Thumbs Up: Savers-What Now?

Physician's Money Digest, August31 2004, Volume 11, Issue 16

Tips:

Looming inflation is spooking manyinvestors, but, after years of thelowest interest rates in history, theprospect of higher yields is painting arosier picture for those who live onyields from CDs and money marketaccounts. Higher interest rates arebecoming a reality, starting with lastmonth's half-point increase, andsome are predicting that the FederalReserve may increase the rate to ashigh as 4.5%, making CDs and moneymarket funds more attractive. Maximize your return on money marketfunds by choosing those with lowexpense ratios, like TIAA-CREF, Vanguard,and T. Rowe Price. To avoidlocking up all your cash at low interestrates, buy CDs and US Treasurysecurities with staggered maturities.As rates rise, you get to reinvest yourmoney at a higher rate as each investmentmatures.