mom received settlement what to do

[Beachgrl]

Hi all!
My mom received a settlement check that is substantial. We are discussing options. She is afraid of any online banking.

She may want to use this money to purchase a condo in 3 years or so.

I'm leaning towards a CD. I'm also trying to encourage an online money market account but i'm not sure she'll go for it. Other ideas? Thankyou

 

[MrLoco]

Define what you mean by "substantial."


It matters because if she is looking to invest this money and also buy a condo in 3 years; we know how to split up the money for various investments.


If she has any debts; she may want to clean those up.


You can get 2.5%+ on brokerage money market accounts with no risk.


Would not want to tie up money in a CD. What if she wants to buy a condo sooner than 3 years?

 

[Dtail]

Show her the online FDIC statements that protect the same monies as a brick and mortar bank.
She could use Ally Bank which doesn't have the highest rates, but is well known and been around awhile.

 

[Beachgrl]

Define what you mean by "substantial."


It matters because if she is looking to invest this money and also buy a condo in 3 years; we know how to split up the money for various investments.


If she has any debts; she may want to clean those up.


You can get 2.5%+ on brokerage money market accounts with no risk.


Would not want to tie up money in a CD. What if she wants to buy a condo sooner than 3 years?

100+K

No debt.

She's not looking to invest, just get some interest and have somewhat access to it.

thanks will check the brokerage

 

[gwraigty]

Agree with both MrLoco and Dtail. I haven't had a brick and mortar bank in years. Perfectly safe and much easier to put the money in a higher yielding investment. If your mom insists on FDIC insurance, go with an online savings account, or purchase short term new issue CDs (commission-free) through a well known broker, like Fidelity or Schwab.

 

[Beachgrl]

Show her the online FDIC statements that protect the same monies as a brick and mortar bank.
She could use Ally Bank which doesn't have the highest rates, but is well known and been around awhile.

good idea!!

 

[frayne]

If all you/she wants to do is to protect the principle and earn a little interest, set up a three year CD ladder at any reputable institution, on line or brick and mortar.

 

[Beachgrl]

If all you/she wants to do is to protect the principle and earn a little interest, set up a three year CD ladder at any reputable institution, on line or brick and mortar.

i think this is her goal

 

[pb4uski]

If her primary goal is preservation of principal, I would do either an online savings account or set up a Vanguard account and buy VMMXX or see if she can catch a good CD special at a local bank.

Online banks at paying~2% and VMMXX is yielding about 2.34% currently. A 3-year CD ladder will likely be a hair above 2%.

 

[RAE]

I would put it in an online savings account at Ally. Perfectly safe, the money would be accessible at any time, and I think they are paying 2.10% right now, which is decent.

 

[Buckeye]

PenFed Credit Union is paying 2.00% on their premium online savings account up to $250,000. Minimum deposit required is $5.

Anyone can join Pentagon Federal Credit Union. I joined 7 or 8 ago by becoming a member of one of their partner organisations for a year but I can't remember which one. You can join the Air Force Association for a year, for example, for $20. PenFed explains it all on their website (PenFed.org) and they have very helpful humans you can talk to.

 

[Scrapr]

By online banking does she mean anything online?I have been helping MIL and she wants to see someone face to face.No Vanguard, no Ally,etc.The Schwaab is downtown & the Fidelity office is in the 'burbs. So pretty much stuck with credit unions. It's her money si it is what it is

 

[MarieIG]

An online, FDIC insured account with high rates. You can compare at bankrate.com.

 

[rk911]

Define what you mean by "substantial."


It matters because if she is looking to invest this money and also buy a condo in 3 years; we know how to split up the money for various investments.


If she has any debts; she may want to clean those up.


You can get 2.5%+ on brokerage money market accounts with no risk.


Would not want to tie up money in a CD. What if she wants to buy a condo sooner than 3 years?

agree with cleaning up debt but otherwise the 3-timeframe is too short and risk of volatility too great to invest in anything but a MM or CD. if the 3-yrs may shrink then a MM or shorter term CD may be a solution.

 

[Koolau]

It's been a while since I bought a CD, but in the old days, cashing one in early usually only cost the past 90-day interest payment. So a CD that nets you 1% more might well be worth a look.

Heh, heh, I don't like on-line banking either. I do have a Vanguard account, but I let my cash (what I'll spend in the next 6 months) lie in a checking account. So don't listen to me. YMMV

 

[Bamaman]

I would put it in an online savings account at Ally. Perfectly safe, the money would be accessible at any time, and I think they are paying 2.10% right now, which is decent.

Ally is paying fair rates on savings accts. (2.10%), and better on larger CD's that can be accessed early. I'd put it there.

 

[Lawrencewendall]

personal capital is advertising 2.3%