Where Do You Park Your Cash These Days?

[audreyh1]

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

 

[KenZ71]

T-Mobile Money?

saw the mention of T-Mobile Money - any reviews?

Thinking I may give it a go. Currently using Schwab.com for my day to day bill pay & checking. No complaints but 4% sounds quite tempting.

 

[GenXguy]

Thanx - that is about what I expected. I was getting way more than that with Ford last year, and even today they are still paying a full 1%.

I've got a significant chunk in a stable value fund in my retirement account through work. It's been paying 3% annually for years, and no expense or admin fees apply. I started putting more in this year.


Outside of that, I have CDs at Ally, NFCU, and EJ, and MM at VG.

 

[pb4uski]

... I am intrigued in the possibilities of the Dominion Energy and Toyota accounts that pb4uski mentioned - if they are still paying 1.5% today, then that is a BIG jump over the current 1.0% at Ford - I'll have to see what their history looks like.

Just checked... they are still 1.5%... but DERI require $50k or more to get that 1.5% rate...1.25% on $10k or less and 1.35% on $10k-$50K... Toyota is 1.5% on all.

 

[pb4uski]

saw the mention of T-Mobile Money - any reviews?

Thinking I may give it a go. Currently using Schwab.com for my day to day bill pay & checking. No complaints but 4% sounds quite tempting.

You realize that the 4% is only on the first $3k and anything after that is 1%?

 

[NW-Bound]

... Now I'm selling puts on stocks I would not mind owning. If the shares are put to me I hold until time is right to sell. If they expire worthless or bought back at a profit then repeat the exercise...

+1

I consider I bond cash because it is not sensitive to interest rate as bonds are. Besides I bond, there's cash in my wife's 401k stable value fund, but the biggest chunk is in the Black Rock Liquidity T-Fund, which I can use as collateral to write puts.

It's not hard to make more than 10%/year with cash covered puts, although there's a risk of having your stock AA driven up if the market tanks. That itself may not be bad, because it forces you to buy stocks when they are cheaper. However, in a crash you may be buying stocks a bit too early. I do spread out my puts to make sure they don't get assigned all at once.


PS. If I get assigned more stocks than I would like my AA to be, I immediately turn around to sell covered calls in an attempt to bring my stock AA back down.

 

[KenZ71]

You realize that the 4% is only on the first $3k and anything after that is 1%?

Yup, but still 1% is miles ahead of 0.01 where it is now.

Is T-Mobile's $3k limit based on average daily balance for the month or some other method?

 

[jazz4cash]

Just checked... they are still 1.5%... but DERI require $50k or more to get that 1.5% rate...1.25% on $10k or less and 1.35% on $10k-$50K... Toyota is 1.5% on all.

Another one is GM Financial Right Notes paying 1.5% with only $500 min. I might open one of these but I seriously have too many accounts already so I’m leaning to bumping up equities since piles of idle cash are abhorrent to me.

 

[RetiredAt55.5]

saw the mention of T-Mobile Money - any reviews?

Thinking I may give it a go. Currently using Schwab.com for my day to day bill pay & checking. No complaints but 4% sounds quite tempting.

Actually, even 1% sounds tempting considering it claims to be FDIC insured.

https://www.t-mobilemoney.com/en/home.html

 

[pb4uski]

Another one is GM Financial Right Notes paying 1.5% with only $500 min. I might open one of these but I seriously have too many accounts already so I’m leaning to bumping up equities since piles of idle cash are abhorrent to me.

That's a new one to me... given the credit risk of these things I don't mind having numerous ones and spreading the money around... not that I think there is a lot of credit risk.... but opening so many accounts is a bot of a PITA.

 

[Katsmeow]

Personally, I've given up chasing around a few basis points for my cash. I tell myself the low return is the price I pay for FDIC safety; kind of like paying for insurance.

This is mostly what I have done. And, I basically rarely have more than about $30k cash on hand and often less. I just keep most of my money in the stock index fund and bond index funds (plus some in Wellesley). The T-Mobile thing looks OK but seems to require a lot of babysitting and I would have to transfer back and forth to my regular bank. It looks like you only get the 4% of the first $3k in your account, but you have to have $5k there to get the full 4% on that first $3k. 4% on $3k is $120 a year and this looks like too much bother to do it (and I'm even a T Mobile customer).

 

[gayl]

Surprisingly I have a year's cash sitting in my bank savings account and I'm a pensioner. That's what I would spend in a year traveling but I also have 6mo traveling expenses in FCC & gift cards. I'm lazy

 

[aja8888]

+1


It's not hard to make more than 10%/year with cash covered puts, although there's a risk of having your stock AA driven up if the market tanks. That itself may not be bad, because it forces you to buy stocks when they are cheaper. However, in a crash you may be buying stocks a bit too early. I do spread out my puts to make sure they don't get assigned all at once.


PS. If I get assigned more stocks than I would like my AA to be, I immediately turn around to sell covered calls in an attempt to bring my stock AA back down.

I've started doing the same since I have been bored this winter.

 

[Sunset]

Surprisingly I have a year's cash sitting in my bank savings account and I'm a pensioner. That's what I would spend in a year traveling but I also have 6mo traveling expenses in FCC & gift cards. I'm lazy

It's ok. I have ~$10K sitting in my checking account , even though my monthly expenses have recently been only $700/mo.

Just not worth transferring to Ally and then remembering to transfer back to stay above the bank minimum amount for free checking..

 

[rayvt]

Yeah, at these rates it hardly pays to search out the highest yield bank or CU. And when you find one, they start dropping the rate. I still get occcasional emails from the Slickdeal thread about opening an account at HSBC paying 2.4%. It was indeed paying that, but not anymore.

DCU pays 6%, but only on the first $1000. After that, 0.25%.

I opened a checking account at a local bank recently. They had an interest paying one, but I told them that they pay so little that it wasn't worth my bother.

All in all, it may pay to flip it on it's head. Get or refinance your house mortgage to a 30 yr FRM at 2.00% - 2.50% and lock in that rate for 30 years.

 

[gooddog]

Majority of it in Schwab Intelligent Conservative Portfolio (bonds/interest...).


The rest in a regular checking account.

 

[dixter]

I buy corporate bonds.. not funds but the actual bonds... you can get ~10% easy...
but at some risk..

if you don't like risk even Apple is paying 4.65%... just now looked it up...

 

[pb4uski]

.... if you don't like risk even Apple is paying 4.65%... just now looked it up...

What is the price for that Apple bond that is paying 4.65%?

 

[dixter]

132.3 for Apple 4.65%
93.008 for Apple 2.55%

and of course the most secure bond in the world...

92.76 US Treasury 30yr 1.625%

there is no reason to take your bank giving you nothing for your money...

 

[kgtest]

keep very little in "cash". $120 in my wallet. Maybe a few thousand in a credit union. 2k in VIMMXX. I have a couple 0% interest cards with a combined 20k limit.

And I'm certain I could snag a $200-400 cash offer to open an account. Also sitting on a few hundred in various gift cards. And almost 1k in credit card rewards /cash back reward pts.

For us, this is enough cash. The rest is all in equities.

 

[2cheap2eat]

132.3 for Apple 4.65%
93.008 for Apple 2.55%

and of course the most secure bond in the world...

92.76 US Treasury 30yr 1.625%

there is no reason to take your bank giving you nothing for your money...

I haven't invested in corporate bonds, what is the holding period for the Apple bonds? I understand I could sell at anytime, but the price can vary of course if not holding to maturity.

Anything other gotchas besides the tax hit with corp bonds?

 

[gozer]

My easy to access "quick cash" is currently stored in the following:

PRFHX - High Yield Muni Bond Fund - earned 3.77% last quarter mostly in tax free dividends.
DiscoverBank savings account, currently down to .45% interest down from 2% just prior to the pandemic.
T-mobile Money account, currently 4% on the first $3000 and 1% on everything else.

T-mobile Money requires you to be a T-mobile customer and you must deposit at least $200 per month to get the 4%. Failing either of those things and you get 1% on everything.

I also keep a balance in my brick and mortar checking account which earns nothing. This one fluctuates between a 4K and 10K balance every month.

 

[Doribe]

I haven't invested in corporate bonds, what is the holding period for the Apple bonds? I understand I could sell at anytime, but the price can vary of course if not holding to maturity.

Anything other gotchas besides the tax hit with corp bonds?

I also just bought Apple bonds, 2.55 coupon, 94.80, 2060, AA+. Nothing to brag about, but better than checking and I have enough higher risk corporates.

 

[SunnyOne]

It's not hard to make more than 10%/year with cash covered puts, although there's a risk of having your stock AA driven up if the market tanks.

Could you suggest a resource for me to learn about cash covered puts? I might be interested in this but have no idea where to start. thanks

 

[37andhappy]

Wow, well maybe this is an age/demographic thing, but I am amazed how few responses have mentioned Bitcoin.

We all know that any cash that is "parked" earns basically zero return (in some cases negative), and will devalue over time. Further, banks can go under, close, limited (or costly to transfer overseas), risk of fraud, tax, confiscation, etc.

In my circle friends are increasingly "parking cash" in Bitcoin. Is then safe, accessible 24/7, does not rely on a bank, free from risk of any bank collapse, confiscation, etc.

Given the future we are heading into, along with possible risk scenarios, I would strongly recommend BTC as a place to put cash.