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Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 3:53 pm
by grandnexus
I plan on buying real estate within the next year, possibly earlier. Where can I park my cash in the meantime to make a bit of money? My Ally Savings account yields 0.8% annually. Can I do better than that while keeping it liquid (or liquid within 6 months)?

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 3:55 pm
by mptfan
A short term bond fund. It's not cash, but it will probably give you a bit more return in exchange for the small risk of NAV fluctuation. If you strictly want to stay in cash you cannot do better than a high yield savings account.

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 4:00 pm
by grandnexus
Any recommendations of a BOND fund via schwab I look at?

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 4:03 pm
by mptfan
SWSBX. You need to be aware that the NAV can go down at any time, right now it is at 10.39, and you should reasonably expect it to go down to 10 at any time. If you don't accept that, stick with cash.

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 4:04 pm
by KlingKlang
I would stay in your Ally Savings account.

Vanguard Short Term Investment-Grade Bond Fund lost 3.8% in September 2008 and kept on going down in October.

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 4:28 pm
by grandnexus
Do Money Markets not work well? I'm not well versed in them, but I thought they made some amount and you can withdraw anytime?

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 4:39 pm
by tashnewbie
Play the "bank bonus" game, if you feel it's worth your time. Probably better return than a bond fund. There's no risk to principal at all. Doctor of Credit website has info about current bonuses.

Re: Where can I park some cash for 6-12 months?

Posted: Tue Sep 15, 2020 4:53 pm
by NMBob
i vote with the just leave it crowd. you have it in a good place. most money markets are paying less, and often way less, than that .8 percent. there is a risk of losing money in a short term bond fund if you try to use one to squeeze out a 1 percent return by going to one. not worth the difference in my book.