Where to put daughter's tuition money while I save up for next year
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Where to put daughter's tuition money while I save up for next year
My daughter is moving from daycare with a monthly fee to preschool with an annual tuition paid in one lump sum. Ouch. In order to save up for next year I will put aside about $1300/month over the next year. I might as well make my money work for me while it sits around. What is the best place to put the money over the next year so I can access it next May? I've seen discussion of high interest savings accounts. Would that be the best way to go?
Re: Where to put daughter's tuition money while I save up for next year
I think a high yield savings account is what I'd choose. Many online banks are paying 0.5% now for a simple savings account, and more complicated options (like CDs) won't pay enough more to justify the hassle over such a short period of time.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: Where to put daughter's tuition money while I save up for next year
There are many low-cost ultra-short duration bond funds.
On Schwab platform, I like BBBMX. No fees.
Also, can probably get high-yield savings or no-cancellation fee CDs from Ally Bank.
On Schwab platform, I like BBBMX. No fees.
Also, can probably get high-yield savings or no-cancellation fee CDs from Ally Bank.
Re: Where to put daughter's tuition money while I save up for next year
According to the Fed's interest calculator -- https://www.investor.gov/financial-tool ... calculator
Starting at zero ...
At 0.9% this will be worth $15,665 in one year
0.5% 》 $15,636
0.1% 》$15,607
So, $60. Consider putting these funds in a local credit union (or bank) and supporting your community. I would not waste time trying to optimize my profits in this case.
Best wishes!
Starting at zero ...
At 0.9% this will be worth $15,665 in one year
0.5% 》 $15,636
0.1% 》$15,607
So, $60. Consider putting these funds in a local credit union (or bank) and supporting your community. I would not waste time trying to optimize my profits in this case.
Best wishes!
Ipsa scientia potestas est. Bacon F.
Re: Where to put daughter's tuition money while I save up for next year
I use Ally Bank my short term savings. I pay my home insurance in a lump sum so I just set aside a monthly payment into a savings account. Granted, right now you just aren’t going to make a whole lot of interest in this environment so keep it simple.
Re: Where to put daughter's tuition money while I save up for next year
Me too. Avoid hassle and keep it simple. Online high yield savings accounts are easy to setup and convenient.
"Know what you own, and know why you own it." — Peter Lynch