Where Do You Park Your Cash These Days?

[dixter]

just saying.... Ford Motor Co. issues corporate bonds for their Union Members to buy.... and anyone can also buy them...

The coupon rate is 9.98% CUSIP 345370BW9

another option if you like to travel is to put money into a bank account that pays you interest in the form of flight miles from American Airlines...

Bank Direct is the banks name... its online so any one can use them....

 

[Timeisprecious]

My single state muni fund NAV has ticked up a tad lately. It still throws off 2% distribution yield which is tax-free to me. Not bad. Still have some 3.7 and 3% add on CDs for maturing CDs so I will allocate among these 3 options.

Wow! 2-3.7% on your loose cash? That's really excellent! I purchased an 18-month and a 5-year CD from NFCU nearly two years ago at 3% and 3.25% respectively; I wish now I had put more into them. That 5-year 3.25% investment looks pretty darn good these days! But - it's a non add-on. Rats.

 

[Chuckanut]

another option if you like to travel is to put money into a bank account that pays you interest in the form of flight miles from American Airlines...

Possibly. Alas, the airlines have a tendency to devalue points every so often, so each point buys fewer [-]loaves of bread[/-] travel miles than before. So it needs to be Earn and Burn to make interest in the form of miles work.

 

[FANOFJESUS]

I just park my cash in checking / savings at the bank, about a year's worth. Get a whole tenth of a percent. I don't care, it's there to spend anyway.

The market makes me dough, the bonds are for stability and the cash is to blow.

Robbie I know your spending is healthy. Just curious how many years do you keep in cash and bonds? I am setting my asset allocation and am looking for ideas.

 

[Stillwater007]

Uh, why not use HM Bradley which has a savings/checking account ranging from 0.5-3% right now. The less you spend in the account, the higher the percentage. Capped at 100k.

 

[BlueberryPie]

I do consider I-Bonds cash, they are just as easy to cash out as you might withdraw from a bank, after the first year ( you can't cash them out during the first year. You also lose 3 months interest during the first 5 years but that's pretty negligible, and they are tax advantaged).

If you have enough cash to build a ladder so that you can live with some of your funds being locked for a year, they are actually a great option, and at 3.54% about the best truth you can get with virtually no risk.
The return is variable, but guaranteed to keep up with inflation.

That's where I keep my emergency fund and my kid's college tuition (he is attending, not a long term 529 replacement).

There were times were I-Bonds when a better deal, and times when CDs had higher yields, but they are liquid enough that you can switch out of them if you get better options.

You can only buy $10k/person/year, so $20k per couple, $30K if you have a revocable living trust since it can count as another entity, you can buy them for kids )but they belong to them) and you can get an extra $5k from your tax return.

 

[jazz4cash]

Uh, why not use HM Bradley which has a savings/checking account ranging from 0.5-3% right now. The less you spend in the account, the higher the percentage. Capped at 100k.

Uh, maybe cause I never heard of it before and looking at the website I’m really not sure what the heck it is. It is FDIC through a partner bank and with a minimum of .5% I am very interested! A hundred k cap is fine by me. Is there a catch?

 

[RobbieB]

Robbie I know your spending is healthy. Just curious how many years do you keep in cash and bonds? I am setting my asset allocation and am looking for ideas.

About 1 year cash in the bank and 5 years in muni bonds.

 

[cj1717]

I don’t worry about it that much.

But I have plenty of high yield savings and short term CDs. Good enough for me. I move things around a bit if a special deal shows up, but generally don’t sweat it that much.

There is a thread dedicated to finding the deals.
https://www.early-retirement.org/fo...ead-2021-please-post-updates-here-107187.html

"But I have plenty of high yield savings"

Please share this option!

 

[audreyh1]

FDIC insured high yield savings accounts are available at online banks such as Ally Bank and Synchrony Bank. Depositaccounts.com lists them.

 

[Alex The Great]

Uh, maybe cause I never heard of it before and looking at the website I’m really not sure what the heck it is. It is FDIC through a partner bank and with a minimum of .5% I am very interested! A hundred k cap is fine by me. Is there a catch?

It looks like they require a monthly direct deposit either from employer or government agency i.e. early retirees not collecting SS yet do not qualify.

 

[njhowie]

just saying.... Ford Motor Co. issues corporate bonds for their Union Members to buy.... and anyone can also buy them...

The coupon rate is 9.98% CUSIP 345370BW9

another option if you like to travel is to put money into a bank account that pays you interest in the form of flight miles from American Airlines...

Bank Direct is the banks name... its online so any one can use them....

1. This bond is rated BA2/BB+ - squarely in non-investment grade/junk category. This is not a cash alternative. There is a very real possibility that Ford could default on them.


2. These bonds mature in 2047 - that is certainly a long term bond, and should interest rates rise, the price of the bonds will fall, possibly significantly. If you plan to hold to maturity, no problem, you know what your yield to maturity will be on the day you purchase. However, should you need to sell, there is a very real possibility that you will sell for a loss, possibly significant.


3. Though the coupon is 9.98%, the bonds are trading at 154 - that means the current yield is 6.5%, and the yield to maturity is 5.82%. So, on the day you purchase, you are going to pay $1540 for every $1000 bond. Meaning, that if you buy 10 bonds today for $15,400, in 2047, when they reach maturity, you're going to be paid $10,000.


Bottom line, Ford bonds are not a cash alternative by any stretch of the imagination. They are an investment. If you choose to put your cash in to some of them, be very aware of the potential risks.

 

[WhenIsItTime]

I took cash position and bought TSLA at $600 in May and sold at $650 in June. Took a month, but got several years return at current bank rates.

Back in cash looking for next stock volatility trade.

Guessing this option won’t be popular.

 

[njhowie]

I took cash position and bought TSLA at $600 in May and sold at $650 in June. Took a month, but got several years return at current bank rates.

Back in cash looking for next stock volatility trade.

Guessing this option won’t be popular.

If the title of the thread was "Where are you investing your money these days?" and it was in the Stock Picking forum, then sure, wonderful, very happy for you. However, "Where Do You Park Your Cash These Days?" in the FIRE and Money forum? You're guessing it won't be popular?

 

[calmloki]

Uh, why not use HM Bradley which has a savings/checking account ranging from 0.5-3% right now. The less you spend in the account, the higher the percentage. Capped at 100k.

Interesting:

The tiers are based on how much you save vs spend from the account, and it does require direct deposit. Was thinking my SS payment of $91.30 would take a long time to get to meaningful interest earnings BUT:

https://faq.hmbradley.com/hc/en-us/...ust-my-direct-deposits-or-all-of-my-deposits-


So I could have my piddling SS direct deposit with HMBradley and plunk $99,900 in as well in the first month and then sit tight on a nice 3% for ~$100k. Decent thought.

 

[WhenIsItTime]

If the title of the thread was "Where are you investing your money these days?" and it was in the Stock Picking forum, then sure, wonderful, very happy for you. However, "Where Do You Park Your Cash These Days?" in the FIRE and Money forum? You're guessing it won't be popular?

Wow. Guess I struck a nerve. I find the forums useful to hear alternative thinking.

YTD the S&P 500 has had 38 days out of 125 with gains of 0.5% or better.

 

[jazz4cash]

WHAT?? Nobody is parking their cash in Bitcoin?

 

[a60dan]

WHAT?? Nobody is parking their cash in Bitcoin?

MY BTC returned about 400% over the past year, but I sold my original “speculation” and am letting the rest ride. Very educational experience. Not an “investment” by any means.

Most of my cash is in VUSB.

 

[Midpack]

Most of my cash is in VUSB.

I’m fed up enough that I plan to put a big chunk of my “cash” in VFSUX, and yes I know the NAV risk.

 

[EA-Sports]

How about VTIP or IBond if you’re pretty sure you won’t need it for a year?

 

[mrfeh]

I’m fed up enough that I plan to put a big chunk of my “cash” in VFSUX, and yes I know the NAV risk.

That's my go-to solution when CD rates stink.

I also dabble in bank loan funds.

 

[BlueberryPie]

How about VTIP or IBond if you’re pretty sure you won’t need it for a year?

Ibonds are a great solution if you don't need it for a year and your cash to stash doesn't exceed the yearly limit. If you're trying to stash $100K for house down payment or the kid just starting college, it'll take you a while to convert to i-bonds

TIPS don't pritect you principal and can have negative yields.

 

[Montecfo]

TMobile Money, 1.00 percent.

RPHIX, yields about 2 pct. Very stable, duration 6 months. Atypical fund.

I also do bank loans and they have been fantastic, but not a cash equivalent.

 

[rayvt]

RPHIX, yields about 2 pct. Very stable, duration 6 months. Atypical fund.

Junk bonds? Why would you park cash there? High risk.

 

[pb4uski]

Since I haven't posted my cash in a while:

Discover Bank 0.4%... I know that there are better online bank rates like T-Mobile at 1% but just can't get excited about changing banks for a couple hundred $ a year.

GM RightNotes (1.5%), Toyota IncomeDriver Notes (1.35%), Dominion Energy Reliability Investment Notes (1.1%)