How to make your savings earn more interest

The Ticker

January 12, 2001|By JULIUS WESTHEIMER

Are you missing out on free money?

"Americans could be earning a lot more interest on their cash without taking any, or little, additional risk," says a study by the Consumer Federation of America.

It points out that "Americans hold trillions in low-yielding savings accounts and could earn substantially more in interest by shifting that cash into higher-yielding alternatives."

The study suggests moving some money from savings accounts into certificates of deposit ("the highest rates in several years"), money market accounts, Treasury bills and tax-free bonds or bond funds.

Most families, though, should have some cash in a savings account that they can get to easily and quickly--money for emergencies, etc.

WALL STREET WATCH: "Most of the rally in Treasuries is over. As for `junk' bonds, they may run into trouble as the economic slowdown bites harder." (Cumberland Advisors)

"The Fed has always followed the message of the markets, implementing monetary policy to protect the banking system. This time will not be an exception, and some liquidity will go into stocks - a bullish sign." (Peter Dag Portfolio Management)

"In the past 50 years (1940-1999) there were only 15 years in which the S&P 500 declined. And had you bought into that index on Dec. 31 of any 'down' year, you would have been ahead 12 months later on 13 of those 15 occasions, for an almost 87 percent win rate." (Barron's)

"Surprise! Major drug stocks in 2000 had their best performance relative to the S&P 500 since 1960." (Christina Heuer, Salomon Smith Barney)

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