Click here for the latest Sharebuilder promotion, a $50 bonus.
I have been participating in ShareBuilder’s $50 bonus promotion which offers the free cash to those who open a new account online with a certain coupon code.
Originally, I funded the account with $50 from my checking account and invested in $46 worth of IYZ, an exchange-traded fund, and paid the $4 commission. Over the las month since opening the account, the value of the fund has floated a little lower than its opening value, but I think the sector has long-term growth potential barring major catastrophes.
In any case, I received an email today from ShareBuilder notifying me that my free $50 has been deposited. I have several options. I could leave the $50 in the cash balance account, which technically invests the money in the Bedford Shares of the RBB Funds Money Market Portfolio (BDMXX) whose 7-day yield is 2.62 percent (tax-exempt), move the $50 to my ING Direct or Emigrant Direct savings account where the taxable yield would be 3.3 to 3.5 percent, or invest in another fund for a commission of $4.
Between the cash accounts, it looks like I’ll be better off in the taxable savings account. My effective tax rate for last year was 10.62 percent, so using that as a guide, after taxes the 3.3 percent yield becomes 2.9 and 3.5 percent becomes 3.1. I’ll move the $50 into my Emigrant Direct account.
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