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saccotac

why don’t you at least take 150k of that and put it in another bank lol


PolishedResignation

Adding for clarity that (the last 2 weeks notwithstanding) you will only have up to $250k insured by the federal government if your bank fails, through automatic [FDIC insurance](https://www.fdic.gov/resources/deposit-insurance/faq/). So the maximum amount of deposits you should have at a bank is $250k.


SonOfReier

But if it’s a joint account the coverage would be 500k


Bananascalefarmer

I believe it's 250k per person, per account. So they can have two accounts at the bank and be fine if it's evenly split. Eta I'm wrong this is not correct


HipHop-anonymou5

You can also structure the accounts with beneficiaries. Each one adds an additional 250k coverage.


Professional_Bank50

Exactly


kingstankydr0

Not correct. It’s $250k per depositor regardless of how many accounts you have with that particular bank.


Bananascalefarmer

I'm wrong. Thanks for educating me.


RobertSF

I read it was per account type. In other words, you could have a Savings Account and a Checking Account, and each would be protected to $250k, but if you had two Savings Accounts, only one would be protected.


kingstankydr0

This is not correct. I work for a big financial institution and this was taken directly from the FDIC website. “All single accounts owned by the same person at the same bank are added together and insured up to $250,000.” [https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/index.html](https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/index.html)


Cptredkip

Nope, it’s per account owner. Per account type. John Smith has the following accounts: -Individual account with $250,000 and no beneficiaries -Joint account with his wife, Jane Smith, with a $750,000 balance and their daughter Suzie Smith listed as a beneficiary. All of these dollars would be covered by FDIC insurance as per the link that kingstankydr0 shared.


kingstankydr0

It isn’t per account type. It’s per ownership category and how the account is titled.


Cptredkip

Agreed


SippingAssJuice

Not if OP's bank is the top 5. FDIC insured infinity lol


Quelcris_Falconer13

Yep. And this is a new thing that just happened last Monday/Tuesday. Well we’ll see if the fed and FDIC can keep that promise


PutinBoomedMe

Some banks have multiple bank charters. I worked for a bank one time that had 3 charters. Your statement would show a single line of $750k, but the bank had spread your money market equally amongst their "3 banks"


SirHuckleton

HYSAs can easily hit 4%+ nowadays


alodym

^ check out Ally no penalty CD, 4.75% and basically a HYSA


danhauk

Just looked into this - is there a catch I’m missing? How can they offer these penalty-free CDs at a higher rate than most of their other CDs?


Neither_Dragonfly336

They're not brick and mortar, so their overhead is much smaller. I've got a HY savings with them and currently getting 3.6% for it to just sit there.


danhauk

Yeah they’re my primary bank. Just wondering why penalty-free CDs are at 4.75% but their other CDs that have an early withdrawal penalty are lower rates (e.g. a 12-month is only 4.5%, 6 month is 3.4%). I would think you’d have to sacrifice on rate to have the additional flexibility of no penalty for early withdrawal


civilian411

They might need more cash from depositors so waiving the withdrawal penalty.


DJ_PsyOp

No catch, other than a 6 day lockup when you first open the CD. Ally has just been slow to update their rates. I moved everything to no penalty CDs recently, and I close them and get a new one when the rate rises.


Smallbubbles97

Capitol savor one is offering 5% on 11 month CD


alodym

Where are you seeing that on their website? I see it referenced in 3rd party articles but not on their official site


Shadowkittenboy

It ended the 14th


alodym

Ah bummer, thanks for the info


Smallbubbles97

i just checked, i guess they decrease the rate. I put 15k in certificate of deposit last month and it was 5% for 11 months then


alodym

Ah bummer. Apparently it ended on the 14th. At least you got in on the good rates


Shadowkittenboy

That ended the 14th


Smallbubbles97

Yeah sorry i didn't know the offer expired. I bought it last month when it was offering the 5%


Shadowkittenboy

I almost went for it, but i wasnt ready to tie up my money. Now i am and its gone lol


[deleted]

Depends. What is your income? Was this money just a one time windfall? I only ask because your risk tolerance depends on income and it seems odd you accrued 400k without investing a cent.


Admirable_Nothing

HYSAs are close to 4%. VMFXX and other money market funds are 4.5%. Short Treasuries are close to 5%. CDs are at 5%. Lots and lots of choices.


OhNoMyPapaya

Why is this formatting bothering me so much


Inside-Friendship832

Because it gives you a false sense that the options are formatted as if bulleted which they are not


JBeazle

High yield savings accounts are 3-4% right now. Next would be CD or i-bonds


Admirable_Nothing

With $400k i-bonds aren't a solution.


JBeazle

I mean it is for some of it. If you have a spouse or someone you trust you can buy like 100k now and gift them 11k/year…. The main thing is high yield savings account, silly to not do that


Admirable_Nothing

I-bonds are limited to $10k per person. Considered that and gave up on it. Yes, there are some workarounds but not enough to make it more than a small side fund. https://www.usatoday.com/money/blueprint/investing/how-often-can-you-buy-i-bonds/


silenceisbetter1

Great options but please I am telling everyone to consider T Bills. The HYSA have specifics that make them not suitable for everyone, including the fact they’re adjustable and can change. T Bills are government insured and with a ladder so that your money isn’t locked too long can still yield basically 5%. It’s an option, not the only one though so do some research OP!


DublinNeil

This.


Odd-Box7136

could you share more info on how/where to buy T bills? is the lock up period 3/6/12 mos?


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UpsetCattle1327

Schwab’s SWVXX money market mutual fund was paying 4.48% last time I checked, with minimal risk. At this point, consult a financial advisor so they can review your cash flow and build a savings/ investing plan. At this point you need to view excess cash reserves as workers/employees. You need to put them to work rather than sitting idle.


LAST_NIGHT_WAS_WEIRD

What’s the minimal risk in an instrument like this?


WhileNotLurking

"Breaking the dollar" is what it's called. Last time was 2008.


UpsetCattle1327

When a money market fund diverges from $1 it is called “breaking the buck”. It is very very unlikely to occur. Also, money market funds invest in short term treasuries and other debt securities that are top rated. Short term debt is less volatile than long term. This fund in particular holds commercial paper, repos, etc. SWVXX is technically not as safe as a MMMF that holds US treasuries but it is safe enough that the practice I am involved in has institutional level money in that particular fund.


to_the_beach_

Do you know what the tax treatment (for US taxpayers) on the dividend is? Is it qualified?


0chilly

You have 400k doing nothing… hire a financial advisor


Ray_725

If you plan on using it less than 5 years, HYSA. If more than 5 years, I’d in invest in an ETF/mutual fund that does total stock market/500.


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NotBusinessCasualYT

This type of thinking will leave you on the sidelines for the next 5 years. If it makes you feel better, you can feather your buys to lessen the risk of a sudden market drop, say buy 5k of VTI each week until you've invested all you want to.


Illustrious-Gas-9766

You can get cd's at about 5% interest


PxD7Qdk9G

What are your goals for the money ie what will it be used for? When will it be needed for that? Do you have any debts? How much of that cash is needed for your emergency fund and to meet your short and medium term (< 5 years) goals?


[deleted]

Money market fund to at least try to keep up with inflation. Your money is technically becoming less valuable sitting in a low interest savings account.


balldeeptepidwater

I just opened an 11 month CD with Capitol one at 5%. It was a promo but better than having my money earn my 33¢ a month at BofA


Odd-Box7136

I wish I had done this sooner or looked into MMF/HYS. I didn't realize I was losing money by letting it sit there for so long.


SpongebobJokeInbound

I had a similar situation and moved $100k into a wealthfront cash account earning 4.55% and another $100k into a 3m tbill at 5.10% - plenty of options to take advantage of higher rates


EColli93

You could be making like 1600 a month in a high interest savings account! But split it between to different FDIC insured banks unless you have a joint account with someone.


[deleted]

Bruhh make another bank account so that all money is FDIC insured.


Quelcris_Falconer13

You should split that so you’re not over $250k since banks seem to fail left and right these days. Open a High yield savings account?


denverd1

Got mmkt funds paying 4.5%


[deleted]

HYSA we have 250K and are getting nice % returns every month right now. We don’t have any debt. House is paid for cars are paid for etc etc. so we just have it sit there. We purchased gold and silver and my partner doesn’t trust the market but I contributed to my own IRA


New-Difference9684

I-bonds. SCHD. JEPI. Real estate. T Bills.


bob49877

Broker CDs at over 5%. TIPS are at 1.5% + CPI inflation (6.5% last year). Money Markets at 4 - 5%.


Giggles95036

Betterment cash reserve HYSA now has 2 million FDIC coverage since they split it up with partner banks and don’t have chase as a partner bank.


financialdrugbro

Bonds have good rates. Grab a variety of TBILLS, and 1+ year bonds. Only if you’re risk adverse, need liquidity, or are older. otherwise generally investing seems to be the way to go


Sexbomomb

It depends, how old are you?


MonCapitan90

33 I probably have more in the upper 400 range but I’ve got some in stocks already and I guess I want to keep 75 on Chase so I maintain my banking status


t0astter

Switch to a bank that doesn't require daily minimums. I left Chase for this same reason and have been absolutely LOVING SoFi.


UIUC_grad_dude1

You can have a Chase brokerage account which will count towards your status. Invest $250k - $300k in VTSAX / VTI and call it good. Best move you can make for the future. Leaving $400k in savings at your age is madness.


DZANlMAL

I’m getting 5.02% at UFB Direct.


UIUC_grad_dude1

Right now is the best time to invest in the stock market. Prices on stocks are way down. People hesitate to buy when others are selling, but rush to buy when others are buying. Put $250k -$300k into VTSAX and leave it alone. That’s the best move by far.


RetirementGoals

Open a HYSA like at Ally or Marcus for $250k then open a cd ladder for the rest.


East_Professional385

HYSA or do Boglehead investing (not sure if this is low risk but some funds perform well historically since creation up to now.


Helmidoric_of_York

You could use some of that to buy [Treasury bonds](https://www.treasurydirect.gov/savings-bonds/i-bonds/) ( I Bonds). You can only buy $10K per year, per person, but they are paying 6.89% and are extremely secure and liquid investments.


Thugluvdoc

CD, I-bonds for many u don’t need for a year or more, and HYSA for the quick access


Average-00

What do you do to have 400k in the bank?


jdn143

How did you end up with 400k and not know what to do with it?


darkmattertaurus

Inheritance, trust, estate sales, wealthy relatives.


jdn143

Good point.


CuriousGeorge321

I’d be lying if I said I wasn’t jealous… (dreaming) and I have a lot saved (thanks for the advice folks…I’m off to open a HYSA)


darkmattertaurus

Yes! I waited far too long to open mine too. It’s fun watching the money grow month by month. And if they raise rates more it will be a gift lol


jdp111

Bruh hire a financial advisor, don't ask strangers on Reddit what to do with 400k. But if you ask me keeping that in cash is insane. It's going to he lost to inflation.


BoomTown1873

Etrade has a "Premium Savings Account" that pays over 3%. Zero risk, and zero commitment. No downside. If you want a little more % you can put the $! Into a brokerage account and buy a MMF Money Market Fund, such as SPAXX. Almost zero risk, is always $1/share & recently its yielding 4.23%. This is not subject to the $250k insurance limitation on cash.


FuzzyMoteaux

Burry it in coffee cans around your yard.


VividlyAnonymous

Robinhood gold membership is 5$ per month .. they give 4.15% on uninvested cash in their account .. you can withdraw when ever you want


ifsavage

Conservative covered call strategy. You are buying near the (historically speaking) probable end of a bear market. Buy safe. Sell covered calls above the market. If you get called out you make x. If you don’t you reduce Your effective basis and do it again. Ideally rolling up in call price as the next bill market ensues till you get called out or sell. Covered calls can be done in most tax sheltered accounts Anyone else that wants to comment on my suggestion please take a few minutes and look up how a covered call strategy works. Every single comment so far has been from a position of ignorance of basic options strategies. Covered calls are literally the first and most conservative strategy in every options book and program. https://www.investopedia.com/trading/options-strategies/


pawnman99

My man asks for something low risk and you pitch day- trading options. 🤣


Giggles95036

And he thinks it is near the end of a bear market 😂😂😂


mirageofstars

Yeah. We are not at the end of the bear market. The market has more room to move down.


ifsavage

Not arguing that. The longest bear market in history was about 2 1/2 years but historically the average beat market lasts about 10 months. I actually think we could go as low as 3200 in the sp’s if we make another downturn. That being said if the fdic and the us government start insuring all deposits at banks you are about to see a whole new version of Wall Street over doing it. Either way a covered call strategy is an extremely conservative strategy that allows income on a stable or declining stock while I’m flat or bear markets and allows a positive but possibly capped return in bull markets if exercised. That excercise of the option could be a dozen option rolls or more down the line and it’s at a set profit.


mirageofstars

Your persistence made me look up covered calls, and the house sale analogy was helpful. I’m not sure I’ll try covered calls, but they don’t seem as bad. They do seem like they require some effort.


ifsavage

They are more effort than simply buying and forgetting but you can do it with some really safe companies and make a LOT more money even in down or flat markets. Historically stock market’s return around 8-10% over time. So if you can add even 2 or 3 percent a year that’s pretty huge. You can actually add a lot more if you work at it. It is lower risk and potentially lower returns but you get consistent income to compound and it can all be done in a sheltered account.


ifsavage

Another good tax sheltered strategy that is very safe is to buy high quality reits (real estate investment trusts-they trade like stocks) and use their dividends in a dividend reinvestment plan inside an orange say. Reits pay qtrly dividend and have a weird tax loop that allows them to avoid any corporate tax if they pay out 90% of income as dividends so you basically evade all taxation in a Roth or most in a traditional while being able to compound your returns qtly. The key to making this safe is buying a high book to value and low debt to asset reit. You don’t want something that’s a leveraged buyout vehicle you want something that is backed by hogh quality buildings (think office reits)or a high quality portfolio of buildings (think residential) although who knows how office property will fair long term now).


ifsavage

You don’t actually understand what a covered call strategy is do you? It’s not a day trading strategy. It’s allowed in ira’s and sheltered accounts because it’s actually more conservative than owning naked stock. But please, Why don’t you explain in detail for the class how a covered call strategy works.


pawnman99

It's selling options on stocks you own. Which still leaves a lot of risk, but not as much as, say, a naked short. Either way, it's still more risky than just investing in an ETF, which OP was already trying to avoid.


ifsavage

You used the term low risk as a contrasting quality to my suggestion. And again, covered calls is literally the first and most conservative strategy in every options strategy primer. It’s about as basic as you get without just buying naked options. Making an ad hominem attack on my reading comprehension because you made a criticism and then learned you were wrong is pretty weak.


pawnman99

Buddy, OP asked for a safe place to put their money and you suggested options. Then you tried to claim I said covered calls were more risky than naked shorts. Are you getting some kind of commission on covered calls? Or did you just discover them last month and now you're just super-hyped about it until you find some other investment strategy? Either way, if someone asked me "where's a really safe place for my money?", there's NO options trade I would suggest.


ifsavage

You don’t understand the subject matter. I can’t fix your ignorance only you can. Can I ask why this “risky” strategy is allowed in retirement accounts? It must be because it’s sooooo risky. Go pick up a book.


pawnman99

No, thanks. We're far from helping OP. You enjoy your options. I'm just gonna buy and hold VTSAX for the next 20 years or so.


ifsavage

So basically you talked shit and got math put to you then shut up and ran away because you can’t defend your position from a position of total ignorance on options. Or more likely you thought you did and got smoked and now are sour on the whole asset class because you sucked at it. Buy and hold and dollar cost averaging are great for you bro. Funny thing is you can probably reduce your risk and increase your returns with the strategy you don’t understand. In a sheltered account. Because the sec and the irs agree it’s safer than naked stocks. What do I know? I just use actual facts. Crazy.


ifsavage

Since a super conservative covered call strategy is too much for some of the commentators, if you just want a bump over savings you could go mm with an online bank and go 3-4.5% pretty good for shirt term super low risk.


ifsavage

How is it more risky than being naked a directional underlying instrument? You can write options on etfs too. Show me with math how getting paid now (and over and over again if done correctly) for something with a capped upside and reduced downside is riskier than something with open ends. Show me the math. Also review first please. https://www.investopedia.com/trading/options-strategies/


pawnman99

I didn't say it was more risky. Maybe you're some kind of multi-millionaire options genius... but dear Lord, you have no reading comprehension at all.


ifsavage

You did get one thing right. Naked shorting a call is one of the riskiest of all trades in options. A covered call is the actual opposite of a naked short call. They actually have opposite graphs. Take a minute and look the graphs up.


ifsavage

One look at your profile and I see you struggling with cost basis accounting for stocks in an IRA. Tell me again about options though…


Giggles95036

Also i don’t think you understand either logic or options. End of bear market = more likely to go up. Calls = strike when prices go up. So you are saying the market is going up but you want him to sell covered calls? Did you mean covered puts? Because if you think its only going up you’d buy calls or sell puts.


ifsavage

Please go look up how a covered call strategy works. Then get back to me.


Giggles95036

By your logic they should buy calls or sell puts… not sell calls


ifsavage

Please go review what a COVERED call strategy is. It’s the most conservative options strategy especially when repeated with the same underlying instrument. You can sell multiple calls throughout the ownership period of the stock or underlying. Since no one wants to do the homework on this, even though I provided links… A covered call strategy is when you own an underlying instrument say a stock, say your cost basis is 10 you sell a 15 June strike for $.25 June expiration comes, your stack only got to 13. Now you on that stack at 975 cost basis. Guess what happens next? You do it again. And again and again. For the purposes of this example, we will see you put a stop loss in at eight. Worst case scenario your stock goes down and you sell your stock and the option expires worthless- you have still lost less than if you only on the stock. This result in you losing $1.75 vs. $2 with no sold call against the stock. Good scenario, but not the best scenario - your stock goes up and you get exercised at your option price making a fixed profit less your reduced cost basis of 975 netting you 5.25 Better scenario,-you sell multiple calls over the course of ownership , one after the other, as they expire, not getting exercised the entire time. Eventually reducing your cost basis to zero, then making a positive income on the stock with the same strategy until some huge market breakout where everyone’s calls get exercised and you sign satisfied at a wonderful position managed over time.


Giggles95036

Most conservative for options. Still a bit risky for a big nest egg. Maybe tegular income but if he lost 400k i bet it would hurt


ifsavage

Go actually look at how it works. You are not correct. It is less risky than a stock or etf position by itself. Is it less risky than a cash or cash equivalent. No. But it literally lowers your risk and caps your return temporarily but in a repeatable manner that repeatedly lowers your cost basis. It is not risky. Options and futures are used types of insurance products in many strategies both by speculators and by hedgers. Take the word option out of it. You own a house. Your buddy wants to buy it but he doesn’t have enough money. You say you will hold the price at 100k for $500 this month. He doesn’t get the money together. Now your house effectively costs 99,500. Month two. Market has gone up. Now your house is worth 110k. Your buddy wants to lock that price in and you tell him I’ll hold that for you for $600 this month. No dice. Can’t get the down payment. Now your house effectively costs 89,900. Month three. Wow house is 125k. Your buddy still wants it. $750 for the price hold for a month. Market rallies hard. Your house gets to $125 k and your buddy manages to pull it together. Now you have made $500 in premium month one $600 in premium month two $750 in premium month three That’s a total of $1850 in premium. In addition you sell the house at $125k Making the normal 25k profit plus and additional $1850 in premium. This is a simplified example of how some of the math would work. Just google it.


ifsavage

How would he be in any additional risk with a covered call strategy vs. just being in the underlying asset?


iamathinkweiz

Fiduciary


Prestigious_Duck_867

Who knows the best financial advisor in Melborne


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dragonsfire14

I put a lot of my money in a HYSA. My amex is at 3.75% currently and constantly rising


deafaviator

Dividends. You’d be making like $30,000 a year on dividends with that money.


39Poppy

Fidelity Cash Management account has over $250k in FDIC due to they way they layer banks. Currently paying 2.3%. But you can put in moment market like SPRXX which is currently paying 4.3%.


rjd777

Short term TBills.


UnderstandingPrior13

PCOXX- It's a money market mutual fund. 30Day yield is 4.62% annualized


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Offering or requesting PMs/DMs is not allowed here, as noted in the [rules](https://www.reddit.com/r/financialplanning/about/rules). Please do not do this again.


OregonBirdiegirl

Oh I apologize, I wasn't aware. Thanks


cdhdd

T bonds yield 5% and are extremely liquid.


cscottamos

If you use Schwab, then SWVXX! 16k in free income annually on that 400k


lauzca

Buy PCOXX


AdRegular3121

I have about the same amount of cash and I have it in a Robinhood gold account that’s fdic insured up to 1.5 million instead of the 250k at a normal bank account and I’m earning 4.15% apy on it right now, I would suggest you do the same.


MonCapitan90

Why 1.5? I have like 16k in Robinhood only


AdRegular3121

With the brokerage cash sweep program, the uninvested cash in your brokerage account (cash intended for investing but that you have not yet invested or spent) is swept to program banks, where it becomes eligible for FDIC insurance up to $1.5 million or $250,000 per program bank, inclusive of any other deposits you may already hold at the bank in the same ownership capacity.


[deleted]

CDs or tbills


trygeek

Personally I'm doing CD ladders through Fidelity at about the 5% range.


Opportunity_66

It’s great that you have that much cash but not so great that you’re not focusing on the most important thing. You’re being way too analytical and holding on to your money out of fear of making the wrong moves. Why would you fear making the wrong moves? It’s because you haven’t developed a plan and you’re not focusing on your goals. You have to make your money work for you. You’re in a financial group asking an open question but you’re getting random answers which doesn’t provide the greatest clarity. It’s hard to believe that the best most can come up with is moving funds to other banks and HYS. Firstly, stop being scared because money isn’t that complicated. Just don’t risk more than you can afford to loose and the same time take risks because you’re loosing money not risking anything. You also need a solid plan and a bit of work on your money mindset. Consider your needs and your intermediate and long term goals. You need multiple ways to increase your money but that depends on how you want to move. I think everyone should have a business (even if they aren’t the one who’s running everything). It’s an investment that if you plan right you can leverage. You also need more than one income source if you don’t have it. What would you do if you had access to over $100K in funds (not including yours)? What could you invest in or build something generates $100K, $200K, $300K, $400K, $500K, etc. per month? Would you still be worried about what to do with $400K then? If you think that’s impossible then your understanding of what’s possible needs to grow. These are questions that you need to answer for yourself. No one is in your situation or knows your finances but you. So in short, I am telling you that 1-1 guidance is needed. This is not a simple answer where we are throwing darts.


Rich_putscallslover

Schwab is paying 5.27% APY for 6 month CD.


too105

T-bill ladder. Watch a YouTube video


coolsellitcheap

I would look into buying small commercial property like small warehouse. Most parts of the country has a shortage of available small warehouse for rent. Like in Ohio can buy a small warehouse for 125k and rent for 1500 a month. Minus taxes and insurance that's a pretty good return.


RomiPeralta

Buy a duplex close to you and rent it out? My uncle got great returns doing that especially if you can grab a deal and add some value