Parking equity for 1 year after sale of home (rate, deposit, Florida)

[Mikala43]

If you sell your house and do not plan on buying for a year or two where is the best place to put that money?

If the amount matters I can add that.

[Moonwalkr]

If you want the full amount back then stick it in a money market fund or online savings account, they yield up to 2%.

[randomparent]

When we needed to do the same thing a few years ago, we put the money into a jumbo CD.

[Florida2014]

I would not put it into anything that would incur penalties for early withdrawal, such as a CD. You just NEVER know if "life" will create a situation in which you must tap into that money.

Money market fund is the way to go here. Safe, liquid, no hassle and you'll earn a little interest in the 1-2 years.

[k7baixo]

Send it to me:

Tommy Flanagan
Pathological Liars Association
1 BS Way
Washington DC

Yeah, that's the ticket!

[semispherical]

Originally Posted by Florida2014

I would not put it into anything that would incur penalties for early withdrawal, such as a CD. You just NEVER know if "life" will create a situation in which you must tap into that money.

Money market fund is the way to go here. Safe, liquid, no hassle and you'll earn a little interest in the 1-2 years.

I put my proceeds into a ladder of $25K CDs, 1 year each, maturing at 3 month intervals and kept another $25K in a money market fund. That way if I need to pull out cash for an earnest money deposit I can do it right away from the money market. Even if you need to sell the CDs before the maturity date you won't take too much of a hit, and in the meantime they are earning more than the banks pay.

I wish there was a safe, liquid way to earn more interest, but this seems like one of those "pick any two" situations.

[rjm1cc]

CD. Probably several. May need a deposit and latter on the closing. The penality for cashing out is probably offset by the money you will earn but I would look for one with a minimal penality.

You can also buy into a bond fund that has maturity dates for the bonds and liquidates at maturity.

Also CD's traded on the market.

You will need a stock broker for the last two items. Difference in earnings may not be worth the work so an online bank's CD is probably the way to go.

[Mikala43]

So far I think the money market is the way to go, that way if we DO see a house we want to buy, say at the 6 month mark, we can withdraw the money without penalty.

I was/am concerned about the housing market increasing in value at a higher rate than the return on the "parked" money.

I guess a little more info.... we are moving from Hawaii to the mainland and pretty much know the area we want to settle.

We would like to do the whole RV tour the states thing for awhile.

I suppose if home values are headed up at the time we would buy, and do the RV thing, as it would make more sense financially... I think.

If the housing market is flat, or going down, I wouldn't feel the same urgency to purchase.

I think that makes sense.

[JONOV]

Originally Posted by Mikala43

So far I think the money market is the way to go, that way if we DO see a house we want to buy, say at the 6 month mark, we can withdraw the money without penalty.

I was/am concerned about the housing market increasing in value at a higher rate than the return on the "parked" money.

I guess a little more info.... we are moving from Hawaii to the mainland and pretty much know the area we want to settle.

We would like to do the whole RV tour the states thing for awhile.

I suppose if home values are headed up at the time we would buy, and do the RV thing, as it would make more sense financially... I think.

If the housing market is flat, or going down, I wouldn't feel the same urgency to purchase.

I think that makes sense.

That's a valid concern, but in the course of a year, its unlikely to outstrip you of your purchasing ability, unless your buying at the tippy-top of your budget already.

[Mikala43]

No, we won't be purchasing at the top of our budget.

I just like to be as wise as possible in these cases.