dogbo wrote:Well, it is not "apples and oranges" from my understanding as Money Market funds have to invest in the same universe of short-term investment instruments as do banks that are offering interest back to their customers in exchange for their deposits. With historically low interest rates, there simply aren't many (if any) good short term investments available for ANYONE....let alone the financial institutions. Yes (as you indicated), some institutions will offer better rates than others, which brings me to my question.
Since it is unlikely anyone on this forum has the answer, have you contacted Smartypig and asked them for an explanation? I don't have a dog in this fight, but I do think it is only fair (especially given this is a homegrown entity that I assume most on this forum would like to see succeed) to at least give them the benefit of the doubt and contact them to see what is occurring.
Technically the deposits are held in BBVA in 'Bama, which is a large bank. I was disappointed when they ended their agreement with Westbank, but not enough to discontinue my accounts.