Dear Dr. Don,
I am looking for some alternatives after reading my bank statement. I have $10,000 in one account and $5,000 in another — and the interest paid on these accounts totaled 18 cents. Yes, that’s cents, not dollars. I need this money, so I do not want to risk it on the stock market. Do you have any ideas about how I can get more interest, or am I out of luck?
— Sara Saver

Dear Sara,
When I started seeing similar monthly results in my money market mutual funds, I extended my maturities by buying a short-term government bond fund. There’s limited risk to principal, and the fund’s year-to-date yield is 2.93 percent. I didn’t have any liquidity requirements in the account, making it easier to extend the maturity.

When investing in bank accounts, the investor has to consider the trade-offs among convenience, liquidity and yield. Fees can also come in to play. Maintaining a minimum balance to avoid monthly fees may not earn you a positive yield, but it keeps you from earning a negative yield on the account balances.

I’m going to assume that at least part of the $15,000 is transactional, meaning you need to be able to tap the funds to pay the bills. That money needs to be liquid. A money market account pays a higher yield than a standard checking account, but limits the amount of withdrawals you can make from the account each month. Using money market account withdrawals to fund your checking account is one way to keep the money on deposit earning a higher yield. Use Bankrate’s compare rates feature to see what’s out there.

You can choose to extend the maturity of a part of the money by buying CDs. This would be for the nontransactional part of the funds. Again, use Bankrate’s compare rates feature to see CD yields for different maturities. In general, for shorter-term CDs, you won’t get much of a yield pick-up over the money market account, so you might as well keep the shorter-term monies in the money market account.

The Bankrate feature, “5 ways to beat puny savings account rates,” puts a finer point on chasing yield when you’re fed up with what you’re earning on checking and savings.

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