[Ally online savings now at 1.80%]

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UpperNwGuy
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Re: Ally online savings now at 1.45%

Post by UpperNwGuy » Wed Apr 18, 2018 6:55 am

Rob54keep wrote:
Wed Apr 18, 2018 6:38 am
There are a few out there or you can calculate it yourself:
https://www.calcxml.com/do/inc11
(Tax-Free Yield)/1-(Marginal Tax Rate) = Tax Equivalent Yield
This calculator is better than the one Vanguard had (until recently) because it shows state and well as federal.

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welderwannabe
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Re: Ally online savings now at 1.45%

Post by welderwannabe » Fri Apr 27, 2018 6:50 am

Ally savings rate is up to 1.50% now. Their money market is still a paltry .90%.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

Crisium
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Re: Ally online savings now at 1.45%

Post by Crisium » Fri Apr 27, 2018 7:02 am

Ally have done 0.10 rate increases in the past. They are really only going to do a 0.05 increase, leaving them still behind competitors?

I like their interface so much though. But I may have to run to Purepoint.

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Re: Ally online savings now at 1.45%

Post by z3r0c00l » Fri Apr 27, 2018 8:01 am

Far better than Chase and Citi, but still lagging inflation significantly.

4strings
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Re: Ally online savings now at 1.45%

Post by 4strings » Fri Apr 27, 2018 2:45 pm

welderwannabe wrote:
Fri Apr 27, 2018 6:50 am
Ally savings rate is up to 1.50% now. Their money market is still a paltry .90%.
better but still have a lot of wood to chop...

Darth Xanadu
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Re: Ally online savings now at 1.45%

Post by Darth Xanadu » Fri Apr 27, 2018 2:53 pm

Weak. I moved from Cap One to Ally a year or two ago to chase the better rate. I've since decided not to bother with further yield-chasing, but that doesn't make me feel any better having apparently settled on the wrong horse.

True, it's not material really but annoying to me nonetheless.
"A courageous teacher, failure is."

AllMostThere
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Re: Ally online savings now at 1.45%

Post by AllMostThere » Fri Apr 27, 2018 3:02 pm

DW & I have a trust account with Ally for our Emergency & Savings money. For years they have been very competitive with MM / Savings / CD. As of recent, I would agree that they are no longer competitive. Their rates are pretty basic to the point, I think that I will close my Ally accounts and CD's, and just take the plunge with Fidelity CM account and use their Brokered CD services.

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welderwannabe
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Re: Ally online savings now at 1.45%

Post by welderwannabe » Fri Apr 27, 2018 5:02 pm

Darth Xanadu wrote:
Fri Apr 27, 2018 2:53 pm
Weak. I moved from Cap One to Ally a year or two ago to chase the better rate. I've since decided not to bother with further yield-chasing, but that doesn't make me feel any better having apparently settled on the wrong horse.

True, it's not material really but annoying to me nonetheless.
I am a customer of both. C360's daily outages and terrible website aren't worth a few extra basis points. Ally runs a tight ship.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Rainier
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Re: Ally online savings now at 1.45%

Post by Rainier » Fri Apr 27, 2018 8:14 pm

They're getting smoked by treasuries and broker money markets right now. I pulled everything out of Ally and now have one less account to manage.

Calygos
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Re: Ally online savings now at 1.45%

Post by Calygos » Fri Apr 27, 2018 8:44 pm

My account still shows 1.45% but no big deal. Ally has been my EF for a few years but I finally moved there for my checking as well since I really like their interface and the simplicity of moving funds immediately, plus their 24/7 support has been helpful on a few occasions. I do also have checking and savings with a big credit union now as well (mainly for ATM cash deposits and being able to withdraw $100 bills when I need lots of cash, which is rare but happens) but their good checking and savings interest rates (4.07% and 6.17%) only apply up to the first $500 each.

Ultimately, for me, the benefits of Ally outweigh them not being the absolute best in terms of interest.

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Re: Ally online savings now at 1.45%

Post by WanderingDoc » Sat Apr 28, 2018 6:12 pm

Rainier wrote:
Fri Apr 27, 2018 8:14 pm
They're getting smoked by treasuries and broker money markets right now. I pulled everything out of Ally and now have one less account to manage.
If I may ask, where did you put the money instead? I have a savings acct and CD with them.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Ally online savings now at 1.45%

Post by Darth Xanadu » Sat Apr 28, 2018 11:17 pm

WanderingDoc wrote:
Sat Apr 28, 2018 6:12 pm
Rainier wrote:
Fri Apr 27, 2018 8:14 pm
They're getting smoked by treasuries and broker money markets right now. I pulled everything out of Ally and now have one less account to manage.
If I may ask, where did you put the money instead? I have a savings acct and CD with them.
My brokerage is Fidelity and their cash options are like 1.3%
"A courageous teacher, failure is."

txranger
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Re: Ally online savings now at 1.50%

Post by txranger » Sun Apr 29, 2018 6:48 am

Vanguard muni market yields 1.55 now, 2.2 at my marginal tax rate. Ally, i m out.

txranger
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Re: Ally online savings now at 1.50%

Post by txranger » Sun Apr 29, 2018 6:55 am

Ps. I have 100k left in their 1.75% no fee cd. Thinking of ditching that too. Only thing stopping me is fact I have 1 extra biz day delay in pullin cash out of vanguard mm fund in my case compared w ally. Still thinkin to get rid of it.

Worst offender is GS bank Marcus. I only have 10 days out of the year to get out of their CD. They won’t take instructions ahead of that. And their EWF is high at 9 mo for 1 yr cd. FYI. I m out of that one too ASAP.

Don’t get me wrong I think ally and alliant r best in biz for what they r and but they r laggin w rates.

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Leif
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Re: Ally online savings now at 1.50%

Post by Leif » Sun Apr 29, 2018 10:10 am

txranger wrote:
Sun Apr 29, 2018 6:48 am
Vanguard muni market yields 1.55 now, 2.2 at my marginal tax rate. Ally, i m out.
Same for me. I had Synchrony at 1.55%. I'm out as well. Now in Vanguard muni money market. Perhaps ACH is faster then 1 week? That remains to be seen.
Investors should diversify across many asset-classes so that whatever happens, we will not have all our investments in underperforming asset classes and thereby fail to meet our goals-Taylor Larimore

Calygos
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Re: Ally online savings now at 1.50%

Post by Calygos » Sun Apr 29, 2018 10:16 am

Why all the rate-chasing here? Savings accounts (i.e. emergency funds, cash reserves, whatever the desired terminology) are supposed to be about security and liquidity, not growth.

txranger
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Re: Ally online savings now at 1.50%

Post by txranger » Sun Apr 29, 2018 10:30 am

I also use cash-like investments as a part of my bond allocation. I don’t see anything better for bonds adjusting for taxes, rate, and liquidity risk than vanguard muni mm.
Do you?

I do most of my banking at Schwab and Fido, so once their mm start doing better than savings accounts, I don’t c much point of staying w online banks. Granted it’s more risky due to lack of fdic covg but I m ok w that risk for now. Thoughts?

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Re: Ally online savings now at 1.50%

Post by UpperNwGuy » Sun Apr 29, 2018 11:11 am

Calygos wrote:
Sun Apr 29, 2018 10:16 am
Why all the rate-chasing here? Savings accounts (i.e. emergency funds, cash reserves, whatever the desired terminology) are supposed to be about security and liquidity, not growth.
But if you can have security, liquidity AND growth, why not go for it? And if inflation rates rise, security improves with higher interest rates.

txranger
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Re: Ally online savings now at 1.50%

Post by txranger » Sun Apr 29, 2018 11:19 am

Right. I feel like the money markets have been quickest to catch up w increasing rates? 1.55% tax free is equivalent to 2.2% after tax in my tax bracket. On 100k of cash even diff btw 1.75 % ally no penalty cd is significant enuf to move... $450 in interest income/yr? That’s smth. Else I have to work to earn that kash. Doin a cple clicks is always preferable.

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jeffyscott
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Re: Ally online savings now at 1.50%

Post by jeffyscott » Sun Apr 29, 2018 11:48 am

txranger wrote:
Sun Apr 29, 2018 10:30 am
I also use cash-like investments as a part of my bond allocation. I don’t see anything better for bonds adjusting for taxes, rate, and liquidity risk than vanguard muni mm.
Do you?
I'm going to start working on creating an I-bond ladder and phasing out savings accounts. We're in 12% Federal bracket, 7% state. Getting at least inflation rate plus tax deferral and no state income tax with no risk seems like our best option, certainly better than 1.5% savings accounts.

We are in situation where all of our existing I-bonds are now more than 5 years old and most are 0%, so they can provide penalty free cash and be replaced with equal or better I-bonds (up to $20K per year). Also now being retired, can withdraw from retirement accounts as needed.
press on, regardless - John C. Bogle

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Re: Ally online savings now at 1.50%

Post by blevine » Sun Apr 29, 2018 12:25 pm

In an effort to start gradually simplifying, I phased out my bank mmkt fund. EF is in short term muni vanguard funds. EF in mmkt (paying about same as discussed here but no income tax on interest). Excess for near term (1-2 years) expenses in short or ltd term muni, now at 1.8 and over 2. Yes I know they are not fdic insured. Vanguard manages these funds conservatively, I can sleep at night, not my biggest risk, and my longer term bonds have US Tsy exposure (Total Bond).

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Re: Ally online savings now at 1.50%

Post by pasadena » Sun Apr 29, 2018 12:37 pm

As I'm moving more and more towards using Ally as my main bank, and as brokerage MM funds are moving in the right direction, I'm in the process of moving my EF out of there - I need it to be out of my reach :oops:

So now some of it is at Vanguard in CA Money Market fund - roughly same rate as Ally's Savings Account, but without taxes. The biggest part is still in an Ally CD that matures in July - I'll move that money out when the time comes, and I keep a few thousands on hand in the savings account.

I do love Ally, though.

BlackcatCA
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Re: Ally online savings now at 1.50%

Post by BlackcatCA » Sun Apr 29, 2018 1:26 pm

I'm wondering if this rise in muni MM yield can be sustained. Just 2 months ago SEC yield was around 1%. How likely for it to go back to <1% in 2 months?

am
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Re: Ally online savings now at 1.50%

Post by am » Sun Apr 29, 2018 2:47 pm

BlackcatCA wrote:
Sun Apr 29, 2018 1:26 pm
I'm wondering if this rise in muni MM yield can be sustained. Just 2 months ago SEC yield was around 1%. How likely for it to go back to <1% in 2 months?
The mm funds track the feds interest rate changes very closely. Not so much with savings accounts which depend more on the generosity of the banks.

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Re: Ally online savings now at 1.50%

Post by WanderingDoc » Sun Apr 29, 2018 4:20 pm

txranger wrote:
Sun Apr 29, 2018 11:19 am
Right. I feel like the money markets have been quickest to catch up w increasing rates? 1.55% tax free is equivalent to 2.2% after tax in my tax bracket. On 100k of cash even diff btw 1.75 % ally no penalty cd is significant enuf to move... $450 in interest income/yr? That’s smth. Else I have to work to earn that kash. Doin a cple clicks is always preferable.
Curious.. How exactly do you do that calculation?.. 1.5 to 2.2. Brain isn't working and not a math whiz to begin with.
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willthrill81
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Re: Ally online savings now at 1.50%

Post by willthrill81 » Sun Apr 29, 2018 4:34 pm

WanderingDoc wrote:
Sun Apr 29, 2018 4:20 pm
txranger wrote:
Sun Apr 29, 2018 11:19 am
Right. I feel like the money markets have been quickest to catch up w increasing rates? 1.55% tax free is equivalent to 2.2% after tax in my tax bracket. On 100k of cash even diff btw 1.75 % ally no penalty cd is significant enuf to move... $450 in interest income/yr? That’s smth. Else I have to work to earn that kash. Doin a cple clicks is always preferable.
Curious.. How exactly do you do that calculation?.. 1.5 to 2.2. Brain isn't working and not a math whiz to begin with.
2.2% - 29.5% tax bracket = 1.55%.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

WanderingDoc
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Re: Ally online savings now at 1.50%

Post by WanderingDoc » Sun Apr 29, 2018 5:03 pm

willthrill81 wrote:
Sun Apr 29, 2018 4:34 pm
WanderingDoc wrote:
Sun Apr 29, 2018 4:20 pm
txranger wrote:
Sun Apr 29, 2018 11:19 am
Right. I feel like the money markets have been quickest to catch up w increasing rates? 1.55% tax free is equivalent to 2.2% after tax in my tax bracket. On 100k of cash even diff btw 1.75 % ally no penalty cd is significant enuf to move... $450 in interest income/yr? That’s smth. Else I have to work to earn that kash. Doin a cple clicks is always preferable.
Curious.. How exactly do you do that calculation?.. 1.5 to 2.2. Brain isn't working and not a math whiz to begin with.
2.2% - 29.5% tax bracket = 1.55%.
So solving for x, I get an effective rate of 1.922% if in the 24% tax bracket. (x = 1.55% + {24% of 1.55} = 1.922%)
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jeffyscott
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Re: Ally online savings now at 1.50%

Post by jeffyscott » Sun Apr 29, 2018 7:30 pm

No, if he gets 2.2% taxable interest, he would pay 29.5% of that in taxes. 29.5% of 2.2% is 0.649%, so after tax he'd end up with 2.2%-0.649% = 1.551%.

Or do the math with $1000 investment. 2.2% interest would be $22. Taxes on the $22 would be $6.49, leaving $15.51 after tax. $15.51 is 1.551% of $1000.
press on, regardless - John C. Bogle

WanderingDoc
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Re: Ally online savings now at 1.50%

Post by WanderingDoc » Sun Apr 29, 2018 7:38 pm

jeffyscott wrote:
Sun Apr 29, 2018 7:30 pm
No, if he gets 2.2% taxable interest, he would pay 29.5% of that in taxes. 29.5% of 2.2% is 0.649%, so after tax he'd end up with 2.2%-0.649% = 1.551%.

Or do the math with $1000 investment. 2.2% interest would be $22. Taxes on the $22 would be $6.49, leaving $15.51 after tax. $15.51 is 1.551% of $1000.
You are still not solving for the number I need. In both examples, you simply state "2.2%" without saying how you actually calculated it.

This is important because I want to being able to plug in a different tax rate to get the effective interest :D
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jeffyscott
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Re: Ally online savings now at 1.50%

Post by jeffyscott » Sun Apr 29, 2018 10:14 pm

To do it that way, just divide by 1-tax rate.
So 1.55% ÷ (1-.295) =
1.55% ÷ 0.705 = 2.19%

So if tax rate is 24%, then the 1.55% is equivalent to 2.04%.
1.55 ÷ 0.76 = 2.04
press on, regardless - John C. Bogle

WanderingDoc
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Re: Ally online savings now at 1.50%

Post by WanderingDoc » Mon Apr 30, 2018 12:21 am

jeffyscott wrote:
Sun Apr 29, 2018 10:14 pm
To do it that way, just divide by 1-tax rate.
So 1.55% ÷ (1-.295) =
1.55% ÷ 0.705 = 2.19%

So if tax rate is 24%, then the 1.55% is equivalent to 2.04%.
1.55 ÷ 0.76 = 2.04
Thanks. First batch is already on the way into Tax-exempt Muni. Next task is to deplete the Ally Savings acct :P
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Re: Ally online savings now at 1.50%

Post by ivk5 » Mon Apr 30, 2018 2:36 am

txranger wrote:
Sun Apr 29, 2018 6:55 am
Ps. I have 100k left in their 1.75% no fee cd. Thinking of ditching that too. Only thing stopping me is fact I have 1 extra biz day delay in pullin cash out of vanguard mm fund in my case compared w ally. Still thinkin to get rid of it.
Hopefully you opened 4x 25k CDs. In that case it's not all or nothing - could take tiered approach. Keep 1 or 2 of the CDs for accessibility; for the others, break the CDs and move to VG Muni MM.

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Re: Ally online savings now at 1.50%

Post by UpperNwGuy » Mon Apr 30, 2018 6:42 am

Why do you consider rapid accessibility to be so important? I am hard pressed to think of a situation that requires a large sum of cash in less than a week. I think money in a Vanguard money market fund is acceptably accessible.

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Rainier
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Re: Ally online savings now at 1.45%

Post by Rainier » Mon Apr 30, 2018 7:11 am

Darth Xanadu wrote:
Sat Apr 28, 2018 11:17 pm
WanderingDoc wrote:
Sat Apr 28, 2018 6:12 pm
Rainier wrote:
Fri Apr 27, 2018 8:14 pm
They're getting smoked by treasuries and broker money markets right now. I pulled everything out of Ally and now have one less account to manage.
If I may ask, where did you put the money instead? I have a savings acct and CD with them.
My brokerage is Fidelity and their cash options are like 1.3%
I had an Ally money market which was less than their savings rate. I'm using money markets at Fidelity and short term treasuries now.

It wasn't just about the rate for me, it also had to do with reducing the number of accounts I manage.

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aj76er
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Re: Ally online savings now at 1.50%

Post by aj76er » Mon Apr 30, 2018 11:12 am

I've still got a couple 1.75% no penalty CD's, which are still seem competitive with (non-muni) money markets. At Fidelity, the best (non-muni) MM is around 1.5% for the prime money market (net of fees).

Alternatives @ Fidelity would be 3mo T-bills directly or an ETF like BIL or SHV. However, the spread isn't quite good enough for the hassle-factor of breaking the CD's and moving the money. My guess is that by mid-year, the no penalty CD's will be uncompetitive and I'll want to move the money.

It's a shame Ally is falling behind the curve a bit with rates. I-bonds would be ideal, but the purchase limits (for single person) makes it really tough to build up in a timely manner
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle

txranger
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Re: Ally online savings now at 1.50%

Post by txranger » Tue May 01, 2018 2:06 pm

I got out of the 1.75% cds into vanguard muni mm, yields 1.53%, which is 2.2% at my marginal tax rate

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Re: Ally online savings now at 1.50%

Post by gmaynardkrebs » Wed May 02, 2018 2:26 pm

txranger wrote:
Tue May 01, 2018 2:06 pm
I got out of the 1.75% cds into vanguard muni mm, yields 1.53%, which is 2.2% at my marginal tax rate
Does muni interest get hit with the 3.8% Medicare/Obamacare tax?

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Re: Ally online savings now at 1.50%

Post by willthrill81 » Wed May 02, 2018 3:17 pm

aj76er wrote:
Mon Apr 30, 2018 11:12 am
It's a shame Ally is falling behind the curve a bit with rates.
Ally has been consistently behind a few others with regard to the speed with which they raise their rates, but their speed of transfers and customer service have been excellent for me. I don't keep nearly enough cash on hand to make it worthwhile to worry about or chase after 10 or 20 basis points.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Ally online savings now at 1.50%

Post by pascalwager » Wed May 02, 2018 5:45 pm

Synchrony Bank is now at 1.65%. Slightly ahead of VG Treasury MM Fund (1.62%, $50k min.), but the Treasury fund has the state tax exemption. I consider VG Prime MM unsuitable for large sums due to lack of FDIC or implied Federal protection.

Synchrony takes three days to move money, but that doesn't bother me. I keep 10, 20 or even $30k in checking to cover any emergency needs.

Next month my Synchrony account will start to spill over (FDIC-wise), and I'll have a decision to make. If I move money to Vanguard, then I'm losing some institutional diversity (e.g., IT meltdown). May add Pure Point HY Savings (1.75%).

Cash is about 23% of my bonds, with an overall duration of about 3.2 years. But that's actually misleading as I don't re-balance and would just use the cash if I needed to spend.

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Re: Ally online savings now at 1.50%

Post by gmaynardkrebs » Wed May 02, 2018 6:38 pm

pascalwager wrote:
Wed May 02, 2018 5:45 pm
Synchrony Bank is now at 1.65%. Slightly ahead of VG Treasury MM Fund (1.62%, $50k min.), but the Treasury fund has the state tax exemption. I consider VG Prime MM unsuitable for large sums due to lack of FDIC or implied Federal protection.

Synchrony takes three days to move money, but that doesn't bother me. I keep 10, 20 or even $30k in checking to cover any emergency needs.

Next month my Synchrony account will start to spill over (FDIC-wise), and I'll have a decision to make. If I move money to Vanguard, then I'm losing some institutional diversity (e.g., IT meltdown). May add Pure Point HY Savings (1.75%).

Cash is about 23% of my bonds, with an overall duration of about 3.2 years. But that's actually misleading as I don't re-balance and would just use the cash if I needed to spend.
Bent’s Reserve Fund paid 99 cents on the dollar, and if Vanguard Prime paid less than 99.999998 on the dollar I’d be shocked.

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zaplunken
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Re: Ally online savings now at 1.50%

Post by zaplunken » Sun May 06, 2018 4:32 pm

I assume the Muni Market fund being discussed is Vanguard Municipal Money Market Fund (VMSXX).

I transfer money from my local bank's checking account to Ally when I have excess money in it which is at least one time often 2 times a month. The turn around is one business day. I can do 6 transfers from Ally to the local bank's checking account 6 times per statement cycle and if I transfer to cover expenses 3 times a month would probably be the most.

Does anyone know what the time frame is to transfer money from a local bank to Vanguard Municipal Money Market Fund (VMSXX)?

Does anyone know what the time frame is to transfer money from Vanguard Municipal Money Market Fund (VMSXX) to a local bank?

Does that 6 transfers apply with Vanguard or is it less?

I'm in the 12% Federal tax bracket for 2018 and pay no state income taxes. I have $50,000 (+ or -) so the difference in yearly interest is $740 at Ally vs $660 with the Vanguard fund but it is tax free.

Thanks.

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Re: Ally online savings now at 1.50%

Post by jeffyscott » Sun May 06, 2018 9:57 pm

zaplunken wrote:
Sun May 06, 2018 4:32 pm
I'm in the 12% Federal tax bracket for 2018 and pay no state income taxes. I have $50,000 (+ or -) so the difference in yearly interest is $740 at Ally vs $660 with the Vanguard fund but it is tax free.
You would be better off with Prime Money Market at 1.83%, which would be 1.61% after 12% tax vs. 1.48% for VMSXX.
press on, regardless - John C. Bogle

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zaplunken
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Re: Ally online savings now at 1.50%

Post by zaplunken » Mon May 07, 2018 7:06 am

jeffyscott wrote:
Sun May 06, 2018 9:57 pm
zaplunken wrote:
Sun May 06, 2018 4:32 pm
I'm in the 12% Federal tax bracket for 2018 and pay no state income taxes. I have $50,000 (+ or -) so the difference in yearly interest is $740 at Ally vs $660 with the Vanguard fund but it is tax free.
You would be better off with Prime Money Market at 1.83%, which would be 1.61% after 12% tax vs. 1.48% for VMSXX.
Thank you Sir! :sharebeer

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Re: Ally online savings now at 1.50%

Post by Riley15 » Mon May 07, 2018 8:52 am

zaplunken wrote:
Mon May 07, 2018 7:06 am
jeffyscott wrote:
Sun May 06, 2018 9:57 pm
zaplunken wrote:
Sun May 06, 2018 4:32 pm
I'm in the 12% Federal tax bracket for 2018 and pay no state income taxes. I have $50,000 (+ or -) so the difference in yearly interest is $740 at Ally vs $660 with the Vanguard fund but it is tax free.
You would be better off with Prime Money Market at 1.83%, which would be 1.61% after 12% tax vs. 1.48% for VMSXX.
Thank you Sir! :sharebeer
FDIC Insurance with Bank vs None with Money Market. Many people overlook this but it's important to remember the extra risk taken with money market funds over savings/cd's.

gmaynardkrebs
Posts: 785
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Re: Ally online savings now at 1.50%

Post by gmaynardkrebs » Mon May 07, 2018 9:10 am

Riley15 wrote:
Mon May 07, 2018 8:52 am
zaplunken wrote:
Mon May 07, 2018 7:06 am
jeffyscott wrote:
Sun May 06, 2018 9:57 pm
zaplunken wrote:
Sun May 06, 2018 4:32 pm
I'm in the 12% Federal tax bracket for 2018 and pay no state income taxes. I have $50,000 (+ or -) so the difference in yearly interest is $740 at Ally vs $660 with the Vanguard fund but it is tax free.
You would be better off with Prime Money Market at 1.83%, which would be 1.61% after 12% tax vs. 1.48% for VMSXX.
Thank you Sir! :sharebeer
FDIC Insurance with Bank vs None with Money Market. Many people overlook this but it's important to remember the extra risk taken with money market funds over savings/cd's.
What do you think the worst case loss could be with Vanguard Prime, bearing in mind that with all the hoopla in 2008, investors got back 99cents on the dollar in Bent's Reserve Fund, which was scandalously mismanaged.

Jack FFR1846
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Joined: Tue Dec 31, 2013 7:05 am

Re: Ally online savings now at 1.50%

Post by Jack FFR1846 » Mon May 07, 2018 9:31 am

redneck bank megamoney 1.75% up to $35k
ablebanking 1.70% no limit
Bogle: Smart Beta is stupid

Riley15
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Re: Ally online savings now at 1.50%

Post by Riley15 » Mon May 07, 2018 10:15 am

gmaynardkrebs wrote:
Mon May 07, 2018 9:10 am
Riley15 wrote:
Mon May 07, 2018 8:52 am
zaplunken wrote:
Mon May 07, 2018 7:06 am
jeffyscott wrote:
Sun May 06, 2018 9:57 pm
zaplunken wrote:
Sun May 06, 2018 4:32 pm
I'm in the 12% Federal tax bracket for 2018 and pay no state income taxes. I have $50,000 (+ or -) so the difference in yearly interest is $740 at Ally vs $660 with the Vanguard fund but it is tax free.
You would be better off with Prime Money Market at 1.83%, which would be 1.61% after 12% tax vs. 1.48% for VMSXX.
Thank you Sir! :sharebeer
FDIC Insurance with Bank vs None with Money Market. Many people overlook this but it's important to remember the extra risk taken with money market funds over savings/cd's.
What do you think the worst case loss could be with Vanguard Prime, bearing in mind that with all the hoopla in 2008, investors got back 99cents on the dollar in Bent's Reserve Fund, which was scandalously mismanaged.
Not all money market funds are created equal. Vanguard Prime Money Market in particular holds ~40% Yankee/Foreign bonds, the majority of its holdings. Many people wouldn't even touch foreign or emerging market bonds but they may be holding it through the money market fund. I like to think of it like any other bond fund, worst case loss would depend on underlying creditworthiness and default ratios. Risks may be lower but it's definitely not equal to FDIC insurance.

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sperry8
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Re: Ally online savings now at 1.50%

Post by sperry8 » Mon May 07, 2018 11:01 am

aj76er wrote:
Mon Apr 30, 2018 11:12 am
I've still got a couple 1.75% no penalty CD's, which are still seem competitive with (non-muni) money markets. At Fidelity, the best (non-muni) MM is around 1.5% for the prime money market (net of fees).

Alternatives @ Fidelity would be 3mo T-bills directly or an ETF like BIL or SHV. However, the spread isn't quite good enough for the hassle-factor of breaking the CD's and moving the money. My guess is that by mid-year, the no penalty CD's will be uncompetitive and I'll want to move the money.

It's a shame Ally is falling behind the curve a bit with rates. I-bonds would be ideal, but the purchase limits (for single person) makes it really tough to build up in a timely manner
Or you could cancel and move to Popular Direct at 2% APY FDIC insured. That's what I did.
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

leftofdial
Posts: 1
Joined: Wed Jan 31, 2018 8:03 pm

Re: Ally online savings now at 1.50%

Post by leftofdial » Mon May 07, 2018 4:32 pm

Capital one recently sent out ads featuring 1.6% on a money market if you hold 10K +, and .85 if the balance is under.
The usual Cap1 360 savings account now pays 1.0
I didn't get any further than skimming the copy, but just throwing this out there for those w/ larger cap 1 balances

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LadyGeek
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Re: Ally online savings now at 1.50%

Post by LadyGeek » Mon May 07, 2018 6:41 pm

Thanks! We have an on-going discussion: Capital One now at 1.60 [Money Market Rate To 1.60% APY]
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