Maximizing Short Term Yield

[Roger_R]

I am not yet retired, but have a 2-3 year horizon in my sights.  Recently, though a moderate windfall I received some unexpected cash.  I would like to park this cash in something for 6 to12 months while I can think about a best investment choice for the longer term and how to rebalance what I have.  CD's are my easy choice, but am wondering about higher paying parking lots.  Any help for now and also my process of reevaluating?  

 

[wabmester]

Re: Maximazing Short Term Yield

Short-term rates are getting loooow. I was going to suggest a Ford Money Market account, but their rate just dropped from 2.8% to 2.3%. Still better than most 1-yr CDs.

A popular place to park, and even a good long-term bet, is the Vanguard Short-Term Corporate fund. Currently yielding 2.89%, but you'll be subject to NAV fluxuations.

What I used to do for short-term parking was buy a zero-coupon bond. Rates are typically better than what you'd get for a typical short-term bond, but I haven't bought one in a couple years.

 

[charlie]

Vanguard's Short Term Corporate is a good choice
and very liquid. The duration is about 1.8 years so
even if short term rates go up, which many expect,
you would probably do better than parking in a
6 mo CD.

Cheers!

Charlie

 

[cute fuzzy bunny]

Same here with the short term corporate account, thats my short term slush fund. I also have an account with ingdirect that pays 2% with no fees. There was a lengthy discussion on the short term corp fund with few if any dissenters that it should be safe for a cash fund alternative.

If you decide to go safer and open the ingdirect account, find someone here that already has one and have them refer you, then you'll both get a cash bonus.