Safe Harbor for cash

[audreyh1]

I don't think there is any security more liquid than a govvie. Selling is as easy as entering the order and you will take a much smaller haircut than when selling a CD.

But the answer is to plan cash flows so you don't have to sell and to keep a little cash if necessary as insurance against selling.

What could be more liquid? An FDIC insured bank checking or savings account? No security selling necessary.

 

[OldShooter]

What could be more liquid? An FDIC insured bank checking or savings account? No security selling necessary.

Well, those are not generally considered to be securities but they certainly have a place in one's financial strategy exactly because they can be accessed immediately.

 

[audreyh1]

Well, those are not generally considered to be securities but they certainly have a place in one's financial strategy exactly because they can be accessed immediately.

Well we aren’t limited to securities for stashing safe cash are we? Hence my suggestion of using an FDIC insured high yield savings account.

 

[REWahoo]

Well we aren’t limited to securities for stashing safe cash are we?

Not as long as we have access to a mattress!

 

[OldShooter]

Well we aren’t limited to securities for stashing safe cash are we?

Jeez. Did you get up on the grumpy side of the bed this morning or are you just determined to have the last word in any conversation?

My statement that you decided to pick on began: "I don't think there is any security more liquid than a govvie." So, yes, it was limited to securities.

 

[audreyh1]

Viewpoint article from Fidelity published on 3/20/20 giving an overview of their different types of money market funds and how they differ. They also give an overview of recent Fed actions to stabilize the credit markets. https://www.fidelity.com/learning-center/trading-investing/market-volatility-money-market

 

[SunnyOne]

Crazy thought. Could settlement fund accounts at a brokerage be even safer than an FDIC insured savings account? Brokerages don't lend out our money but banks do.

Side note - I have a Treasury Direct account for my I Bonds. How complicated is it to go in and buy T Bills?

Thanks

 

[Ready-4-ER-at-14]

I was just at the wsj bonds and rates page and what I saw was negative rates of return on 1 month and 3 month treasuries.

 

[audreyh1]

Crazy thought. Could settlement fund accounts at a brokerage be even safer than an FDIC insured savings account? Brokerages don't lend out our money but banks do.

Thanks

No.

 

[audreyh1]

I was just at the wsj bonds and rates page and what I saw was negative rates of return on 1 month and 3 month treasuries.

Yeah, I wonder if that’s a short term phenomenon like right after the oil price crash had 10 year treasury rate down to 0.4% during the day. 10 year rates have since returned to their prior levels and a bit higher.

I guess we’ll see what it means......

MM fund rates have been dropping super fast, but I assumed they would just go to 0....

 

[jetpack]

Ally savings is 1.5% plus the 1% bonus. . I got a bit parked there.

Moved about 500k to cash as this started going down, so now looking to DCA my way back in.

 

[VFK57]

Ally savings is 1.5% plus the 1% bonus. . I got a bit parked there.

Moved about 500k to cash as this started going down, so now looking to DCA my way back in.

Not sure if Ally Bank 1.5% only for new accounts or an old ad. My Ally saving acct pays .75% down from 1% only a few month ago.

 

[capjak]

SPAXX is a government MM fund, not treasuries only. SPAXX = Fidelity® Government Money Market Fund

Correct.

 

[ownyourfuture]

I was going to start a separate thread for this, but since the money market fund in question has already been mentioned several times, I'll just ask here.

At Fidelity, I keep cash in a government money market fund (SPAXX)
As of today, it says the 7 day yield is 0.24% with an expense ratio (gross) of 0.42%

Will this translate into a negative yield ?

 

[Another Reader]

Not sure if Ally Bank 1.5% only for new accounts or an old ad. My Ally saving acct pays .75% down from 1% only a few month ago.

That's not the savings account. That's the money market account. The savings account pays 1.5 percent right now. You might want to consider switching.

 

[VFK57]

That's not the savings account. That's the money market account. The savings account pays 1.5 percent right now. You might want to consider switching.

Thanks

 

[gamboolman]

We just got evacuated from Nigeria 3 days ago.

Felt good having 5 figures of cash sat in the Gun Safe - as when we got to Houston it was pretty well deserted.

42 years of Oilfield along the Gulf Coast and Overseas and many Hurricanes, Ice Storms, Power outages, Hamatan for weeks, Coup Attempts, Civil Unrest, Lassa Fever, Malaria, Ebola, Corona Flu, Cholera, Kidnapping, Labor Strikes, etc

I can tell you that Cash is King when your in a tight spot - at least in ms gamboolgal's and I experience.

Lifes A Dance And You Learn As You Go
gamboolman...

 

[jazz4cash]

WelcomeHome Gamboolman

 

[audreyh1]

I was going to start a separate thread for this, but since the money market fund in question has already been mentioned several times, I'll just ask here.

At Fidelity, I keep cash in a government money market fund (SPAXX)
As of today, it says the 7 day yield is 0.24% with an expense ratio (gross) of 0.42%

Will this translate into a negative yield ?

No, the 0.24% is after the ER is taken out.

I don’t know what is going to happen if short-term treasuries stay negative.

 

[Dtail]

I was going to start a separate thread for this, but since the money market fund in question has already been mentioned several times, I'll just ask here.

At Fidelity, I keep cash in a government money market fund (SPAXX)
As of today, it says the 7 day yield is 0.24% with an expense ratio (gross) of 0.42%

Will this translate into a negative yield ?

Besides Audrey's comment, if you have 100k in cash and since you are already in a non treasury MM fund, you could switch your monies to the Fidelity FZDXX MM fund, which is their highest yielding MM fund.
You don't have to keep 100k in the fund. You just have to invest 100k to start with and then immediately can keep any balance in it.

 

[ownyourfuture]

No, the 0.24% is after the ER is taken out.

I don’t know what is going to happen if short-term treasuries stay negative.

Thank you.

 

[ownyourfuture]

Besides Audrey's comment, if you have 100k in cash and since you are already in a non treasury MM fund, you could switch your monies to the Fidelity FZDXX MM fund, which is their highest yielding MM fund.
You don't have to keep 100k in the fund. You just have to invest 100k to start with and then immediately can keep any balance in it.

The bulk of my cash (60k) is ladder CD's I started mid jan.
Thanks for the reply/info.

 

[jazz4cash]

My MM IRA is still paying 2.03 at a small local bank,