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That is why I asked if he needed the full amount and the suggestion to park the excess in mutual funds would allow him to have access to the funds if needed down the road . But keep in mind, you take out a mortgage at 3%, it stays at 3% (assuming you don't get an adjustable rate which would be stupid right now). The mutual fund money is going to make way more than 3% in the foreseeable future, but even parking it in a good muni fund would get him more than 3% and certainly more than 1%.
Also keep in mind, buying in a HOT, HOT, HOT sellers market is a bad idea.....
I know, which is why I'm glad we're still many years from buying, but I don't know the OP's situation.
OP wants to protect his principal, that investment can (and quite simply has) lost value. Those who bought in Jul 2016 @ $70 are now sitting 14% drop in value. That would have been a loss of $60K. There are other, more stable, dividend stocks to invest in if that's the route OP should choose to go (perhaps T). There is still risk.
For a variety of personal reasons, I will probably delay buying a home for the time being. I would like to keep $50,000 set aside as an emergency fund, and then park the remainder of my money somewhere where its interest will help pay off rent. Basically, I am looking for a place to invest $410,000 where it will be safe and remain accessible.
I currently live in an area where housing inventory is basically nonexistent. If a miracle were to happen and something came on the market that I'd like to buy, I would still consider that. For this reason alone, I would prefer to have my money reasonably accessible.
It's a shame the housing market is what it is. But, in the meantime, I'd sure like to put my money somewhere where it would help offset my rent.
Thanks for any suggestions..
I hope you found a solution for your money to help offset your rent. I noticed you posted this at the beginning of the year and the market is still a Sellers and low inventory. Hopefully once school lets out in the next month or so the home inventory starts flowing. An you find the house to make your home. If you ever have any real estate questions don't hesitate to message me.
That's a difficult question to answer because it's dependent on the local housing inventory. A house could come on the market tomorrow I'd like to buy, or I could be waiting all year. I'm not exaggerating, it's that bad!
I just know it's a shame to have that kind of money in savings accounts which aren't helping me at all...
I was in this boat for several years. I left the money in savings accounts because I wanted it to be available if I needed to jump on a house. I eventually did find one.
The solution is what others have already stated: put the money into 2 or 3 FDIC-insured savings accounts. Any other move either involves too much risk to the principal, or reduces liquidity too much.
If you put the funds into a savings account such as Ally Bank currently paying 1%, make sure you put a max of $250K in each account which is the FDIC insurance limit. If you want to be liquid and safe that is the only way to go.
You can't just open multiple accounts of the same type to create more fdic coverage. Account types are consolidated by institution for aggregate fdic coverage. You can increase coverage by having multiple account types single, joint, Ira etc
You can't just open multiple accounts of the same type to create more fdic coverage. Account types are consolidated by institution for aggregate fdic coverage.
The OP could open savings accounts at several different banks to get the needed coverage.
The OP could open savings accounts at several different banks to get the needed coverage.
That is correct
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. But keep in mind, you take out a mortgage at 3%, it stays at 3% (assuming you don't get an adjustable rate which would be stupid right now). The mutual fund money is going to make way more than 3% in the foreseeable future, but even parking it in a good muni fund would get him more than 3% and certainly more than 1%.
