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GA, USA
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Posted: 1/19/2024 10:11:13 AM EDT
I'm looking at options for my mom to park an emergency fund. She is no longer working due to a head injury, so zero income. She has not started drawing SS, disability, or touched her retirement accounts. She has a pile of cash sitting in a little safe she's been living off. I'm working with a financial advisor to shuffle her money around to be a little smarter and less risky than a pile of cash. We landed on a number of $50k that would need to get treated as an emergency fund. I'm looking for something with minimal risk, and can be accessed in a few days if needed. Bonus points for something that gains interest without adding in too many hurdles to jump through.
I was looking at the different "high yield" accounts. Penfed has a 3% savings account. It is subject to 5 day holds, which isn't terrible. They have local branches, which is convenient. My credit union has 3.5%, but its a checking account and you need to have direct deposit enabled and make 15 debit card transactions per month to get that rate. SoFi advertises 4.6%. But its similar to my credit union, where they require direct deposits to get that rate. What other places should we be considering to put the money for an emergency fund? |
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Posted: 1/19/2024 10:19:19 AM EDT
[#1]
For my mom, we park them in Treasury bonds with 6 month dates, then a small amount in a bank account as her emergency. The Treasure is paying a little over 5% last time I re upped it
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USA
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Posted: 1/19/2024 10:23:40 AM EDT
[#2]
Personally, I go with:
- modest amount of physical cash in various denominations - Discover Checking and Savings accounts: instant internal transfers and the latter currently offers 4.35% APY (no physical locations if that matters to you) - Vanguard settlement fund (VMFXX): not FDIC insured but comprised of short-term gov securities and currently at 5.27%; in the past, took <1 week to transfer out of Vanguard to Discover There are many other online banks that offer high yield savings accounts, and other money market options. I would look in that general direction for secure and liquid places to park an emergency fund (plus credit cards on deck to float things if absolutely needed). |
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Posted: 1/19/2024 11:07:31 AM EDT
[#3]
I scatter it out. Too much to break down typing here on my phone.
I have 153k in bonds and stocks with Edward Jones. 26k in my deferred comp program at work(high risk.” It’s rocking right now at a 18% return. I stack a couple hundred a month into my credit union for shit that breaks, tires, stuff like that. When it hits a certain amount I roll the excess out and blow it on gun shit or something fun. I keep 4k in cash at the house for SHTF, hurricane season etc. |
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Posted: 1/19/2024 11:20:55 AM EDT
[#4]
Just curious: how did you arrive at $50k for an emergency fund? Seems high for the situation.
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Posted: 1/19/2024 12:06:17 PM EDT
[Last Edit: RUGERKAC556]
[#5]
Marcus online banking. 4.5% currently.
Edit to remove link. |
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Posted: 1/19/2024 12:33:47 PM EDT
[#6]
Ally
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Posted: 1/19/2024 1:07:17 PM EDT
[#7]
Quote HistoryOriginally Posted By R2point0: Just curious: how did you arrive at $50k for an emergency fund? Seems high for the situation. Yeah seems excessive, but hard to tell without knowing expenses. How many months of normal expenses is that? A lot of “emergency” situations can still be solved with access that is fairly quick (like next week) versus on hand for immediate use. I think you can do better than the rates you saw in your initial search though. Saw up to 5.25 in our CU while trying to help my kid stash some funds away, so high 4’s or above at least I would think is doable. |
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GA, USA
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Posted: 1/19/2024 1:52:33 PM EDT
[#8]
Quote HistoryOriginally Posted By tac556: Yeah seems excessive, but hard to tell without knowing expenses. How many months of normal expenses is that? A lot of “emergency” situations can still be solved with access that is fairly quick (like next week) versus on hand for immediate use. Thats a 6 month fund. She's just got higher than normal expenses due to medical issues. |
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Posted: 1/19/2024 2:01:30 PM EDT
[#9]
Ladder some money into 4 week T Bills, with reinvest option. That way if you need to pull some out, you can turn off reinvestment and it gets deposited back to your bank every week as they mature. In 4 weeks, you can then have it all back up needed.
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Posted: 1/19/2024 2:03:08 PM EDT
[#10]
Makes sense then at 50k.
I wouldn’t put medical bills in the same category as money to fix a roof or replace a car, hospitals can take a while to even bill you, so I think you should have a lot of flexibility on where to put the funds as a result. |
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Posted: 1/19/2024 3:03:46 PM EDT
[#11]
High yield savings account at Emigrant Direct paying 4%. I don't have $50k in it though as my six month expense number is a lot lower than that.
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Posted: 1/19/2024 3:25:05 PM EDT
[#12]
Vanguard keeps sending me emails about a Vanguard Cash Plus Account @ 4.7%.
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Posted: 1/19/2024 5:17:00 PM EDT
[#13]
Fidelity is paying 5% on cash in their money market. My EFTs to/from fidelity rarely take more than 24 hours to complete on business days, sometimes a bit over 24 hours on weekends/holidays.
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Posted: 1/20/2024 11:22:52 AM EDT
[#14]
Fidelity MMA, I think? 5%
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Posted: 1/20/2024 6:23:36 PM EDT
[#15]
American Express (FDIC insured) is offering 4.6 percent if you are a cardholder.
Vanguard's money market sweep fund seems to be paying 5.25 percent this month. The annual difference between 4.6 percent and 5.25 percent on $50,000 is around $350. Fidelity has also been a good option. The T-Bill ladder also sounds like a good idea...I need to watch a video on setting one up. |
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Posted: 1/20/2024 10:31:15 PM EDT
[Last Edit: FALARAK]
[#16]
No question. Open a Fidelity or Vanguard account (whichever you prefer) and invest in a money market fund. The core settlement accounts pay between 5 and 5.3%. Almost ANY HYSA just pays less, and is silly to throw away money for a few clicks.
Easily transferred to a linked bank account. If she pays state income taxes, then T-bills through treasury direct is a good option with auto-roll enabled. But a little more complicated, and you'd have to set up a ladder that doesn't tie up all the money for a month at a time. |
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Posted: 1/20/2024 10:38:24 PM EDT
[#17]
Quote HistoryOriginally Posted By wildearp: Ally I'm a fan of Ally, but they currently pay 4.35%, while VMFXX at Vanguard pays 5.28%. That's like lighting $40 a month on fire. I'll pass. |
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Posted: 1/21/2024 10:05:30 AM EDT
[#18]
Quote HistoryOriginally Posted By youisme: Personally, I go with: - modest amount of physical cash in various denominations - Discover Checking and Savings accounts: instant internal transfers and the latter currently offers 4.35% APY (no physical locations if that matters to you) - Vanguard settlement fund (VMFXX): not FDIC insured but comprised of short-term gov securities and currently at 5.27%; in the past, took <1 week to transfer out of Vanguard to Discover There are many other online banks that offer high yield savings accounts, and other money market options. I would look in that general direction for secure and liquid places to park an emergency fund (plus credit cards on deck to float things if absolutely needed). This is what Im doing with my stand by cash. |
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Posted: 1/21/2024 10:09:18 AM EDT
[#19]
I wouldn’t do anything with the cash until we see if Basel III has any impact next week.
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GA, USA
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Posted: 1/21/2024 12:11:34 PM EDT
[Last Edit: giantpune]
[#20]
Quote HistoryOriginally Posted By FALARAK: I'm a fan of Ally, but they currently pay 4.35%, while VMFXX at Vanguard pays 5.28%. That's like lighting $40 a month on fire. I'll pass. IMO, $40/mo isn't worth any level of extra effort. That barely feeds 2 people lunch at McDonalds. I would give up $40 a month for almost any other benefit like faster transactions or even an easier to login website |
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Posted: 1/21/2024 12:18:27 PM EDT
[#21]
Quote HistoryOriginally Posted By giantpune: IMO, $40/mo isn't worth any level of extra effort. That barely feeds 2 people lunch at McDonalds. I would give up $40 a month for almost any other benefit like faster transactions or even an easier to login website But over the next 20 years, at 5.25 percent interest, that $40 a month becomes over $16,000. |
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Posted: 1/21/2024 12:23:05 PM EDT
[Last Edit: FALARAK]
[#22]
Quote HistoryOriginally Posted By giantpune: IMO, $40/mo isn't worth any level of extra effort. That barely feeds 2 people lunch at McDonalds. I would give up $40 a month for almost any other benefit like faster transactions or even an easier to login website Quote HistoryOriginally Posted By giantpune: Originally Posted By FALARAK: I'm a fan of Ally, but they currently pay 4.35%, while VMFXX at Vanguard pays 5.28%. That's like lighting $40 a month on fire. I'll pass. IMO, $40/mo isn't worth any level of extra effort. That barely feeds 2 people lunch at McDonalds. I would give up $40 a month for almost any other benefit like faster transactions or even an easier to login website There is zero difference in speed of transactions and ease of use from a MMF at Fidelity vs a HYSA at any bank. ACH is 1-3 days in both cases. Ease of logging into a website? I have Vanguard, Fidelity, Ally Bank, and several other banks for different business reasons. I don't find any difference whatsoever in the login and transfer experience. I cannot possibly fathom throwing away $40 per month for something so trivial. The point of parking an emergency fund where it can earn the highest rate is generally one of two reasons: 1. To try and limit the amount that inflation destroys, or 2. To generate some monthly income. $50k at 5.28% earns $220 per month. At 4.35% it earns $181 per month. Why would anyone choose to earn less, for the equivalent of 15 minutes opening an account? |
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GA, USA
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Posted: 1/21/2024 12:58:15 PM EDT
[#23]
Quote HistoryOriginally Posted By FALARAK: There is zero difference in speed of transactions and ease of use from a MMF at Fidelity vs a HYSA at any bank. ACH is 1-3 days in both cases. Ease of logging into a website? I have Vanguard, Fidelity, Ally Bank, and several other banks for different business reasons. I don't find any difference whatsoever in the login and transfer experience. I cannot possibly fathom throwing away $40 per month for something so trivial. The point of parking an emergency fund where it can earn the highest rate is generally one of two reasons: 1. To try and limit the amount that inflation destroys, or 2. To generate some monthly income. $50k at 5.28% earns $220 per month. At 4.35% it earns $181 per month. Why would anyone choose to earn less, for the equivalent of 15 minutes opening an account? You are completely ignoring the rest of it. The part when the actual emergency happens. You are only focusing on opening the account, which is the easiest and lowest stress part of the emergency fund's job. When shit happens, I want my mom to be able to get her money easily. There may be a time when I am not available to do it for her. Something that seems trivial to the financial guys, logging into vanguard and figuring out which account is which, and transferring money over to your bank account. That is not something 99% of people are comfortable doing. And especially the case with my mom who has a head injury. I dont want to put her money somewhere and then when its time that she needs it, she cant figure out how to get it out to where she can spend it. The extra $40/mo is garbage if she can't get her money out when it matters. Even with printed out instructions in a binder with screenshots of everything to click, I dont think she could successfully navigate transferring money across accounts and financial institutions without help. |
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Posted: 1/21/2024 1:03:45 PM EDT
[Last Edit: FALARAK]
[#24]
Quote HistoryOriginally Posted By giantpune: You are completely ignoring the rest of it. The part when the actual emergency happens. You are only focusing on opening the account, which is the easiest and lowest stress part of the emergency fund's job. When shit happens, I want my mom to be able to get her money easily. There may be a time when I am not available to do it for her. Something that seems trivial to the financial guys, logging into vanguard and figuring out which account is which, and transferring money over to your bank account. That is not something 99% of people are comfortable doing. And especially the case with my mom who has a head injury. I dont want to put her money somewhere and then when its time that she needs it, she cant figure out how to get it out to where she can spend it. The extra $40/mo is garbage if she can't get her money out when it matters. Even with printed out instructions in a binder with screenshots of everything to click, I dont think she could successfully navigate transferring money across accounts and financial institutions without help. Quote HistoryOriginally Posted By giantpune: Originally Posted By FALARAK: There is zero difference in speed of transactions and ease of use from a MMF at Fidelity vs a HYSA at any bank. ACH is 1-3 days in both cases. Ease of logging into a website? I have Vanguard, Fidelity, Ally Bank, and several other banks for different business reasons. I don't find any difference whatsoever in the login and transfer experience. I cannot possibly fathom throwing away $40 per month for something so trivial. The point of parking an emergency fund where it can earn the highest rate is generally one of two reasons: 1. To try and limit the amount that inflation destroys, or 2. To generate some monthly income. $50k at 5.28% earns $220 per month. At 4.35% it earns $181 per month. Why would anyone choose to earn less, for the equivalent of 15 minutes opening an account? You are completely ignoring the rest of it. The part when the actual emergency happens. You are only focusing on opening the account, which is the easiest and lowest stress part of the emergency fund's job. When shit happens, I want my mom to be able to get her money easily. There may be a time when I am not available to do it for her. Something that seems trivial to the financial guys, logging into vanguard and figuring out which account is which, and transferring money over to your bank account. That is not something 99% of people are comfortable doing. And especially the case with my mom who has a head injury. I dont want to put her money somewhere and then when its time that she needs it, she cant figure out how to get it out to where she can spend it. The extra $40/mo is garbage if she can't get her money out when it matters. Even with printed out instructions in a binder with screenshots of everything to click, I dont think she could successfully navigate transferring money across accounts and financial institutions without help. I help manage two different widow's finances (one being my mother). I have set both of them up to use their local bank (which they are familiar with) to transfer from any linked accounts. It doesn't matter WHERE the money is, once you have a linked account you can transfer the funds from EITHER side. One of the widows I help has ZERO experience, never written a check, never logged into a bank account in her life. Her husband did it all. She needs help from time to time, but she has figured it out. Additionally, at Fidelity, you can use an account that has a debit card and check-writing.... if you needed to pay for something NOW and cannot wait for ACH. The simplest is always to keep the emergency fund in the same local bank as her checking/debit account, but in a seperate savings account. Those will have instant transfers, but they will generally not pay much interest. |
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Posted: 1/23/2024 5:50:36 PM EDT
[#25]
SPAXX since interest rates came up.
0.1% on my savings at the local credit union means the 4.98% I'm accruing in my money market makes a big difference. Sadly everything in my house has been breaking so I haven't been able to squirrel money away much in the past few months. |
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Posted: 1/23/2024 7:04:36 PM EDT
[#26]
I have a little bit in my Fidelity as cash, but I've been using a savings account with Redneck Bank. Yeah, it's a funny name but it's paying a 5.05% APR (up to $75k) while fidelity bounces up and down.
I used Live Oak Bank before as they had a good rate when everyone else was abysmal (even fidelity), and even Citi for a short while, but Citi was only for the 3 month cash bonus and then I closed it back out. |
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OK, USA
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Posted: 1/23/2024 7:10:52 PM EDT
[Last Edit: King_Mud]
[#27]
I use BMO Alto for near immediate access emergency funds. Right now my savings is 5.10%.
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Posted: 1/23/2024 11:40:08 PM EDT
[#28]
Fidelity has banking options.
make an appointment with your local Fidelity office. |
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Posted: 1/24/2024 9:44:22 AM EDT
[Last Edit: Morgan321]
[#29]
Quote HistoryOriginally Posted By OKnativeson: Fidelity has banking options. make an appointment with your local Fidelity office. Quote HistoryOriginally Posted By OKnativeson: Fidelity has banking options. make an appointment with your local Fidelity office. FYSA, I have one of the fidelity "cash management" accounts that has a debit card and SPAXX is not available as an option to keep your cash in. You would have to have a different account type that allows SPAXX, then log in and transfer money between the accounts in order to access the cash via debit card. Better option might be the fidelity credit card. It gives good cash back and you can set it up to auto-pay from an account that uses SPAXX for your cash. Originally Posted By jasoncar40: Yeah, it's a funny name but it's paying a 5.05% APR (up to $75k) while fidelity bounces up and down. Fidelity is 4.98% today. Last week it was 5.01% and last month it was 4.99%. I'd hardly call that bouncing up and down. It's been 5% since the last fed rate hike. Also fidelity has no limits on balance to earn that 5% - many banks have a minimum balance required to get 5% and/or only pay that 5% on a fraction of your balance. |
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GA, USA
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Posted: 1/24/2024 10:02:37 AM EDT
[#30]
Quote HistoryOriginally Posted By Morgan321: Better option might be the fidelity credit card. It gives good cash back and you can set it up to auto-pay from an account that uses SPAXX for your cash. I think for mom with her head injury, I would avoid a credit card. Her entire life, she never had a credit card. She was all cash and debit all the time. With the head injury and the forgetfulness now, I can see a credit card being a slippery slope to a hole she can't dig herself out of. Now probably isn't the time to test and see if she is or isn't a credit card person. 
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WA, USA
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Posted: 1/24/2024 10:39:28 AM EDT
[#31]
Quote HistoryOriginally Posted By FALARAK: I help manage two different widow's finances (one being my mother). I have set both of them up to use their local bank (which they are familiar with) to transfer from any linked accounts. It doesn't matter WHERE the money is, once you have a linked account you can transfer the funds from EITHER side. One of the widows I help has ZERO experience, never written a check, never logged into a bank account in her life. Her husband did it all. She needs help from time to time, but she has figured it out. Additionally, at Fidelity, you can use an account that has a debit card and check-writing.... if you needed to pay for something NOW and cannot wait for ACH. The simplest is always to keep the emergency fund in the same local bank as her checking/debit account, but in a seperate savings account. Those will have instant transfers, but they will generally not pay much interest. |
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SK, CAN
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Posted: 2/6/2024 8:46:59 PM EDT
[#32]
Originally Posted By giantpune: I'm looking at options for my mom to park an emergency fund. She is no longer working due to a head injury, so zero income. She has not started drawing SS, disability, or touched her retirement accounts. She has a pile of cash sitting in a little safe she's been living off. I'm working with a financial advisor to shuffle her money around to be a little smarter and less risky than a pile of cash. We landed on a number of $50k that would need to get treated as an emergency fund. I'm looking for something with minimal risk, and can be accessed in a few days if needed. Bonus points for something that gains interest without adding in too many hurdles to jump through. I was looking at the different "high yield" accounts. Penfed has a 3% savings account. It is subject to 5 day holds, which isn't terrible. They have local branches, which is convenient. My credit union has 3.5%, but its a checking account and you need to have direct deposit enabled and make 15 debit card transactions per month to get that rate. SoFi advertises 4.6%. But its similar to my credit union, where they require direct deposits to get that rate. What other places should we be considering to put the money for an emergency fund? The only safe place is in PHYSICAL GOLD. It can be liquidated easily, and there is no counter party risk.  It's as good as gold. |
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Posted: 2/6/2024 10:23:35 PM EDT
[#33]
Quote HistoryOriginally Posted By Pureblood: The only safe place is in PHYSICAL GOLD. It can be liquidated easily, and there is no counter party risk. https://i.imgur.com/7qeKD4J.png It's as good as gold. Quote HistoryOriginally Posted By Pureblood: Originally Posted By giantpune: I'm looking at options for my mom to park an emergency fund. She is no longer working due to a head injury, so zero income. She has not started drawing SS, disability, or touched her retirement accounts. She has a pile of cash sitting in a little safe she's been living off. I'm working with a financial advisor to shuffle her money around to be a little smarter and less risky than a pile of cash. We landed on a number of $50k that would need to get treated as an emergency fund. I'm looking for something with minimal risk, and can be accessed in a few days if needed. Bonus points for something that gains interest without adding in too many hurdles to jump through. I was looking at the different "high yield" accounts. Penfed has a 3% savings account. It is subject to 5 day holds, which isn't terrible. They have local branches, which is convenient. My credit union has 3.5%, but its a checking account and you need to have direct deposit enabled and make 15 debit card transactions per month to get that rate. SoFi advertises 4.6%. But its similar to my credit union, where they require direct deposits to get that rate. What other places should we be considering to put the money for an emergency fund? The only safe place is in PHYSICAL GOLD. It can be liquidated easily, and there is no counter party risk. https://i.imgur.com/7qeKD4J.png It's as good as gold. He asked for: 1. Safer than a pile of cash. 2. Earns interest 3. Less hurdles to jump through when needing the cash. Gold provides for NONE of those. |
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Posted: 2/6/2024 11:22:28 PM EDT
[#34]
About $50K in my HSA account, invested mostly in ETFs with a moderate to conservative asset allocation. Pulled out about $5K last fall when my 16 year old's appendix tried to kill her. It was unsuccessful in its attempt.
A few thousand in cash in the safe. A bit more in my Ally money market account. And some in a Fidelity post-tax brokerage account, although some of that is play/gambling money when the options bug hits me. |
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SK, CAN
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Posted: 2/10/2024 12:44:53 AM EDT
[#35]
Quote HistoryOriginally Posted By FALARAK: He asked for: 1. Safer than a pile of cash. 2. Earns interest 3. Less hurdles to jump through when needing the cash. Gold provides for NONE of those. 1. Gold is safer than cash, it has no counter party risk. 2. Gold I bought in 2010 has doubled in fiat currency value, if that's not earning interest what is ? 3. What hurdles ? |
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Posted: 2/10/2024 12:48:12 AM EDT
[#36]
Quote HistoryOriginally Posted By Pureblood: 1. Gold is safer than cash, it has no counter party risk. 2. Gold I bought in 2010 has doubled in fiat currency value, if that's not earning interest what is ? 3. What hurdles ? Quote HistoryOriginally Posted By Pureblood: Originally Posted By FALARAK: He asked for: 1. Safer than a pile of cash. 2. Earns interest 3. Less hurdles to jump through when needing the cash. Gold provides for NONE of those. 1. Gold is safer than cash, it has no counter party risk. 2. Gold I bought in 2010 has doubled in fiat currency value, if that's not earning interest what is ? 3. What hurdles ? |
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