Date: Sun, 24 Sep 2006 09:03:29 -0500
From: "Andy" 
Newsgroups: misc.invest.financial-plan
Subject: Re: BASIC saving account advice
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mick wrote:
>
> One savings account earns 5% and I have around $200k in it
>
> The other savings account earns around 4.7% and has around $100k in it
>
> 1. I understand that FDIC insures only up to $100k per account; what
> would it take for a large reputable bank to go under and me to need to
> worry about FDIC insurance?

Answer: Who knows what it would take for a large bank to go under. But
with so many banks out there offering money market rates of 5% or over,
why take any chances going over the FDIC limit with one bank. When I
checked here:

http://www.money-rates.com/mmarket.htm

I saw 14 banks offering money market rates of 5% or over.

> 2. How much of a difference (more $) would I earn if I put the $100k
> from the 2nd account into the first account that is earning more (5%)
> and already has 200k in it? How much more does the compounding effect
> make? Would you do this?

Over the course of a year 100K would earn an extra $300 interest at 5%
as compared to 4.7% (100,000*0.003=300).  I personally wouldn't pile
more than 100K at one bank to make this extra interest income, but I
would move the $100K from the 4.7% account to one earning 5%+.

Andy