Looking for Place to Park Cash

[kannon]

Morning All.

We have a CD coming due in a few days at Ally's. Usually they have very good rates but looked around in BankRate and found some alternatives.

Came across UFB Direct, 1.61% for MMA. A MMA is ok for us cause with want to have some more liquidity if needed, vice locking up in a 1 yr CD.

Anyone hear of UFB Direct?
What's best way to check them out? Always skeptical about online reviews. Went to FDIC site to check and can't find them under UFB Direct but can find under Axos Bank. I am definitely comfortable with Ally but with just some finger pressing on a keyboard can get a few hundred dollars more in interest earned.

Appreciate your feedback.

 

[Sojourner]

I am definitely comfortable with Ally but with just some finger pressing on a keyboard can get a few hundred dollars more in interest earned.

Just my two cents, but I don't think a few hundred dollars (as in, say, $200) is worth the hassle of opening a new account at a new online bank you're unfamiliar with. Personally, I'd only do it if it was a well-known bank offering a new account/signup bonus along with a very competitive interest rate. For example, I opened and funded a new savings account six months ago with Capital One to get the large signup bonus ($1,000).

I don't know of any reputable, long-established bank that's offering a savings or MM rate of over 1.55% right now. And even if you do find one, the rate is likely to drop soon, so probably not worth the hassle IMHO.

 

[samm]

Bankrate.com review of ufb-direct

Anyone hear of UFB Direct?
What's best way to check them out? Always skeptical about online reviews. Went to FDIC site to check and can't find them under UFB Direct but can find under Axos Bank. I am definitely comfortable with Ally but with just some finger pressing on a keyboard can get a few hundred dollars more in interest earned. Appreciate your feedback.

See below. They look legit
https://www.bankrate.com/banking/reviews/ufb-direct/

 

[Drake3287]

Unless somethings changed, Capital One is offering a $500. sign-up bonus for a 1.5% CD right now if you have $50,000 or more, smaller bonus for lower deposits. I did it last year so I'm not eligible to get a second bonus.

 

[Gotadimple]

According to Bauer Financial.com UFB Direct is a trade name for Axos Bank, San Diego CA. Both UFB Direct and Axos Bank are rated 5 stars (Superior). I generally use BauerFinancial rather than Bankrate as they accept no advertising, and use the reporting submitted to the Treasury Department to assess financial stability.

- Rita

 

[kannon]

According to Bauer Financial.com UFB Direct is a trade name for Axos Bank, San Diego CA. Both UFB Direct and Axos Bank are rated 5 stars (Superior). I generally use BauerFinancial rather than Bankrate as they accept no advertising, and use the reporting submitted to the Treasury Department to assess financial stability.

- Rita

Thank you. Great information.

 

[jazz4cash]

I agree with Sojourner. Not worth the hassle esp for MM account that will probably drop.

Best source for info on UFB is here, but no recent reviews:

https://www.depositaccounts.com/banks/ufb-direct.html

I didn’t think OP was worried about legitimacy.

These days the No Penalty CDs seem to be a better option than MM accounts for a combination of decent rates and good liquidity.

https://www.depositaccounts.com/banks/ally-bank.html

 

[HawkeyeNFO]

12 month certificate @ 3.5% if you're eligible and jump through a couple of hoops....

https://www.navyfederal.org/checking-savings/savings/certificates/easystart-certificate.php

 

[njhowie]

According to Bauer Financial.com UFB Direct is a trade name for Axos Bank, San Diego CA. Both UFB Direct and Axos Bank are rated 5 stars (Superior). I generally use BauerFinancial rather than Bankrate as they accept no advertising, and use the reporting submitted to the Treasury Department to assess financial stability.

- Rita

I am a big fan of Bauer. However, going forward, you need to take their ratings with a grain of salt. Why? Because they are backward looking - their ratings are based on their financial reporting, as you point out...past reporting - it has no knowledge of what's coming down the pike. Over the past few years, most banks on Bauer have moved to 4 and 5 stars because of the strong economy. However, over the coming year, the quality of their loan portfolios are going to either shine, or cause headaches. For most, it will be the latter.

Bottom line, you cannot blindly accept the ratings from Bauer or any other site at this time, unless they are forecasting some sort of deterioration of loans and have determined that amounts reserved for loan losses are sufficient. This is generally not the case. Over the past few years, having gone through many bank income statements, I have found very few have been reserving sufficiently - most were decreasing the amounts reserved for loan losses to further boost earnings, and this will come back to bite many of them.

 

[Dtail]

I agree with Sojourner. Not worth the hassle esp for MM account that will probably drop.

Best source for info on UFB is here, but no recent reviews:

https://www.depositaccounts.com/banks/ufb-direct.html

I didn’t think OP was worried about legitimacy.

These days the No Penalty CDs seem to be a better option than MM accounts for a combination of decent rates and good liquidity.

https://www.depositaccounts.com/banks/ally-bank.html

+1 generically on no penalty CD's, or large bank bonus programs.

 

[pb4uski]

12 month certificate @ 3.5% if you're eligible and jump through a couple of hoops....

https://www.navyfederal.org/checking-savings/savings/certificates/easystart-certificate.php

The 3.5% for the Special Easy-Start CD is subject to a maximum of $3,000... so pretty useless.

However, the Easy-Start certificates are pretty good.... I locked in a 1.35% add-on for 12 months earlier this week.... only need $50 to seed it and then can add to it anytime.

 

[Soccerman1bmw]

I've been moving more and more of my cash into gold as a long term store. This fed is out of control and they seem to be addicted to money printing.

If the cash is going to be long term and it can also makes sense to use an fixed or fixed indexed annuity, typically these have 10% liquidity annually so you can always access if needed but atleast there's a chance you'll keep up with inflation unlike banks cause rates are likely to keep going lower and lower.

 

[brewer12345]

Hahahaha! Awesome.

 

[Spock]

I've been moving more and more of my cash into gold as a long term store. This fed is out of control and they seem to be addicted to money printing.

If the cash is going to be long term and it can also makes sense to use an fixed or fixed indexed annuity, typically these have 10% liquidity annually so you can always access if needed but atleast there's a chance you'll keep up with inflation unlike banks cause rates are likely to keep going lower and lower.

where are you finding physical bullion?
or are you buying paper ETFs like GLD?

 

[kannon]

Thanks for info on UFB Direct. Next question. Their 1.61% rates are going for both MMA and Savings accounts. Is one better than the other.

And that also got me thinking, how often are rates for savings/MMA changed? I know if we go with a CD at lower rate at least its locked or possible can do a one time step up. Maybe over the course of a year the CD is better than a potentially changing (i.e., lowering) rate on MMA or Savings.

Thanks

 

[cbo111]

Unless somethings changed, Capital One is offering a $500. sign-up bonus for a 1.5% CD right now if you have $50,000 or more, smaller bonus for lower deposits. I did it last year so I'm not eligible to get a second bonus.

I have a Capital One account and cannot see that $500 bonus deal on their website. I would like to take advantage as I have a couple jumbo CD's maturing in the next few weeks.

 

[njhowie]

I have a Capital One account and cannot see that $500 bonus deal on their website. I would like to take advantage as I have a couple jumbo CD's maturing in the next few weeks.

https://www.capitalone.com/score500

Take note:

If you have or had an open savings and/or money market account (excluding CDs, IRA savings accounts and Kids Savings accounts) as a primary or secondary account holder with Capital One on or after January 1, 2016, you're ineligible for the bonus.

 

[Gotadimple]

I am a big fan of Bauer. However, going forward, you need to take their ratings with a grain of salt. Why? Because they are backward looking - their ratings are based on their financial reporting, as you point out...past reporting - it has no knowledge of what's coming down the pike. Over the past few years, most banks on Bauer have moved to 4 and 5 stars because of the strong economy. However, over the coming year, the quality of their loan portfolios are going to either shine, or cause headaches. For most, it will be the latter.

Bottom line, you cannot blindly accept the ratings from Bauer or any other site at this time, unless they are forecasting some sort of deterioration of loans and have determined that amounts reserved for loan losses are sufficient. This is generally not the case. Over the past few years, having gone through many bank income statements, I have found very few have been reserving sufficiently - most were decreasing the amounts reserved for loan losses to further boost earnings, and this will come back to bite many of them.

Agree that financial ratings are just one component. There is also the customer service component to consider. A bank or credit union can be scored high on financial stability, and be lousy at customer service. By that I mean, take an inordinate amount of time to open an account or fund a CD. Sometimes it's just there operational processes, other times they are dealing with the Comptroller of the Currency. Both take some digging to identify.

- Rita

 

[Gotadimple]

Thanks for info on UFB Direct. Next question. Their 1.61% rates are going for both MMA and Savings accounts. Is one better than the other.

And that also got me thinking, how often are rates for savings/MMA changed? I know if we go with a CD at lower rate at least its locked or possible can do a one time step up. Maybe over the course of a year the CD is better than a potentially changing (i.e., lowering) rate on MMA or Savings.

Thanks

Yes, you lock in rates with a CD. MMA and Savings depends on the bank you are dealing with. Big commercial banks have low yielding Savings accounts that don't change as frequently as MMA. But MMA are just that, a bundle of investments that mature and then must be replaced.

Rita

 

[Soccerman1bmw]

where are you finding physical bullion?
or are you buying paper ETFs like GLD?

Sprott physical gold trust ticker phys.

 

[Spock]

Sprott physical gold trust ticker phys.

This is an obviously biased "hit piece", but the tax consequences section is worth understanding if you're holding it in taxable accounts.
https://www.etf.com/sections/blog/7345-phys-not-a-gold-etf-and-a-bad-deal.html?nopaging=1

 

[Soccerman1bmw]

I focus on making money first taxes 2nd but that piece doesnt make much sense. Take a look at the sprott website and make sure own judgement but that blog is a joke

 

[LA_Newsboy]

For parking cash I am using VCSH and VCIT, both from Vanguard, and MINT, from Pimco. They are exchange-traded funds and have done very well for me in the past few months. I hold them in several Fidelity accounts. The money can be moved with a click if an opportunity appears.

 

[Finance Dave]

I don't understand how you can say you are "parking cash" in a corporate bond fund. Those funds can be quite volatile...so I would say you "invested in bonds"...not "parked cash".

Maybe I'm not understanding your terms, but to me "parking cash" means you are putting it temporarily in a place that is unlikely to be volatile. Heck that bond fund dropped from 82 to 71 during the recent market downturn...that's about a 15% drop!

 

[LA_Newsboy]

Thanks for the note, Dave. You made a good point.



For me, "parking cash" does not mean NO volatility. I'll accept some. And yes, that fund did fall 15%, which isn't the end of the world. And I parked/invested my cash in the mid-70s, so I'm green. And I watch it like a hawk.


Also I should say, I have a higher than average tolerance for risk. (Most of my money is in energy MLPs.) Maybe I shouldn't be advising anyone to do what I do.