Where to park cash?
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Where to park cash?
Where are people putting cash to earn even a little interest these days? Had a CD mature and will use proceeds over the year for expenses.
I’ve been using Toyota Income Driver Notes, but they dropped their rates again down to 1.15%. I realize its not FDIC insured.
I’ve been using Toyota Income Driver Notes, but they dropped their rates again down to 1.15%. I realize its not FDIC insured.
Re: Where to park cash?
You can get close to that, or much higher with some limits, in federally insured accounts:
* 7.12% on Series I US savings bonds for 6 months, then periodically adjusts based on recent inflation. $10,000 annual purchase limit, no redemption allowed for one year, defers federal taxes, avoids state taxes.
* 6.17% at Digital Credit Union. $1,000 limit.
* 6% at H-E-B Debit. $2,000 limit. Requires some activity every 90 days to avoid fees, a $1 ACH push is sufficient.
* 5% at Service Credit Union. $500 limit, you can also get 3% on an additional $3,000.
* 4.07% at Genisys Credit Union. $7,500 limit, requires 10 debit purchases of $5 or more each month.
* 3.3% at Evansville Teachers Federal Credit Union. $20,000 limit, requires 15 debit purchases (any amount) each month and an electronic deposit.
* 3% at One Finance. No limit, but funding the 3% account is limited to 10% payroll/benefits direct deposits, up to a maximum of $1,000 per month.
* 1% at T-Mobile Money. No limit or requirements.
* 7.12% on Series I US savings bonds for 6 months, then periodically adjusts based on recent inflation. $10,000 annual purchase limit, no redemption allowed for one year, defers federal taxes, avoids state taxes.
* 6.17% at Digital Credit Union. $1,000 limit.
* 6% at H-E-B Debit. $2,000 limit. Requires some activity every 90 days to avoid fees, a $1 ACH push is sufficient.
* 5% at Service Credit Union. $500 limit, you can also get 3% on an additional $3,000.
* 4.07% at Genisys Credit Union. $7,500 limit, requires 10 debit purchases of $5 or more each month.
* 3.3% at Evansville Teachers Federal Credit Union. $20,000 limit, requires 15 debit purchases (any amount) each month and an electronic deposit.
* 3% at One Finance. No limit, but funding the 3% account is limited to 10% payroll/benefits direct deposits, up to a maximum of $1,000 per month.
* 1% at T-Mobile Money. No limit or requirements.
Re: Where to park cash?
We accept the best rate that we can find without opening 5 more accounts. This is not a criticism of anyone who wants to maximize their return. We focus on total return. CDs are not worth much effort right now.SpaceCowboy wrote: ↑Tue Jan 18, 2022 4:35 pm Where are people putting cash to earn even a little interest these days? Had a CD mature and will use proceeds over the year for expenses.
I’ve been using Toyota Income Driver Notes, but they dropped their rates again down to 1.15%. I realize its not FDIC insured.
"I started with nothing and I still have most of it left."
Re: Where to park cash?
I don’t think that you’ll find a rate much better than Toyota for any significant amount of cash that you’ll spend down over a year.SpaceCowboy wrote: ↑Tue Jan 18, 2022 4:35 pm Where are people putting cash to earn even a little interest these days? Had a CD mature and will use proceeds over the year for expenses.
I’ve been using Toyota Income Driver Notes, but they dropped their rates again down to 1.15%. I realize its not FDIC insured.
I agree with Wiggums about not opening multiple accounts to earn higher rates of interest on pretty trivial balances. I like to keep my financial life simple.
Last edited by Stinky on Tue Jan 18, 2022 8:07 pm, edited 1 time in total.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Where to park cash?
Many conservative investors, myself included, favor fixed annuities these days. They pay much better than bank accounts, money market funds, CD and other low-risk fixed income investments.
There was a good thread recently titled Purchasing MYGAs (multi year guaranteed annuities) - mega thread that might be worth a look.
viewtopic.php?f=1&t=334589
I believe the shortest MYGA on offer is 2 years so they probably aren't applicable for your situation.
There was a good thread recently titled Purchasing MYGAs (multi year guaranteed annuities) - mega thread that might be worth a look.
viewtopic.php?f=1&t=334589
I believe the shortest MYGA on offer is 2 years so they probably aren't applicable for your situation.
Last edited by 7eight9 on Tue Jan 18, 2022 8:33 pm, edited 1 time in total.
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They could be warming up my hearse.
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Re: Where to park cash?
Hi this is asked all the time - I-bonds are the best way currently. Check out the wiki for answers.
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Re: Where to park cash?
@patrick Don't have direct deposits, so I can't use those types of accounts. Their maximum deposits are just too low.
Also, this is basically a decent chunk of cash to fund a year's worth of living expenses. Plan to draw down once a month.
@7eight9 I switched to MYGAs to replace maturing CDs that I rollover, but have primarily used 5 year terms. Not feasible for this year's cash.
Will buy my limit of iBonds, like everyone else. That's pretty much a no-brainer in the current environment. Just wish TIPS had a similar 0% real rate floor.
Also, this is basically a decent chunk of cash to fund a year's worth of living expenses. Plan to draw down once a month.
@7eight9 I switched to MYGAs to replace maturing CDs that I rollover, but have primarily used 5 year terms. Not feasible for this year's cash.
Will buy my limit of iBonds, like everyone else. That's pretty much a no-brainer in the current environment. Just wish TIPS had a similar 0% real rate floor.
Re: Where to park cash?
If you're over 59.5, MYGAs are an option. (Or, if you will be by the time it matures. Alternatively, you can roll the maturing MYGA into a new one.)SpaceCowboy wrote: ↑Tue Jan 18, 2022 11:56 pm @patrick Don't have direct deposits, so I can't use those types of accounts. Their maximum deposits are just too low.
Also, this is basically a decent chunk of cash to fund a year's worth of living expenses. Plan to draw down once a month.
@7eight9 I switched to MYGAs to replace maturing CDs that I rollover, but have primarily used 5 year terms. Not feasible for this year's cash.
Will buy my limit of iBonds, like everyone else. That's pretty much a no-brainer in the current environment. Just wish TIPS had a similar 0% real rate floor.
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Re: Where to park cash?
How are they an option for cash that's needed during the year? They have high early withdrawal penalties?exodusNH wrote: ↑Tue Jan 18, 2022 11:58 pmIf you're over 59.5, MYGAs are an option. (Or, if you will be by the time it matures. Alternatively, you can roll the maturing MYGA into a new one.)SpaceCowboy wrote: ↑Tue Jan 18, 2022 11:56 pm @patrick Don't have direct deposits, so I can't use those types of accounts. Their maximum deposits are just too low.
Also, this is basically a decent chunk of cash to fund a year's worth of living expenses. Plan to draw down once a month.
@7eight9 I switched to MYGAs to replace maturing CDs that I rollover, but have primarily used 5 year terms. Not feasible for this year's cash.
Will buy my limit of iBonds, like everyone else. That's pretty much a no-brainer in the current environment. Just wish TIPS had a similar 0% real rate floor.
Re: Where to park cash?
Sometimes you can withdraw a small percentage each year. It depends on the product. They are most definitely not suitable for regular withdrawals.SpaceCowboy wrote: ↑Wed Jan 19, 2022 12:04 amHow are they an option for cash that's needed during the year? They have high early withdrawal penalties?exodusNH wrote: ↑Tue Jan 18, 2022 11:58 pmIf you're over 59.5, MYGAs are an option. (Or, if you will be by the time it matures. Alternatively, you can roll the maturing MYGA into a new one.)SpaceCowboy wrote: ↑Tue Jan 18, 2022 11:56 pm @patrick Don't have direct deposits, so I can't use those types of accounts. Their maximum deposits are just too low.
Also, this is basically a decent chunk of cash to fund a year's worth of living expenses. Plan to draw down once a month.
@7eight9 I switched to MYGAs to replace maturing CDs that I rollover, but have primarily used 5 year terms. Not feasible for this year's cash.
Will buy my limit of iBonds, like everyone else. That's pretty much a no-brainer in the current environment. Just wish TIPS had a similar 0% real rate floor.
Re: Where to park cash?
Space, if you really mean “cash,” as opposed to compromises such as a term or lock-up, or an element of risk, one approach is to simply shrug and invest in a money market fund such as Vanguard U.S. Treasury VUSSX, on the premise that by 2023 the fund may be yielding 2% or more, depending on the pace of Fed interest rate hikes. That’s what I would do if I really required a demand deposit investment today.SpaceCowboy wrote: ↑Tue Jan 18, 2022 11:56 pm @patrick Don't have direct deposits, so I can't use those types of accounts. Their maximum deposits are just too low.
Also, this is basically a decent chunk of cash to fund a year's worth of living expenses. Plan to draw down once a month.
@7eight9 I switched to MYGAs to replace maturing CDs that I rollover, but have primarily used 5 year terms. Not feasible for this year's cash.
Will buy my limit of iBonds, like everyone else. That's pretty much a no-brainer in the current environment. Just wish TIPS had a similar 0% real rate floor.
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Re: Where to park cash?
VUSSX is already down 8% in the past year. A 2% yield isn't going to offset your losses.smectym wrote: ↑Wed Jan 19, 2022 12:24 am Space, if you really mean “cash,” as opposed to compromises such as a term or lock-up, or an element of risk, one approach is to simply shrug and invest in a money market fund such as Vanguard U.S. Treasury VUSSX, on the premise that by 2023 the fund may be yielding 2% or more, depending on the pace of Fed interest rate hikes. That’s what I would do if I really required a demand deposit investment today.