Where are you parking Cash?

[ktdtx]

Not a traditional, ready "cash parking" place but I looked at the long term price fluctuation and I'm willing to take some risk for the return. I do not have all my cash here--FRFZX

 

[friar1610]

My NFCU MM pays .45%. That’s 15-45x better.

Although there may be cash accounts that pay marginally better than NFCU, I haven’t seen anything that’s enough better to make it worth my time/effort to switch. And I trust NFCU - that’s worth something.

 

[jimbee]

I don't think everyone here uses the same definition of the word cash.

 

[sengsational]

The purpose of "cash", for most of us, is to not have to "sell low". That's a good enough definition for me.

 

[jazz4cash]

Although there may be cash accounts that pay marginally better than NFCU, I haven’t seen anything that’s enough better to make it worth my time/effort to switch. And I trust NFCU - that’s worth something.

Switch from what? I agree it’s not worth chasing .25% or less unless we’re taking a huge amount. I just think it’s smart to use term ladders to get a little better return on funds not needed for the current year. These online savings rates could drop any day.

 

[RobbieB]

In the checking/savings for .01%. Yeah, it's for spending.

Stocks for making dough, bonds for stability and cash to blow!

 

[audreyh1]

I’ve kind of given up beyond high yield savings accounts. I do have a big stash in shorter term CDs not maturing until next spring. So until next spring I’m not even shopping.

 

[friar1610]

Switch from what? I agree it’s not worth chasing .25% or less unless we’re taking a huge amount. I just think it’s smart to use term ladders to get a little better return on funds not needed for the current year. These online savings rates could drop any day.

From NFCU’s MM account paying .45% for my cash* holdings. I was responding to your comment that you have a .45% NFCU MM account. I was agreeing with you. As I appear to with you about on-line savings rates.

* By “cash” I mean savings accounts, MM accounts, checking accounts, etc. Not bonds, CDs, MYGAs, I-Bonds, ST bond funds, etc.

 

[Guamaniac]

$500 a year per $100k just doesn't excite me enough to go through the trouble of rolling money over to a bank and creating another account. I'll let my equities do the heavy lifting. That's what they're there for. The cash is for not having to sell during a market downturn.
Late last year I did move some cash into a Baird short term bond fund just to "try something". That obviously hasn't gone anywhere.

I do have about 40% of my cash/equivalents in a guaranteed 3% fund inside my 401k which is the only reason I haven't rolled it into my IRA. I could roll money the other way from IRA to 401k, I guess, but in order to access it they actually make you fill out paper forms and fax or mail to get the withdrawal. Nope, no thanks.

 

[gamboolman]

The Bank and in the Gunsafe

Interest rates are about the same....

Nice having Cash handy at home.....

 

[RobbieB]

Me too, got 10 grand in the safe, 100 Benjamins. Doesn't take much room -

 

[Timeisprecious]

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.

Well, that sounds pretty good these days. I'm keeping cash in a Vio savings account at 0.57%. We're all hoping for a bit of an upturn in interest rates soon, right?

 

[jazz4cash]

My Marcus savings is earning 0.8% due to bonuses from AARP and the referral deal that expire next month. Maybe I should repost and promote that referral link!

 

[Dash man]

We have about $740k in Flexible Retirement Annuities with USAA paying an average of 2.25%. Any new money added would pay the minimum 1%. We’ve had them long enough that they’re basically a savings account now with no penalties of any kind, and no fees. They’re not FDIC insured, but USAA is a very strong company.

 

[Sunset]

The Bank and in the Gunsafe

Interest rates are about the same....

Nice having Cash handy at home.....

Until you get a home invasion.

Years ago, read about a couple, had (in today's dollars) about $300,000 in cash in safe at home. They were beaten nearly to death until the safe was opened.
They had not trusted banks, so it was the majority of their savings.

Very sad...

 

[aja8888]

Until you get a home invasion.

Years ago, read about a couple, had (in today's dollars) about $300,000 in cash in safe at home. They were beaten nearly to death until the safe was opened.
They had not trusted banks, so it was the majority of their savings.

Very sad...

They were not too smart...someone with a gun safe (or other safe) need to keep some "iron" handy in case of a home invasion sort of thing. I know it's wishful thinking, but one must be prepared if holding "Big Dollars" in cash at home.

 

[zekeboz]

So take with grain of whatever. I always get sand and salt confused with that phrase.

1 year's expenses: GM Financial Right notes@1.5% - not FDIC

+1 Has worked out great so far and of course it is not FDIC insured but I am willing to take the risk and I 'diversify' by also putting some funds with Toyota's demand notes, 1.35%.

 

[HockeyGoon]

I'm about 3-4 years from FIRE. I recently took out a securities backed line of credit for $150K, max. The interest rate is less than 3%. I only keep about $4k in cash in checking. The line of credit can be drawn at any time as needed. At the end of the year I will use my bonus to pay it down. I have everything else invested. The majority of what used to be cash, in index funds.

This is our only debt. The drawbacks are that you cannot use the funds directly to purchase additional securities and the interest is not deductible.

The plus side is that it can be drawn at any time and allows us to use it for cash flow, while paying it off as needed. When I retire, I plan on using that for cash flow, while keeping most of our nest egg invested. It does not count as income for a tax purposes.

 

[Dash man]

They were not too smart...someone with a gun safe (or other safe) need to keep some "iron" handy in case of a home invasion sort of thing. I know it's wishful thinking, but one must be prepared if holding "Big Dollars" in cash at home.

Or have a more visible safe with a smaller amount of cash, and a more well hidden safe with the larger amount. Give them what’s in the safe with the smaller value items and they will likely move on.

 

[Pointby2]

I just rolled over the 401K monies from my last job. While I reinvest it I've been stashing the IRA rollover cash in a Vanguard VTIP fund at E Trade. It shows a 2.27% dividend yield and an estimated annual income of $4,663.84 on the $126,751 in have there. It sounds too good to be true. Inflation protected, govt issued TIPS and a great dividend yield.



Am I missing something?

 

[youbet]

I just rolled over the 401K monies from my last job. While I reinvest it I've been stashing the IRA rollover cash in a Vanguard VTIP fund at E Trade. It shows a 2.27% dividend yield and an estimated annual income of $4,663.84 on the $126,751 in have there. It sounds too good to be true. Inflation protected, govt issued TIPS and a great dividend yield.



Am I missing something?

I'm no bond or bond fund expert, but the info I see on VTIP (from Schwab) looks different from what you're seeing on E Trade. Something isn't adding up and I agree with you, the numbers you're seeing seem too good to be true.

Previous Dividend Payment
$0.4808
Previous Pay Date
Jul 07, 2021
Previous Ex-Date
Jul 01, 2021
Distribution Yield
1.35%
SEC Yield (30 Day)
-2.69%

I noticed on the distribution history, VTIP has skipped quarterly div payments numerous times. And compared to other similar index funds following the TIPS 0 - 5 year index, VTIP's return is considered below average.

 

[sengsational]

They were not too smart...someone with a gun safe (or other safe) need to keep some "iron" handy in case of a home invasion sort of thing. I know it's wishful thinking, but one must be prepared if holding "Big Dollars" in cash at home.

I get that someone may want to go that route, but not me. If someone wants something of mine bad enough to use force (imminent physical threat), I'm going to help them get it in the most expedient way possible. I'll be alive, probably less injured, and have somewhat lower net worth.

So no large amount of valuables in the house for me, even if the bank rate is 0%. I DO have a problem with negative rates, though. Not sure what I'd do if they start taking a fraction of assets periodically.

 

[Oakster]

If the cash represents 3 yrs of expenses, I’d 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 it’s FDIC. It’s not like you’ll need all the funds to buy a house in a yr or two.

That is basically the plan I have, when I decide to retire. I have 10 years or so yet to try and figure out a better way.

 

[75Norton]

I get .75% at the local credit union and they add .25% if you maintain a balance over 100k. A few years ago they were paying the same when others were at 2%.

 

[paul5795]

While not the normal answer, I have pretty much given up on CDs, and cash accounts, even MMFs … still maintain a buffer, but …

Been buying ATT on dips for the past 18 months … 7% dividend and really stable share price.

I recognize the risks.

ATT announced way back in May that down the road they would be slashing that 7% dividend. Not to say that ATT is a bad investment . . . I own some and continue to own some! But the future stability of the ATT stock price is an open question, and ATT is certainly not a cash substitute.