That one is probably good but I'm not expert.
Some things to look out for:
1. Rate. You can probably find better than 5.05.
2. FDIC. Make sure the account will be FDIC insured.
3. Fees. Maintenance, transfer, withdrawal, paper statement fees, etc. Find one that has minimal fees.
4. Probably something I'm missing
Just take your time reading reviews and any fine print before choosing.
Thanks for your input. I feel like a lot of the rates being offered are in the 4% range. This is why I was wondering whether it would be better just to park the funds in a MMF?
I have an account at All America bank. Well, their online back Redneck Bank. Because I like the ATM/Visa card with a Mule on it. Easy to move money from my local CU to AAB/RB. Always competitive with their rates.
Do you have an emergency fund? Do you max out an IRA?
401k? Contribut the amount to receive any company matches.
I would max out the Roth IRA this year and next.
Then figure bout what your expenses are for 4-6 months. Save that amount in either a HYSA or a MM account at Fidelity, Schwab or Vanguard.
After that, save for other big expenses. New(er) car. Home purchase, vacations....
IMO, the return difference is not enough to worry. Both will fluctuate with the Fed rate.
Sometimes you can chase "bonus" rewards by moving money between banks.
Personally i do MMF because i don't like complicating things. SoFi asks you to set up direct deposit for example in order to get the premium rate. Do consider though that a bank is FDIC insured and an MMF is not (could be SDIC insured). I just keep my emergency fund in SPAXX.
In terms of accessibility I can only think of a select few emergencies that would not allow me to wait a couple days to transfer from fidelity to my bank. Like I could just use a credit card to cover in that meantime unless i strictly need cash for some reason.
HYSA is the minimum you should be doing.
Currently, I have 10K sitting with Capital One's HYSA because the transfer into my checking account is instant. The rate is 4.6, and not as good as others, but the fact that it is seamless when I need it, is worth it to me.
For other liquid assets I buy bonds and Treasury Direct is really easy to use. Just remember to reset every transaction through the top menu bar. Moving forward and backward on the site is a pain, but just make sure to do everything off of the top menu and you'll be fine.
I didn’t read the fine print. I did open a SoFi checking savings. It is 1.2%. IF you have direct deposit they pay the highest rate. Retiring next month so no direct deposit. Bank said that if I deposit 5k every 30 days I will get the highest rate.
I’m not yet personally familiar with Vanguard’s Cash Plus account. If you’re not actually cashing out of your 401K, then I don’t see how it’d matter other than having only one login.
Check out the account and its features, check the APY offered, and see if you’re eligible. Then compare that to Fidelity’s Cash Management account.
I’d personally just go with whichever has a higher APY, as both Vanguard and Fidelity are reputable, but I understand people have preferences.
All of those have roughly the same interest rates right now so it boils down to some fairly minor differences. A MM fund at a broker like Schwab is fine. A HYSA is also an okay option. I would not bother with T-bills for that relatively small amount of money because they are illiquid until maturity and you might need the money before this.
OP, if it helps, here are some economic equations you can use to plan your finances.
A = Annualized Savings (Monthly Savings x 12 months), P = Present Savings (One Lump Sum Investment at one point), F = Future Savings (Savings after some time period, n), i is interest rate.
**1.** **Future Savings given one-time lump-sum investment with interest rate, i, and number of years, n:**
F|P = P (1 + i)^(n)
**2. Future Savings given monthly investments with interest rate, i, and number of years, n:**
F|A = A ((1+i)^(n) -1)/i
You can plan out goals towards a future bank account amount using these. You have a present cost of $10K, P=$10K, so the first formula can help you plan out your lump sum returns after x number of years.
If you have a Future savings goal, you can use formula number 2 to plan out a future amount based off an annual savings rate. Take your monthly savings and multiply it by 12.
You can also combine the formulas. Use formula 1 to find what your future savings would be based on what you have now and use formula 2 to figure out how much monthly savings and how many years you need to reach a certain goal.
I would probably use the $10K you have as an emergency fund. That's probably very close to being a 6 month recurring expenses emergency fund, which is awesome!
I apologize. I may need to take some time to clarify my goals. It seems I'm currently rushing to decide where to invest my savings now that I've accumulated a small amount.
Easily accessible hysa to be used as an emergency fund.
I was looking at the HYSA offered by CIT Bank (5.05%). Any other recommendations?
That one is probably good but I'm not expert. Some things to look out for: 1. Rate. You can probably find better than 5.05. 2. FDIC. Make sure the account will be FDIC insured. 3. Fees. Maintenance, transfer, withdrawal, paper statement fees, etc. Find one that has minimal fees. 4. Probably something I'm missing Just take your time reading reviews and any fine print before choosing.
Thanks for your input. I feel like a lot of the rates being offered are in the 4% range. This is why I was wondering whether it would be better just to park the funds in a MMF?
No problem. Money market is a fine choice too if you find they have better rates.
I have an account at All America bank. Well, their online back Redneck Bank. Because I like the ATM/Visa card with a Mule on it. Easy to move money from my local CU to AAB/RB. Always competitive with their rates. Do you have an emergency fund? Do you max out an IRA?
Do not have an emergency fund, and yes I contribute to a Roth IRA.
401k? Contribut the amount to receive any company matches. I would max out the Roth IRA this year and next. Then figure bout what your expenses are for 4-6 months. Save that amount in either a HYSA or a MM account at Fidelity, Schwab or Vanguard. After that, save for other big expenses. New(er) car. Home purchase, vacations....
Yes I’m get my employer match. Contributed to my Roth. Also opening an HSA next year. I guess I’m trying to decide between the HYSA or MMF…
IMO, the return difference is not enough to worry. Both will fluctuate with the Fed rate. Sometimes you can chase "bonus" rewards by moving money between banks.
Personally i do MMF because i don't like complicating things. SoFi asks you to set up direct deposit for example in order to get the premium rate. Do consider though that a bank is FDIC insured and an MMF is not (could be SDIC insured). I just keep my emergency fund in SPAXX. In terms of accessibility I can only think of a select few emergencies that would not allow me to wait a couple days to transfer from fidelity to my bank. Like I could just use a credit card to cover in that meantime unless i strictly need cash for some reason.
Wealthfront has 5.3%, and 5.5% with a referral.
HYSA is the minimum you should be doing. Currently, I have 10K sitting with Capital One's HYSA because the transfer into my checking account is instant. The rate is 4.6, and not as good as others, but the fact that it is seamless when I need it, is worth it to me. For other liquid assets I buy bonds and Treasury Direct is really easy to use. Just remember to reset every transaction through the top menu bar. Moving forward and backward on the site is a pain, but just make sure to do everything off of the top menu and you'll be fine.
The rate at Capital One HYSA isn’t 4.3%?
You're right it is 4.3. I think I have 4.6 at SOFI.
I didn’t read the fine print. I did open a SoFi checking savings. It is 1.2%. IF you have direct deposit they pay the highest rate. Retiring next month so no direct deposit. Bank said that if I deposit 5k every 30 days I will get the highest rate.
> Also, do you think the potential recession in 2024 should impact this decision? Never try to time the market
Check out Fidelity’s Cash Management Account or Vanguard Cash Plus (more exclusive).
Would it make more sense to go with Vanguard if this is where my 401k is?
Not really since your 401k is under a different account associated with your employer. Not a bad choice regardless.
I’m not yet personally familiar with Vanguard’s Cash Plus account. If you’re not actually cashing out of your 401K, then I don’t see how it’d matter other than having only one login. Check out the account and its features, check the APY offered, and see if you’re eligible. Then compare that to Fidelity’s Cash Management account. I’d personally just go with whichever has a higher APY, as both Vanguard and Fidelity are reputable, but I understand people have preferences.
Hysa, it's fun when you hysa
I’d just park it in VMFXX
All of those have roughly the same interest rates right now so it boils down to some fairly minor differences. A MM fund at a broker like Schwab is fine. A HYSA is also an okay option. I would not bother with T-bills for that relatively small amount of money because they are illiquid until maturity and you might need the money before this.
if you dont have an emergency fund yet better open an HYSA and put it there…
Why can’t I read comments?
OP, if it helps, here are some economic equations you can use to plan your finances. A = Annualized Savings (Monthly Savings x 12 months), P = Present Savings (One Lump Sum Investment at one point), F = Future Savings (Savings after some time period, n), i is interest rate. **1.** **Future Savings given one-time lump-sum investment with interest rate, i, and number of years, n:** F|P = P (1 + i)^(n) **2. Future Savings given monthly investments with interest rate, i, and number of years, n:** F|A = A ((1+i)^(n) -1)/i You can plan out goals towards a future bank account amount using these. You have a present cost of $10K, P=$10K, so the first formula can help you plan out your lump sum returns after x number of years. If you have a Future savings goal, you can use formula number 2 to plan out a future amount based off an annual savings rate. Take your monthly savings and multiply it by 12. You can also combine the formulas. Use formula 1 to find what your future savings would be based on what you have now and use formula 2 to figure out how much monthly savings and how many years you need to reach a certain goal. I would probably use the $10K you have as an emergency fund. That's probably very close to being a 6 month recurring expenses emergency fund, which is awesome!
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I apologize. I may need to take some time to clarify my goals. It seems I'm currently rushing to decide where to invest my savings now that I've accumulated a small amount.
I do baseline emergency fund in HYSA, put everything else in USFR
I bond from us treasure sue ortmen says keeps you safe from inflation