Where to Park Money for short term?

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Topic Author
4growth
Posts: 8
Joined: Thu May 10, 2018 12:23 am

Where to Park Money for short term?

Post by 4growth »

We have a large amount of money that we plan to use for Real Estate investments, but likely won't be needing to access the funds for 4-8 months, and it will most likely be used in increments(vs all at once). Curious where the best place to park this money is in the near term, where it's still making some money, yet is not at significant risk. We live in California and are considering placing the money in tax exempt bond funds, since this will be in a taxable account. Funds we are considering:

- Vanguard Intermediate-Term Tax-Exempt fund (VWIUX)
- Vanguard California Intermediate-Term Tax-Exempt fund (VCADX)
- Vanguard California Long-Term Tax-Exempt Fund(VCLAX).

Questions:
- Where is the best place to park these funds? Are bonds funds a reasonable option?
- If bonds are a good option, are these good ones to be considering or should I be looking at others?

Thanks!
000
Posts: 3318
Joined: Thu Jul 23, 2020 12:04 am

Re: Where to Park Money for short term?

Post by 000 »

IMO intermediate and long term bonds are not suitable for a 4-8 month timeframe.

Too much interest rate risk, too little upside.

How much are you really saving in taxes for a short term holding versus just a bank account?
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anon_investor
Posts: 3751
Joined: Mon Jun 03, 2019 1:43 pm

Re: Where to Park Money for short term?

Post by anon_investor »

No penalty CDs at Ally or Marcus.
Actin
Posts: 115
Joined: Wed May 16, 2018 8:40 pm

Re: Where to Park Money for short term?

Post by Actin »

You don't have any good alternatives to cash for that short of a time frame
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AlabamaPaul
Posts: 106
Joined: Sat Jul 18, 2020 2:45 pm

Re: Where to Park Money for short term?

Post by AlabamaPaul »

With that short of a time frame, there is no real inflation risk. So, just keep it readily available...
Topic Author
4growth
Posts: 8
Joined: Thu May 10, 2018 12:23 am

Re: Where to Park Money for short term?

Post by 4growth »

Thank you all for the quick replies. Originally my gut was saying to keep it in the Vanguard Money Market(VMFXX), but was not sure if that was short sighted. So your feedback here was very helpful. Thank you all!
happydaze412
Posts: 26
Joined: Thu Aug 27, 2020 3:37 pm

Re: Where to Park Money for short term?

Post by happydaze412 »

6 month cd at Ally Bank is 0.4% as of right now. But their high yield savings account is yielding 0.8%. Not going to get much more than that for a savings account to park cash. Wish you the best with your investments!
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