Storing cash balance during dollar cost averaging
-
- Posts: 6
- Joined: Fri Apr 16, 2021 6:04 pm
Storing cash balance during dollar cost averaging
Moving money into the market using dollar cost averaging over next 12 months (I know, there's some debate over whether this makes mathematical sense, but with the market at an all-time high, figured it might make sense). Given this, need to find a good place for the second half for 6 months and am suddenly worried about FDIC limits. Options so far include:
- Leaving it in brokerage cash account and ignoring the risk
- Using CDARS: safe, but the yield is like 0.05% or something crazy like that
- Moving to high yield savings: rate is 0.3% but FDIC limited to 250k
- Putting it in https://investor.vanguard.com/etf/profile/VTIP or something like that
- Stable coin e.g. USDC (the crazy route)
Looking for a sanity check and/or other ideas I'm missing.
- Leaving it in brokerage cash account and ignoring the risk
- Using CDARS: safe, but the yield is like 0.05% or something crazy like that
- Moving to high yield savings: rate is 0.3% but FDIC limited to 250k
- Putting it in https://investor.vanguard.com/etf/profile/VTIP or something like that
- Stable coin e.g. USDC (the crazy route)
Looking for a sanity check and/or other ideas I'm missing.
- anon_investor
- Posts: 15111
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Storing cash balance during dollar cost averaging
How much money? You could open a few FDIC online savings accounts, a few like Ally Bank and Marcus pay 0.5% interest.leafmuncher wrote: ↑Fri Apr 16, 2021 6:08 pm Moving money into the market using dollar cost averaging over next 12 months (I know, there's some debate over whether this makes mathematical sense, but with the market at an all-time high, figured it might make sense). Given this, need to find a good place for the second half for 6 months and am suddenly worried about FDIC limits. Options so far include:
- Leaving it in brokerage cash account and ignoring the risk
- Using CDARS: safe, but the yield is like 0.05% or something crazy like that
- Moving to high yield savings: rate is 0.3% but FDIC limited to 250k
- Putting it in https://investor.vanguard.com/etf/profile/VTIP or something like that
- Stable coin e.g. USDC (the crazy route)
Looking for a sanity check and/or other ideas I'm missing.
Re: Storing cash balance during dollar cost averaging
You could leave up to $250K your regular savings account and that would be FDIC insured.
Note that if you have a joint account with your spouse you could have double the FDIC coverage
The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
https://www.fdic.gov/resources/deposit- ... -deposits/
I like this option as well - Putting it in https://investor.vanguard.com/etf/profile/VTIP or something like that
Note that Vanguard has other interesting money market options as well.
Note that if you have a joint account with your spouse you could have double the FDIC coverage
The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
https://www.fdic.gov/resources/deposit- ... -deposits/
I like this option as well - Putting it in https://investor.vanguard.com/etf/profile/VTIP or something like that
Note that Vanguard has other interesting money market options as well.
-
- Posts: 25617
- Joined: Thu Apr 05, 2007 8:20 pm
- Location: New York
Re: Storing cash balance during dollar cost averaging
US Treasury or Federal Money Market fund - no yield but as safe as FDIC. Your afraid to invest in the market because of all time highs? But you are actually considering USDC? Re-read that again and compare it to FDIC, then realize that it’s irrational thinking.leafmuncher wrote: ↑Fri Apr 16, 2021 6:08 pm Moving money into the market using dollar cost averaging over next 12 months (I know, there's some debate over whether this makes mathematical sense, but with the market at an all-time high, figured it might make sense). Given this, need to find a good place for the second half for 6 months and am suddenly worried about FDIC limits. Options so far include:
- Leaving it in brokerage cash account and ignoring the risk
- Using CDARS: safe, but the yield is like 0.05% or something crazy like that
- Moving to high yield savings: rate is 0.3% but FDIC limited to 250k
- Putting it in https://investor.vanguard.com/etf/profile/VTIP or something like that
- Stable coin e.g. USDC (the crazy route)
Looking for a sanity check and/or other ideas I'm missing.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
-
- Posts: 1608
- Joined: Wed May 20, 2020 6:36 am
Re: Storing cash balance during dollar cost averaging
leafmuncher wrote: ↑Fri Apr 16, 2021 6:08 pm Given this, need to find a good place for the second half for 6 months and am suddenly worried about FDIC limits.
This is a recently introduced option that may be attractive. There has been chatter on the board about it in other threads.Looking for a sanity check and/or other ideas I'm missing.
Vanguard Ultra-Short Bond ETF (VUSB)
https://investor.vanguard.com/etf/profile/overview/vusb
“Now shall I walk or shall I ride? |
'Ride,' Pleasure said; |
'Walk,' Joy replied.” |
|
― W.H. Davies
Re: Storing cash balance during dollar cost averaging
[
[/quote]
How much money? You could open a few FDIC online savings accounts, a few like Ally Bank and Marcus pay 0.5% interest.
[/quote]
If you belong to AARP Marcus adds another .1%
[/quote]
How much money? You could open a few FDIC online savings accounts, a few like Ally Bank and Marcus pay 0.5% interest.
[/quote]
If you belong to AARP Marcus adds another .1%
-
- Posts: 991
- Joined: Sat Feb 08, 2020 4:25 pm
Re: Storing cash balance during dollar cost averaging
If you are worried about losing out on the cash while you DCA, why not just lump sum?
- ruralavalon
- Posts: 26297
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: Storing cash balance during dollar cost averaging
There is also Vanguard Ultra-Short-Term Bond Fund Admiral Shares (VUSFX), current SEC Yield = 0.52%. This fund is not so new.backpacker61 wrote: ↑Sat Apr 17, 2021 5:53 amleafmuncher wrote: ↑Fri Apr 16, 2021 6:08 pm Given this, need to find a good place for the second half for 6 months and am suddenly worried about FDIC limits.This is a recently introduced option that may be attractive. There has been chatter on the board about it in other threads.Looking for a sanity check and/or other ideas I'm missing.
Vanguard Ultra-Short Bond ETF (VUSB)
https://investor.vanguard.com/etf/profile/overview/vusb
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
- ruralavalon
- Posts: 26297
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: Storing cash balance during dollar cost averaging
There is also Vanguard Ultra-Short-Term Bond Fund Admiral Shares (VUSFX), current SEC Yield = 0.52%, which is not new.backpacker61 wrote: ↑Sat Apr 17, 2021 5:53 amleafmuncher wrote: ↑Fri Apr 16, 2021 6:08 pm Given this, need to find a good place for the second half for 6 months and am suddenly worried about FDIC limits.This is a recently introduced option that may be attractive. There has been chatter on the board about it in other threads.Looking for a sanity check and/or other ideas I'm missing.
Vanguard Ultra-Short Bond ETF (VUSB)
https://investor.vanguard.com/etf/profile/overview/vusb
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
-
- Posts: 6
- Joined: Fri Apr 16, 2021 6:04 pm
Re: Storing cash balance during dollar cost averaging
Appreciate all the suggestions, thanks!