Best account for intermediate savings???

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gt4715b
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Best account for intermediate savings???

Post by gt4715b » Sat Sep 03, 2011 12:53 pm

I'm in the process of starting to build my "intermediate savings", which I define as money to be used for large infrequent purchases such as a car, roof repair, etc. Anyway, I'm trying to figure out the best type of account for this money. I need an account with low fees and that allows me to do direct deposit. I think I want to invest in something like intermediate bonds in terms of the risk/reward characteristics.

I would just invest at Vanguard but the funds have a $3,000 minimum. Anyone have any ideas?

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CABob
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Post by CABob » Sat Sep 03, 2011 2:51 pm

Do you have an emergency fund and if so where is it kept? It seems to me that your emergency fund and your intermediate fund is just a matter of mental accounting and physically they could be comingled. In any case I would think that a bank savings account is perhaps appropriate at the moment.
Bob

rwwoods
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Post by rwwoods » Sat Sep 03, 2011 7:00 pm

Studies have shown that the probability of having the highest return is obtained when the duration of a bond fund matches the investment horizon.
"I'm not so much concerned about the return on my money as the return of my money" - Will Rogers

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kellyfj
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Post by kellyfj » Sat Sep 03, 2011 7:28 pm

A short-term bond index would suffice I think. VFSTX being a pretty good start.

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BigD53
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Post by BigD53 » Sat Sep 03, 2011 7:38 pm

Yes, most all Vanguard funds require a $3,000 investment to open the account.

I only know of one fund company that allows you to open an account with as little as $50.
T. Rowe Price will do that, if you agree to sign up for an automatic monthly purchase of $50.

If you would like to invest in an intermediate-term bond fund, you might check out the Price funds. But they are slightly higher in fees than Vanguard.

Charleville
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Post by Charleville » Sat Sep 03, 2011 9:39 pm

I am sure TRP funds require $100 monthly investments now, this is a recent change. You could put your money in Vanguard Star Fund which requires only a $1,000 minimum investment.

mamster
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Post by mamster » Sat Sep 03, 2011 10:32 pm

I-bonds?

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