We are expats considering moving back to the States.
I want to determine where to place liquid funds that we have now or will be accumulating over the next few months that would be used for 2015 tIRAs and taxable investing IF we do not move back to the States in 2015. (Note: the tIRAs are currently our only tax advantaged place we can invest. We both have 401ks with former employers, the tIRAs as well as some IBonds. The 401ks offer excellent fund choices and very low costs, so we're not moving them in the near term.)
If we do move back to the States, we would plan to max out any employer sponsored retirement funds and divert this cash towards living expenses (if needed) or towards other purposes.
We are currently 28% tax bracket and likely will be long term, however we may drop down to the 25% bracket for 2015 depending on how the move plays out.
How do we best invest funds for a 1 year or shorter horizon without dealing with short term capital gains? I'd rather get more than the .9% Ally is paying on our online savings.
Thank you!
Where to hold $ for less than 1 year
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- Joined: Wed Apr 17, 2013 12:05 pm
Re: Where to hold $ for less than 1 year
Unfortunately for the short time frame, Ally is probably about the safest bet. Even if you could get a couple more basis points without increasing your risk, would it be worth the hassle for funds that will be needed in under a year?
Re: Where to hold $ for less than 1 year
If you are over the $250K limit, Jill on Money had the guy from max my interest (https://www.maxmyinterest.com/) on the other week and they will shuffle money between accounts for 0.08% or some such. Haven't tried, but it looks potentially interesting if the $250K FDIC limit is of concern.
- Artsdoctor
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- Joined: Thu Jun 28, 2012 3:09 pm
- Location: Los Angeles, CA
Re: Where to hold $ for less than 1 year
It's hard to imagine making a lot of money on a one-year investment which you're going to keep safe. An online savings account is going to be your best option. The Ally rate of 0.9% isn't all that much lower than Barclays or Citi but you'll be able to find something that's FDIC-insured for 1% and change. If you're talking about a lot of money, you can put $250,000 in each person's name in each institution, so you'll have no problem parking $1M without any significant effort. I certainly wouldn't pay someone or something 0.08% to do it for you!
Re: Where to hold $ for less than 1 year
There's no "silver bullet" for short-term, FDIC- or NCUA-insured deposits these days. One percent (plus or minus) is about as good as it gets.