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Citbank and American Express are FDIC insured and liquid access. There is no reason to invest in a cd if the rates aren't better than those savings account
Since it was an emergency fund I wanted more liquid access. Depositing the money into a 12 month CD up front would mean I couldn't access it (at least not penalty free) for a year.
I have half of my fund in a Discoverbank regular online savings at .85% . The other half is laddered - started with a 1 yr, 2 yr, 3 yr, 4 yr, and 5 yr.
They're all at 5 years now, but 1 matures every year.
Here's their current rates ...
I have half of my fund in a Discoverbank regular online savings at .85% . The other half is laddered - started with a 1 yr, 2 yr, 3 yr, 4 yr, and 5 yr.
They're all at 5 years now, but 1 matures every year.
Here's their current rates ... Attachment 133700
Considering a 5 year outlook is considered "long term" in investing, is there any reason why you went with the CD at 1.9% instead of a stock market index that would have netted you 7-8% (historically)?
Is it a matter of 1.9% "in hand" versus chasing 7-8% "in the bush" (to use the bird analogy).
I second the high yield savings. American Express savings is at 85 bps, citbank 90-95bps
If your CDs are less than that don't buy them
Agreed. .71% is too low to bother with a CD, especially multiple CDs. The juice isn't worth the squeeze. I utilize AmEx MM for our emergency fund. It's bounced between .8 and .95 since we have used it.
At these interest rates, is it a serious question?
Why lock up your money with these joke interest rates? Just leave it in a high yield savings account until rates go back to more reasonable levels then consider CDs.
My main physical bank has interest rates at .01% for savings and .06% for CDs, so the .71% at USAA sounded amazing. I was not aware of these online banks (and to be honest, would have been skeptical of the advertised rates) before posting here. Had I known before posting about the other options, it would have been a no brainer. Right now, my only decision is which of the banks to go with, especially since I don't have prior experience with any of them.
Originally Posted by Gandalara
I have half of my fund in a Discoverbank regular online savings at .85% . The other half is laddered - started with a 1 yr, 2 yr, 3 yr, 4 yr, and 5 yr.
They're all at 5 years now, but 1 matures every year.
Here's their current rates ... Attachment 133700
Quote:
Originally Posted by broadbill
Considering a 5 year outlook is considered "long term" in investing, is there any reason why you went with the CD at 1.9% instead of a stock market index that would have netted you 7-8% (historically)?
Is it a matter of 1.9% "in hand" versus chasing 7-8% "in the bush" (to use the bird analogy).
Thanks!
I have plenty in my retirement and taxable brokerage accounts that are earning very nicely.
The cash - kept at about 5% of my net worth - is also there for use if the Markets takes a dive and I want to buy. I can grab the regular savings at any time and the CD's remain.
I like available cash without having to sell, I guess the main reason is that makes me feel safe and secure
My main physical bank has interest rates at .01% for savings and .06% for CDs, so the .71% at USAA sounded amazing. I was not aware of these online banks (and to be honest, would have been skeptical of the advertised rates) before posting here. Had I known before posting about the other options, it would have been a no brainer. Right now, my only decision is which of the banks to go with, especially since I don't have prior experience with any of them.
The advertised rates are genuine. Online banks are heavily regulated, the same as brick and mortar banks. They can offer higher rates because they don't have the overhead of all those physical buildings.
You open a savings account, link it to your existing checking account, and transfer money back and forth in that way. Some will also give you a debit card if you want. Transfers to and from your checking account do take up to 3 business days, so keep that in mind.
Over the years, I have had accounts with ING (now Capital One 360), Ally, HSBC, Tiaa-Cref, and now Barclay's. I've had no complaint with any of them. There are other online banks out there, too. Pick one.
Currently, I am earning .90% at Barclay's in a savings account. Nothing to get excited about, but far better than the .01% both my BAM bank and credit union are paying. It's a great place to park your cash.
I have been with Ally Bank since the beginning of this year & it is very smooth, though I haven' t had to withdraw yet. I have my near term money in my local bank for bills & typical expenses & my emergency fund in Ally.
I picked Ally over Capital One & the others because the dividend rate then was very similar but Ally was the only one that compounded daily.
I have plenty in my retirement and taxable brokerage accounts that are earning very nicely.
The cash - kept at about 5% of my net worth - is also there for use if the Markets takes a dive and I want to buy. I can grab the regular savings at any time and the CD's remain.
I like available cash without having to sell, I guess the main reason is that makes me feel safe and secure
I can agree. Right now, about 80% of my (extremely limited) money is in the stock market, and when I had a minor emergency last year I had no choice but to sell one of my holdings for access to some quick cash.
I'm thinking I'll try to set aside about $2K each month, half being liquid for an emergency fund (what I was originally planning on putting in CDs but am now leaning heavily towards online savings account), half of the remaining going into a Roth IRA (probably mostly ETFs for the time being) and the remaining being put aside for luxury purchases: vacation, car purchase, computer upgrades, etc. Once I have about 5 months worth of expenses set aside in my emergency fund I'll probably put more into retirement, ideally hitting the Roth limits each year with excess going either into my main brokerage account or my luxury purchase account.
I should probably talk with an accountant to figure out a retirement plan even though I'm still young. I tried some online calculators and each one gave me a different target amount to save.
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