Money Market funds safer than PayPal?

I recently found out that if you put your money into PayPal, you get a very nice percentage weeky. 4-7% weekly is not bad at all. However, I would not like to run the risk of PayPal suddenly deciding to take all of my money out of my account. Are there any safer, reliable, and trustworthy places where I could collect the interest on a money market fund like with PayPal?

I use ingdirect.com. They have savings and CD accounts that earn around 5% (savings) and more depending on what type of account you have. Their accounts tie to your checking account like PayPal and their accounts are also FDIC insured, so your money is safe.

Go to http://www.bankrate.com will give you a list of the highest paying money market accounts.

HSBCDirect.com is also paying 6% on new accounts through April 31st.

Paypal is currently paying slightly more than 5% per YEAR, not weekly. At least in the US.

Just make sure where you go is either FDIC or SIPC insured!

THE big difference you are missing here is that PayPal is legally neither a bank, nor an investment firm.

PayPal is NOT subject to same federal regulations as these 'legitimate' financial institutions, which have strict rules as to what they can/can't do with your funds left on deposit. These regulations ensure things like liquidity and/or reserve requirements, which dictate how much money the institution must keep on-hand for people to withdraw, what things they can invest in with those funds, etc... Basically these rules all help ensure your money is available when YOU want it. PayPal is NOT subject to these regulations and scrutiny.

In addition, PayPal does NOT offer any type of depository insurance. Depository insurance means that a federally backed agency guarantees availability of your funds in the event your financial institution fails. These programs are known as FDIC (Federal Deposit Insurance Corporation), which is provides up to $100,000 PER account at federally chartered BANKS, and SIPC (Securities Investor Protection Corporation), which offers up to $500,000 per account at registered INVESTMENT institutions. Both of these federally backed programs were developed as a result of the banking collapse during the Great Depression - when people went to the banks, they had no money on hand, causing panic and the eventual collapse of the US economy. Now, when you place your money in a backed institution, you do so knowing that if you go to your bank/investment company and they have gone broke, the appropriate backing agency will guarantee availability of your funds up to their limits.

For these reasons, the lack of regulatory requirements that dictate what PayPal does with your money, they can pay this absurd rate; however, if they can offer this type of ratem I'd hate to know where my money really is... For me, not worth the risk. Put your money in a REAL bank or brokerage and sleep well knowing that your money is in a regulated environment, as opposed to where PayPal (owned by eBay) can do what they want without worrying about you....

E*Trade and EverBank are both well-respected, established and easily accessible institutions with highly competitive Money Market rates and excellent on-line tools. In addition, you can link your accounts to PayPal and make transferring an easy process.

E*Trade:
https://us.etrade.com/e/t/welcome/moneym...

EverBank:
http://www.everbank.com/main.asp?affid=e...