idea (I'm hitting my 401k hard because the state has a huge matching plan), but given that Bionix is 19, a 46 year return may be a little longer-term than he's thinking

 

Perhaps the best thing you can invest in is Civil War Commemorative Plates. Just get a whole set and sit on it!

[UMTopSpinC7]

4% is nothing spectacular. Heck, you can get close to that by just leaving it in your savings account, and with no risk and no hassle. IRA/401k is a great idea (I'm hitting my 401k hard because the state has a huge matching plan), but given that Bionix is 19, a 46 year return may be a little longer-term than he's thinking

Well, I'm 19 and I have a Roth IRA I've started adding to. The earlier the better, or so I've been told B:) It's a pretty good way to save money and it forces you to save because you can't really take the money out once it is in there. A 46 year return would be pretty huge once you take it out but if you think you can't spare the money than it isn't really a good option.

 

If you put the money in a MM account it's not going to lose value in the same way stocks do. There really isn't a whole lot of risk associated with those type of accounts. CDs are fairly stable and you would probably be safe putting your money in a 6 to 12 month one. However, I wouldn't recommend doing that now (at least not a long term CD) because I think the rates have gone down quite a bit lately.

 

Perhaps the best thing you can invest in is Civil War Commemorative Plates. Just get a whole set and sit on it!

Unconventional but who knows lol.

[Lee3188]

That IRA sounds like a good deal, the only problem I have is not being able to get it out till your 65? You're pretty much an old geezer by then, you can't DO anything with the money! Haha. I'm only 18 years old, but investment stuff like this interests me a lot. What are some other options that have big yields over a shorter amount of time, say 20 years or so. I'm a save-aholic , right now I'm sitting on a decent amount of cash for my age. I would be interested in learning about some investment options. I know you guys aren't pro's on the subject, but a lot of you probably have more experience than I do.

[Overclocker16]

That IRA sounds like a good deal, the only problem I have is not being able to get it out till your 65? You're pretty much an old geezer by then, you can't DO anything with the money! Haha. I'm only 18 years old, but investment stuff like this interests me a lot. What are some other options that have big yields over a shorter amount of time, say 20 years or so. I'm a save-aholic , right now I'm sitting on a decent amount of cash for my age. I would be interested in learning about some investment options. I know you guys aren't pro's on the subject, but a lot of you probably have more experience than I do.

 

Currently the 10 year CD seems like a good idea. But you'll have to watch the market, but right now, it's the best way to go.

 

Also, stocks are very good way to go. If you know what you are doing (I know, not the best way for quick money) but it's very possible. I've got one, wish I had more money to invest, but it's gone up about 47 cents per share within a month. It hasn't shown a sign of slowing yet either. So there is a simple way to make a few hundred bucks.

[Verran]

That IRA sounds like a good deal, the only problem I have is not being able to get it out till your 65? You're pretty much an old geezer by then, you can't DO anything with the money! Haha. I'm only 18 years old, but investment stuff like this interests me a lot. What are some other options that have big yields over a shorter amount of time, say 20 years or so. I'm a save-aholic , right now I'm sitting on a decent amount of cash for my age. I would be interested in learning about some investment options. I know you guys aren't pro's on the subject, but a lot of you probably have more experience than I do.

LOL, to an 18 year old, 65 does seem pretty durn old, but that's exactly the point. You know what you're not going to want to do at 65? WORK! How do you plan to pay bills and keep health insurance and such if you're not working? 401k/IRAs. It's a retirement plan. The idea is that if you start early, you build interest on interest on interest and it ends up being a LOT of money. Like Lo said, if you start when you're 18, you will have put in about $200k but with the compound interest over 47 years, the account will have $2mil+. That's a killer deal. It's enough that most people could live a pretty decent life just off the interest that the money earns each year. I know I plan to not be working at 60, and that makes me very happy

 

Ultimately though, I get the feeling that the OP is looking for something a little shorter-term than a retirement fund