Posted: 8/7/2025 8:57:05 AM EDT
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Selling my house, but it will be 6 months to a year before actively looking for the next place. My savings account is a pathetic .1%. Capital One 360 offers a 3.5% rate for savings. Without being locked in for a specific term, any recommendations? There are a few other places that offer online high yield for around 4.5%, but most local places (even money market accounts) are near 1%. Mainly looking for low risk and the ability to pull the cash when I find the next place. Could find a great deal tomorrow, but not seriously looking until spring. |
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We did a thread like this recently. Current best is around 4.5%. Average around 4.2% Rates are not guaranteed to stay the same for 6 months. 6 months ago, my HYSA was 1% higher than it is now. I have my emergency fund in a local credit union getting like 3.5% with a brick and mortar building and office building I can walk into. Any cash past that is just in vanguard's money market, somewhere north of 4%. https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx |
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Open a fidelity account and put the money into treasury bills. They pay around 4.3% in the short term but the bonus is that the interest is exempt from state taxes. Google says WI state income tax ranges from 3.5-7.65% so the state tax savings can add up if you're talking 6-figure amounts of cash. |
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SPAXX is 3.98% and 55% tax free. I use my Fidelity holding account as my HYSA for my household. |
WTF is up with this bullshit anti-bayo lug crap. Was there a group of irrate japanese guys bonzai charging disabled school children and puppies that I wasn't aware of?
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If you have a Vanguard account - VMFXX (4.22%) If you have a Fidelity account - FZDXX (4.13%) If you live in a state that has income tax - 1 month T-bills If you have neither, why not? Instantly transferable to another account using wire or ACH, can enable check writing on the Fidelity account for sure and just write a check when needed for the new property. |
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Originally Posted By Silverbulletz06: SPAXX is 3.98% and 55% tax free. *State* income tax free due to holding treasuries. But not "tax free" as all will be considered non-qualified dividends and taxed at the ordinary income tax rate at the Federal tax level, just like interest. |
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Originally Posted By FALARAK: *State* income tax free due to holding treasuries. But not "tax free" as all will be considered non-qualified dividends and taxed at the ordinary income tax rate at the Federal tax level, just like interest. Fair enough. But it's 4% return earns me more in a month then my CU does in a whole year. |
WTF is up with this bullshit anti-bayo lug crap. Was there a group of irrate japanese guys bonzai charging disabled school children and puppies that I wasn't aware of?
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Originally Posted By FALARAK: can enable check writing on the Fidelity account for sure and just write a check when needed for the new property. You can enable check writing in the vanguard, too. Some of the hoops are listed here. https://personal.vanguard.com/us/whatweoffer/accountservices/checkwriting?lang=en |
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Originally Posted By Morgan321: Open a fidelity account and put the money into treasury bills. They pay around 4.3% in the short term but the bonus is that the interest is exempt from state taxes. Google says WI state income tax ranges from 3.5-7.65% so the state tax savings can add up if you're talking 6-figure amounts of cash. I may have to look into this angle more; tax exemption is always nice. Might be a good long term plan. For starters, thinking of giving Capital One a shot...at least long enough to get the free $1500.  https://www.capitalone.com/bank/bonus1500/
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Originally Posted By NAM: I may have to look into this angle more; tax exemption is always nice. Might be a good long term plan. For starters, thinking of giving Capital One a shot...at least long enough to get the free $1500. https://www.capitalone.com/bank/bonus1500/Thats the spirit. Use $100k to get $1500 at capitol one. At the same time, use $15k to get $900 at chase. Thought, I'm not sure the math is that great for the capitol one. Parking $100k for 90 days, and then having to wait another 60 days to get paid, just to earn $1500. Thats 1.5%. Is it really that much better than parking the money in a 4.2% money market and forgetting about it? |
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Originally Posted By NAM: I may have to look into this angle more; tax exemption is always nice. Might be a good long term plan. For starters, thinking of giving Capital One a shot...at least long enough to get the free $1500. https://www.capitalone.com/bank/bonus1500/Originally Posted By NAM: Originally Posted By Morgan321: Open a fidelity account and put the money into treasury bills. They pay around 4.3% in the short term but the bonus is that the interest is exempt from state taxes. Google says WI state income tax ranges from 3.5-7.65% so the state tax savings can add up if you're talking 6-figure amounts of cash. I may have to look into this angle more; tax exemption is always nice. Might be a good long term plan. For starters, thinking of giving Capital One a shot...at least long enough to get the free $1500. https://www.capitalone.com/bank/bonus1500/Do the math. Not a good deal, unless you bounce as soon as they will let you, which is 105 days after account opening, AND you ONLY contribute a maximum of $100k. If you played it perfectly, you'd earn 5% (3.5% plus 1.5%) for those 105 ish days (minus time in transfer) so lets say 100 days of actual earning. With Vanguard's VMFXX paying 4.22%, you'd earn an extra 0.78% (annualized) interest on your $100k, or a net result of $214 additional dollars. And that assumes you did everything perfectly.... They know that 99% of their clients wont bother, and the bank wins. But, after state taxes, you will likely be losing money taking this approach. Just rotating T-bills in a state with income tax is a much stronger and simpler play, or just using VMFXX. |
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Originally Posted By FALARAK: Not a good deal, unless you bounce as soon as they will let you, which is 105 days after account opening, AND you ONLY contribute a maximum of $100k. And that's the plan, for now. Deposit the minimum necessary, and while I'm waiting for the 105 days to elapse, research what to do next. It's better than putting it in a savings account where it will do jack squat. Is it the best option? Probably not. But it buys me time. |
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Originally Posted By Silverbulletz06: SPAXX is 3.98% and 55% tax free. I use my Fidelity holding account as my HYSA for my household. Yep |
Callsign-ChuckYeager
That man is a homo and a liar-TrojanMan
Hell, a Ford just breaks down on you. It doesn't fall apart AND try to kill you at the same time-Bloodsport2885
That man is a homo and a liar-TrojanMan
Hell, a Ford just breaks down on you. It doesn't fall apart AND try to kill you at the same time-Bloodsport2885
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Originally Posted By NAM: And that's the plan, for now. Deposit the minimum necessary, and while I'm waiting for the 105 days to elapse, research what to do next. It's better than putting it in a savings account where it will do jack squat. Is it the best option? Probably not. But it buys me time. Do the math for the 90 day capital one "holding period" and $100k: For a $100k deposit spanning 3 months you'll earn about 2.375%(1.5+3.5/4) and all interest will be taxable. If you pay 7% WI state income tax that means your profit from the capital one route drops to about 2.2%(2.375-2.375*0.07). If you use a brokerage with good rates (ie. Fidelity or vanguard) you'll earn about 1.1% in 3 months and that interest is exempt from state taxes. That roughly 1.1% difference (2.2-1.1) means an extra $1100 over that 3 months to deal with the time/hassle of opening an account you don't intend to keep, trasferring money around, etc. If you're talking about more than $100k then you'd want to only put $100k into capital one (since that gets you the max return) and put the rest in Fidelity(or wherever) at 4-4.3%. So now you're got you money split across two accounts at two different places. Don't discount how much of a PITA it can be. Additionally, every day you leave your cash at capital one after that 90 days is up you lose money because you're earning 3.5% vs 4.3% annual rate. Now you're losing $80/month on your $100k. Lastly, that 15 day window might be an issue depending on how you get the cash, holidays, waits for checks to clear, waits for ACH transfers, etc. I would recommend you open a Fidelity account now. You can do a mobile deposit of the check into your fidelity account immediately when they hand you the check at closing and you start earning 4% instantly. Then, at your leisure, you can open the capital one account, link it to your fidelity account, and transfer $100k. Let it sit and once you're sure you've earned their bonus transfer it and the interest you earned back to fidelity. Once the bonus hits transfer it to fidelity and close the capital one account. |
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Originally Posted By ChemTrailZ: Auto roll 30 day t bills in fidelity, should yield 3.5-4% interest and they are state tax exempt as opposed to all interest being taxed in other vehicles Attached File |
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Once Fidelity financial advisors see a substantial amount in your account, they will start calling you often. They're going to propose meeting with you to go over your "financial goals." Take the information/consult for what it is, but realize a partial intent is to talk you into having them manage your portfolio for a % fee. This could be good or bad depending on your investment goal. But I will say the Fidelity brokered CD's are convenient and have a large selection. I had previously done a Capital One CD, and they held the funds a week before starting the CD and the interest. So I won't be using Capital One again. If you go the CD route with long maturity dates over 9 months, in this current economy just be aware of which CD's are "callable" |
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Originally Posted By 1P29: But I will say the Fidelity brokered CD's are convenient and have a large selection. I like brokered CD's as well, and use them at Fidelity to keep short term money earning the highest rates possible. However, I live in a state with no state income tax. If I lived in a state that had income tax, it would US treasuries without question. Usually around the same rates as similar CD's, but no additional tax. |
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Originally Posted By NAM: Ok, I've been persuaded. Just opened a Fidelity account. Waiting for the initial connection to my personal bank. House closing is next week; doing a direct mobile deposit may indeed make more sense (my prehistoric bank still doesn't have mobile deposit). What type of account? Some types of fidelity accounts default to cash or similar to hold your cash and pay very low interest rates. Different account types have different options for your “core” position. Log in and find your “core position” and set to spaxx or fdrxx if it isn’t already. I’ve talked to multiple fidelity advisors who called me out of the blue. They have never been pushy and it was obvious to me their goal was to ensure I was happy so I would stay at fidelity. The fidelity advisors are fidelity employees and paid salary, not commissions. |
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Originally Posted By FALARAK: I like brokered CD's as well, and use them at Fidelity to keep short term money earning the highest rates possible. However, I live in a state with no state income tax. If I lived in a state that had income tax, it would US treasuries without question. Usually around the same rates as similar CD's, but no additional tax. I always appreciate your insight in these financial threads. |
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Originally Posted By bondservant2: I always appreciate your insight in these financial threads. Agreed. I have a business degree that mostly collects dust. Most of the financial stuff has long evaporated from my brain. Always nice to have help/guidance from knowledgeable folks. |
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I hate to hijack thread, but I am looking to move my current savings from my chase savings account to a HYSA or the fidelity CMA and figured I would ask in this thread over making a new one. Hope you don't mind OP. I am leaning towards HYSA (currently looking at peak bank as it is 4.35%APR, and they have a website-I don't want app only ones) over the fidelity CMA as it is FDIC insured. This is long term savings, not short term. This would be main savings-all of my money I have other than what is in my checking account at chase and another checking account at a local credit union. What is the trade off with the HYSA over the CMA-just have to pay federal and state taxes on the interest I make every year? I am in Indiana. Thanks! |
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Originally Posted By Mav3rick: What is the trade off with the HYSA over the CMA-just have to pay federal and state taxes on the interest I make every year? HYSA typically do NOT keep up over long terms with a money market fund account. Someone might be offering 4.35% right now, but that will not last as that's almost higher than short term treasuries. Also, often HYSA comes with more strings attached like direct deposit or account balance requirements to keep it free or to keep your promotional rate. FDIC is a non issue when comparing to a Money Market Fund (MMF) that primarily invests in US government obligations and treasuries. If one fails - so did the other. Don't just think of Fidelity's CMA.... a typical Fidelity brokerage account is just fine, has check writing if needed, but the big benefit to me is the ability to buy brokered CD's, treasuries, and conservative dividend stock funds all in the same account. You will pay taxes on interest and non-qualified stock dividends as ordinary income on either account. |
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Originally Posted By Mav3rick: I hate to hijack thread, but I am looking to move my current savings from my chase savings account to a HYSA or the fidelity CMA and figured I would ask in this thread over making a new one. Hope you don't mind OP. I am leaning towards HYSA (currently looking at peak bank as it is 4.35%APR, and they have a website-I don't want app only ones) over the fidelity CMA as it is FDIC insured. Originally Posted By Mav3rick: I hate to hijack thread, but I am looking to move my current savings from my chase savings account to a HYSA or the fidelity CMA and figured I would ask in this thread over making a new one. Hope you don't mind OP. I am leaning towards HYSA (currently looking at peak bank as it is 4.35%APR, and they have a website-I don't want app only ones) over the fidelity CMA as it is FDIC insured. The fidelity cash management account is not ideal for long term holding of cash. I believe the core positions on cash in it are limited and all pay under the treasury rates. Just logged in, the “cma” shows it is currently paying 2.19%. What you want is a standard fidelity brokerage account where your cash would earn the current going rate of 4% or slightly higher. Fidelity has an app as well as the best money website I’ve ever used. The core cash positions in fidelity brokerages can be set treasuries (spaxx or similar) - if the .gov goes bankrupt there won’t be an fdic to make you whole. If that happens you’ll need canned food, ammo, and antibiotics and not worthless dollars. Originally Posted By mclark202: It’s where I have cash I may need quickly. But really even dropping it in the S&P500 would be safe. |
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Originally Posted By FALARAK: HYSA typically do NOT keep up over long terms with a money market fund account. Someone might be offering 4.35% right now, but that will not last as that's almost higher than short term treasuries. Also, often HYSA comes with more strings attached like direct deposit or account balance requirements to keep it free or to keep your promotional rate. FDIC is a non issue when comparing to a Money Market Fund (MMF) that primarily invests in US government obligations and treasuries. If one fails - so did the other. Don't just think of Fidelity's CMA.... a typical Fidelity brokerage account is just fine, has check writing if needed, but the big benefit to me is the ability to buy brokered CD's, treasuries, and conservative dividend stock funds all in the same account. You will pay taxes on interest and non-qualified stock dividends as ordinary income on either account. That HYSA I mentioned doesnt' have any of those gotchas (no minimum balance or need for setting up DD) and I understand that the rate can and will go down if the FED cuts interest rates. What concerns me about putting my entire savings (over 50K) into the Fidelity CMA is that there is still some risk. I don't care about check writing, atm card, etc. I just want a safe place to park my savings that will get me as much interest as possible. Currently my chase savings account is giving me a shitty 0.015% and I am tired of them making money off my money without sharing some of the wealth. |
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Originally Posted By Morgan321: The fidelity cash management account is not ideal for long term holding of cash. I believe the core positions on cash in it are limited and all pay under the treasury rates. Just logged in, the “cma” shows it is currently paying 2.19%. What you want is a standard fidelity brokerage account where your cash would earn the current going rate of 4% or slightly higher. Fidelity has an app as well as the best money website I’ve ever used. The core cash positions in fidelity brokerages can be set treasuries (spaxx or similar) - if the .gov goes bankrupt there won’t be an fdic to make you whole. If that happens you’ll need canned food, ammo, and antibiotics and not worthless dollars. Yeah I need some place safe for long term storage of this money-I am not planning on doing anything with it, it is just my savings. I see fidelity offers their government money market account at 3.96% (SPAXX) but it says there is still some risk. |
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Originally Posted By Morgan321: um, safe until the sp500 goes down 10-50% as is usual during a recession. 100% SP500 has had some pretty long dips. If you had socked your money there June 2000, it dipped and took 6 years to recover, not even considering making up for inflation. The dip from Dec 2021 took almost 2 years to recover. Scared money don't make money. SP500 makes money. That means there's a reason to be scared. It can dip and take a while to come back. |
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Originally Posted By Mav3rick: What concerns me about putting my entire savings (over 50K) into the Fidelity CMA is that there is still some risk. Again, Fidelity CMA is not what I would recommend. I'd get off that. There is no risk in a Fidelity brokerage account, it is what you invest in inside that account that determines risk. A money market fund's risk is based on the underlying investments and holdings of the fund. If you choose a Money Market fund that primarily holds US Government Treasuries and debt obligations, I'd argue that is the EXACT same risk as putting it in any bank backed by FDIC. FDIC is nothing more than a promise from the US Government to cover the balances protected. It is only as good as the solvency of the US Government. The same is true for US Treasuries - they are a "promise". If one fails - the other failed as well. You seem to feel that FDIC = no risk. That's false, and a misunderstanding of what "some risk" is. But the reality is for only $50,000..... whether you earn 3.9% or 4.3% it really doesn't matter at all. Many people parking cash are talking about 10x or 20x that amount, where it does matter a little more. You said this is "long term savings". Do you also have long term investments in stocks/bonds/mutual funds and this is just the cash allocation of your total portfolio? Or are you just super anti-risk and willing to accept returns that are eaten completely by inflation? |
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Originally Posted By FALARAK: Again, Fidelity CMA is not what I would recommend. I'd get off that. There is no risk in a Fidelity brokerage account, it is what you invest in inside that account that determines risk. A money market fund's risk is based on the underlying investments and holdings of the fund. If you choose a Money Market fund that primarily holds US Government Treasuries and debt obligations, I'd argue that is the EXACT same risk as putting it in any bank backed by FDIC. FDIC is nothing more than a promise from the US Government to cover the balances protected. It is only as good as the solvency of the US Government. The same is true for US Treasuries - they are a "promise". If one fails - the other failed as well. You seem to feel that FDIC = no risk. That's false, and a misunderstanding of what "some risk" is. But the reality is for only $50,000..... whether you earn 3.9% or 4.3% it really doesn't matter at all. Many people parking cash are talking about 10x or 20x that amount, where it does matter a little more. You said this is "long term savings". Do you also have long term investments in stocks/bonds/mutual funds and this is just the cash allocation of your total portfolio? Or are you just super anti-risk and willing to accept returns that are eaten completely by inflation? I guess I am confused on the difference bewteeen the fidelity CMA and a brokerage account. I thought they were one in the same. I see what you are saying about the FDIC thing. I just don't want to move my savings into something and risk losing it. This is all the savings I have. I would just like to earn more interest on it as opposed to earning next to nothing from chase, but I am pretty anti-risk when it comes to this. As far as investments, the only thing I have is a 401K at work that is split 50/50 as an IRA and Roth IRA. I currently contribute to it biweekly to achieve the max I am allowed to put in every year which at my age I think is 31K. I started being more aggressive with putting in as much as possible a few years ago so it is up to almost 400K. Before that I was just putting in whatever percent gave me my full employer match. I wish I would have put more in back then, but oh well. I have been mostly concentrating on paying down all my debt (house, cars, medical bills) and by January next year I should have zero debt other than monthly CC debt which I pay off every month. |
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Originally Posted By Mav3rick: I guess I am confused on the difference between the fidelity CMA and a brokerage account. I thought they were one in the same. I see what you are saying about the FDIC thing. I just don't want to move my savings into something and risk losing it. This is all the savings I have. I would just like to earn more interest on it as opposed to earning next to nothing from chase, but I am pretty anti-risk when it comes to this. As far as investments, the only thing I have is a 401K at work that is split 50/50 as an IRA and Roth IRA. I currently contribute to it biweekly to achieve the max I am allowed to put in every year which at my age I think is 31K. I started being more aggressive with putting in as much as possible a few years ago so it is up to almost 400K. Before that I was just putting in whatever percent gave me my full employer match. I wish I would have put more in back then, but oh well. I have been mostly concentrating on paying down all my debt (house, cars, medical bills) and by January next year I should have zero debt other than monthly CC debt which I pay off every month. Originally Posted By Mav3rick: Originally Posted By FALARAK: Again, Fidelity CMA is not what I would recommend. I'd get off that. There is no risk in a Fidelity brokerage account, it is what you invest in inside that account that determines risk. A money market fund's risk is based on the underlying investments and holdings of the fund. If you choose a Money Market fund that primarily holds US Government Treasuries and debt obligations, I'd argue that is the EXACT same risk as putting it in any bank backed by FDIC. FDIC is nothing more than a promise from the US Government to cover the balances protected. It is only as good as the solvency of the US Government. The same is true for US Treasuries - they are a "promise". If one fails - the other failed as well. You seem to feel that FDIC = no risk. That's false, and a misunderstanding of what "some risk" is. But the reality is for only $50,000..... whether you earn 3.9% or 4.3% it really doesn't matter at all. Many people parking cash are talking about 10x or 20x that amount, where it does matter a little more. You said this is "long term savings". Do you also have long term investments in stocks/bonds/mutual funds and this is just the cash allocation of your total portfolio? Or are you just super anti-risk and willing to accept returns that are eaten completely by inflation? I guess I am confused on the difference between the fidelity CMA and a brokerage account. I thought they were one in the same. I see what you are saying about the FDIC thing. I just don't want to move my savings into something and risk losing it. This is all the savings I have. I would just like to earn more interest on it as opposed to earning next to nothing from chase, but I am pretty anti-risk when it comes to this. As far as investments, the only thing I have is a 401K at work that is split 50/50 as an IRA and Roth IRA. I currently contribute to it biweekly to achieve the max I am allowed to put in every year which at my age I think is 31K. I started being more aggressive with putting in as much as possible a few years ago so it is up to almost 400K. Before that I was just putting in whatever percent gave me my full employer match. I wish I would have put more in back then, but oh well. I have been mostly concentrating on paying down all my debt (house, cars, medical bills) and by January next year I should have zero debt other than monthly CC debt which I pay off every month. That helps. CMA is an account to woo old people away from a brick and mortar "savings account" at a local bank, and has all the same features as a local bank savings account (Debit/ATM card, Mobile check deposit, Direct deposit and direct debits, Bill pay, Checkwriting, P2P, etc.) If we are parking cash, we don't need that, and a standard old Brokerage Account is better in my opinion. If this conversation is simply "where do I park my emergency fund", then it largely does not matter. Just get the highest return with the least strings. If you are still working, risk should not be your first thought. Growth should be. Everyone has to decide how much cash they want in their emergency fund based on their expenses. Beyond that, unless you are saving additional cash to some goal that is soon to be reached (saving for a down payment on a home, saving for a car, saving for college expenses, etc) then the rest of that money should be invested into the market. What allocation and investment choices would be the next discussion. I remember when I saved my first $50k. It was a hell of a milestone for me at the time and I gripped it a little to tight..... not wanting to expose it to risk. In hindsight, that was a mistake and I should have put that money to work, which also means taking on some risk. Not really risk of loss, but risk of volatility. But if you feel like you have retirement planning covered, and just want a larger cash position, there is nothing wrong with that either. On the 401k, you do not have a 401k split as an "IRA and Roth IRA". That's not possible, as those are different types of accounts and are not part of a 401k. In your 401k, you likely have some type of split for your contributions between *pretax* and *Roth 401k*. (which would be similar in tax treatment to an IRA and Roth IRA, but not the same). Is this money then invested in an appropriate asset allocation mix of stocks/bonds based on your chosen growth/returns/risk profile? |
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Originally Posted By FALARAK: That helps. CMA is an account to woo old people away from a brick and mortar "savings account" at a local bank, and has all the same features as a local bank savings account (Debit/ATM card, Mobile check deposit, Direct deposit and direct debits, Bill pay, Checkwriting, P2P, etc.) If we are parking cash, we don't need that, and a standard old Brokerage Account is better in my opinion. If this conversation is simply "where do I park my emergency fund", then it largely does not matter. Just get the highest return with the least strings. If you are still working, risk should not be your first thought. Growth should be. Everyone has to decide how much cash they want in their emergency fund based on their expenses. Beyond that, unless you are saving additional cash to some goal that is soon to be reached (saving for a down payment on a home, saving for a car, saving for college expenses, etc) then the rest of that money should be invested into the market. What allocation and investment choices would be the next discussion. I remember when I saved my first $50k. It was a hell of a milestone for me at the time and I gripped it a little to tight..... not wanting to expose it to risk. In hindsight, that was a mistake and I should have put that money to work, which also means taking on some risk. Not really risk of loss, but risk of volatility. But if you feel like you have retirement planning covered, and just want a larger cash position, there is nothing wrong with that either. On the 401k, you do not have a 401k split as an "IRA and Roth IRA". That's not possible, as those are different types of accounts and are not part of a 401k. In your 401k, you likely have some type of split for your contributions between *pretax* and *Roth 401k*. (which would be similar in tax treatment to an IRA and Roth IRA, but not the same). Is this money then invested in an appropriate asset allocation mix of stocks/bonds based on your chosen growth/returns/risk profile? The 50K emergency/savings fund is probably more than I need for covering expenses, etc. if something were to happen, but I am driving a 15y/o toyota with over 240K miles on it. It is still going strong, and I am hoping to get another year out of it if I can, but in the event that doesn't happen I may need to dip into this towards a new or slightly used car to replace it. My wife has expressed interest in possibly going on a trip next year as we really haven't gone on a real vacation for over 10 years. We are more of home bodies but I can see she has been fine up to this point but has been talking about taking a real vacation sometime next year, so will need to dip into this for that too possibly. I really don't know much about investing. I have a coworker that does a lot of investing. He has been showing me his stuff and has been trying to get me to start investing but I told him I want to wait until all my debt is paid off and possibly maybe next year. So for me I am happy with things are for now, but maybe next year I can try investing some online. In regards to my 401K, you are probably correct. I am contributing 28% per paycheck with an even 14%/14% split for roth and ira. I see on my pay stubs the ira portion being taken out pre tax and the roth post tax. I got help with an advisor from work and have it invested in a 70/30 mix of stocks and bonds. I know as I get closer to retirement I will need to get closer to flipping that ratio to reduce risk. |
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Originally Posted By Mav3rick: The 50K emergency/savings fund is probably more than I need for covering expenses, etc. if something were to happen, but I am driving a 15y/o toyota with over 240K miles on it. It is still going strong, and I am hoping to get another year out of it if I can, but in the event that doesn't happen I may need to dip into this towards a new or slightly used car to replace it. My wife has expressed interest in possibly going on a trip next year as we really haven't gone on a real vacation for over 10 years. We are more of home bodies but I can see she has been fine up to this point but has been talking about taking a real vacation sometime next year, so will need to dip into this for that too possibly. I really don't know much about investing. I have a coworker that does a lot of investing. He has been showing me his stuff and has been trying to get me to start investing but I told him I want to wait until all my debt is paid off and possibly maybe next year. So for me I am happy with things are for now, but maybe next year I can try investing some online. In regards to my 401K, you are probably correct. I am contributing 28% per paycheck with an even 14%/14% split for roth and ira. I see on my pay stubs the ira portion being taken out pre tax and the roth post tax. I got help with an advisor from work and have it invested in a 70/30 mix of stocks and bonds. I know as I get closer to retirement I will need to get closer to flipping that ratio to reduce risk. Originally Posted By Mav3rick: Originally Posted By FALARAK: That helps. CMA is an account to woo old people away from a brick and mortar "savings account" at a local bank, and has all the same features as a local bank savings account (Debit/ATM card, Mobile check deposit, Direct deposit and direct debits, Bill pay, Checkwriting, P2P, etc.) If we are parking cash, we don't need that, and a standard old Brokerage Account is better in my opinion. If this conversation is simply "where do I park my emergency fund", then it largely does not matter. Just get the highest return with the least strings. If you are still working, risk should not be your first thought. Growth should be. Everyone has to decide how much cash they want in their emergency fund based on their expenses. Beyond that, unless you are saving additional cash to some goal that is soon to be reached (saving for a down payment on a home, saving for a car, saving for college expenses, etc) then the rest of that money should be invested into the market. What allocation and investment choices would be the next discussion. I remember when I saved my first $50k. It was a hell of a milestone for me at the time and I gripped it a little to tight..... not wanting to expose it to risk. In hindsight, that was a mistake and I should have put that money to work, which also means taking on some risk. Not really risk of loss, but risk of volatility. But if you feel like you have retirement planning covered, and just want a larger cash position, there is nothing wrong with that either. On the 401k, you do not have a 401k split as an "IRA and Roth IRA". That's not possible, as those are different types of accounts and are not part of a 401k. In your 401k, you likely have some type of split for your contributions between *pretax* and *Roth 401k*. (which would be similar in tax treatment to an IRA and Roth IRA, but not the same). Is this money then invested in an appropriate asset allocation mix of stocks/bonds based on your chosen growth/returns/risk profile? The 50K emergency/savings fund is probably more than I need for covering expenses, etc. if something were to happen, but I am driving a 15y/o toyota with over 240K miles on it. It is still going strong, and I am hoping to get another year out of it if I can, but in the event that doesn't happen I may need to dip into this towards a new or slightly used car to replace it. My wife has expressed interest in possibly going on a trip next year as we really haven't gone on a real vacation for over 10 years. We are more of home bodies but I can see she has been fine up to this point but has been talking about taking a real vacation sometime next year, so will need to dip into this for that too possibly. I really don't know much about investing. I have a coworker that does a lot of investing. He has been showing me his stuff and has been trying to get me to start investing but I told him I want to wait until all my debt is paid off and possibly maybe next year. So for me I am happy with things are for now, but maybe next year I can try investing some online. In regards to my 401K, you are probably correct. I am contributing 28% per paycheck with an even 14%/14% split for roth and ira. I see on my pay stubs the ira portion being taken out pre tax and the roth post tax. I got help with an advisor from work and have it invested in a 70/30 mix of stocks and bonds. I know as I get closer to retirement I will need to get closer to flipping that ratio to reduce risk. That sounds great. Understand however, a 70/30 ratio is LOW risk. That's is the recommended ratio while IN RETIREMENT if you have a long time horizon (30+ years). Most will never go lower than a 60/40, or 50/50 at ultra conservative. You actually start LOSING money and increasing risk going lower than that, depending on your rate of withdrawal. Don't assume you will flip that. |
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Originally Posted By FALARAK: That sounds great. Understand however, a 70/30 ratio is LOW risk. That's is the recommended ratio while IN RETIREMENT if you have a long time horizon (30+ years). Most will never go lower than a 60/40, or 50/50 at ultra conservative. You actually start LOSING money and increasing risk going lower than that, depending on your rate of withdrawal. Don't assume you will flip that. Thanks. Ok-will keep that in mind. So going back to my original question, knowing all of this should I just stick with the HYSA I mentioned? |
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Originally Posted By Mav3rick: I guess I am confused on the difference bewteeen the fidelity CMA and a brokerage account. I thought they were one in the same. I see what you are saying about the FDIC thing. I just don't want to move my savings into something and risk losing it. This is all the savings I have. I would just like to earn more interest on it as opposed to earning next to nothing from chase, but I am pretty anti-risk when it comes to this. I have is a 401K at work that is split 50/50 as an IRA and Roth IRA. ............. I have been mostly concentrating on paying down all my debt (house, cars, medical bills) and by January next year I should have zero debt other than monthly CC debt which I pay off every month. Fidelity supports dozens of different account types, pick the one that best meets your needs. The features of the "basic" accounts are described here. Both the "Cash management account" and the "fidelity account" do let you select SPAXX as your core position (CMA originally did not but was changed recently), so decide between one of those. The "Fidelity account" is their new name for a standard brokerage account. In terms of losing your money you have to worry about the institution going bankrupt or the investments you hold decreasing in value. I can't even fathom a situation where Fidelity, Vanguard, etc. could disappear overnight, if that happens it's zombie apocalypse time and nobody cares about money. FDIC is a .gov organization and treasury products are backed by the same .gov promise to pay out on them - as far as "insurance" they are equally risky. If the federal government can't pay it's debt then you need bullets because the world economy instantly implodes and the boogaloo begins. See what FAL said about 401k/IRA/roth IRA. I would encourage you to make a financial plan and to further educate yourself on some basics of investing. It sounds like you're 50+ and still working? It's never too late to make a plan. |
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So far, so good! Still waiting to get the initial chunk all deposited. No complaints for Fidelity, but plenty for BMO. Every time I try to transfer, despite BMO saying my limit is $X, locks my account when I try to transfer near that amount. Went in circles with their shitty 3rd world phone support. Been locked out twice so far. I have been initiating from Fidelity as a workaround, but they hold the funds for 10 days. Oh well, first world problems. Fuck BMO. |
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Originally Posted By NAM: No complaints for Fidelity, but plenty for BMO......... I have been initiating from Fidelity as a workaround, but they hold the funds for 10 days. One thing I've learned from moving all over the world is that I avoid most local banks and "corporate banks" like BMO. We only have used USAA and Fidelity for a number of years now minus a mortgage from a local bank because I can walk into their office and see them face to face. Fidelity has credit/debit cards and I think even check writing now, so except for mortgages/car loans you could probably live with only Fidelity these days. Fidelity will hold funds based on your account risk (balance and account age). If you just opened the account and are talking 6-figure house amounts of money they will definitely hold the funds until there is zero doubt the money is really there. |
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Originally Posted By Morgan321: Bank of Montreal? One thing I've learned from moving all over the world is that I avoid most local banks and "corporate banks" like BMO. We only have used USAA and Fidelity for a number of years now minus a mortgage from a local bank because I can walk into their office and see them face to face. Fidelity has credit/debit cards and I think even check writing now, so except for mortgages/car loans you could probably live with only Fidelity these days. Fidelity will hold funds based on your account risk (balance and account age). If you just opened the account and are talking 6-figure house amounts of money they will definitely hold the funds until there is zero doubt the money is really there. Unfortunately, yes. M&I was big in Wisconsin, until BMO bought them out. Now there's BMO locations all over the place. Not my primary banking, but they're local. As for USAA, I used them for my bank account about a decade ago, but they seemed to like to play games with fees and whatnot. I am very likely to close out the BMO account after this transfer is complete. |
| Lol...got a notice from BMO today that my transfer is pending. Looks like my account is no longer locked either. Apparently if you ignore the account lock/fraud alert, it just goes away on it's own. Either way, I'll likely be closing that account in the near future. |
My first post in Business & Investing... I use Fidelity for both a CMA and brokerage account. Maybe I misunderstood one of the previous posts in this thread, but is there a reason why I should be holding my cash reserves in the brokerage account, whether those funds are in SPAXX, T-Bills or SGOV? Aren't the fees associated with SPAXX or SGOV the same, regardless of which account they're in? |
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Originally Posted By BB42: My first post in Business & Investing... I use Fidelity for both a CMA and brokerage account. Maybe I misunderstood one of the previous posts in this thread, but is there a reason why I should be holding my cash reserves in the brokerage account, whether those funds are in SPAXX, T-Bills or SGOV? Aren't the fees associated with SPAXX or SGOV the same, regardless of which account they're in? Your core position in a Fidelity CMA can be SPAXX or FDIC. Generally speaking, you should make sure this is SPAXX. In a non-retirement brokerage account, the core position can be SPAXX or FZFXX or FCASH. The fees and returns will be the same, if you use SPAXX and choose to hold money in the CMA or the brokerage account. Since you can add checkwriting to any non-retirement brokerage account at Fidelity, most people don't see much need for the CMA. It is really just a brokerage account with some features wrapped around it. |
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Originally Posted By FALARAK: Your core position in a Fidelity CMA can be SPAXX or FDIC. Generally speaking, you should make sure this is SPAXX. In a non-retirement brokerage account, the core position can be SPAXX or FZFXX or FCASH. The fees and returns will be the same, if you use SPAXX and choose to hold money in the CMA or the brokerage account. Since you can add checkwriting to any non-retirement brokerage account at Fidelity, most people don't see much need for the CMA. It is really just a brokerage account with some features wrapped around it. Thanks for the reply. I must have misread one of the previous posts 
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