High yield savings/money market

[Starport Seven-Five]

This is the website I always visit for things like this: https://www.doctorofcredit.com/high-interest-savings-to-get/

To be honest, the best use of funds like that right now is chasing bank signup bonuses. Interest rates are low and you can earn more with 1 sign up bonus than you can in interest. This is their page listing best sign up bonuses: https://www.doctorofcredit.com/best-bank-account-bonuses/

Yep. Chasing yield is a bad idea. My emergency funds are all in my checking account. It's not worth doing savings, CDs, or treasuries because the short term yield is almost zero anyway.

I agree that chasing rates it is a bad idea (because 0.7% is not significantly better than 0.6%) but even 0.60% on 25k is $150 per year. It's better than nothing and reduces the losses you experience to inflation.

 

[tvguy]

My wife shifted her entire 401k account balance (35 years in the plan) about 8 years ago into Money Markets. The balance was high enough that with social security it will easily cover her entire lifetime income needs. She did not want to risk losing any money. Good news, she hasn't lost a penny of what she put in and has made money. Bad news, our financial adviser ran the numbers on the mutual funds she had been in before.....she missed out on $125,000 in gains if she had stayed in them.
Hard to believe that when we got married in 1982 a federally insured CD paid 16% interest. But, our first mortgage was 12.25%! Our daughter just refinanced and her new mortgage rate is 3.6%!

 

[MrsBooch]

I work in banking - it's not a great time for interest rates -

there are short term cd's out there that get you .70 after 18 months - but .6 is about average for savings or money market anywhere.

Ally Bank has a no penalty cd for .6 and a raise your rate 2 yr cd at .7 where if a rate increase happens during your term you can have it applied.

they're all online though if that matters to you.

 

[Sjm9911]

If you can stomach a little risk look for a stock that pays dividends. Something safer, like a utility.

 

[tvguy]

If you can stomach a little risk look for a stock that pays dividends. Something safer, like a utility.

Given how many utilities have gone bankrupt THIS year, I'd not include any utility on the list of safe investments.

 

[Sjm9911]

Given how many utilities have gone bankrupt THIS year, I'd not include any utility on the list of safe investments.

Ok, your in California, so anywhere they dont sue the utillity companies and blame them for wildfires when the utillity poles get knocked down. I think that may be any other state but California. Over on the other side of the country they are pretty stable.

 

[tvguy]

Ok, your in California, so anywhere they dont sue the utillity companies and blame them for wildfires when the utillity poles get knocked down. I think that may be any other state but California. Over on the other side of the country they are pretty stable.

Doesn't appear P-G_& E is unique.
https://www.greenbiz.com/article/many-electric-utilities-are-struggling-will-more-go-bankrupt

 

[Sjm9911]

Upon skimming the artical, it really dosent say anything other then pg &e and another componay years ago that went bankrupt. Kind of a bad headline. So , yea , ps&g is pretty unique. The artical does mention that they invest in stuff that may or may not get built, but the cost is transfered to the customers. Not the investers. Even if they change the way power is generated they still distribute that power it for a profit. Untill that changes there will always be utility companies, unless it happens that they get sued by the state and left open to liabilities. It will be worth seeing what happens in California. I can imagine, no one else will take on the liability and the state will take over the utility. But , thats only in California. Other states ( i think all) dont sue for acts of nature. There would have to be malfeasance for that to happen.

 

[Starport Seven-Five]

If you can stomach a little risk look for a stock that pays dividends. Something safer, like a utility.

Why use dividends as a screening tool? All a dividend payment does is force a taxable event while pulling a bit of value out of your shares.

 

[Sjm9911]

Depends on what you want to do, reinvest it to buy more shares, get more dividands, not taxable. It dosen't nessassarly effect the share price. But it is true, the shares are usally stable. You can get 5.5 percent in dividands. To me thats better then .75 in a cd. There is risk, but such is life.

 

[Sjm9911]

Not taxable untill you sell, sorry for that. It dosent add to your tax burden for that year if you reinvest it in the same stock.

 

[loves to dive]

I use Nerdwallet and Bankrate to check rates and find the best around. Right now I have some in a regular savings, some in a MMA and some in a 10 year annuity that has 7 years left. I check the MMA accounts every year to find the best one.

 

[BridgetBordeaux]

I'm not putting it anywhere that has risk. Just trying to find the safest/highest interest possible. I'm hesitant to do a CD, just in case I need it for something.

Something else you could do would be to put a portion in some CD's AND put some in a "high yield" savings account.

In the past, if I had 10K to set aside, I would get four 2500 dollar CD's.

You could split up your 25K as you wish and it would be safe in multiple FDIC insured products.

 

[pklein09]

I have about 25k that I need to park somewhere. I need be able to add to it and don't plan to really touch it for a couple of years.

This was at the advice of our financial planner. Do you guys know of a good place?

I've read through all the suggestions, but my question is why didn't your financial planner suggest something? Are you asking here to verify what he/she suggested? Our financial planner will have suggestions, but ultimately the decision is ours.

 

[ruadisneyfan2]

My wife shifted her entire 401k account balance (35 years in the plan) about 8 years ago into Money Markets. The balance was high enough that with social security it will easily cover her entire lifetime income needs. She did not want to risk losing any money. Good news, she hasn't lost a penny of what she put in and has made money. Bad news, our financial adviser ran the numbers on the mutual funds she had been in before.....she missed out on $125,000 in gains if she had stayed in them.
Hard to believe that when we got married in 1982 a federally insured CD paid 16% interest. But, our first mortgage was 12.25%! Our daughter just refinanced and her new mortgage rate is 3.6%!

Did the FA advise her to move all of her 401K to a money market account? I'm no expert but I would think that keeping a couple years worth of expenses in a mm account wouldn't be a bad idea in case the market takes a dive but to move the whole thing would definitely mean a loss in potential earnings.
Mine has gained over $100k in just the 3 years that I've been watching it closely. I'm not close to retirement.

 

[tvguy]

. But , thats only in California. Other states ( i think all) dont sue for acts of nature. There would have to be malfeasance for that to happen.

PG&E wasn't sued for acts of nature. They failed to maintain their equipment, it failed, and started fires.

 

[tvguy]

Did the FA advise her to move all of her 401K to a money market account? I'm no expert but I would think that keeping a couple years worth of expenses in a mm account wouldn't be a bad idea in case the market takes a dive but to move the whole thing would definitely mean a loss in potential earnings.
Mine has gained over $100k in just the 3 years that I've been watching it closely. I'm not close to retirement.

He did not advise it. He agreed with her that she wouldn't lose a penny of her 401k moving into money markets, but warned that the risk was the stock market going up sharply, like it did. He doesn't manage our 401ks, just our IRAs and other investments.

 

[Sjm9911]

PG&E wasn't sued for acts of nature. They failed to maintain their equipment, it failed, and started fires.

Not exactly, but lets get back to investing. Pm me if you want to further discuss that.

 

[tvguy]

Not exactly, but lets get back to investing. Pm me if you want to further discuss that.

THEY (P-G&E) admitted that their neglegence caused 84 deaths. This Emmy award winning documentary chronicles that. https://www.abc10.com/firepowermoney

As for investments in utilities, no need to PM. Everyone needs to educate themselves and make their own decisions before investing.

 

[mommy2allyandaveri]

I've read through all the suggestions, but my question is why didn't your financial planner suggest something? Are you asking here to verify what he/she suggested? Our financial planner will have suggestions, but ultimately the decision is ours.

I'm actually a little frustrated that he wasn't more helpful. His company's money market was extremely low so his suggesting was to find a savings account for it.