Short term Cash - where is best return?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Parkinglotracer
Posts: 1231
Joined: Fri Dec 20, 2019 3:49 am
Location: Upstate NY

Short term Cash - where is best return?

Post by Parkinglotracer »

I’ve lost track of where the best places are to get some return for some short term cash we might need in near future (3-6 months) for retirement expenses now that interest rates are up a little.

Any suggestions? Thank you
jebmke
Posts: 16473
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Short term Cash - where is best return?

Post by jebmke »

Treasury bills are fairly attractive when compared to say, a high yield savings account.
When you discover that you are riding a dead horse, the best strategy is to dismount.
User avatar
JoeRetire
Posts: 12890
Joined: Tue Jan 16, 2018 2:44 pm

Re: Short term Cash - where is best return?

Post by JoeRetire »

Get 3 or 6 month CDs.
This is gonna be my time. Time to taste the fruits and let the juices drip down my chin. I proclaim this: The Summer of George!
MikeG62
Posts: 4164
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Short term Cash - where is best return?

Post by MikeG62 »

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
Real Knowledge Comes Only From Experience
User avatar
sperry8
Posts: 2525
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: Short term Cash - where is best return?

Post by sperry8 »

jebmke wrote: Sat Jun 18, 2022 8:03 am Treasury bills are fairly attractive when compared to say, a high yield savings account.
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.
MikeG62 wrote: Sat Jun 18, 2022 8:55 am Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
where do we buy these?
Last edited by sperry8 on Sat Jun 18, 2022 9:00 am, edited 1 time in total.
BH Contests: 21 #66 of 636 |20 #253 of 664 |19 #233 of 645 |18 #150 of 493 |17 #516 of 647 |16 #121 of 610 |15 #18 of 552 |14 #225 of 503 |13 #383 of 433 |12 #366 of 410 |11 #113 of 369 |10 #53 of 282
jebmke
Posts: 16473
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Short term Cash - where is best return?

Post by jebmke »

MikeG62 wrote: Sat Jun 18, 2022 8:55 am Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
certainly more liquid than CDs if you need the money sooner than you think.
When you discover that you are riding a dead horse, the best strategy is to dismount.
radiowave
Posts: 2883
Joined: Thu Apr 30, 2015 5:01 pm

Re: Short term Cash - where is best return?

Post by radiowave »

Here's two sites to check current rates for CDs and Savings:

https://www.depositaccounts.com/

https://www.bankrate.com/
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page
dbr
Posts: 41323
Joined: Sun Mar 04, 2007 9:50 am

Re: Short term Cash - where is best return?

Post by dbr »

sperry8 wrote: Sat Jun 18, 2022 8:59 am
jebmke wrote: Sat Jun 18, 2022 8:03 am Treasury bills are fairly attractive when compared to say, a high yield savings account.
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.
MikeG62 wrote: Sat Jun 18, 2022 8:55 am Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
where do we buy these?
Probably for Tbills you would use Treasury Direct https://www.treasurydirect.gov/
Alternatively you can buy Tbills at brokers such as Fidelity: https://www.fidelity.com/fixed-income-b ... sury-bonds


Once you have accounts at TD you can also consider holding I bonds.

It could also be that the hassle is not worth it and for your purposes savings accounts, CDs, and even money market funds are much easier and the value of optimizing interest rates on cash is not great.
MikeG62
Posts: 4164
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Short term Cash - where is best return?

Post by MikeG62 »

sperry8 wrote: Sat Jun 18, 2022 8:59 am
jebmke wrote: Sat Jun 18, 2022 8:03 am Treasury bills are fairly attractive when compared to say, a high yield savings account.
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.
MikeG62 wrote: Sat Jun 18, 2022 8:55 am Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
where do we buy these?
I prefer to purchase them through Fidelity (although I've also recently bought them through Merrill Edge). I bought $250K in Treasuries this week (mix of 12 and 24 months). 12-months yielding 3.10% and 24-months yielding 3.40%. This was on Tuesday of this week.

Note, all my purchases were done in the secondary market. I've bought at auction in the past too, but did not want to wait for the auctions given the spike in yields earlier this week. Also, I believe I got a slight yield premium taking bonds off the hands of someone who wanted/needed to sell them.
Real Knowledge Comes Only From Experience
User avatar
whodidntante
Posts: 10822
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: Short term Cash - where is best return?

Post by whodidntante »

Treasury bills. They are even better if you live in a high-income tax state.

You can also get your money back quickly if needed. The market for T-bills features low spreads. It's possible to lose money if you sell early though if rates have gone up after you bought. You will not lose money if you hold to maturity.
User avatar
whodidntante
Posts: 10822
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: Short term Cash - where is best return?

Post by whodidntante »

dbr wrote: Sat Jun 18, 2022 9:12 am Probably for Tbills you would use Treasury Direct https://www.treasurydirect.gov/
You can, but that makes them a pain to sell if you need to sell earlier than planned. Buy at a broker.
dbr
Posts: 41323
Joined: Sun Mar 04, 2007 9:50 am

Re: Short term Cash - where is best return?

Post by dbr »

whodidntante wrote: Sat Jun 18, 2022 9:19 am
dbr wrote: Sat Jun 18, 2022 9:12 am Probably for Tbills you would use Treasury Direct https://www.treasurydirect.gov/
You can, but that makes them a pain to sell if you need to sell earlier than planned. Buy at a broker.
True. I would imagine that for Tbills selling them would not be so likely because the terms are so short. It might be if an investor wants the money to come and go at will that a money market fund or a bank account would be simpler. People can do what they prefer.
User avatar
papermario
Posts: 34
Joined: Fri Apr 16, 2021 10:19 pm

Re: Short term Cash - where is best return?

Post by papermario »

Wealthfront has a 1.4% cash account https://www.wealthfront.com/cash
User avatar
tc101
Posts: 3560
Joined: Tue Feb 20, 2007 3:18 pm
Location: Atlanta - Retired in 2004 at age 54

Re: Short term Cash - where is best return?

Post by tc101 »

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.
Fidelity and Schwab MMFs are yielding about half of that. This is an example of how Vanguard excels. People talk about moving to Fido or Schwab to get better service, but the service is now terrible at all 3, and the yields are better at Vanguard.
. | The most important thing you should know about me is that I am not an expert.
SchruteB&B
Posts: 550
Joined: Mon Jul 02, 2018 7:48 am

Re: Short term Cash - where is best return?

Post by SchruteB&B »

6 mos treasury is 2.25%

E trade has a savings account paying 1.4%
https://us.etrade.com/bank/premium-savings-account

www.depositaccounts.com has a few 6 mos CDs paying 1.35%
HDM1004
Posts: 39
Joined: Thu Sep 30, 2021 9:33 am

Re: Short term Cash - where is best return?

Post by HDM1004 »

Topic Author
Parkinglotracer
Posts: 1231
Joined: Fri Dec 20, 2019 3:49 am
Location: Upstate NY

Re: Short term Cash - where is best return?

Post by Parkinglotracer »

Thank you - I’ll start looking at these suggestions.. I appreciate the help brothers and sisters.
cubs1999
Posts: 48
Joined: Tue Jun 07, 2022 11:40 pm

Re: Short term Cash - where is best return?

Post by cubs1999 »

In another thread here, someone mentioned "First Foundation" paying 1.65% now.
1moreyr
Posts: 214
Joined: Sun Jan 12, 2020 7:10 pm

Re: Short term Cash - where is best return?

Post by 1moreyr »

I buy secondary Tbills on my Schwab account. The rates are similar or slightly higher. it could be timing of post since when I looked.
As far as service, I have $1M in Schwab and I literally have a local guy that answers my call, my mail and gets me the help I need.
i realize not everyone has that amount, but I also don't know what the minimum is to get that kind of service. I found even Schwab service via phone faster and more accurate when moving my vanguard account to Schwab.

either way, it's where I am putting all semi liquid money ( as I plan to hold it there 3-12 months based on the T bill)

I am a little concerned on locking in for 12 months in this climate but that 3% rate looks really appealing. still not sure
exodusNH
Posts: 4308
Joined: Wed Jan 06, 2021 8:21 pm

Re: Short term Cash - where is best return?

Post by exodusNH »

sperry8 wrote: Sat Jun 18, 2022 8:59 am
jebmke wrote: Sat Jun 18, 2022 8:03 am Treasury bills are fairly attractive when compared to say, a high yield savings account.
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.
MikeG62 wrote: Sat Jun 18, 2022 8:55 am Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
where do we buy these?
I missed that rate increase. I looked 10 days ago and it was like 0.7. Not only is it better than most HYSA, there's also no 6 withdrawal limit.
User avatar
sperry8
Posts: 2525
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: Short term Cash - where is best return?

Post by sperry8 »

exodusNH wrote: Mon Jun 20, 2022 12:26 pm
sperry8 wrote: Sat Jun 18, 2022 8:59 am
jebmke wrote: Sat Jun 18, 2022 8:03 am Treasury bills are fairly attractive when compared to say, a high yield savings account.
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.
MikeG62 wrote: Sat Jun 18, 2022 8:55 am Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.
where do we buy these?
I missed that rate increase. I looked 10 days ago and it was like 0.7. Not only is it better than most HYSA, there's also no 6 withdrawal limit.
VMFXX is now at 1.27%. And rising.
BH Contests: 21 #66 of 636 |20 #253 of 664 |19 #233 of 645 |18 #150 of 493 |17 #516 of 647 |16 #121 of 610 |15 #18 of 552 |14 #225 of 503 |13 #383 of 433 |12 #366 of 410 |11 #113 of 369 |10 #53 of 282
Chip
Posts: 3847
Joined: Wed Feb 21, 2007 4:57 am

Re: Short term Cash - where is best return?

Post by Chip »

tc101 wrote: Sat Jun 18, 2022 9:41 am
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.
Fidelity and Schwab MMFs are yielding about half of that. This is an example of how Vanguard excels. People talk about moving to Fido or Schwab to get better service, but the service is now terrible at all 3, and the yields are better at Vanguard.
Yields are better at Vanguard, but not 2x Fidelity.

Current 7 day yield on VMRXX is 1.22%
VMFXX is 1.27%
FDRXX is 1.03%
FZDXX is 1.18%

I question your assertion that customer service is equally terrible at all 3.
stocknoob4111
Posts: 2712
Joined: Sun Jan 07, 2018 12:52 pm

Re: Short term Cash - where is best return?

Post by stocknoob4111 »

i'm parking it in 3 month T-Bills at around 1.55% or so, best deal of yield vs duration at the moment imo, of course net of taxes at 32% and inflation return is around -7.5% real
Creditcardguy
Posts: 125
Joined: Fri May 25, 2018 7:23 am

Re: Short term Cash - where is best return?

Post by Creditcardguy »

cubs1999 wrote: Sun Jun 19, 2022 6:08 pm In another thread here, someone mentioned "First Foundation" paying 1.65% now.
I signed up for this yesterday, good reviews. No fees, except if you close it within 90 days it's $20.
slickracer
Posts: 108
Joined: Sat Dec 26, 2020 10:00 am

Re: Short term Cash - where is best return?

Post by slickracer »

TD ameritrade has some nice short term CD rates right now.
User avatar
JoMoney
Posts: 13723
Joined: Tue Jul 23, 2013 5:31 am

Re: Short term Cash - where is best return?

Post by JoMoney »

Chip wrote: Wed Jun 22, 2022 7:40 am
tc101 wrote: Sat Jun 18, 2022 9:41 am
VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.
Fidelity and Schwab MMFs are yielding about half of that. This is an example of how Vanguard excels. People talk about moving to Fido or Schwab to get better service, but the service is now terrible at all 3, and the yields are better at Vanguard.
Yields are better at Vanguard, but not 2x Fidelity.

Current 7 day yield on VMRXX is 1.22%
VMFXX is 1.27%
FDRXX is 1.03%
FZDXX is 1.18%

I question your assertion that customer service is equally terrible at all 3.
Yes, but for what it's worth there was some lag over this past weekend where Vanguard was showing a rate on VMFXX that was almost twice that of the comparable FDRXX or SPAXX Fidelity fund... until they updated the rates this week.

Money Market fund rates have been rising fast, and I expect they'll be leading the way up unless you're willing to hop around to multiple banks chasing whoever has the newest updated promotion/rate.

I've been using FDRXX at Fidelity, because I no longer have an account at Vanguard, it's not worthwhile at this point for me to have the paperwork hassle to open an account just for VMFXX, and I really like the cash management features at Fidelity (i.e. ATM/debit card, Bill Pay, check writing, no fees/atm reimbursement, etc..) on their money market funds... and I already have accounts at Fidelity, so I'm not adding additional account hassle.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Nowizard
Posts: 4076
Joined: Tue Oct 23, 2007 5:33 pm

Re: Short term Cash - where is best return?

Post by Nowizard »

Our CU paying 3% up to 20K.

Tim
Chip
Posts: 3847
Joined: Wed Feb 21, 2007 4:57 am

Re: Short term Cash - where is best return?

Post by Chip »

JoMoney wrote: Wed Jun 22, 2022 8:26 am Yes, but for what it's worth there was some lag over this past weekend where Vanguard was showing a rate on VMFXX that was almost twice that of the comparable FDRXX or SPAXX Fidelity fund... until they updated the rates this week.

Money Market fund rates have been rising fast, and I expect they'll be leading the way up unless you're willing to hop around to multiple banks chasing whoever has the newest updated promotion/rate.
Yes. No reasonable way for Fido to overcome the higher expense ratios on its funds. Vanguard should always be leading.

FWIW, the 1 day yield on FDRXX jumped the day after the Fed raise. Using the Fido institutional link provided by Lyrrad in this post, I was able to get the 1, 7 and 30 day yields for FDRXX; shown below.

Code: Select all

Date 	            Yields 		
	       1-Day 	7-Day   30-Day
06/14/2022	0.53%	0.51%	0.47%
06/15/2022	0.53%	0.51%	0.47%
06/16/2022	1.01%	0.58%	0.49%
06/17/2022	1.04%	0.66%	0.51%
06/18/2022	1.04%	0.74%	0.53%
06/19/2022	1.04%	0.81%	0.55%
06/20/2022	1.04%	0.89%	0.57%
06/21/2022	1.03%	0.96%	0.59%
Post Reply