Where to put funds temporarily

[socaldonnan]

DH is in the process of selling family farm property in Canada to the family that's been farming it for a number of years. As he will be receiving funds by 12/31, trying to figure out where to put funds until we figure out what to do. All our investments are in Vanguard funds. Canadian taxes will be paid before funds are released to us. The proceeds will be slightly over $1 million after taxes. I'm thinking we should just let it sit in our Prime MM account for at least six months until - well until we figure out what we want to do with it. We already have CD's laddered and we do not need to live off this money. We are selling because due to Canadian laws our sons nor I cannot inherit the property. DH starting to have some health issues and feel it's time to divest. It's been in the family since 1910 - five generations. Thoughts and comments appreciated.

 

[DrRoy]

Prime MM is a good temporary place.

 

[bingybear]

If you know you won't do anything for at least 6 months, then I would look at CDs. If the rate is better than MM, then use brokered CDs from different banks (all at your broker to make it easy) so that you have all covered by FDIC.

Alternatively look at treasuries.

 

[EastWest Gal]

I’m a fan of treasuries over CDs. It’s easy to set up an account, and you can invest in vehicles that mature in as little as 4 weeks. You can set up automatic reinvestments and cancel automatic reinvestment just by logging in and making changes. With a CD, you have to act when it matures or it gets locked in again. With treasuries, it’s the opposite. Much more flexible than a CD. Interest rates are similar.

 

[VanWinkle]

Treasuries first, or Vanguard MM if you want to keep it simple.

 

[Another Reader]

Sad that you are not able to keep it in the family. Shame on the Canadian government!

Vanguard also has a treasury money market fund that is treasuries only, VUSXX. No fancy yield boosting paper like some treasury money market funds. It pays a little less than the more generic money market fund, but is the lowest risk money market fund available. One of those two funds seems appropriate for your situation.

 

[socaldonnan]

Thanks everyone hadn’t thought about looking into short-term treasuries, some brokered CD’s and perhaps leave a bit in our Prime MM.

 

[gwraigty]

I’m a fan of treasuries over CDs. It’s easy to set up an account, and you can invest in vehicles that mature in as little as 4 weeks. You can set up automatic reinvestments and cancel automatic reinvestment just by logging in and making changes. With a CD, you have to act when it matures or it gets locked in again. With treasuries, it’s the opposite. Much more flexible than a CD. Interest rates are similar.

Not with brokered CDs. With a brokerage account, you can have CDs, treasuries, etc., without having to use multiple accounts just for those.

 

[OldShooter]

I would opt for t-bills, maybe even buying some one year bills. If you decide you sell some or all, it will cost less than selling a brokered CD. The market is very liquid. And if you're like us, that 6-month decision plan will be delayed anyway.

A little farther out on the risk/reward scale are floating rate funds, which can be bought and sold as needed. We have had a chunk of cash in SAMBX for several years and have been very happy to get the approx. 4% return. Farther out yet are leveraged floating rate funds but that's too far out for us.