Short term stash for house proceeds

[kyounge1956]

I don't want to count my chickens before they hatch, but I think I've sold my house. The first buyer never responded to my counter offer, but today I got a second offer, all cash, contingent on inspection, and accepted it. So unless the inspector turns up something unexpected, looks like this is a go. After paying the balance of the existing loan I will have about $100K with which to buy a house to live in after retirement.

I was so scared it would sit on the market for months and months! Even better, to the best of my knowledge, there's no capital gains tax due.

I'm just wondering what's a good place to park this money until I'm ready to buy. I had my eye on a nice little house but someone beat me to it, and I'm in no hurry to buy because I'll most likely be in treatment until next spring. The only idea that occurs to me immediately is the B of A's "break any time after a week" CD's. They don't pay much interest, but the money is available almost at a moment's notice if just the right house comes on the market and I need to pounce. Any other ideas?

 

[Onward]

I keep short-term money in VBISX.

 

[kyounge1956]

I keep short-term money in VBISX.

For you, is "short term" the money you expect to need any time between a few weeks and a year from now, or money you'll need in a year or two?

 

[brewer12345]

A high yield online savings account would be perfect.

 

[Gotadimple]

A high yield online savings account would be perfect.

+1

 

[FinanceDude]

ING Orange Direct or Ally..........

 

[W2R]

Congratulations on getting an offer that you accepted! I am so happy for you, especially given the housing market in many locations during the past few years.

I agree with Brewer12345 and the others. I'd just put it in a bank for now, since I assume that you plan to buy within a year or two.

 

[Onward]

For you, is "short term" the money you expect to need any time between a few weeks and a year from now, or money you'll need in a year or two?

Less than a year. Once per year I withdraw from the portfolio and put the proceeds in VBISX. Then I withdraw from that throughout the year for spending needs.

 

[meekie]

I'd keep enough for the downpayment in a high yield savings (which is what you'd need immediately), and the rest in the best CD that would have a reasonable early withdrawal fee. I think you should wait till after treatment is over and you've recovered to start really looking for a place, so finding a good CD would be worth it.

Congrats on selling your place!!

 

[pb4uski]

A high yield online savings account would be perfect.

TIAA Direct currently pays 1.25% APR on online savings. Best that I know of and FDIC insured.

 

[Alan]

Less than a year. Once per year I withdraw from the portfolio and put the proceeds in VBISX. Then I withdraw from that throughout the year for spending needs.

I do similar. During the year the quarterly dividends go into VBISX and the following year I draw out a couple of times into an on-line savings account.

 

[WilliamG]

Less than a year. Once per year I withdraw from the portfolio and put the proceeds in VBISX. Then I withdraw from that throughout the year for spending needs.

Do you anticipate changing this approach when interest rates begin a rise; i.e, use a money market instead?

 

[Alan]

I do similar. During the year the quarterly dividends go into VBISX and the following year I draw out a couple of times into an on-line savings account.

Do you anticipate changing this approach when interest rates begin a rise; i.e, use a money market instead?

If interest rates were rising then I would consider other options, e.g. a money market account.

 

[Katsmeow]

I keep most of my mine in VFSUX (short term investment grade fund, admiral shares). This is money that I expect to spend this year. I keep about 2-3 months of expenses in my bank account (some in savings, some in checking).

 

[Onward]

I keep most of my mine in VFSUX (short term investment grade fund, admiral shares)

Does your balance often drop below $10,000? If so, what happens to your admiral shares? That's the issue that's kept me from converting to admiral.

 

[brewer12345]

TIAA Direct currently pays 1.25% APR on online savings. Best that I know of and FDIC insured.

For as long as it lasts, that rate seems to beat all competitive CDs.

 

[photoguy]

Does your balance often drop below $10,000? If so, what happens to your admiral shares? That's the issue that's kept me from converting to admiral.

I thought the min for admiral (VFSUX) was 50k?

 

[braumeister]

TIAA Direct currently pays 1.25% APR on online savings. Best that I know of and FDIC insured.

Currently closed to new subscribers.

 

[kyounge1956]

offer withdrawn

Got an email from my real estate agent this afternoon, and the buyer has backed out of the offer, which was made subject to inspection. As far as I have been told, no inspector ever looked at the house. The claim is "the neighborhood is not safe enough for their daughter", but no facts were presented to support this assertion. The nature of the neighborhood was apparent when the offer was made. If they didn't like it, they should have kept looking. Anyway, I didn't accept the offer "subject to approval by buyer's parents". She is (I assume) an adult, and in control of her own finances. If she was getting the money from her parents, she should have gotten their OK before making the offer. GRRRR!

IMO this is either a plain renege (if the buyer changed her mind) or bad faith (if she made a cash offer with money she didn't have), so I told the agent if he hadn't already said he would return the earnest money, he shouldn't do so.

 

[MichaelB]

Sorry to hear that. If there was an inspection there needs to be a report. If there was ernest money there should also be a sales contract. I changed my mind is not a valid reason to return the deposit.

 

[Katsmeow]

Does your balance often drop below $10,000? If so, what happens to your admiral shares? That's the issue that's kept me from converting to admiral.

The minimum is $50k and I don't ever go below that. My understanding is that if you go below the admiral amount that Vanguard will notify you at some point to either buy back up to the minimum requirement or that you will be converted to investor shares.

 

[kyounge1956]

woohoo!! I just checked my online banking and the $$$$ from sale of my townhouse has magically appeared in my checking account.


Now to see if the little yellow housie passes inspection.....Monday's the day.

P.S. What's the FDIC limit nowadays? I'm wondering if I need to split the bucks between two banks.

 

[W2R]

woohoo!! I just checked my online banking and the $$$$ from sale of my townhouse has magically appeared in my checking account.


Now to see if the little yellow housie passes inspection.....Monday's the day.

P.S. What's the FDIC limit nowadays? I'm wondering if I need to split the bucks between two banks.

Wonderful! I am so happy for you.

(I think it is still $250K, for a single person, but good idea to check on that.)