Money Market Fund Question

[TruePaige]

I have a quick question.

I logged into my paypal account today, had a bit of extra cash..and it asked if I wanted to try the money market fund they have.

It said the "7-Day-Yield" was nearly 5%.

Now...what exactly does that mean? That after 7 days of having your money in this money market fund that you have made 5% interest?

Just curious. 0.0

 

[woodie1]

IIRC the average yield over a 7-Day period is almost 5% APR

 

[HombrePequeno]

There's no way a money market fund would get that high of a yield. That's gotta be annual interest rate.

 

[FoBoT]

i think it means they use your average balance over 7 days for what they pay the APR on
maybe it is compounded weekly based on the 7 day average balance
?

 

[TruePaige]

Originally posted by: FoBoT
i think it means they use your average balance over 7 days for what they pay the APR on
maybe it is compounded weekly based on the 7 day average balance
?

So if it were compounded weekly would that mean I would get 5% of what I put in every week?

 

[Nerva]

thats pretax though.

 

[TruePaige]

Ah, okay it's yearly but you earn interest daily...so you can move the money as much as you need and still keep the interest you earned..hmm..

 

[SLU MD]

its yearly 5%. so for a week (7days) you would get ~7/365 of 5% as interest. so if you put in 1000 bux and left it for a week your balance at the end of the week would be ~1000.96

hope this helps.