[OT]: High Yield Savings Accounts
motorhead
Fat, drunk and stupid is no way to go through life
Not sure if this should be posted on a strip club site, but this pursuit of happiness is by no means inexpensive, so financial talk is perhaps not so far fetched.
Anyone have any thoughts on high yield savings accounts offered by the on-line banks? 4 to 5 percent interest is intriguing when my old school brick-and-mortar bank is paying virtually nothing.
The bulk of my money is invested in stocks, ETF’s and mutual funds, but I do want to keep low 5 figures on hand for any potential emergencies. But I’m earning less than the price of a stick of bubblegum per month.
How accessible is your money if I need it now? Any pros or cons?
Anyone have any thoughts on high yield savings accounts offered by the on-line banks? 4 to 5 percent interest is intriguing when my old school brick-and-mortar bank is paying virtually nothing.
The bulk of my money is invested in stocks, ETF’s and mutual funds, but I do want to keep low 5 figures on hand for any potential emergencies. But I’m earning less than the price of a stick of bubblegum per month.
How accessible is your money if I need it now? Any pros or cons?
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Treasury direct will allow you to purchase directly 4 week notes (or longer) and bonds with longer durations. Since this is cash you may need in an unforeseen pinch, I recommend purchasing only 4-8 week notes as their yields are at 5.45% and annualized at 5.7% or more (reinvested with interest). Once the note expires they’ll automatically returned to where you do your banking or you can auto renew to another 4 week or 8 week note by a push of the button.
If you prefer immediate liquidity of your cash, then direct it to a brokerage account (Schwab or fidelity), and once it has been deposited into your brokerage account simply by a short term etf like SGOV (1-3 month treasuries) or SHY (1-3 year treasuries). These are funds invested in US treasury notes and bills with a minute charge. The SGOV still gives me close to 5.4% ROR and the SHY is around 5%, but at least my 1-3 year duration on the SHY fund is guaranteed for a longer duration. You could go out further on the yield curve 7-10 years with IEF etf, but my guess is rates on the long end will rise so you’re better of sticking shorter duration. The problem with going to the online banks that offer higher yields on their money markets is that you’ll only get that rate for a minute until the fed decides to cut rates, which is about to happen soon(albeit only a 1/2 % or so). The treasury direct or brokerage account option will lock in your rate of return for a longer duration than those online banks, which will only have the high yield temporarily. The brokerage account funds on short term durations can be liquidated immediately for your needs, and the treasury direct option allows you to ladder out your amounts for differing periods in case you can’t wait too long for them to expire. Good luck, you got some homework but after a couple hours of research you’ll be getting 4-5% higher return on your cash.
I’m not a big fan of Mutual Funds they cost too much, but you seem to have a handle on it, just be sure to rebalance periodically.
Invested in ETFs for the bulk of my money. Traditional mutual funds with high expense ratios not worth it. I play stock picker with a few hundred thousand. I'm pretty good with they mostly because I invest in what I know and the industry I've been in for 20+ years.
My brokerage account is mostly in SPY (index fund) with a bunch in FTEC (tech mutual fund) as well as some blue chips like JP Morgan, Microsoft, Tesla. A bunch of smaller companies as well... I've had better luck with smaller ones, a couple of whom had been 10-baggers.
Might withdraw a bunch to buy a house outright (chance I could be moving in a couple months).
The Vanguard target-date funds have received a lot of negative scrutiny lately. Not so much because they're bad funds, they're doing fine with OK or good yield and reliability. It's more that they aren't true to the target-dates in their names, they have little to do with cashing out on such-and-so a date. My 401K is one of these but I might shift it. Vanguard has recently started charging a hefty fee for phone-transactions that could be done by internet, and that's pissing me off. Their computer access and online systems are garbage, though their funds seem to be good generally.
I use Schwab for day trading and no foreign transaction fees for cash.....but not for ultra conservative investments.
I bonds through Treasury Direct.
Online savings through Ally.
CD's are around 5.15% for one year. For example, that is the top one year being offered by Goldman Sach's Marcus right now. Three and six month CD's can be found for around 5.25-5.35% at various small banks and credit unions.
I have been routinely buying gold on the dips. Bank of America has gold projected to be $3,000/ounce in the next twelve to eighteen months. With the end of the petrodollar (after fifty years), BRICS currency on the horizon, and endless dollar printing by our government, the dollar is going to continue to lose value. I am balanced in all three options I mentioned, but I feel the most confident in my precious metals holdings.
I would worry about the new on-line Internet accounts as they don't have a track record.
Mate27 & Puddy did a really good analysis of available options.
@mogul - thanks
I don't do crypto either. Curious about it but just don't trust it, not sure what underlies it or moves it. I don't invest in what I don't know.
You can find occasional money market or CDs offering higher, but need to carefully weigh the risks and read the fine print before locking up your assets like that.
I am not a fan of gold and other commodities which traditionally shift value. Not only may the value be down when you need to sell, but good luck finding a physical gold buyer who won't be looking to fuck you.
Tech stocks are well known for their volatility. I used to be a proponent of "need" stocks like oil, plastics, and base chemicals, but even those have been extraordinarily volatile over the past 15 years.
Land is the only safe investment but, to make the big money, you have to go into big debt. I sold my Florida holdings while the selling was good. Interest rates are too high right now to buy more. I would advise moving your money into the highest yielding, easily liquid accounts you can find. This is definitely a "hold" economy.
Because they're selling $85 billion in 4 week bills at a single auction and a whole lot more across the whole curve. Money is flowing in from all corners of the earth and plenty from here at home. Anything from mom and pop would be a drop in the bucket. In short, plenty of demand already, no reason to push anything.
My online savings is strictly rainy day cash.
I hear there a run on them!😁