Where are you parking Cash?

[sroby2020]

Don't really know much about Vanguard money market funds, but I've got most of my extra cash in a Goldman Sachs Marcus Savings account. Super liquid, transfers to/from are within a business day, and it's paying 0.50%. Better than earnings peanuts in a checking account.

Also watch for CD specials from Marcus. They are sometimes a little better than the savings.

 

[Bdroc]

Good afternoon. Curious where folks are parking their respective cash reserves. Currently have ~$200K sitting in a Vanguard Federal Money Market Fund. At 57 and looking to retire at end of year, the purpose of this money is to keep it liquid and be able to cover ~3 years of expenses, ride out any market downturns or emergencies. My allocation is 65% equities, 30% fixed and 5% cash. Would like to keep it as liquid as possible and within Vanguard. Suggestions?

3.5% iBonds

1.7% 3 year fixed annuity if you don't need the cash right away

0..5% Ally Savings account

 

[2177V]

Until you get a home invasion.

Years ago, read about a couple, had (in today's dollars) about $300,000 in cash in safe at home. They were beaten nearly to death until the safe was opened.
They had not trusted banks, so it was the majority of their savings.

Very sad...

I agree. People should not post that they keep their cash at home on the internet. I had a co-worker who stated he owned a gun to protect himself. However the word got out …and a thief broke into his house while he was at work. Most gun owners keep their gun in the bedroom (under the mattress, night stand, etc) so it was easy for the thief to find the gun. The thief took nothing else. Safe deposit box at a bank is a better way to hold cash.

 

[richardf]

Cash is King

Good afternoon. Curious where folks are parking their respective cash reserves. Currently have ~$200K sitting in a Vanguard Federal Money Market Fund. At 57 and looking to retire at end of year, the purpose of this money is to keep it liquid and be able to cover ~3 years of expenses, ride out any market downturns or emergencies. My allocation is 65% equities, 30% fixed and 5% cash. Would like to keep it as liquid as possible and within Vanguard. Suggestions?

Using Ally .5%, tied to PNC.

 

[maestro]

Yeah, this topic is beaten to death, squeezing fractional cents in money market or checking accounts, out of dollars better spent. The BIG fed government beaurocrats will stop at nothing to watch us all cringe. Cash is king in my camp, but so many corporations are also sitting on a TON of cash right now. I like dividends, and more companies will be raising their's soon. YMMV.

 

[richardf]

YES!

I'm fortunate, as I have a guaranteed income fund, paying 3.25%. But my mom is going to get a huge check after selling her house, and is asking me where to put it. The best I could offer is just find one of the 0.5% FDIC accounts.

Absolutely, put it in a bank for awhile. See if she needs it for everyday stuff. Don’t lock it up.

 

[nvgs123]

+1

+1 Has worked out great so far and of course it is not FDIC insured but I am willing to take the risk and I 'diversify' by also putting some funds with Toyota's demand notes, 1.35%.

I looked at GM income notes but you have to qualify (be an employee or retiree, etc.)
I am in Toyota income notes now, but they've dropped from 1.5% to 1.35%.
I am now moving into Dominion Energy Reliability Investments. Not FDIC but 1.5% with high liquidity.

 

[teetee]

With 4M net worth I don't think 0-3% annual interest return on 200k matters if your goal is to keep it liquid. Nice to have time and energy to pay attention to such detail though.

Just prepare for the diminishing buying power from inflation so you have proper expectation after say 5 or 10 years.

 

[teachme]

Everything over 6 months of emergency cash is earning 8.88% at celsius.network however will switch to 4% at Coinbase Pro due to Coinbase having better experience with regulators in the U.S. Crypto "stable" coins are not for everyone and the volatility of the crypto market tends to scare people away so the usual DYODD if you're willing to venture into the unknown to earn higher returns on your "cash"

https://celsius.network/earn-rewards-on-your-crypto
Auditors reveal USDC backing as Jim Cramer sounds alarm over Tether’s mad money | CryptoPost
https://www.coinbase.com/learn/crypto-basics/what-is-usdc

 

[jazz4cash]

I looked at GM income notes but you have to qualify (be an employee or retiree, etc.)

That’s not how I read the eligibility requirements from the website:

Confirm eligibility

Right Notes are available to individuals and entities with a U.S. address and a SSN or Federal Tax ID number, including:

GM and GM Financial U.S. employees and retirees
U.S. employees of GM dealerships


The current rate is 1.5 so I’ll be checking into this. I’d probably limit myself to one year of expenses at each institution GM, Toyota, and Dominion. Dominion stock pays 4%, though.

 

[Tracer]

Fortunately I have much of my idle cash in two deferred annuities paying 3%. They are nothing more than CD's issued by an insurance company with the added benefit of deferring the taxes on the interest. They were purchased years ago when interest rates were higher. Now matured, they are fully liquid. No longer have any penalty to withdraw. I chose to keep the money in them. No reason to pull the cash out now with interest rates what they are elsewhere.

 

[FreeBear]

Stocks for making dough, bonds for stability and cash to blow!

+1 Love it!!


Short, simple, and sweet!

 

[pb4uski]

I looked at GM income notes but you have to qualify (be an employee or retiree, etc.)
I am in Toyota income notes now, but they've dropped from 1.5% to 1.35%.
I am now moving into Dominion Energy Reliability Investments. Not FDIC but 1.5% with high liquidity.

I have all 3 of the above. Anyone can buy GM RightNotes... I have some and I am not a GM employee nor a GM retiree.

Who is eligible to make a Right Notes investment?

Individuals and entities with a valid Social Security number or U.S. Federal tax identification number and a U.S. address are eligible. Right Notes may be held individually or jointly, by corporations, partnerships, limited liability companies, firms, associations or as custodial or trust investments.

 

[Golden sunsets]

I have all 3 of the above. Anyone can buy GM RightNotes... I have some and I am not a GM employee nor a GM retiree.

And what are the GM Notes paying right now?

 

[pb4uski]

1.5%

 

[Gearhead Jim]

We have a CD ladder, so we're never more than a year away from $100k there.
We also have a nice chunk in some stable value funds, readily accessible under normal circumstances.
Finally, each year's worth of expected withdrawals in Fed money market.

 

[Sunset]

I just moved $10K from Ally at 0.5% to TreasuryDirect ibond at ~3.5% , I am expecting when it resets the rate at the 6 month point, that it will actually pay more as by then inflation will be higher.

Yes it's a tiny amount, a difference of $300 per year, but has the bonus of no taxation by my State !

 

[Golden sunsets]

I just moved $10K from Ally at 0.5% to TreasuryDirect ibond at ~3.5% , I am expecting when it resets the rate at the 6 month point, that it will actually pay more as by then inflation will be higher.

Yes it's a tiny amount, a difference of $300 per year, but has the bonus of no taxation by my State !

Just keep in mind that you have to hold the asset for 5 years or pay an early redemption penalty of 90 days interest. I have owned ibonds since 2001 and there have been periods where the ibond rate trailed average CD rates. There have been a number of periods where no interest at all was paid for the 6 month interval.

 

[tulak]

I opened a T-Mobile bank account to get 1%.

I think about iBonds, but decide against them due to the rules and purchase limit.

 

[2177V]

I liquidated most of my cash to buy several properties and commodities. If I need cash, I borrow against the properties using a HELOC at low interest rates. Interest rates are low for both savings and borrowing. Having properties and commodities protects me from inflation. I also have $100K+ Invested in VCMDX which is a hedge fund against inflation. VCMDX involve derivatives so do not invest in derivatives unless you understand them. What this means it is a high reward but high risk investment. However, I personally believe inflation will likely occur…and if it does, I expect high reward.

 

[Sunset]

Just keep in mind that you have to hold the asset for 5 years or pay an early redemption penalty of 90 days interest. I have owned ibonds since 2001 and there have been periods where the ibond rate trailed average CD rates. There have been a number of periods where no interest at all was paid for the 6 month interval.

True, but I realized if it's paying a tiny interest rate or inflation goes to 0% so it pays 0%, then I can cash it as the 90 days at 0% is $0

I'm not really worried, as it's a small portion of my actual cash, but I'll probably increase the amount over the years, so that it's worth having.

 

[Sunset]

I opened a T-Mobile bank account to get 1%.

I think about iBonds, but decide against them due to the rules and purchase limit.

Hopefully T-mobile bank doesn't use the same server farm as T-mobile the phone company, else your bank info is out there...

 

[tulak]

Hopefully T-mobile bank doesn't use the same server farm as T-mobile the phone company, else your bank info is out there...

I did think about that. My only concern is giving T-Mobile external bank info for transfers. To get around that, I’ll transfer money from the external bank to T-Mobile, so they won’t know anything about my other accounts. Otherwise they don’t have any more info than the mobile part of T-Mobile and that info is already out there (and probably was anyway due to leaks at other companies).

Amazing what we’ll do for a whopping 1%, eh?

 

[Trailwalker]

Just noticed Dominion dropped from 1.5 to 1.25 in early August for deposits over 50,000. A tough environment for cash.

 

[friar1610]

Just keep in mind that you have to hold the asset for 5 years or pay an early redemption penalty of 90 days interest. I have owned ibonds since 2001 and there have been periods where the ibond rate trailed average CD rates. There have been a number of periods where no interest at all was paid for the 6 month interval.

This makes the case for fixed income diversification, IMO. We hear a lot about how our equities should be diversified: large, medium and small cap; domestic and international; value and growth, etc. We also hear a lot about diversifying bonds: by duration; by both government and corporate; by both domestic and international, etc. But not as much about diversifying fixed income generally. I like to keep bond funds, CDs, I-Bonds (and may use MYGAs in the future). Each has unique characteristics that make them attractive. And, at any point in time, one may be providing a better return than the others. So I like to spread the fixed income around rather than sticking it all in, say, one mid-term mutual fund.