Liquid cash with competitive interest rates
At times ,it is really important to keep liquid cash though you may not be using it on a daily basis. But with that cash sitting in your bank account you always tend to think of the value proposition. Uninvested cash is as good as obsolete cash, your money should give you returns even when it is sitting in the account. There are not many products available in the market which serve this dual purpose.
But, here’s a product to solve this problem. Bank of America Merill Lynch has come up with a terrific product , called Preferred Deposits.
Preferred deposits is a proprietary bank deposit product of Bank of America offered through a Merrill Edge Self directed account. With Preferred deposit you can maintain the cash liquidity while still earning a competitive yield. The deposit is insured by FDIC.
Here are some of the key features associated with it
- Your money is placed in a totally liquid interest bearing deposit account in Bank of America. N.A. The interest rate is variable based on the changing market conditions. However, this is a competitive rate and almost at par with the current CD rates available. To check the current rates you can click here.
- The deposit amount is fully insured by the Federal Deposit Insurance Corporation (FDIC) up to the applicable limits. However, you are responsible for ensuring that your balances in the account do not reach beyond the maximum coverage provided by the FDIC.
- With a single login you get a consolidated view of all your Bank of America products, that is the savings account , checking account and the CMA(Merrill Lynch) brokerage account. You can easily transfer money between these accounts.
How to get started with the Preferred deposit account
- You can start by connecting with a ML advisor who can then help you create a brokerage account. You can also create an account on merrilledge.com.
- The minimum initial deposit into the account is $100,000. Thereafter, you can make additional deposits in the whole dollar amount of $1000 or more online.
- You can also make withdrawals in whole dollar amounts online
- For the risk averse investor please note that funds do not sweep or automatically withdraw from Preferred deposit to cover margin balance or debit transactions
Things to keep in mind
- The interest rate on Preferred deposit is a variable rate. This means the interest rate and annual percentage yield may change at any time without notice or limit.
- Preferred deposits are not available with retirement accounts
Benefits of Preferred Deposits
- You can have liquid cash in your bank all the time
- You are earning an interest on the money at a rate which is higher than that provided in money market accounts or savings accounts. The rate is comparable to that of the interest rate on CD’s.
- Your money is growing while it is available for any required immediate usage
