Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[lewdog]

Anyone have any good recommendations for higher paying Savings Accounts? I am looking to move our emergency savings into a savings account that gets 1%+ interest. Good for an extra few hundred dollars a year which is better than my current savings account.

This is the best I have found on the subject.

http://www.magnifymoney.com/blog/ear...ounts275921001

Or any other ideas?

[Demonpenz]

Originally Posted by Cornstock

Demonpenz's financial IQ is literally skyrocketing before our very eyes.

Knowing is one thing but executing is another. The good thing is that I am too lazy to send in more money on my 0 percent car payment or I probably would. Another good thing is my job in my 20's gave me money not a match just gave me retirement money so it was nice to have something before I even took the hit of taking money out of my paycheck.

[TinyEvel]

Hi guys.

I have owned a house for 15years. For the first time, due to moves, I sold it and I'm renting...for now. Hope to get back into a home I can buy in about year. In the meantime, the equity I had built up in previous home is sitting in cash savings. How should I invest it to minimize risk (I need it for down payment on next home in about year) but get best return (savings account is less than 1 percent return)

[scho63]

Originally Posted by lewdog

Anyone have any good recommendations for higher paying Savings Accounts?

It's a complete oxymoron in this environment.

You realize that if you have $20,000 in an emergency fund and you are deciding between a .025% and a 1% fund it's all kind of bullshit and time for about $175 if you left it there for the entire year?

Don't be so short sided.

Buy a short term corporate bond for a much better yield

[scho63]

Originally Posted by TinyEvel

Hi guys.

I have owned a house for 15years. For the first time, due to moves, I sold it and I'm renting...for now. Hope to get back into a home I can buy in about year. In the meantime, the equity I had built up in previous home is sitting in cash savings. How should I invest it to minimize risk (I need it for down payment on next home in about year) but get best return (savings account is less than 1 percent return)

Keep an eye on any capital gains taxes if you sold for higher than purchase plus cap improvements and do not buy for many years to come.

[DaFace]

Originally Posted by lewdog

Anyone have any good recommendations for higher paying Savings Accounts? I am looking to move our emergency savings into a savings account that gets 1%+ interest. Good for an extra few hundred dollars a year which is better than my current savings account.

This is the best I have found on the subject.

http://www.magnifymoney.com/blog/ear...ounts275921001

Or any other ideas?

I've got mine in Discover, and I like it pretty well. Transfers are pretty quick, and the $100 sign up bonus is a nice perk. Even at the higher interest rates, though, you aren't going to get rich. Better than a shitty 0.01% account though.

[DaFace]

Originally Posted by scho63

It's a complete oxymoron in this environment.

You realize that if you have $20,000 in an emergency fund and you are deciding between a .025% and a 1% fund it's all kind of bullshit and time for about $175 if you left it there for the entire year?

Don't be so short sided.

Buy a short term corporate bond for a much better yield

Yeah, a short term bond is probably my suggestion, too. A high yield online savings account like those lew linked would be a good option too.


But really, if we're only talking about a year, it's not going to matter much.

[lewdog]

Originally Posted by scho63

It's a complete oxymoron in this environment.

You realize that if you have $20,000 in an emergency fund and you are deciding between a .025% and a 1% fund it's all kind of bullshit and time for about $175 if you left it there for the entire year?

Don't be so short sided.

Buy a short term corporate bond for a much better yield

Originally Posted by DaFace

Yeah, a short term bond is probably my suggestion, too. A high yield online savings account like those lew linked would be a good option too.


But really, if we're only talking about a year, it's not going to matter much.

I'm torn between understanding that, and wanting the money to be very safe. I realized bond funds are fairly safe, but parking money in there does have a chance to go down.

Here's a 5 star Vanguard short term corporate bond Index. Had I parked money in there 5 years ago, it would have gained only .6% in those 5 years.
And at some point had I needed the money, I could be selling some bonds while they are down. That can't happen in a 1% interest savings account. Bonds to me seem a bit shaky with interest rates sure to rise over the next decade. I'm not sure there's a great play there to park emergency savings unless you guys had something I'm missing?

http://quotes.morningstar.com/chart/...&culture=en-US

[DaFace]

Originally Posted by lewdog

I'm torn between understanding that, and wanting the money to be very safe. I realized bond funds are fairly safe, but parking money in there does have a chance to go down.

Here's a 5 star Vanguard short term corporate bond Index. Had I parked money in there 5 years ago, it would have gained only .6% in those 5 years.
And at some point had I needed the money, I could be selling some bonds while they are down. That can't happen in a 1% interest savings account. Bonds to me seem a bit shaky with interest rates sure to rise over the next decade. I'm not sure there's a great play there to park emergency savings unless you guys had something I'm missing?

http://quotes.morningstar.com/chart/...&culture=en-US

Buying a 1 year bond is different than buying a bond with the intention of selling it. If you hold to maturity, you won't lose value (assuming the issuer doesn't go under or something). A 1 year CD is another similar option.

[lewdog]

Originally Posted by DaFace

Buying a 1 year bond is different than buying a bond with the intention of selling it. If you hold to maturity, you won't lose value (assuming the issuer doesn't go under or something). A 1 year CD is another similar option.

I guess I'll clarify.

I want to park our emergency savings where they are still fairly liquid. Like if our AC goes out and needs replacement in the next few years, I take can take $10k from it and pay cash.

[DaFace]

Originally Posted by lewdog

I guess I'll clarify.

I want to park our emergency savings where they are still fairly liquid. Like if our AC goes out and needs replacement in the next few years, I take can take $10k from it and pay cash.

Sorry, I just realized that scho was quoting you rather than Tiny. I agree, emergency funds are better in savings. I was thinking of him parking money for a few years until he buys a place again.

[ChiliConCarnage]

Originally Posted by lewdog

Anyone have any good recommendations for higher paying Savings Accounts? I am looking to move our emergency savings into a savings account that gets 1%+ interest. Good for an extra few hundred dollars a year which is better than my current savings account.

This is the best I have found on the subject.

http://www.magnifymoney.com/blog/ear...ounts275921001

Or any other ideas?

I've been at Ally for years. Put an amount in liquid savings and the real emergency amount in CD form. If you need to brake glass and use it, it costs at worst a couple months of interest.

[lewdog]

Originally Posted by ChiliConCarnage

I've been at Ally for years. Put an amount in liquid savings and the real emergency amount in CD form. If you need to brake glass and use it, it costs at worst a couple months of interest.

Ok. What's the penalty on a CD for cashing it before maturity?

[lewdog]

Originally Posted by ChiliConCarnage

I've been at Ally for years. Put an amount in liquid savings and the real emergency amount in CD form. If you need to brake glass and use it, it costs at worst a couple months of interest.

Dang....they have a no penalty 11 month maturity CD that gives 1.50% for $25k deposit. I might just give that one a go. You can cash out 6 days after funding and pay no penalty and keep any interest gained. Interest is compounded daily. That's quite good.

https://www.ally.com/bank/no-penalty-cd/

[Demonpenz]