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Old 08-02-2018, 02:19 PM
 
432 posts, read 178,959 times
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Quote:
Originally Posted by Grizzly Addams View Post
I really appreciate all of these responses. Has anyone ever dealt with Ally Bank?

It appears that their APY is 1.45% which seems too good to be true.
That's actual low in today's rising rate environment. I have a Fidelity prime money market that pays 1.96%. I even have a work-a-day cash sweep account that pays 1.61%.
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Old 08-02-2018, 03:08 PM
 
Location: 5,400 feet
2,201 posts, read 2,273,568 times
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Quote:
Originally Posted by Grizzly Addams View Post
I really appreciate all of these responses. Has anyone ever dealt with Ally Bank?

It appears that their APY is 1.45% which seems too good to be true.

I've had CDs with lly for awhile. This is their current offer.
https://www.ally.com/bank/high-yield-cd/
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Old 08-02-2018, 03:46 PM
 
3,460 posts, read 1,957,879 times
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Quote:
Originally Posted by Grizzly Addams View Post
I'm saving for a down payment on a house. I'm thinking roughly 2 years.
Don't invest the money in anything other than FDIC CDs because this is money you really need and in a short-term. Doesn't matter what bank, as long as it is FDIC insured. Since you can't time interest rates for CDs, it's best in your situation to get them in cascading CDs. Take the $35K and divide it into a CDs with different terms. This way you can have one coming due every 3 or 6 months.
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Old 08-02-2018, 04:50 PM
 
Location: Northern panhandle WV
2,257 posts, read 1,748,867 times
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It does matter what bank. Wells Fargo is a BAD bank, get your money out of it. whether you put it in a cash account with Fidelity or a Local savings bank. Wells Fargo just reached a huge settlement deal with the Government over shady practices.
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Old 08-03-2018, 12:19 AM
 
4,784 posts, read 4,669,685 times
Reputation: 5521
Quote:
Originally Posted by Grizzly Addams View Post
I really appreciate all of these responses. Has anyone ever dealt with Ally Bank?

It appears that their APY is 1.45% which seems too good to be true.

There are a lot of online banks with a 1.8-1.9% right now for savings accounts. Mine is.
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Old 08-03-2018, 08:15 PM
 
Location: Silicon Valley
2,760 posts, read 1,214,346 times
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Quote:
Originally Posted by Grizzly Addams View Post
I really appreciate the responses.

By restricted do you mean can't withdraw without paying a penalty? If so then the money tied up in my companies stock is not restricted once purchased. Last purchasing period I sold it right away and transferred it to my checking account (regretting this decision as the stock has done really well since).

I'm just wondering if I will yield more returns if my money sits in the brokerage account vs my Wells Fargo savings account (not to mention the opportunity I have to invest that money)
I'm not sure on the employee account. It really depends. You'd have to talk with someone at your workplace tbh. Many plans are restricted. It sounds like yours may not be.

The thing with retail banks is that they can accept smaller bits of money to buy larger offerings. If I offer everyone 1.5% here, and I get 10 people that want a year CD at that rate, I can turn around and get a national CD today for 2.35%. I've got .85% of profit for getting the money together. For the people with $1,000, that's good too, because they get something instead of nothing. The problem at the middle tier is if you have 19 people say ok to 1.5% and you can only buy in $10,000 increments.

So all I'm saying is that you can get a better CD rate by going through a broker than you can a retail bank. Doesn't matter if they're "good" or not. There market is getting smaller investments.

Where some are crying foul, with good reason, is that there are other options once you are there. You could let it sit in you default Money Market....doing nothing got me 1.68 last month. Some of those are protected, some aren't, you need to check with your broker. To me there's no risk there save if the banks stop lending to one another. Even then...you still need your money in a bank. Plus you have access to your cash whenever you need it.

If you're for sure on a 2 year period, you could also buy some high quality bonds. HSBC has a 2 year that's yielding 3.11% Of course, there's risk there, but it's much safer than a stock dividend. HSBC isn't going to go bankrupt in 2 years. If they do, we're all toast anyway. So the bond is going to pay out. The danger for bond holders is inflation. If you're paid 3.11%, and 25% of that is going to tax, did you beat inflation? The answer is generally....by a tiny bit. Some people then conclude it's silly, but, if you have your money in a retail CD for the same timeframe, you probably won't match inflation. Hence your dollars are there in both cases, but the buying power is reduced.

Bonds go up and down based upon this. However, if you buy something and hold it to maturity....you really don't have to worry about that. That's what bond traders do. They're a lot more in the know than you or me.

So your year 1 breaks down like this:

Go to Ally bank, get their 1.45% - you're familiar, they're happy, you're happy - $580 earned
Go to Fidelity or Schwab or someone and they get you in your core (cash) position and you never trade - ~$664 (it will vary)
Go to Fidelity or Schwab and buy a national CD - $940
Go to Fidelity or Schwab and buy a 2 year bond - $1,252

No wrong moves. Just offering info.

Your bigger danger is if inflation starts moving to 5% or so, you lose buying power....albeit less than if you were in a retail CD for the same timeframe. The bond professionals play a whole different game. If you're just a buy and hold and stick with solvent companies...you'll get your return.
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Old 08-03-2018, 09:08 PM
 
2,799 posts, read 2,474,983 times
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Quote:
Originally Posted by stockwiz View Post
One of the safer, higher yielding oil/natural gas trusts is Cross Timbers, ticker symbol CRT. You could also buy a safer, high yielding stock like AT&T or a blue chip index fund. I wouldn't get too aggressive here because I think the market is overvalued.

The yields on short term bonds are doing alright at the moment as well.. you could simply buy some savings bonds or other government issued notes.

U.S. 2 Year Treasury Note, BX:TMUBMUSD02Y Quick Chart - (TPI) BX:TMUBMUSD02Y, U.S. 2 Year Treasury Note Stock Price - BigCharts.com

You could also try municipal bonds which are federal tax exempt.

Nuveen Municipal Credit Income Fund, NZF Quick Chart - (NYSE) NZF, Nuveen Municipal Credit Income Fund Stock Price - BigCharts.com
Your name is stockwiz and you are recommending AT&T?? Is this some kind of a joke? AT&T will surely be lower when he goes to access this money.
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Old 08-03-2018, 09:13 PM
 
2,799 posts, read 2,474,983 times
Reputation: 5077
Quote:
Originally Posted by Grizzly Addams View Post
I really appreciate all of these responses. Has anyone ever dealt with Ally Bank?

It appears that their APY is 1.45% which seems too good to be true.
I have had a checking account with Ally for the past two years and I highly recommend them.

ANY FDIC insured bank is better than Wells Fargo, that is unless you like greedy Wells Fargo employees taking money out of your account and opening another account in your name without your permission and charging you fees, all so that they can accumulate some brownie points for their career at Wells. I would give my money to Bernie Madoff before I put it into Wells.
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Old 08-08-2018, 07:03 AM
 
Location: Twin Cities (StP)
3,007 posts, read 1,709,643 times
Reputation: 2293
Quote:
Originally Posted by eastcoastguyz View Post
Don't invest the money in anything other than FDIC CDs because this is money you really need and in a short-term. Doesn't matter what bank, as long as it is FDIC insured. Since you can't time interest rates for CDs, it's best in your situation to get them in cascading CDs. Take the $35K and divide it into a CDs with different terms. This way you can have one coming due every 3 or 6 months.
I should probably clarify this.

The money was originally for a down payment on house, however, this was before I started dating my girlfriend. Things have gotten serious between us and the odds of getting married are pretty good, so that is where I have come up with the ~2 year estimate. The thing is, she also makes pretty good money and has been saving as well, so this 35k I currently have isn't the only money that will be available for a future down payment.

In this case, would you invest a portion of that (or maybe transfer enough to max out my IRA for the year)? While continuing to save a portion of my paycheck to "regrow" my original down payment account over the next ~2 years.
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Old 08-08-2018, 08:56 AM
 
Location: The Triad (NC)
26,865 posts, read 57,900,981 times
Reputation: 29286
Quote:
Originally Posted by Grizzly Addams View Post
In this case, would you invest a portion of that (or maybe transfer enough to max out my IRA for the year)?
No to either notion.
You don't invest money that is expected to be needed "soon"
However you should probably be upping the 401K and IRA contributions.

Quote:
While continuing to save a portion of my paycheck...
Forever and ever and ever.

Start with a plan and a budget... eg 15% of gross into the Save/Invest column.
Most of that into the PRE-TAX choices and the rest into after tax choices.
Then stick to it and choose to live off what is left over like the 23% of net for Housing (-or less)
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