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Where are you parking Cash?
Old 07-16-2021, 12:18 PM   #1
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Where are you parking Cash?

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?
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Old 07-16-2021, 12:21 PM   #2
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Originally Posted by DawgSavr View Post
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?
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.
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Old 07-16-2021, 12:37 PM   #3
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I think this topic has been beat to death recently.......https://www.early-retirement.org/for...ys-107723.html

Many options discussed, much broader than just looking at Vanguard funds.

I use primarily Discover hi-yield online savings account currently paying 0.4%. With a linked Discover checking account for immediate availability.

Within Vanguard, odd cash is parked in the Vanguard Short-Term Federal Bond Fund. The return is about 0.52 30day yield, and has been trending down for many months.

https://investor.vanguard.com/mutual.../profile/VSGBX
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Old 07-16-2021, 02:52 PM   #4
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Alliant Credit Union - 0.55%
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Old 07-16-2021, 03:02 PM   #5
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RE2Boys appreciate the redirect...didn't see this thread when reviewing the forums.
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Old 07-16-2021, 03:20 PM   #6
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Alliant Credit Union - 0.55%

Alliant pays competitive interest, but I lost all of it and more due to ACH fraud that was only partially covered by Alliant. It was my fault for not logging into the account for six months, but I was not impressed by Alliant's fraud department, customer service or communication. I guess the lesson is park your cash, but check the meter frequently.
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Old 07-16-2021, 03:22 PM   #7
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I keep most of the cash I plan on using for 1-2 year expenses in a savings account at Ally. I transfer $ to my local checking account when I need some. It doesn’t earn much, but it works for me.
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Old 07-16-2021, 03:43 PM   #8
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Old 07-16-2021, 04:56 PM   #9
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I keep most of the cash I plan on using for 1-2 year expenses in a savings account at Ally. I transfer $ to my local checking account when I need some. It doesnít earn much, but it works for me.
Same here.
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Where are you parking Cash?
Old 07-16-2021, 05:23 PM   #10
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Where are you parking Cash?

Itís amazing that 0.5% is NOT considered peanuts. In my mind itís crushed peanuts with lots of aflatoxin mixed in.

Alas. Itís also the better of many bad deals.
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Old 07-16-2021, 08:33 PM   #11
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Itís amazing that 0.5% is NOT considered peanuts. In my mind itís crushed peanuts with lots of aflatoxin mixed in.

Alas. Itís also the better of many bad deals.


Yeah itís peanuts but itís all relative. My BofA savings pays .01 to .03 if I keep 20k on deposit. My NFCU MM pays .45%. Thatís 15-45x better.
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Old 07-16-2021, 08:41 PM   #12
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Itís amazing that 0.5% is NOT considered peanuts. In my mind itís crushed peanuts with lots of aflatoxin mixed in.

Alas. Itís also the better of many bad deals.
We must keep in mind that there is a war against savers going on in this country. The consumptive economy we have is based on us peons spending every cent we have. And with the 6%+ inflation going on, we will be spending more dollars.

We are lucky to have institutions that are willing to give us 0.5% on what we have in the account.
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Old 07-16-2021, 11:27 PM   #13
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Alliant pays competitive interest, but I lost all of it and more due to ACH fraud that was only partially covered by Alliant. It was my fault for not logging into the account for six months, but I was not impressed by Alliant's fraud department, customer service or communication. I guess the lesson is park your cash, but check the meter frequently.
That sounds pretty outrageous, and scary.
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Old 07-17-2021, 04:23 AM   #14
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^^^ Some people recommend looking at your accounts only once a year.

There may not be anything left when you do.
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Old 07-17-2021, 08:25 AM   #15
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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?
You need to decide how much you're willing to sacrifice moneywise for keeping the money at Vanguard. Vanguard Federal Money Market Fund and all Vanguard money market funds are currently paying 0.01% - $20/year on your $200K. As others have mentioned, at 0.5%, as most HY online savings accounts are currently paying, that would be $1,000/year on your $200K.

You could move the money in to a different Vanguard non-money market fund, but there would be additional risk, and in the current interest rate environment may not be justified.

Personally, if I were looking to keep the money as cash, I'd go with one of the major online banks offering ~0.5%. They all are generally very good and make it easy to move money around and are all FDIC insured. We use Ally and Marcus. Marcus is currently at 0.5% and gives an additional 0.1% if you have AARP membership.

If you're happy with Vanguard, and believe it is worth sacrificing $1,000 a year to keep the cash with them, there's no harm in doing that.
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Old 07-17-2021, 11:51 AM   #16
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We must keep in mind that there is a war against savers going on in this country. The consumptive economy we have is based on us peons spending every cent we have. And with the 6%+ inflation going on, we will be spending more dollars.

We are lucky to have institutions that are willing to give us 0.5% on what we have in the account.
OTOH, our 20 and 30-somethings are getting mortgages at rates that I could only dream of when I was their age. Too bad these rates are also helping to fuel sky-high home prices.
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Old 07-17-2021, 11:56 AM   #17
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And not only is real estate astronomically high in our area, 25% of sales are paid in cash. Thatís mind boggling. I have the same issue with my kids. Iím trying to help them out so they can eventually buy a home here. Weíll see how it goes.

https://www.seattletimes.com/busines...box=1626403964

Back to the thread topic, Iíve been considering opening an account with T-Mobile bank to get 1%. Not sure if I want another account though.
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Old 07-17-2021, 12:05 PM   #18
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I keep most of the cash I plan on using for 1-2 year expenses in a savings account at Ally. I transfer $ to my local checking account when I need some. It doesnít earn much, but it works for me.
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Old 07-19-2021, 07:20 PM   #19
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Originally Posted by DawgSavr View Post
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?


If the cash represents 3 yrs of expenses, Iíd spread it over a Hi yield savings for year 1 and CDs for the 2nd and 3rd year. A ladder like this could earn about .55% at Ally right now and itís FDIC. Itís not like youíll need all the funds to buy a house in a yr or two.
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Old 07-19-2021, 07:53 PM   #20
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OTOH, our 20 and 30-somethings are getting mortgages at rates that I could only dream of when I was their age. Too bad these rates are also helping to fuel sky-high home prices.
Yes, that's a plus, and I recall signing on for an 18+% mortgage when I moved to California in 1981. The lowest % mortgage I ever had was 6 1/2% in 2013 or so. That's when I paid the house off.
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