Personal Finance Blog By MoneyRates - October 2007

The folks at PiggyBankInc.com have set up a great online tool for parents looking for a little help in allocating allowances to their kids. The site allows parents to set a weekly allowance, interest rate, and enter deposits and withdrawals for each of their kids in separate account accessible online. No money actually changes hands between the site and their customers as it is strictly recordkeeping, but parents have the option to send weekly e-mail statements to their kids updating them on their balance. Looks like a great way to teach kids about savings (as long as they do their chores!)

Investors who are looking for bond funds which offer safety and income might consider U.S. government bond funds. These funds, which typically hold U.S. Treasuries, Government Agency paper, Mortgage-backed government entity securities, or other AAA-rated investments, are considered less risky than bond funds which invest in corporate bonds or corporate notes. The shorter the duration (average maturity of holdings) of a fund - the less price fluctuation that can be expected. Listed below are government bond funds from large established fund families which are rated 4 or 5 stars by Morningstar:

Government Bond Funds
Funds which invest in short term government securities including U.S. Treasuries and mortgage-backed government securities.

Morgan Stanley U.S. Government (USGAX) - yield 4.51%, holds 100% securities rated AAA primarily U.S. Treasuries and government mortgages securities, average maturity of holdings 6.30 years, YTD return 3.23%, minimum investment $1,000

JP Morgan Treasury and Agency Select (OMBAX) - yield 4.54%, holds 99% securities rated AAA primarily government mortgages securities, average maturity of holdings 4.5 years, YTD return 3.49%, minimum investment $10,000

Vanguard GNMA (VFIIX) - yield 5.22%, holds 100% securities rated AAA primarily Ginnie Mae securities, average maturity of holdings 7.10 years, YTD return 3.68%, minimum investment $3,000

Inflation-Protection Government Funds
Fund which specifically target offering a return that exceeds or matches inflation are available for investors who might need inflation protection in their portfolio.

Franklin Real Return A (FRRAX) - yield 3.31%, YTD return 7.24%, $1,000 minimum investment

DWS Inflation Protected Plus (TIPIX) - yield 4.87%, YTD return 6.77%, $1,000,000 minimum investment

State Farm Interim (SFITX) - yield 3.80%, YTD return 6.50%, $250 minimum investment

Hartford Inflation Plus A (HIPAX) - yield 3.41%, YTD return 6.22%, $1,000 minimum investment

Schwab Inflation Protected Select (SWRSX) - yield 4.24%, YTD return 5.82%, $50,000 minimum investment

Exchange Traded Government Funds
Funds with portfolios holding U.S. government bonds or investment grade bonds, a portfolio average maturity duration less than 10 years, and 52-week returns which outperformed overall bond indexes.

iShares 1-3 Year Treasury Bond Fund (SHY) - yield 4.41%, holds U.S. Treasuries, average duration 1.8 years, 52-week return 5.70%

iShares Lehman 7-10 Year Treasury Bond Fund (IEF) - yield 4.60%, holds U.S. Treasuries, average duration 6.64 years, 52-week return 5.51%

iShares Lehman Intermediate Credit Bond Fund (CIU) - yield 5.41%, holds government agency and investment grade bond, average duration 5.15 years, 52-week return 4.61%

More information regarding iShares exchange traded funds here

Credit Card Rate Averages and Special Deals

Banks are starting to offer better rates and deals on their credit cards in response to the lowering of the prime rate - the most significant benchmark to which credit card rates are indexed.

Regular Card - 11.90% national average (specials as low as 7.99% APR)

Cash-Back - 12.44% national average (specials)

Business - 13.99% national average (specials)

Reward - 13.19% national average (specials)

Airline Rewards - 15.05% national average (specials including 25,000 bonus miles)

Student - 16.41% national average (specials)

* All rates are quoted using APR (annual percentage yield)

Principal Bank has not lowered their deposit rates on money market savings account and regular savings account which has in effect made their rates among the most competitive in the nation

Principal Bank Money Market Accounts

$50,000 to $99,999.99 5.03% rate / 5.15% APY


$100,000 to $249,999.99 5.08% rate / 5.20% APY


$250,000 and over 5.13% rate / 5.25% APY

Principal Bank Savings Accounts

$25,000 to $49,999.99 5.06% rate / 5.16% APY


$50,000 to $99,999.99 5.11% rate / 5.21% APY


$100,000 to $249,999.99 5.16% rate / 5.26% APY


$250,000 to $499,999.99 5.16% rate / 5.26% APY


$500,000 and over 5.16% rate / 5.26% APY



For more information or to apply online visit principal.com

HSBC Direct is an international bank with operations in the United States, Canada, Taiwan, and South Korea. The HSBC Direct Online Savings Account has been one of the premiere savings accounts in the United States for over one year now and currently is offering a 4.50% APY on all balances. Customers can link their online savings account to the HSBC Direct online payment account which allows online bill payments for one-time or recurring payments. The online payment account pays a reasonable 2.50% APY, much higher than the national average on checking accounts. HSBC Direct has a good track record of maintaining their savings rates and this offer should not be considered a teaser or introductory APY.


Online Savings Account
4.50% APY* - One of the highest savings rate in the country.

No monthly fees.
No matter how much you use our ATMs or how many times you transfer your money, there are no fees

No minimum balance requirement.
It's always up to you how much you keep in your account.

Online Payment Account

Send one-time payments or schedule recurring payments.
You control who you pay and when. Add as many companies or people as you like.
Pay electronically. It’s paperless, fast and efficient.

Make purchases or get cash at more than 395,000 ATMs nationwide with a debit card.
If you use a non-HSBC ATM in the U.S., they will reimburse the first 3 ATM surcharge/convenience fees each month.