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Anyone use a muni ETFs as an alternative to CDs or muni bond ladders
Old 01-30-2018, 04:55 PM   #1
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Anyone use a muni ETFs as an alternative to CDs or muni bond ladders

Been sitting on some cash and have recently moved as much to CDs as I feel comfortable having out of reach.

Anyone using national muni ETFs like MUB (about 15 yr average maturity) or SUB (about 5 yrs maturity) as a substitute for muni money market or CDs, etc?

I really want to be able to get out quickly if I have to make a large purchase ...

Thanks!
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Old 01-30-2018, 07:33 PM   #2
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You're kind of apples and oranges with taxable CDs and speculation about nontaxable munis. Be sure to do the tax calculations carefully to get net return when comparing.

Re "out of reach" you could just buy t-bills in whatever maturity you like. If an opportunity for a large purchase arises, they are easily sold without much in the way of a penalty. I buy them on the auction and usually Schwab waives the usual $25 fee. I may be giving up a few basis points in yield but that is not a big deal to me. YMMV.
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Old 01-30-2018, 10:13 PM   #3
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Well, yeah - of course CDs and muni based products are different. But, if the point is to find short term yield alternatives to either MMF or MMMF or CDs, then the passively traded national muni bond ETFs might be suitable.

The core component of the post relates to whether anyone has thoughts re MUB and SUB as muni substitutes.
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Old 01-31-2018, 09:45 AM   #4
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I mostly use Vanguard Limited Term Tax Exempt. Pretty stable NAV, yield is ~1.8% after-tax right now.

We have a mix of this fund and Intermediate Term.
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