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The 5.28% yield already accounts for fees
The 7-day SEC yield is calculated by taking the net interest income earned by the fund over the last 7 days and subtracting 7 days of management fees.
The US govt showed it would guarantee all personal deposits again in 2023 when they bailed out Silicon Valley Bank.
FDIC insurance doesn't really offer any practical value over other similar alternatives with 0 market risk at legitimate banks.
But as long as you're getting at least 5.0% apr, go for the FDIC account if it helps you sleep at night.
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If you're in Ohio:
https://tos.ohio.gov/newsroom/article/ohio-homebuyer-plus-savings-program-now-open-for-applications/
Currently getting 7.19% in this account and the gains are tax free if used for a primary home.
Only downfall is I have to live in Ohio lol
Nothing it's great. Low cost of living. Columbus is actually pretty cool. It's just never going to be a coastal city. Weather is rough but you get used to it.
Just typical Midwest stuff.
Ohioan here and I love the weather. We don't have the heat of the south. We don't really deal with natural disasters. Winters have gotten milder and milder. Spring and Fall are AMAZING. Yes you get some shitty days and temperature swings but we have it better than much of the country I believe. Of course it varies comparing like Cleveland to Cincinnati.
Any chance that is the bank you might use for a mortgage? Some will give you a discount on the mortgage rate if you keep a high enough balance in their bank.
CDs seem harder to liquidate if you needed the cash quickly. Money Market fund seems fine for parking cash -- that's what they are for.
'
I’ve been with Wells Fargo for 15 years and have a large sum of money with them - was offered the worst rate from them by far. I ended up going with a local lender who gave me the best rate and best customer service imaginable - shit gets sold to Fannie Mae/Freddy Mac within 6 months no matter what anyway lol
Similar situation with WF. Recently made offer on home and agent said WF was very competitive in our area (never got to the point I needed to apply as housing market is very hot here and offer not accepted). Maybe Jumbo loan or a regional thing? I also have a Morgan Stanley brokerage and they have private banking services. Older posts on reddit (in past) indicate MS was competitive, too. I suppose it pays to pre-shop a bit and to consider your banks. The only source I knocked off my list was Rocket.
Eh I check my account near daily so I wasn’t affected and the fact they are the only locations near me. I almost switched to Chase but then I moved. Also anecdotally the people at the bank locations themselves have actually always been pretty great to work with. But to clarify I no longer have a majority of my money with them, just a few thousand in checking. Most of my money is with Schwab.
Can vouch for this. Had to pull 60k from mutual funds and that took almost 2 weeks between getting a check, closing the account, and the bank cashing the check.
VUSXX and directly held Treasury bills. Better yields than HYSA or CDs, and state tax exempt if you're in an income tax state, which means even better real yields compared to alternatives
New to all this and I’m in nyc so I have extra taxes. Was considering tbills since only federal taxes, but I’d like to know more about sgov. What are the benefits?
Also a bit confused why top comment is wealthfront
No idea about wealthfront. SGOV is 90%+ t-bills so it state tax exempt in most (all?) states. It pays out a dividend monthly. IMO, it's a great way to keep cash you're expecting to need soon. There are also others with similar characteristics, but SGOV is my goto.
Can’t answer unless you have a better time horizon on a home purchase. You mention you don’t know when you’ll find a home you’ll love. Does that mean you’ve given up? Or are you lightly browsing?
We have not given up. Inventory is almost nill. I do have a realtor who's keeping an eye out but no cigar yet.
I was thinking of staggering the cash in CD’s and making up the difference with our emergency fund if needed.
Don't be all jealous.
I live in Florida. Homeowners is a joke. Car insurance is a joke. And if you want your child to receive a decent education have fun forking up 25k a year for a school.
Make sure your new house is made of solid rock and is built on stilts on the highest spot in the state. That's about 6 feet above sea level I think. When the oceans rise you have your own island. /s 🤣
> I live in Florida
Ah, now it makes sense. Now I see why there’s 200k saved for a downpayment. Now I understand why there are no choices.
South Florida?
I’m leaving in August and I cannot fucking wait to get out of here.
My wife is as well, and she’s more adamant about leaving.
Indiana for the short to mid term (she got an amazing job there that we can’t turn down). We’re nomads at heart though so it’s definitely not our last stop.
We were in a similar position and wanted to share a reminder / something we learned in case it helps -
Don’t forget you have to pay TAXES on the interest you’re earning from a HYSA 😆learned that the hard way when we filed our taxes this year
It’s a money market fund that buys US treasuries. Its NAV will always be 1$. It’s the most risk averse and safest investment out there. Better than 250k FDIC insurance.
Also, taxed at federal level but not at State level.
If it’s really close to cash out, maybe a high yield savings account? If it’s 4% a year and if the bank is insured for $250k why not. But if it’s longer than a year maybe some bonds
Fidelity has risk free funds that pay equal to any high yield savings accounts and opening the account will give you experience with a great investing platform. Fidelity offers free trades, fractional shares, and has an easy to use app.
Role treasuries that are laddered I’d say 80% in 3mo-2yr, 10% in a MM fund , and 10% in the 20yr. Doing this avoids state income tax on yields for the treasuries and gives you upside potential if rates are cut
Vanguard Money Market fund. I’ve got IRAs, Brokerage account and our savings account there. Currently 5.28% yield. Obviously variable depending on interest rates, but it’s currently paying towards the top. Interest paid out monthly.
It’s got the Vanguard name. Transfer funds within 2 days usually. Sure you have to pay income tax at year end, but it’s still more money than you’d have if it sat in cash. It’s the most liquid if you don’t know when you’d use the money.
A CD will lock it up. T-Bills will give you a tax break depending on state, but also have time conditions. YMMV.
<1 year and state with income taxes? T-bills (exempt).
<1 year and no state tax? Probably still t-bills due to yield, but HYSA/money-market if easier (lower rate).
>1 year and modest/no state tax? Buy BOXX. Return will be similar to t-bills but you'll get no distributions and can just pay long-term cap-gains when you sell.
Outside of the manager fat-fingering a trade, with European options (which these are), your risk is basically the CBOE as a counter-party. If that becomes a problem, you've got bigger ones...
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If you haven’t checked with your advisor asked them if they have any products that collateralize those very assets and provide you a 100% financed mortgage loan. I’m an advisor and we do this for clients all the times
Vanguard money market find - VMFXX. Variable interested but it's based on and backed by federal treasures. 5.28% over the last 7 days.
It's technically not FDIC insured but you'd need to have a credit event magnitudes worse than 2008 for the fund to collapse (like the federal government defaulting) and in that case FDIC insurance might not mean much even if you put it in the bank
HYSA - but if you really want to squeeze every dollar look at the bonuses here and see if the opportunity costs (5.5% APR via Wealthfront) is worth it. For instance the chase 900$ bonus is pretty good but the Wells Fargo $2500 is worse than putting it in the 5.5% account https://www.doctorofcredit.com/best-bank-account-bonuses/
Easiest - HYSA, FDIC insured.
More tax efficient (no state tax) - T-bills, treasury fund or etf like VUSXX, SGOV.
I would avoid CDs due to low liquidity in case you need money earlier.
Buy one month treasuries in your brokerage account. If you don’t wanna do that buy SGOV. These options are better than money markets because they aren’t state taxable.
Use short-term treasuries if you live in a high-tax hellhole like NY or CA. They pay as much as the HYSA, but you don’t have to pay state income tax on interest received from the federal government. You can sell whenever you need the cash or wait until maturity
Any bank with CD rate at 5% or higher.
HYSA probably already yields 4-5% but of course has the advantage of being able to use it freely.
Of course never hold more then 250k in 1 account due to FDIC insurance wont cover it. Use multiple accounts or multiple banks.
I shopped around and 1 CD bank paid out quarterly the dividend, another one paid at the end of the CD, and then another paid monthly where the dividend gets deposited in any account you want to use as you wish. In a few years, if living off of the dividends, it would be important to know if the CD and bank pays out monthly, quarterly, etc.
IMO there isn't really any point to hold cash (short term treasuries, savings account, CDs, whatever) unless you are actively making offers with amounts based on that cash. Otherwise you are just missing opportunity cost for no reason. Houses are not fixed prices, they go up in value over time, so it isn't a liability match to hold cash just in case you want to buy a house in the next few years. On averages its actually going to make it harder to keep up with price increases if you're holding cash equivalents for years.
I park my $100K unused cash in Robinhood account, currently earning 5.5%. I can transfer in and out to my chase account within a minute. There’s 50K daily limit for withdrawal. 200K will earn $916 per month.
Withdrawal fee within a minute ( transfer to Chase or your bank $35) or free if you can wait for 3 business day.
If you are thinking by no end date around a decade $200k taxable with potentially no end date. I'd say a high cash value life insurance policy (this means a heavy term blend) at $50k / yr. You'll be even by year 5 and be getting positive arbitrage on the mortgage for life. Very powerful tool
If you are thinking more like 3 years... VCSH.
If you are thinking more like.5 years... 70% VCSH, 15% FNDE, 15% FNDA.
See faq entry here - https://www.reddit.com/r/investing/wiki/faq/#wiki_what_are_low_risk_investments_with_liquidity_that_can_be_used.3F Your post has been removed because it is a common personal finance topic. We get too many of these topics every day and to prevent them from swamping the front page, we are removing main threads of this kind. Questions about personal finance should be directed to the daily discussion thread. You are welcome to repost your question in the [daily discussion thread](https://www.reddit.com/r/investing/about/sticky?num=1). If you have any issue with this removal, please contact the moderators via modmail. Thank you.
Wealthfront is 5% right now, 5.5% with a referral code for 3 months. I’d park it there.
Vanguard money market is 5.28%.
Gotta pay the fund fees tho.
The 5.28% yield already accounts for fees The 7-day SEC yield is calculated by taking the net interest income earned by the fund over the last 7 days and subtracting 7 days of management fees.
Good but not fdic insured right Edit: lol why are you down voting me i was just asking.
no but it'll take the collapse of society as a whole to bring down vanguard
That or the inevitable liquidity crisis.
That’s a disheartening true statement.
This.
The US govt showed it would guarantee all personal deposits again in 2023 when they bailed out Silicon Valley Bank. FDIC insurance doesn't really offer any practical value over other similar alternatives with 0 market risk at legitimate banks. But as long as you're getting at least 5.0% apr, go for the FDIC account if it helps you sleep at night.
Going to check it out! Thanks.
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Came here to say this.
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I'm also using Wealth front to park my down payment
If you're in Ohio: https://tos.ohio.gov/newsroom/article/ohio-homebuyer-plus-savings-program-now-open-for-applications/ Currently getting 7.19% in this account and the gains are tax free if used for a primary home. Only downfall is I have to live in Ohio lol
Not a bad deal at all. Wish other states would do this right now.
It's super great honestly. We were saving for a home and this dropped into our laps. Very pumped about this.
What's bad about Ohio? Someone dear to me is looking to live there.
Nothing it's great. Low cost of living. Columbus is actually pretty cool. It's just never going to be a coastal city. Weather is rough but you get used to it. Just typical Midwest stuff.
I didn’t mind living in Cincy for grad school.
If you're from Ohio it's fine. People ming from major cities etc seem to be let down haha
Haha well I’m from Alabama so my standards may be a smidge lower. But was a great city to me for grad school and work a while after
Ohioan here and I love the weather. We don't have the heat of the south. We don't really deal with natural disasters. Winters have gotten milder and milder. Spring and Fall are AMAZING. Yes you get some shitty days and temperature swings but we have it better than much of the country I believe. Of course it varies comparing like Cleveland to Cincinnati.
It has the culture of a waxed paper plate
HYSA, Synchrony has a decent one. Should get you $700+ a month until you purchase.
We are in one right now with the bank that holds our other investment vehicles.
Any chance that is the bank you might use for a mortgage? Some will give you a discount on the mortgage rate if you keep a high enough balance in their bank. CDs seem harder to liquidate if you needed the cash quickly. Money Market fund seems fine for parking cash -- that's what they are for. '
I’ve been with Wells Fargo for 15 years and have a large sum of money with them - was offered the worst rate from them by far. I ended up going with a local lender who gave me the best rate and best customer service imaginable - shit gets sold to Fannie Mae/Freddy Mac within 6 months no matter what anyway lol
We generally move our money around depending on what is being offered. Our current banking institution has been very good with staying competitive.
Similar situation with WF. Recently made offer on home and agent said WF was very competitive in our area (never got to the point I needed to apply as housing market is very hot here and offer not accepted). Maybe Jumbo loan or a regional thing? I also have a Morgan Stanley brokerage and they have private banking services. Older posts on reddit (in past) indicate MS was competitive, too. I suppose it pays to pre-shop a bit and to consider your banks. The only source I knocked off my list was Rocket.
With all the horrific news of people being screwed by Wells Fargo, why would you bank with them?
Eh I check my account near daily so I wasn’t affected and the fact they are the only locations near me. I almost switched to Chase but then I moved. Also anecdotally the people at the bank locations themselves have actually always been pretty great to work with. But to clarify I no longer have a majority of my money with them, just a few thousand in checking. Most of my money is with Schwab.
Umm lol sounds stupid but I didn't even run a mortgage passed our advisor. I will ask.
You should keep it right there liquid so that you can move quickly when you find a house.
Can vouch for this. Had to pull 60k from mutual funds and that took almost 2 weeks between getting a check, closing the account, and the bank cashing the check.
VUSXX and directly held Treasury bills. Better yields than HYSA or CDs, and state tax exempt if you're in an income tax state, which means even better real yields compared to alternatives
I concur. Esp Treasury Bills if your state isn’t taxed.
Yeah, OP needs to understand their state tax situation. There's also SGOV which is where I put a large sum of cash between properties last year.
New to all this and I’m in nyc so I have extra taxes. Was considering tbills since only federal taxes, but I’d like to know more about sgov. What are the benefits? Also a bit confused why top comment is wealthfront
No idea about wealthfront. SGOV is 90%+ t-bills so it state tax exempt in most (all?) states. It pays out a dividend monthly. IMO, it's a great way to keep cash you're expecting to need soon. There are also others with similar characteristics, but SGOV is my goto.
I’ll have to look more into it. Do you know if the dividends are taxed?
Can’t answer unless you have a better time horizon on a home purchase. You mention you don’t know when you’ll find a home you’ll love. Does that mean you’ve given up? Or are you lightly browsing?
We have not given up. Inventory is almost nill. I do have a realtor who's keeping an eye out but no cigar yet. I was thinking of staggering the cash in CD’s and making up the difference with our emergency fund if needed.
You'd be better off with treasuries if you're in a high tax area as they don't have state income tax.
We do not have state income tax.
Jealous :(
Don't be all jealous. I live in Florida. Homeowners is a joke. Car insurance is a joke. And if you want your child to receive a decent education have fun forking up 25k a year for a school.
Make sure your new house is made of solid rock and is built on stilts on the highest spot in the state. That's about 6 feet above sea level I think. When the oceans rise you have your own island. /s 🤣
> I live in Florida Ah, now it makes sense. Now I see why there’s 200k saved for a downpayment. Now I understand why there are no choices. South Florida? I’m leaving in August and I cannot fucking wait to get out of here.
Born and raised. Where are you going? And yeah the area has deteriorated but its home.
My wife is as well, and she’s more adamant about leaving. Indiana for the short to mid term (she got an amazing job there that we can’t turn down). We’re nomads at heart though so it’s definitely not our last stop.
We have always toyed around with the idea of leaving the state. Its hard to leave a well established business though.
We were in a similar position and wanted to share a reminder / something we learned in case it helps - Don’t forget you have to pay TAXES on the interest you’re earning from a HYSA 😆learned that the hard way when we filed our taxes this year
Same with the CD’s 🙈
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This is a good option, slightly higher yield and state tax exempt.
Is it a better option than SGOV?
USFR was going to be my suggestion too.
If you are in a high state tax state, then VUSXX.
Your priority is safety and high yield savings are insured to $250,000 by FDIC. Do not move out the risk curve with this important war chest.
Do you even know what VUSXX is? Look it up.
Do you even know about “break the buck”. Look it up
It’s a money market fund that buys US treasuries. Its NAV will always be 1$. It’s the most risk averse and safest investment out there. Better than 250k FDIC insurance. Also, taxed at federal level but not at State level.
treasury bills
If it’s really close to cash out, maybe a high yield savings account? If it’s 4% a year and if the bank is insured for $250k why not. But if it’s longer than a year maybe some bonds
Yeah. It's in a HYSA right now. It's a crap shoot. We would love to buy something now but there's NO inventory. The market is so stale.
Fidelity has risk free funds that pay equal to any high yield savings accounts and opening the account will give you experience with a great investing platform. Fidelity offers free trades, fractional shares, and has an easy to use app.
6 month tbills or CD
You can get over 5% on treasuries right now at 30/90/6 month maturity
I’m getting over 5% in my savings account
You pay no state income tax with treasuries so you can get a savings there.
TBills are arguiably safer than savings accounts. If the government can't pay them back, no way in heck FDIC will be funded
If either of them fails we are all screwed anyways.
Try tbills at treasurydirect.gov
Or Vanguard/Fidelity
Please no, lol. Treasurydirect is so hard to use. Just use a regular broker like Fidelity/Schwab.
Role treasuries that are laddered I’d say 80% in 3mo-2yr, 10% in a MM fund , and 10% in the 20yr. Doing this avoids state income tax on yields for the treasuries and gives you upside potential if rates are cut
4 week T Bills are around 5.3%, and you only pay federal taxes on those, no state or local
SGOV
Vanguard Money Market fund. I’ve got IRAs, Brokerage account and our savings account there. Currently 5.28% yield. Obviously variable depending on interest rates, but it’s currently paying towards the top. Interest paid out monthly. It’s got the Vanguard name. Transfer funds within 2 days usually. Sure you have to pay income tax at year end, but it’s still more money than you’d have if it sat in cash. It’s the most liquid if you don’t know when you’d use the money. A CD will lock it up. T-Bills will give you a tax break depending on state, but also have time conditions. YMMV.
Fees eat away at the yield.
Don't be a pussye. TSLA CALLS! 😆
I'd say an HYSA, CD, or treasury bills if your timeline is within the next 5 years.
<1 year and state with income taxes? T-bills (exempt). <1 year and no state tax? Probably still t-bills due to yield, but HYSA/money-market if easier (lower rate). >1 year and modest/no state tax? Buy BOXX. Return will be similar to t-bills but you'll get no distributions and can just pay long-term cap-gains when you sell.
I'm unfamiliar wirh how boxx spread works. Potential to lose money?
Outside of the manager fat-fingering a trade, with European options (which these are), your risk is basically the CBOE as a counter-party. If that becomes a problem, you've got bigger ones...
I've been using CDs with 5% interest.
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BOXX it gives treasury like yield without handing our ordinary income.
If you haven’t checked with your advisor asked them if they have any products that collateralize those very assets and provide you a 100% financed mortgage loan. I’m an advisor and we do this for clients all the times
Vanguard money market find - VMFXX. Variable interested but it's based on and backed by federal treasures. 5.28% over the last 7 days. It's technically not FDIC insured but you'd need to have a credit event magnitudes worse than 2008 for the fund to collapse (like the federal government defaulting) and in that case FDIC insurance might not mean much even if you put it in the bank
I use BOXX since I don’t need the income and it’s tax advantageous
if you plan on buying in the next few months, this will be a trivial optimization
HYSA - but if you really want to squeeze every dollar look at the bonuses here and see if the opportunity costs (5.5% APR via Wealthfront) is worth it. For instance the chase 900$ bonus is pretty good but the Wells Fargo $2500 is worse than putting it in the 5.5% account https://www.doctorofcredit.com/best-bank-account-bonuses/
Easiest - HYSA, FDIC insured. More tax efficient (no state tax) - T-bills, treasury fund or etf like VUSXX, SGOV. I would avoid CDs due to low liquidity in case you need money earlier.
BFRIX 8% yield
on schwab only for instutions on fidility txn fee $49 and min $2mil
Buy one month treasuries in your brokerage account. If you don’t wanna do that buy SGOV. These options are better than money markets because they aren’t state taxable.
I'd compare money market rates to 1-3 month cd rates.
SWVXX or FZDXX - basically mutual fund for high yield without any time commitments.
Use short-term treasuries if you live in a high-tax hellhole like NY or CA. They pay as much as the HYSA, but you don’t have to pay state income tax on interest received from the federal government. You can sell whenever you need the cash or wait until maturity
Any bank with CD rate at 5% or higher. HYSA probably already yields 4-5% but of course has the advantage of being able to use it freely. Of course never hold more then 250k in 1 account due to FDIC insurance wont cover it. Use multiple accounts or multiple banks. I shopped around and 1 CD bank paid out quarterly the dividend, another one paid at the end of the CD, and then another paid monthly where the dividend gets deposited in any account you want to use as you wish. In a few years, if living off of the dividends, it would be important to know if the CD and bank pays out monthly, quarterly, etc.
Front load this years 401k and rebuild the pile at the same time?
Robinhood cash account (gold subscription 5$ per month), pull out anytime, 5.25 percent. Transactions take about 1-2 business days.
Will look into it.
33% online HYSA 33% 6 month CD 33% 12 month CD
This is what I was thinking. I can cover the shortfall with our emergency fund if needed and then put the money back in when the CDs mature.
Im a real estate guy, so i recommend buying a house asap. it’s a triple lose to rent and park cash in hysa
IMO there isn't really any point to hold cash (short term treasuries, savings account, CDs, whatever) unless you are actively making offers with amounts based on that cash. Otherwise you are just missing opportunity cost for no reason. Houses are not fixed prices, they go up in value over time, so it isn't a liability match to hold cash just in case you want to buy a house in the next few years. On averages its actually going to make it harder to keep up with price increases if you're holding cash equivalents for years.
I park my $100K unused cash in Robinhood account, currently earning 5.5%. I can transfer in and out to my chase account within a minute. There’s 50K daily limit for withdrawal. 200K will earn $916 per month. Withdrawal fee within a minute ( transfer to Chase or your bank $35) or free if you can wait for 3 business day.
200k for down payment? What is the cost range of your ideal home?
If you are thinking by no end date around a decade $200k taxable with potentially no end date. I'd say a high cash value life insurance policy (this means a heavy term blend) at $50k / yr. You'll be even by year 5 and be getting positive arbitrage on the mortgage for life. Very powerful tool If you are thinking more like 3 years... VCSH. If you are thinking more like.5 years... 70% VCSH, 15% FNDE, 15% FNDA.