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What to do with extra $30K in checking account?
Old 01-14-2023, 01:52 PM   #1
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What to do with extra $30K in checking account?

I have money sitting in my checking account every year doing nothing. What are folks doing with extra cash that sits in your checking account accumulating nothing? 1yr CD ?, 1yr MM fund ?
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Old 01-14-2023, 01:57 PM   #2
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I never keep more than a few thousand in my checking account -- just enough to cover the upcoming bills. I keep $20k in my local PNC bank savings account as an emergency fund, which now earns decent, but not stellar, interest. Anything else, I put either in a high yield savings account (Ally) or in a Vanguard MM fund. Currently, the MM fund is earning more than Ally, so I've moved most of my "cash" into the MM fund.

I pull from the MM fund back into my checking account as needed to pay my bills.
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Old 01-14-2023, 01:59 PM   #3
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I keep one monthís expenses in checking as a cushion, so that I donít have to pay attention to when my credit cards are paid off in full each month. Otherwise, fully-invested.
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Old 01-14-2023, 02:03 PM   #4
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A light bulb went off in my head today and I don't understand why I have kept this extra cash in my checking account for many years accumulating nothing. Time to get smarter and have this money make money for me.
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Old 01-14-2023, 02:17 PM   #5
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I have money sitting in my checking account every year doing nothing. What are folks doing with extra cash that sits in your checking account accumulating nothing? 1yr CD ?, 1yr MM fund ?
Each Jan I transfer a year’s worth of cash to a high yield savings account earning decent interest (3.3% and creeping up), and I send an amount monthly to my checking account to cover bills.
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Old 01-14-2023, 02:17 PM   #6
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I have enough money in my checking to pay my monthly credit card bill from everything I paid the previous month and get all those free points from my cc company and every other dollar goes into my online Bank ACA Bask Bank at 4.07% APR, so I am making money anywhere possible to keep me living below my means lol.
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Old 01-14-2023, 02:26 PM   #7
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Liberty FCU in Evansville, IN pays 3.45% up to 20k with one transfer in per month plus 15 debit card purchases. I have all my bills paid from here.

https://libertyfcu.org/
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Old 01-14-2023, 02:31 PM   #8
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Money I will need within a year or so goes into a MM or MM-like account. Lately VG Ultra-Short/VUBFX. I draw from that when I need it, typically for lumpy expenses like real estate taxes or capital investments like a new driveway. Longer term money just goes into the portfolio AA and I don't consider it to be separate in any way.

Lots of people do a better job than I do chasing basis points on short term money. From reading lately, it seems like T-bills and notes are popular. It's more work though.
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Old 01-14-2023, 02:34 PM   #9
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If I accumulate cash it goes into my stocks now. I stopped buying bonds and don't hold cash other than working capital.
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Old 01-14-2023, 03:17 PM   #10
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Until recently it was not worth the trouble to worry about cash in the checking account. Now I would keep 3 months in a MM or online bank to earn 3% or more and the rest in 13 or 26 week to bills to earn 4.5% or better.

Word of thanks to my mentors in the T-Bill thread.
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Old 01-14-2023, 03:21 PM   #11
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You’re leaving close to $100 a month sit on the table. I work on 30-60 day window of expenses in checking. The rest earns 4.27% in a MM until needed.
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Old 01-14-2023, 03:39 PM   #12
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With Fidelity Cash Management accounts, we can hold essentially as cash in FZDXX with the 4.27% 7 day yield and it will pull right out of this fund after the core account. I just make certain every deposit made is re-invested into this fund.

One of our accounts is grandfathered to use this fund as its core, but the one we use as a checking account has a core fund to receive deposits, and pulls second from FZDXX when the core runs out.

I was using Marcus as my high yield savings until the promo extra 1% ran out, I then moved a bunch to fido. It took a few moves to transfer as it exceeded the EFT limits on each side......
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Old 01-14-2023, 03:44 PM   #13
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My new Fido rep was trying to coach me into buying those I Shares Ibond ETF's instead of Prime MM to hold larger sums of cash. Not so much a fan of such funds, but they do try to offset duration risk by using fixed durations. I am not sure they are worth the tenths of a percent better yield over the Prime MM, for the higher risk while rates continue to rise.
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Old 01-14-2023, 03:47 PM   #14
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Brokerage or online bank money market type of account. Easy.
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Old 01-14-2023, 03:48 PM   #15
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I have a checking account along with a hi-yield savings account (3.3%) at Discover. So what is not needed within the next month is in savings. But I can instantly move money from one to the other is needed to cover a larger bill or buy a car. I've tended to keep too much in the savings account recently, should move more into 6-12 month treasures (4.7%) Works for me. Only limit is I can only withdraw from savings 6 times a month.

I do have a local physical bank checking account that has no fees if your over 60. Keep around a thousand there for cash purposes. Last year Discover somehow screwed up my bill pay feature and I was glad I had a second checking account.
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Old 01-14-2023, 03:58 PM   #16
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Most online checking banks have an online savings account that can earn close to a CD. That's what I do with TIAA. 10k-ish in checking, the rest in savings, easy to move across same-day if and when I need.
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Old 01-14-2023, 03:59 PM   #17
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With Fidelity Cash Management accounts, we can hold essentially as cash in FZDXX with the 4.27% 7 day yield and it will pull right out of this fund after the core account. I just make certain every deposit made is re-invested into this fund.

One of our accounts is grandfathered to use this fund as its core, but the one we use as a checking account has a core fund to receive deposits, and pulls second from FZDXX when the core runs out.

I was using Marcus as my high yield savings until the promo extra 1% ran out, I then moved a bunch to fido. It took a few moves to transfer as it exceeded the EFT limits on each side......
I'm trying to consolidate everything to Fidelity where most of my retirement investments are located. I will look into the Fidelity Cash management account and the FZDXX money market account.
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Old 01-14-2023, 04:05 PM   #18
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I put cash in my Merrill Edge accounts in BlackRock TSTXX, a short-term T-bill fund.

The last 7-day yield of TSTXX is 4.07%. On $30K cash, that's $100/month, enough for a dinner for 2.
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Old 01-14-2023, 04:09 PM   #19
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I put cash in my Merrill Edge accounts in BlackRock TSTXX, a short-term T-bill fund.

The last 7-day yield of TSTXX is 4.07%. On $30K cash, that's $100/month, enough for a dinner for 2.
I'm confused on yield vs return.

Here is the yield and return on FZDXX.

Yield as of 01/13/2023
1 Day 7 Day 30 Day
4.26% 4.27% 4.25%


Avg. Annual Returns As of 12/31/2022
1 Yr. 3 Yr. 5 Yr. 10 Yr.
+1.58% +0.67% +1.20% +0.75%

If I leave $30k in FZDXX what would be my yield and what would be my return?
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Old 01-14-2023, 04:13 PM   #20
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I'm trying to consolidate everything to Fidelity where most of my retirement investments are located. I will look into the Fidelity Cash management account and the FZDXX money market account.
To me, the same idea the past few years. I closed my Schwab accounts, consolidated my brick and mortar banks to Chase and a Credit Union for emergency, but do almost everything now with Fido. Their Visa card pays 2% cash back no cost, and their debit card works everywhere and they rebate all the ATM fees charged within a day. Just to know, you need 100K to buy into the FZDXX, but you only need to keep at least $1 in it to keep it open for cash flow.

I found the remote deposit limits elsewhere were ridiculous, Fido lets us deposit check remote with access to funds better than all other banks. Schwab is also good, but it so nice to have a checking account with such high yield. I keeps a lot more in other accounts at Fido separately. Probably still keep too much in that Cash Management account, but its pretty convenient. I even invest in t-bills in that account along with the Prime MM.

For us, who travel a lot, these work very well with only a 1% foreign fee, or else I use our Costco Visa with no foreign fee and cash back for travel costs at 3%.
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