A MM account or not?

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nwffdiver
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A MM account or not?

Post by nwffdiver » Wed Oct 22, 2014 6:37 pm

I recently closed a small taxable account I had($5000). I was thinking of opening a VG PrimeMM account as a place to put it until I can add it (most of it) into my 2015 Roth. I plan to leave about $500 in there, then after I fill up mine and the wife's Roths, keep adding a couple hundred a month there. I realize the rates are next to nil. Or would it be easier just to put the money in my Ally MM savings until the new year, then transfer a couple hundred each month from my checking there?

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midareff
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Re: A MM account or not?

Post by midareff » Wed Oct 22, 2014 6:41 pm

Fill buckets with cups and drops. Ally's drops are bigger than VG's,.... I use Ally checking and MM.

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Re: A MM account or not?

Post by placeholder » Wed Oct 22, 2014 7:32 pm

I wouldn't use a MM fund these days when checking accounts pay better.

John3754
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Re: A MM account or not?

Post by John3754 » Wed Oct 22, 2014 7:40 pm

MM funds are essentially useless at this point in time in my opinion. Why use a MM fund yielding 0.01% when you can use an FDIC insured bank account yielding 0.9%?

nwffdiver
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Re: A MM account or not?

Post by nwffdiver » Wed Oct 22, 2014 8:23 pm

Thanks everybody.. That's what I thought. I just wanted to hear it from the masses. More $ in the Ally account means more interest. Easy.

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Phineas J. Whoopee
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Re: A MM account or not?

Post by Phineas J. Whoopee » Thu Oct 23, 2014 3:55 pm

To help others who may happen across this thread, the subject line refers to a Money Market Account, but the body of the OP talks about a Money Market Fund.

The latter, which are mutual funds, are not FDIC insured, and pay very little interest, even by today's standards.

The former, which are FDIC-insured bank accounts, are similar to savings accounts, and it's possible to find some which pay over 1% as of this writing. It's less than trailing inflation, but a lot more than the money market funds pay these days.

PJW

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avenger
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Re: A MM account or not?

Post by avenger » Thu Oct 30, 2014 4:40 am

I just transferred $5500 from checking to my MM fund at Vanguard for my 2015 backdoor Roth contribution. The only cash management account I have is checking (no savings) and is tied to a debit card. I don't like to have a ton of cash in checking (keep 10k for cash flow needs) that could potentially somehow be at risk if my card were stolen. And I don't want to go yield chasing and open up another savings account somewhere to earn me an extra $10.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

The Wizard
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Re: A MM account or not?

Post by The Wizard » Thu Oct 30, 2014 5:54 am

I agree with the others that a MM account is a needless complication presently.
I'm happy using my checking account as my "hub" for most transactions.
Dividends from my Vanguard taxable account go in to my checking account.
When I have extra $$$ beyond a particular dollar amount, I move money out of checking into online savings or my taxable investment account, depending on the phase of the moon...
Attempted new signature...

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Re: A MM account or not?

Post by placeholder » Thu Oct 30, 2014 12:35 pm

I just use my online checking account which gives me a less than ideal .4% but I don't keep that much in it and the account is linked all over the place to move money around so I just don't sweat it too much although don't see any reason to use a MM fund at a brokerage.

Leeraar
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Re: A MM account or not?

Post by Leeraar » Thu Oct 30, 2014 1:08 pm

I had two money market accounts (Vanguard and Ally), and closed them both when I discovered their archaic rules for transferring money*.

Now, I have my checking account at BofA linked to my Vanguard account.

* Funds will transfer two business days after the next NYSE close of business. Ask for a transfer after 4 pm on a Friday, and you will see the funds the following Wednesday evening, presuming there is not an intervening holiday.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

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