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Fools,

Two years or so ago I took advantage of a couple of those teaser offers where they give you some nice deposit if you open an account. That was nice; but back then, you got a fairly decent return on cash, so the incentives didn't make that big a difference. Interest rates on savings are half what they were then, so a sign up bonus seems like a much bigger deal.

Well, as I mentioned on the CC board, MBNA has kindly consented to loan me a small chunk of change ($23,500) for 4 months interest free (see: http://boards.fool.com/Message.asp?mid=17545818). So, here I am up late at night wondering what I can do to make the most of it.

Searching the internet naturally took me to BankRate.com, where NetBank is promoting a $50 sign-up bonus for a $5,000 deposit held for only 30 days with a current APY of 2.75% -- same as ING Direct. It immediately struck me that I would be foolish to pass up such a deal, given my new-found cash. And given that I should get the $50 after only 30 days, I don't see how I could loose. But that still leaves $18,500 to occupy, so I continued my search.

BankRate didn't offer much else; but I remembered what jrr7 said earlier today (http://boards.fool.com/Message.asp?mid=17553069) about Ford Financial. I got to wondering what other major corporations might have finance divisions that offer good deals; but aren't really main-stream banks or brokers.

The first that occured to me was GM -- specifically, GMAC et. al -- mainly because jrr7 mentioned it too; but I hadn't looked at it. Their main site is advertising a $25 promo offer if you open an Ameritrade account; but I didn't find that too intersting since it can cost money to close a brokerage account. jrr7's mention of GMAC's Demand Notes and the Smart Notes programs are interesting; but not quite what I'm looking for.

Then I tried GE, which led me to GE Capital, then GEFN. Sure enough, GEFN is offering a $25 sign-up bonus, if you open an account with only $500. Plus the account earns a 2.00% yield. The account is structured like a money market account; but it invests in GE's own AAA-rated bonds. Ah ha! A rather tiddy little bonus and it only ties up $500. That leave $18K.

Any other suggestions? These large corporations that offer their debt directly to individual investors seem like a great idea -- at least for the investor, if not corporation. Is there a list of what companies make direct offerings?

BTW: I've also stumbled across Principal Bank (Principal Financial). They're offering a $50 sign-up bonus for a $100 deposit in their "free" checking. A 50% return! What a deal!

And yes, I know I'm probably wasting my time with this; but I think it's kind of fun ... and funny. And besides, it's my time to waste.

- Joel
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NetBank has a few different account closing fees that may apply depending on your situation. Be very careful with them and read their fee schedule while you're feeling wary.

GEFN doesn't invest in GE's bonds; rather, it lends money to people (originally just to buy GE appliances; since then they've expanded). If so many borrowers default that the loan reserves are wiped out, GEFN will have no money to pay you and GE is not obligated to bail you out. They probably will, though, since they people to keep buying their refrigerators.

Investing directly with a company is certainly more convenient and having less frictional cost than investing via a broker, but the returns you get won't be as high. It is actually wonderful for the company, as they don't have to pay an investment bank to be a middleman.

For instance, Advanta and ABFS offer high-yield ("junk") bonds directly to the public, but the yield on the bonds is a bit lower than the yield you'd get on similar bonds through a broker.
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jrr7,

Thanks for the info. Of course, I'm not really interested in junk bonds for this particular investment/savings account. And investing the money through a broker doesn't seem very practical, given the short term. I have $23,500 I need to invest right now and I need to be able to withdraw it in less than 4 months. It would seem that buying an actual bond would incur way too much risk for this type of investment; but putting my money in a money market type account with a solid company like GE Financial wouldn't bother one bit. On the other hand, I think GMAC may actually be a bit "dodgy". ;-)

I would like to maximize my return over these next four months; but I can't really accept risking the principal. The liquidity of the funds is also important, as I must be able to repay this "loan" from MBNA before the interest rate reverts. I run the risk of loosing all my potential gains if MBNA is given the opportunity to charge me at the regular interest rate for less than a week. If there's any real risk of loosing the capital in an investment in the coming 4 months, I'll ultimately have to drop it from consideration -- at least for these funds.

One more note. The funds cleared my checking account tonight. I need to make a decision quickly. I've shifted these funds into my credit union's shares account for the time being; but that's only earning 1.5%. I could initiate a transfer to my ING account now; but I don't know how to transfer those funds into another investment without transferring them first back into my checking account. And a round trip through my ING account takes nearly a week.

Any additional suggestions or thoughts would be greatly appreciated.

- Joel
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Hey,

Actually, Ford's money market account looked interesting. Although as I understand it, the rate is structured to a benchmark and won't necessarily be the same when I deposit my money there.

Does anyone know a Money Market account (with checkwriting, which throws out Zions) that pays over 3.00%?

Chris
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Couldn't you open both a savings and checking account at some bank? Transfers between savings and checking are typically handled within a day.

All transactional bank accounts have a Routing Number and an Account Number. The routing number designates which bank this is. These numbers are printed on checks and deposit slips.

If you open an account with ING you can call them up and get the routing number and account number (even though you don't have checks). MBNA lets you pay your bill online; you just have to enter your numbers. So you could pay your bill directly from ING without going through your checking account.
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I understand you can open a money market account and a free checking account (initial deposit $100), and transfer money between the two accounts via internet. Assuming the transfer is instant, this should give you the facility you need.
Hope it helps.
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Sorry. I forgot to add I was referring to Zions Bank.
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jrr7,

You wrote, If you open an account with ING you can call them up and get the routing number and account number (even though you don't have checks). MBNA lets you pay your bill online; you just have to enter your numbers. So you could pay your bill directly from ING without going through your checking account.

Really?!

I thought an ING Orange account was like a passbook account. I don't know of any (other) institution that will honor an ACH request on a passbook account.

Of course, it would really make sense if ING honors external ACH requests. After all, ING uses internally generated ACH transfers to shuttle funds to and from my CU checking account.

I'll give their CSRs a call.

BTW: It occurred to me that there's another reason not to send the funds to ING if I plan to send them elsewhere. ING has a fairly long holding period on newly deposited funds, even if they were transferred by ACH. That's never been a consideration in the past; but I could easily run afoul of that restriction here.

In fact, that reminds me -- I should call my CU tomorrow to make sure there isn't a hold on these funds before I initiate an out-bound transfer.

Thanks,
- Joel
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I have pulled money from ING via my brokerage account. But each withdrawl is a withdrawl that counts toward the limit of 6 per month regardless of where it is initiated.


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