Rewards for Saving

All money-market accounts are not created equal. Yields on money-market mutual funds, which are tied to short-term interest rates, are dropping. Recently, the average yield was 4.56%, down from 4.62% before the Federal Reserve Board cut rates.

But rates on bank money-market deposit accounts remain high, with a number of banks yielding 5% or better. For instance, UFBDirect.com was recently offering 5.31%, and Zions Bank, 5.30% (see table on page 87). "Banks will be more deliberate in cutting rates to keep deposits coming in the door," says Greg McBride, of Bankrate.com.

Consumers are accustomed to being offered rewards points when they spend money. Now Capital One is adding a new twist by offering mileage or cash awards if you save money. Capital One's Rewards Money Market Account yields a competitive 4.66% and sweetens the deal with bonus miles. If points are your thing, you earn one mile for every $20 of your average monthly balance. Miles may be redeemed for free flights, merchandise or cash. If you select the cash rebate, you'll receive $100 for every 10,000 miles you accumulate, adding 0.6% to your yield.

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Deposit $500 within the first month after opening your account and you'll receive an extra 2,500 miles. Plus, Capital One No Hassle Miles Rewards credit-card holders can pool the miles they accumulate in both accounts.