how much can you get 100% risk free interest?? [Archive]

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KaneKungFu123

08-14-2005, 10:22 PM

just curious what the highest money markets actually offer.

wildwood

08-14-2005, 10:40 PM

No investment is 100% risk-free. Even US Government Treasury Bonds have inflation risk and interest rate risk. Your principal in a money market fund is only risk-free if it is FDIC insured. You need to ask the bank that question. I don't think anyone has lost money in a money market fund so far, but that doesn't mean it couldn't happen going forward.

Uglyowl

08-15-2005, 02:04 AM

Check out bankrate.com

imported_bingobazza

08-15-2005, 02:23 PM

think of the higest risk free return as the treasuty yeild on the longest dated government bonds...and you won go far wrong...

Bingo

TN_POKER_MAN

08-18-2005, 08:07 AM

Bankrate.com maintains a pretty good list.

INGdirect.com paying 3.3%
UFB Direct paying 3.6%
Giantbank.com paying 3.5%

Richard Berg

08-20-2005, 05:13 PM

[ QUOTE ]
No investment is 100% risk-free. Even US Government Treasury Bonds have inflation risk and interest rate risk. Your principal in a money market fund is only risk-free if it is FDIC insured. You need to ask the bank that question. I don't think anyone has lost money in a money market fund so far, but that doesn't mean it couldn't happen going forward.

[/ QUOTE ]
I Bonds are risk-free since they are indexed to inflation and can be redeemed at any time (without having to trade on the open market). Yield is currently 4.8%, enough to beat savings / MM accounts despite the cashin penalty so long as you hold them at least 13 months; obviously you do much better than any MM after that point. Their dividends are also tax-deferred.

http://www.savingsbonds.gov/indiv/products/ibonds_glance.htm

08-23-2005, 02:10 PM

I bonds still carry some interest rate risk. If interest rates go up and inflation stays constant, they'll drop. Also, they're indexed to the Consumer Price Index, which measures the cost of food and gasoline and other consumer products, but does not include some other important aspects of the cost of living, most notably housing prices.

After inflation and taxes, you can get about 2% risk free. If you want to retire at 20 and live off the interest of your poker winnings, you'll need $5 million for a consistent $100k/year income.