Choosing HYSA
Choosing HYSA
I cannot decide on a HYSA with all the options out there. One of our kiddos is transitioning to public school soon and that means no more day care expenses. My wife and I want to take the day care cost and transition it to a savings account to finally build something more solid up for home projects, vacations, etc. Open to suggestions but I've narrowed it down some:
Ally
Marcus
Redneck Bank (have always liked these rates but I don't see much talk about them)
Any help is appreciated, thank you in advance.
VSS
Ally
Marcus
Redneck Bank (have always liked these rates but I don't see much talk about them)
Any help is appreciated, thank you in advance.
VSS
Re: Choosing HYSA
I have Ally and Marcus.
I prefer Ally - their year end tax forms are better. My biggest issue with Marcus is you cannot login to your accounts when outside US.
I prefer Ally - their year end tax forms are better. My biggest issue with Marcus is you cannot login to your accounts when outside US.
Re: Choosing HYSA
Ally is good if you want check writing. The Ally money market account includes free checks. Currently they pay the same rate, although historically the money market account has had about a quarter point difference from the online savings account rate. But you could write a check and move the funds over the same day on the app so the difference wasn't significant.
SoFi, if you are willing to do direct deposit, is paying 1.25% and also offers check writing. Redneck Bank (and other banks in the Huckaby family) used to be competitive but haven't been since the pandemic. They dropped their rates with the others and haven't gone back up.
If ATM access or cash deposit availability is important to you I would also consider Alliant Credit Union. Their rates are as competitive as Ally but you can make cash deposits and withdrawals at any Co-Op Network ATM. They will also reimburse ATM fees up to $10 a month. They generally only adjust rates once a month, but this month made a special adjustment to match the other large online savings accounts at 1%.
The liquid account survey on Deposit Accounts is updated bi-weekly and is a good source of info. https://www.depositaccounts.com/blog/ba ... ts-survey/
SoFi, if you are willing to do direct deposit, is paying 1.25% and also offers check writing. Redneck Bank (and other banks in the Huckaby family) used to be competitive but haven't been since the pandemic. They dropped their rates with the others and haven't gone back up.
If ATM access or cash deposit availability is important to you I would also consider Alliant Credit Union. Their rates are as competitive as Ally but you can make cash deposits and withdrawals at any Co-Op Network ATM. They will also reimburse ATM fees up to $10 a month. They generally only adjust rates once a month, but this month made a special adjustment to match the other large online savings accounts at 1%.
The liquid account survey on Deposit Accounts is updated bi-weekly and is a good source of info. https://www.depositaccounts.com/blog/ba ... ts-survey/
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Re: Choosing HYSA
The buckets feature in Ally is convenient for keeping track of savings designated for specific purposes.
Re: Choosing HYSA
Vanguard money market funds have higher yields than Ally savings, so I prefer them now for savings.
If I make a calculation error, #Cruncher probably will let me know.
Re: Choosing HYSA
Comenity bank is at 1.65% currently. No issues and easy to use. Fast transfers with ACH.
Re: Choosing HYSA
Been there a few years. They are fdic insured. I initially got started there because they had the best cd rates a couple years ago. They are always competitive and their rates jump within a few days of the feds raising rates. Their cd rates are still very good. They are a part or bread financial. It's all online but their app is simple to use and they even have phone support for questions.
Re: Choosing HYSA
Yes, but it isn’t hard to do.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Re: Choosing HYSA
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Re: Choosing HYSA
I just opened a joint account there this past weekend. Super easy and it was opened in a few minutes. A few others I considered were so complicated or restricted I gave up. Getting ready to transfer my emergency fund out of Ally.
Re: Choosing HYSA
No, it's your settlement fund.
Re: Choosing HYSA
Federal Money Market is the settlement fund for a brokerage account, so no minimum for that. It currently has the highest SEC yield of the VG MM funds, at 1.38%. This is likely to be even higher if you pay state income tax, since about 70% of the income was exempt from state income tax last year. We don't know exactly what it will be for 2022.
Kevin
If I make a calculation error, #Cruncher probably will let me know.
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Re: Choosing HYSA
For anyone with a Vanguard taxable brokerage account, using the settlement fund (VFMXX) is easy (no new accounts to make and no minimum) and pays 1.38%. Plus some of the interest may be exempt from state income tax.exodusNH wrote: ↑Mon Jun 27, 2022 7:20 pmNo, it's your settlement fund.
Re: Choosing HYSA
Or for anyone with an E-Trade account...though there's a $3k minimum on initial purchase. Some of the other brokers might also offer VFMXX with no loads or transaction fees.anon_investor wrote: ↑Mon Jun 27, 2022 7:22 pmFor anyone with a Vanguard taxable brokerage account, using the settlement fund (VFMXX) is easy (no new accounts to make and no minimum) and pays 1.38%. Plus some of the interest may be exempt from state income tax.exodusNH wrote: ↑Mon Jun 27, 2022 7:20 pmNo, it's your settlement fund.
Re: Choosing HYSA
No. The yield was better than any of the non weird hysa options.
Re: Choosing HYSA
Yes, this is the one I was talking about. If you already have Vanguard it makes the most sense. As someone pointed out on another thread you wouldn't keep money you might need to bail someone out of jail tonight, but you could keep money to bail someone out later in the week.anon_investor wrote: ↑Mon Jun 27, 2022 7:22 pmFor anyone with a Vanguard taxable brokerage account, using the settlement fund (VFMXX) is easy (no new accounts to make and no minimum) and pays 1.38%. Plus some of the interest may be exempt from state income tax.exodusNH wrote: ↑Mon Jun 27, 2022 7:20 pmNo, it's your settlement fund.
Re: Choosing HYSA
So I can start another account with Vanguard, since I have my IRA there this would be a taxable account right? Then simply put money into the settlement fund and not invest it anything else? Just simple as that?letahl wrote: ↑Mon Jun 27, 2022 8:08 pmYes, this is the one I was talking about. If you already have Vanguard it makes the most sense. As someone pointed out on another thread you wouldn't keep money you might need to bail someone out of jail tonight, but you could keep money to bail someone out later in the week.anon_investor wrote: ↑Mon Jun 27, 2022 7:22 pmFor anyone with a Vanguard taxable brokerage account, using the settlement fund (VFMXX) is easy (no new accounts to make and no minimum) and pays 1.38%. Plus some of the interest may be exempt from state income tax.
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Re: Choosing HYSA
Yep, a taxable brokerage account. Just know that you can't immediately transfer out funds you transfer in, I think there is a week or so hold period, and after that it takes maybe a day or two to receive in your bank after you initiate the transfer out. So this shouldn't be money you might need for a couple of weeks initially.vss317 wrote: ↑Mon Jun 27, 2022 8:13 pmSo I can start another account with Vanguard, since I have my IRA there this would be a taxable account right? Then simply put money into the settlement fund and not invest it anything else? Just simple as that?letahl wrote: ↑Mon Jun 27, 2022 8:08 pmYes, this is the one I was talking about. If you already have Vanguard it makes the most sense. As someone pointed out on another thread you wouldn't keep money you might need to bail someone out of jail tonight, but you could keep money to bail someone out later in the week.anon_investor wrote: ↑Mon Jun 27, 2022 7:22 pmFor anyone with a Vanguard taxable brokerage account, using the settlement fund (VFMXX) is easy (no new accounts to make and no minimum) and pays 1.38%. Plus some of the interest may be exempt from state income tax.
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Re: Choosing HYSA
Also, Comenity/Breadfinancial's 1-year High Yield CD is at 2.5% vs ALLY's at 1.75%wbarabas wrote: ↑Mon Jun 27, 2022 5:31 pmBeen there a few years. They are fdic insured. I initially got started there because they had the best cd rates a couple years ago. They are always competitive and their rates jump within a few days of the feds raising rates. Their cd rates are still very good. They are a part or bread financial. It's all online but their app is simple to use and they even have phone support for questions.
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Re: Choosing HYSA
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Last edited by AerialWombat on Thu Aug 25, 2022 6:56 pm, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
Re: Choosing HYSA
Reviews on Deposit accounts would give me pause.
https://www.depositaccounts.com/banks/b ... ncial.html
Seems transferring large amounts out is problematic.
No mention in the reviews that this can be solved by initiating the transfer from the other side and pulling the funds. Doesn't mean it is not a workaround, but did not see mention of it.
Real Knowledge Comes Only From Experience
Re: Choosing HYSA
Edit: Recommendation retracted.
Last edited by vaylie on Sun Jan 21, 2024 4:58 am, edited 1 time in total.
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Re: Choosing HYSA
Is that the rate earned in 6 months or is the advertised rate for 12 months?AerialWombat wrote: ↑Tue Jun 28, 2022 8:00 am If you’re just going to open a brokerage account instead, then consider Treasury bills at auction. 6-month T-bills are about 2.48%.
"The greatest enemy of a good plan is the dream of a perfect plan"
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Re: Choosing HYSA
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Last edited by AerialWombat on Thu Aug 25, 2022 6:58 pm, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
Re: Choosing HYSA
I have used Marcus for the last two years and am pleased with it. They tend to be on the higher end of what rates they offer and tend to raise rates faster than most others. You can get higher rates if you jump through some hoops at other banks, but I don't have time to do that
Re: Choosing HYSA
I would not put any funds with Ally that you might need to get out with less than two weeks' notice. Do a forum search for Ally wire transfers as well as Ally ACH transfers; various rules around the timeframes you can receive funds via ACH and while you might expect wires to be a same-day service, it's closer to "same day the day they get around to doing it" which could have a significant effect on your transactions.
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Re: Choosing HYSA
I don't know what the daily limits are, but I have never had any issue with getting money out from Ally via ACH. At least once a year I move $10k-$25k via ACH (pulled via my brokerage) without any issue.8foot7 wrote: ↑Tue Jun 28, 2022 10:33 am I would not put any funds with Ally that you might need to get out with less than two weeks' notice. Do a forum search for Ally wire transfers as well as Ally ACH transfers; various rules around the timeframes you can receive funds via ACH and while you might expect wires to be a same-day service, it's closer to "same day the day they get around to doing it" which could have a significant effect on your transactions.
Re: Choosing HYSA
A few years ago I transferred about 15k to my bank acct to purchase a used car. It only took 1 day to process. Not sure what they consider a large amount but to me that was a big expense but was easy.MikeG62 wrote: ↑Tue Jun 28, 2022 8:13 amReviews on Deposit accounts would give me pause.
https://www.depositaccounts.com/banks/b ... ncial.html
Seems transferring large amounts out is problematic.
No mention in the reviews that this can be solved by initiating the transfer from the other side and pulling the funds. Doesn't mean it is not a workaround, but did not see mention of it.
I had their cds in the past and 1 phone call to roll over to my hysa was all it took when the time was up.
I think their 1 year will be even better after the next 2 fed rate hikes.
Re: Choosing HYSA
I think this depends on how long you’ve had the account opened and how often you use it and move funds around.8foot7 wrote: ↑Tue Jun 28, 2022 10:33 am I would not put any funds with Ally that you might need to get out with less than two weeks' notice. Do a forum search for Ally wire transfers as well as Ally ACH transfers; various rules around the timeframes you can receive funds via ACH and while you might expect wires to be a same-day service, it's closer to "same day the day they get around to doing it" which could have a significant effect on your transactions.
I’ve been with Ally ~15 years and have no issue ACH’ing funds the next business day. Marcus is even better doing same day ACH’s if initiated in the morning. Of course with Marcus you can wire the funds same day at no fee as well.
Real Knowledge Comes Only From Experience
Re: Choosing HYSA
I routinely move low five figure amounts and periodically mid five figure and low six figure amounts. Not once a delay in processing.anon_investor wrote: ↑Tue Jun 28, 2022 10:48 amI don't know what the daily limits are, but I have never had any issue with getting money out from Ally via ACH. At least once a year I move $10k-$25k via ACH (pulled via my brokerage) without any issue.8foot7 wrote: ↑Tue Jun 28, 2022 10:33 am I would not put any funds with Ally that you might need to get out with less than two weeks' notice. Do a forum search for Ally wire transfers as well as Ally ACH transfers; various rules around the timeframes you can receive funds via ACH and while you might expect wires to be a same-day service, it's closer to "same day the day they get around to doing it" which could have a significant effect on your transactions.
Real Knowledge Comes Only From Experience
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Re: Choosing HYSA
I have done 6 figure wire transfers from Ally a few times for home down payments before without issue. Depending if I submit the request online early enough it is either same day or the next business day. Although, I have always sent the money to an escrow account and it is usually done a few days in advance of closing, so I have been in a situation where it HAD to get there same day.MikeG62 wrote: ↑Tue Jun 28, 2022 12:13 pmI routinely move low five figure amounts and periodically mid five figure and low six figure amounts. Not once a delay in processing.anon_investor wrote: ↑Tue Jun 28, 2022 10:48 amI don't know what the daily limits are, but I have never had any issue with getting money out from Ally via ACH. At least once a year I move $10k-$25k via ACH (pulled via my brokerage) without any issue.8foot7 wrote: ↑Tue Jun 28, 2022 10:33 am I would not put any funds with Ally that you might need to get out with less than two weeks' notice. Do a forum search for Ally wire transfers as well as Ally ACH transfers; various rules around the timeframes you can receive funds via ACH and while you might expect wires to be a same-day service, it's closer to "same day the day they get around to doing it" which could have a significant effect on your transactions.
Re: Choosing HYSA
Yep. I'm seriously thinking about doing this as well. Seems like a pretty easy way to earn more than the typical HYSA, at least for money that you would not need immediately (ie beyond a basic emergency fund and / or working cash). And if there is a real emergency for which the money is actually needed, I believe they can be sold on the secondary market so you're not totally losing the liquidity.AerialWombat wrote: ↑Tue Jun 28, 2022 8:00 am If you’re just going to open a brokerage account instead, then consider Treasury bills at auction. 6-month T-bills are about 2.48%.
Re: Choosing HYSA
Correct, you can sell on the secondary market very easily, but like any other bond, you've got interest rate risk that might mean you're receiving less than you paid.cockersx3 wrote: ↑Tue Jun 28, 2022 2:30 pmYep. I'm seriously thinking about doing this as well. Seems like a pretty easy way to earn more than the typical HYSA, at least for money that you would not need immediately (ie beyond a basic emergency fund and / or working cash). And if there is a real emergency for which the money is actually needed, I believe they can be sold on the secondary market so you're not totally losing the liquidity.AerialWombat wrote: ↑Tue Jun 28, 2022 8:00 am If you’re just going to open a brokerage account instead, then consider Treasury bills at auction. 6-month T-bills are about 2.48%.
Re: Choosing HYSA
This is all really good information and I appreciate it. I talked to my wife and think what we're going to shoot for is a small amount in cash at one of our current banks, probably Chase because they are everywhere. Then next start a taxable Vanguard account, I like the idea of keeping things with Vanguard since I already have my IRA there. So I'll just do the settlement fund mentioned in a previous post. And finally, when we are comfy with the amount in the settlement fund, I'll look into the bonds or expanding the taxable account. I've always been interested in I-Bonds, just never had the money to do it. Kiddos day care is expensive!!!
Again, thanks for the help.
Again, thanks for the help.
Re: Choosing HYSA
SoFi has emailed me that their interest rate (with direct deposit) has gone up to 1.5% .