Mauser
Dryer sheet wannabe
Doesn't matter what cash it is - emergency fund, waiting on the next investment, etc. Doesn't matter how much cash it is - we all have some, even if it is just the daily checking account you use to pay off the credit cards. So the question is, where do you think is the best place to park that stuff to try and earn some return while keeping it safe and easily accessible?
Interest rates on savings have been a joke for years; most Money Market funds are barely any better. Cash at a brokerage seems to be just as bad.
For the last 20 years, I have mostly kept my cash at either Ally Demand Notes (was GMAC) or Ford Interest Advantage - depending on which one was paying the best interest at the time. Those accounts mostly operated like MM, even though they did not technically have that designation. The risk is that those accounts are not insured, but the return was significantly above the other insured options - e.g., during the majority of 2018 & 2019, Ford was paying around 2.5%, but that really started dropping throughout 2020. Now Ally Demand Notes has closed shop, and FIA is down to 1.0%, and I have about $300K that I want better returns on.
I have started putting some of it in no-fee managed portfolios at Ally Invest. I know that these accounts have MUCH more market volatility, but they do seem to allow for easy and almost instant access when I want to pull some cash out. And the no-fee options keep 30% of the investment in cash, which provides some additional protection from market swings along with my ability to choose lower risk portfolios. Of course, that 30% is still only earning 1%, so that is just a trade-off for not paying management fees on the account. And that cash is not really "available" in the traditional sense - if I want to pull $10,000 out during a down market, the portfolio will sell $7,000 of investments low and then reduce the cash balance by $3,000, compared to the ideal situation where I would just use available cash and leave all the investments alone waiting for the recovery.
So far, I still cannot bring myself to put more than a small percentage of my total cash in those managed portfolios. So I am looking for other ideas - are there better choices to get higher returns on the cash without the market risk?
Interest rates on savings have been a joke for years; most Money Market funds are barely any better. Cash at a brokerage seems to be just as bad.
For the last 20 years, I have mostly kept my cash at either Ally Demand Notes (was GMAC) or Ford Interest Advantage - depending on which one was paying the best interest at the time. Those accounts mostly operated like MM, even though they did not technically have that designation. The risk is that those accounts are not insured, but the return was significantly above the other insured options - e.g., during the majority of 2018 & 2019, Ford was paying around 2.5%, but that really started dropping throughout 2020. Now Ally Demand Notes has closed shop, and FIA is down to 1.0%, and I have about $300K that I want better returns on.
I have started putting some of it in no-fee managed portfolios at Ally Invest. I know that these accounts have MUCH more market volatility, but they do seem to allow for easy and almost instant access when I want to pull some cash out. And the no-fee options keep 30% of the investment in cash, which provides some additional protection from market swings along with my ability to choose lower risk portfolios. Of course, that 30% is still only earning 1%, so that is just a trade-off for not paying management fees on the account. And that cash is not really "available" in the traditional sense - if I want to pull $10,000 out during a down market, the portfolio will sell $7,000 of investments low and then reduce the cash balance by $3,000, compared to the ideal situation where I would just use available cash and leave all the investments alone waiting for the recovery.
So far, I still cannot bring myself to put more than a small percentage of my total cash in those managed portfolios. So I am looking for other ideas - are there better choices to get higher returns on the cash without the market risk?
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On the other hand it would probably just be better if I just throw that 20k in an index fund and act like it is not even there and check it in 20 years.
