Bloomberg writes "Duke, GE Tempt Savers With Higher Yield Than Money Funds". The article says, "Duke Energy Corp., Ford Motor Co. and General Electric Co. are enticing a growing number of individuals to buy their debt through investments pitched as higher-yield alternatives to checking accounts and money funds. These and other companies that sell the debt, called floating-rate demand notes, are exploiting frustration with money-market funds paying an average 0.03 percent as of May 29 and bank savings accounts at 0.13 percent. The notes, which usually require a minimum deposit such as $500 or $1,000 and offer checks to access the money, are paying 1 percent to 1.6 percent." The Bloomberg piece adds, "The notes help companies diversify their funding, which is skewed to securities such as commercial paper and bonds bought mainly by institutions. For retail investors, they provide less protection than an insured bank account or a money fund that holds debt from many issuers. The notes aren't secured."
