Mar 30, 2009 6:00 pm US/Eastern
3 On Your Side: Investing Through Money Aisle
PHILADELPHIA (CBS 3) ―
Are you looking for a safe place to stash your cash in this troubled economy? Certificates of Deposits (CD's) are a safe bet, but how do you find which bank is offering the best rates? Your Money Team found a place where banks are actually bidding for your business.
3-On Your Side's Jim Donovan reports that if you don't have a stomach for the stock market, you may want to think about taking a stroll down the money aisle.
With Wall Street suffering more down days than up lately, people are looking for safer ways to invest.
When Marty Leamy wanted to put $5,000 into a CD, he used Moneyaisle.com.
Leamy says, "You have over 100 banks bidding for your CD amount, it's very easy."
Simply input how much you have to invest, and for how long, and watch as dozens of banks bid online for your business for both high-yield savings accounts and CD's.
"It's an auction, and it really is a true auction," says Christopher Coyne, a finance professor at St. Joseph's University.
He says using Moneyaisle.com has pro's and con's.
"While it is good from the sense that you're going to get a potentially get a higher rate, it's possibly bad because you may be actually putting your money in something that you wouldn't normally wouldn't put it into," says Coyne. Meaning a more risky bank.
Marty Leamy received a 2.86 percent rate on a $5,000, 6-month CD from Troy, Michigan's Flagstar Bank.
Leamy says "I actually printed out an application, sent a check."
When 3-On Your Side looked up Flagstar's "Safe and Sound" rating on Bankrate.com, we found it received only two stars. Which means it falls below peer group, or below average.
That doesn't seem to bother Leamy.
He says, "It's protected to $250,000, it's a good investment short term."
And all the banks on bidding on money aisle are FDIC insured.
While Moneyaisle.com doesn't charge a fee, the banks bidding for your business may charge one, potentially lowering the return on your investment, so be sure to check.
RELATED LINKS:
www.moneyaisle.com
www.bankrate.com
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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