Is it time to dump high yield savings for prime money market?

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welderwannabe
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Re: Is it time to dump high yield savings for prime money market?

Post by welderwannabe » Wed Mar 28, 2018 1:23 pm

kappy wrote:
Wed Mar 28, 2018 10:21 am
Quick question about Prime MM... does interest accrue daily? I know it pays out monthly but is it accruing daily?
Daily.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: Is it time to dump high yield savings for prime money market?

Post by foamypirate » Wed Mar 28, 2018 1:26 pm

welderwannabe wrote:
Wed Mar 28, 2018 1:23 pm
kappy wrote:
Wed Mar 28, 2018 10:21 am
Quick question about Prime MM... does interest accrue daily? I know it pays out monthly but is it accruing daily?
Daily.
Yep! In fact, if you go to the "Balance by Date" view at Vanguard, you can see the accumulated dividends Month-to-date, on the date you select.

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Re: Is it time to dump high yield savings for prime money market?

Post by kappy » Wed Mar 28, 2018 6:49 pm

Great! Thanks.

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ruralavalon
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Re: Is it time to dump high yield savings for prime money market?

Post by ruralavalon » Thu Mar 29, 2018 5:11 pm

mbasherp wrote:
Tue Mar 20, 2018 10:34 am
I've happily watched interest rates on cash come back to life. My "high yield" savings has been with Discover for a long time and is currently at 1.5%. I keep watching Vanguard's Prime Money Market fund VMMXX and its yield seems like it has become the first to move up, in comparison to the FDIC savings accounts.

With a current SEC Yield of 1.61% and a steady ascent, is anyone else dumping the HY savings in favor of MM with their emergency funds and short term cash needs? Is this trend likely to continue? I've read about, but wasn't around for the times when money market rates significantly outperformed savings rates in the early 80's.
High yield savings accounts and Vanguard Prime Money Market Fund (VMMXX) are now in the same general range of yield. I would not change over the small difference in rate.

I am retired, we have no savings account, and we keep almost no cash in investing accounts, so that the near equivalent yields will not affect us.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Is it time to dump high yield savings for prime money market?

Post by LOLC2k » Thu Mar 29, 2018 8:11 pm

I do not keep enough in cash savings for this to matter. It would need to be over 5% for to move money out of my savings accounts, because that is the amount I'm getting on my savings, currently. Once I have too much in savings to put into these 5% accounts, then maybe I'll look into it. I don't currently bother with "high yield" savings of 1.45%.

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Re: Is it time to dump high yield savings for prime money market?

Post by MotoTrojan » Thu Mar 29, 2018 10:10 pm

LOLC2k wrote:
Thu Mar 29, 2018 8:11 pm
I do not keep enough in cash savings for this to matter. It would need to be over 5% for to move money out of my savings accounts, because that is the amount I'm getting on my savings, currently. Once I have too much in savings to put into these 5% accounts, then maybe I'll look into it. I don't currently bother with "high yield" savings of 1.45%.
Where are you saving at 5%? I have been struggling to get myself to hold much cash at all but if it were getting 5% I'd let it ride. Every time I get some savings or have a big windfall, I establish a reasonable EF, and eventually widdle it down (via investment) until my checking account is all that is left.

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Re: Is it time to dump high yield savings for prime money market?

Post by LOLC2k » Fri Mar 30, 2018 8:16 am

MotoTrojan wrote:
Thu Mar 29, 2018 10:10 pm
LOLC2k wrote:
Thu Mar 29, 2018 8:11 pm
I do not keep enough in cash savings for this to matter. It would need to be over 5% for to move money out of my savings accounts, because that is the amount I'm getting on my savings, currently. Once I have too much in savings to put into these 5% accounts, then maybe I'll look into it. I don't currently bother with "high yield" savings of 1.45%.
Where are you saving at 5%? I have been struggling to get myself to hold much cash at all but if it were getting 5% I'd let it ride. Every time I get some savings or have a big windfall, I establish a reasonable EF, and eventually widdle it down (via investment) until my checking account is all that is left.
I am working towards having 15,000 in emergency savings (this is my first year of not being underemployed). I have two insight card accounts that have 5% 5,000 savings. Any interest accrued past the 5,000 stays at 5% as well, it just won't let you deposit anything past that.There are also five netpsend cards you can get that give 5% interest on 1,000 dollars or less. Any additional money in those drops to I beleive .5 or 1%, so I withdraw the interest on those quarterly. Some people have had more luck with insight and can open up 3-4 cards, potentially giving them 20-25k. Others can only seem to open one. Worth noting if you're married (I am not) your spouse can open all of these accounts as well, doubling your amount.

The "trick" is to never use the cards as they are laden with fees. Pick the pay as you go option, and file the card away. Do an ACH transfer in from ally, then move the money to the savings. If you need to withdraw, do an ACH transfer (no fees). I beleive there's an inactivity fee of 90 days, easily avoided by making a $1 ACH every other month (with Ally you can schedule all of these as recurring), and I just pull that dollar or two back quarterly along with the interest earned. Takes a bit to set up, depending on if you have an ally account. If you do, 5-10 minutes per card.
The longest part is waiting for the cards in the mail.

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Re: Is it time to dump high yield savings for prime money market?

Post by MotoTrojan » Fri Mar 30, 2018 11:16 am

LOLC2k wrote:
Fri Mar 30, 2018 8:16 am
MotoTrojan wrote:
Thu Mar 29, 2018 10:10 pm
LOLC2k wrote:
Thu Mar 29, 2018 8:11 pm
I do not keep enough in cash savings for this to matter. It would need to be over 5% for to move money out of my savings accounts, because that is the amount I'm getting on my savings, currently. Once I have too much in savings to put into these 5% accounts, then maybe I'll look into it. I don't currently bother with "high yield" savings of 1.45%.
Where are you saving at 5%? I have been struggling to get myself to hold much cash at all but if it were getting 5% I'd let it ride. Every time I get some savings or have a big windfall, I establish a reasonable EF, and eventually widdle it down (via investment) until my checking account is all that is left.
I am working towards having 15,000 in emergency savings (this is my first year of not being underemployed). I have two insight card accounts that have 5% 5,000 savings. Any interest accrued past the 5,000 stays at 5% as well, it just won't let you deposit anything past that.There are also five netpsend cards you can get that give 5% interest on 1,000 dollars or less. Any additional money in those drops to I beleive .5 or 1%, so I withdraw the interest on those quarterly. Some people have had more luck with insight and can open up 3-4 cards, potentially giving them 20-25k. Others can only seem to open one. Worth noting if you're married (I am not) your spouse can open all of these accounts as well, doubling your amount.

The "trick" is to never use the cards as they are laden with fees. Pick the pay as you go option, and file the card away. Do an ACH transfer in from ally, then move the money to the savings. If you need to withdraw, do an ACH transfer (no fees). I beleive there's an inactivity fee of 90 days, easily avoided by making a $1 ACH every other month (with Ally you can schedule all of these as recurring), and I just pull that dollar or two back quarterly along with the interest earned. Takes a bit to set up, depending on if you have an ally account. If you do, 5-10 minutes per card.
The longest part is waiting for the cards in the mail.
I'll have to check out insight. No monthly purchase requirements other than the 90 day inactivity? I do have Ally.

$5000 would satisfy my emergency needs as I have pretty low required expenses and a very healthy taxable account.

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Re: Is it time to dump high yield savings for prime money market?

Post by LOLC2k » Fri Mar 30, 2018 11:41 am

Set up the account, deposit the money (preferably from ally) and link it. Transfer the money from ally to insight, then put it on the savings. MAKE SURE you're on the "pay as you go" plan. This has a LOT of fees when you make purchases, but no monthly/annual fee. Since you won't be using the card (EVER), no problem. Then set up a 1 dollar payment every other month to make sure there's no inactivity fee.

And no, there's no purchase requirements. I got my cards and put them in a file cabinet when I got them, to make sure I never ever use the things. You can get between 2-4 insight cards, generally. Insight I like more both because of the higher limit and the fact that the interest earns 5% as well even when above $5,000.

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Re: Is it time to dump high yield savings for prime money market?

Post by BogleMelon » Fri Mar 30, 2018 12:34 pm

LOLC2k wrote:
Fri Mar 30, 2018 11:41 am
Set up the account, deposit the money (preferably from ally) and link it. Transfer the money from ally to insight, then put it on the savings. MAKE SURE you're on the "pay as you go" plan. This has a LOT of fees when you make purchases, but no monthly/annual fee. Since you won't be using the card (EVER), no problem. Then set up a 1 dollar payment every other month to make sure there's no inactivity fee.

And no, there's no purchase requirements. I got my cards and put them in a file cabinet when I got them, to make sure I never ever use the things. You can get between 2-4 insight cards, generally. Insight I like more both because of the higher limit and the fact that the interest earns 5% as well even when above $5,000.
For a married couple, do they offer a joint account? If so, would they allow 4 cards instead say 2 cards?
Also when money is transferred, the card is loaded with $5K, what is the risk there if say the card was stolen or lost?
Is having the card loaded means you will get the 5%? or you have to move it to a saving account they have?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Rainier
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Re: Is it time to dump high yield savings for prime money market?

Post by Rainier » Fri Mar 30, 2018 1:17 pm

Not a big income boost going from Ally to my brokerage money market fund (like 10 basis points), but I pulled the trigger today.

Biggest reason was to simplify. One less account, one less 1099, one less check book floating around.

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Re: Is it time to dump high yield savings for prime money market?

Post by LOLC2k » Fri Mar 30, 2018 4:44 pm

BogleMelon wrote:
Fri Mar 30, 2018 12:34 pm
LOLC2k wrote:
Fri Mar 30, 2018 11:41 am
Set up the account, deposit the money (preferably from ally) and link it. Transfer the money from ally to insight, then put it on the savings. MAKE SURE you're on the "pay as you go" plan. This has a LOT of fees when you make purchases, but no monthly/annual fee. Since you won't be using the card (EVER), no problem. Then set up a 1 dollar payment every other month to make sure there's no inactivity fee.

And no, there's no purchase requirements. I got my cards and put them in a file cabinet when I got them, to make sure I never ever use the things. You can get between 2-4 insight cards, generally. Insight I like more both because of the higher limit and the fact that the interest earns 5% as well even when above $5,000.
For a married couple, do they offer a joint account? If so, would they allow 4 cards instead say 2 cards?
Also when money is transferred, the card is loaded with $5K, what is the risk there if say the card was stolen or lost?
Is having the card loaded means you will get the 5%? or you have to move it to a saving account they have?
There is no joint account, but she can get her own 2-4 cards. You move it from the card to the savings account attached, and interestingly, there is no overdraft. So in the off chacne that the card gets stolen, no, they won't take the savings off that way.
It's a standard debit prepaid card, eg, much less protection than a credit card. Don't lose it. I don't see how you would since your just going to shove it in a strongbox after you get it.

So it's put the money on the card, then to the savings on it. If you want to spend the money or move it, you just click to put it back on the card (though I would still do an ACH transfer like any other savings account instead).

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Re: Is it time to dump high yield savings for prime money market?

Post by BogleMelon » Fri Mar 30, 2018 4:48 pm

LOLC2k wrote:
Fri Mar 30, 2018 4:44 pm
BogleMelon wrote:
Fri Mar 30, 2018 12:34 pm
LOLC2k wrote:
Fri Mar 30, 2018 11:41 am
Set up the account, deposit the money (preferably from ally) and link it. Transfer the money from ally to insight, then put it on the savings. MAKE SURE you're on the "pay as you go" plan. This has a LOT of fees when you make purchases, but no monthly/annual fee. Since you won't be using the card (EVER), no problem. Then set up a 1 dollar payment every other month to make sure there's no inactivity fee.

And no, there's no purchase requirements. I got my cards and put them in a file cabinet when I got them, to make sure I never ever use the things. You can get between 2-4 insight cards, generally. Insight I like more both because of the higher limit and the fact that the interest earns 5% as well even when above $5,000.
For a married couple, do they offer a joint account? If so, would they allow 4 cards instead say 2 cards?
Also when money is transferred, the card is loaded with $5K, what is the risk there if say the card was stolen or lost?
Is having the card loaded means you will get the 5%? or you have to move it to a saving account they have?
There is no joint account, but she can get her own 2-4 cards. You move it from the card to the savings account attached, and interestingly, there is no overdraft. So in the off chacne that the card gets stolen, no, they won't take the savings off that way.
It's a standard debit prepaid card, eg, much less protection than a credit card. Don't lose it. I don't see how you would since your just going to shove it in a strongbox after you get it.

So it's put the money on the card, then to the savings on it. If you want to spend the money or move it, you just click to put it back on the card (though I would still do an ACH transfer like any other savings account instead).
Thanks for the info. I actually ordered my first card after some investigation..
Now I can not order a card for my wife! The system is showing an error once I fill her application, and the message advice she contact the customer service! Not a good start..

Couple of more questions please, so you can only get the money out through funneling it first to the card then to your Ally account? or it can be a direct transaction from Insight saving to Ally?
Also, is there any limit per day on the amount you can withdraw?
Thanks!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Is it time to dump high yield savings for prime money market?

Post by LOLC2k » Fri Mar 30, 2018 5:01 pm

BogleMelon wrote:
Fri Mar 30, 2018 4:48 pm
LOLC2k wrote:
Fri Mar 30, 2018 4:44 pm
BogleMelon wrote:
Fri Mar 30, 2018 12:34 pm
LOLC2k wrote:
Fri Mar 30, 2018 11:41 am
Set up the account, deposit the money (preferably from ally) and link it. Transfer the money from ally to insight, then put it on the savings. MAKE SURE you're on the "pay as you go" plan. This has a LOT of fees when you make purchases, but no monthly/annual fee. Since you won't be using the card (EVER), no problem. Then set up a 1 dollar payment every other month to make sure there's no inactivity fee.

And no, there's no purchase requirements. I got my cards and put them in a file cabinet when I got them, to make sure I never ever use the things. You can get between 2-4 insight cards, generally. Insight I like more both because of the higher limit and the fact that the interest earns 5% as well even when above $5,000.
For a married couple, do they offer a joint account? If so, would they allow 4 cards instead say 2 cards?
Also when money is transferred, the card is loaded with $5K, what is the risk there if say the card was stolen or lost?
Is having the card loaded means you will get the 5%? or you have to move it to a saving account they have?
There is no joint account, but she can get her own 2-4 cards. You move it from the card to the savings account attached, and interestingly, there is no overdraft. So in the off chacne that the card gets stolen, no, they won't take the savings off that way.
It's a standard debit prepaid card, eg, much less protection than a credit card. Don't lose it. I don't see how you would since your just going to shove it in a strongbox after you get it.

So it's put the money on the card, then to the savings on it. If you want to spend the money or move it, you just click to put it back on the card (though I would still do an ACH transfer like any other savings account instead).
Thanks for the info. I actually ordered my first card after some investigation..
Now I can not order a card for my wife! The system is showing an error once I fill her application, and the message advice she contact the customer service! Not a good start..

Couple of more questions please, so you can only get the money out through funneling it first to the card then to your Ally account? or it can be a direct transaction from Insight saving to Ally?
Also, is there any limit per day on the amount you can withdraw?
Thanks!
As to the first question about the wife, I've heard you should only set one up at a time in a household. I'd get one funded before trying for another. I haven't tried pulling from the savings, but I believe you should move it to the card first. Moving from card -> savings or savings -> card happens basically instaneously, so it doesn't take additional time. I've heard moving more than 3,000 in a day might cause an issue, but other people I know have said this is not true. It is all word of mouth to me, I've never tried withdrawing such a sum in one day from the card!

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Re: Is it time to dump high yield savings for prime money market?

Post by MotoTrojan » Fri Mar 30, 2018 9:59 pm

Insight seems like a winner to me! I’m selling some private company stock next month I think I’ll fund my EF to the tune of $5K and let it ride.

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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Thu Apr 12, 2018 2:43 pm

bhsince87 wrote:
Tue Mar 20, 2018 10:39 pm
BogleMelon wrote:
Tue Mar 20, 2018 11:04 am
In my case I am not sure if 0.16% difference worth the hassle (My savings is earning 1.45% at Ally currently). To make things worse, this 0.16% is taxable so it is only 0.13% ($13 more per year for every $10K also not FDIC) :D
Your savings account is taxable too.
Finally! I was wondering if anyone would mention interest is taxed NO MATTER WHERE YOU INCUR IT! Why not be taxed on a larger gain?

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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Thu Apr 12, 2018 2:52 pm

dkturner wrote:
Wed Mar 21, 2018 10:43 am
For most of us it depends on a combination of yield, security and convenience. Personally I prefer the Vanguard Advantage Account to online bank money market accounts. As to yield the current number for the VAA Account settlement fund is 1.41%, with no fees. The settlement fund is invested in the Federal Money Market Fund, but, with the click of the mouse we can move funds to or from the Prime Money Market Fund with its slightly higher yield. As to security the settlement fund assets are invested in US government securities and repurchase agreements collateralized by US government securities. As to convenience we can write an unlimited number of checks, with no minimum amount, or take advantage of online bill payments. We can “push” or “pull” funds between our VAA Account and our regular bank checking account.
How do you open and qualify for a Vanguard Advantage Account? I can't find it on their site.

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Re: Is it time to dump high yield savings for prime money market?

Post by Doc » Thu Apr 12, 2018 3:15 pm

guyesmith wrote:
Thu Apr 12, 2018 2:52 pm
How do you open and qualify for a Vanguard Advantage Account? I can't find it on their site.
https://investor.vanguard.com/investing ... t-a-glance

For the "advantage" thingy, login and search for Vanguard Advantage.

But ask yourself why would you want to use a broker for banking services.

Do you buy mutual funds at your bank? Why not? Many banks offer that type of service.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Is it time to dump high yield savings for prime money market?

Post by ruralavalon » Thu Apr 12, 2018 3:47 pm

Why not just use a bank for banking services?

That's what we do.
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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Thu Apr 12, 2018 7:58 pm

Doc wrote:
Thu Apr 12, 2018 3:15 pm
guyesmith wrote:
Thu Apr 12, 2018 2:52 pm
How do you open and qualify for a Vanguard Advantage Account? I can't find it on their site.
https://investor.vanguard.com/investing ... t-a-glance

For the "advantage" thingy, login and search for Vanguard Advantage.

But ask yourself why would you want to use a broker for banking services.

Do you buy mutual funds at your bank? Why not? Many banks offer that type of service.
Gotcha. It doesn’t look like I meet the qualifications yes anyway. Too bad it isn’t available to lost anyone.

I agree with your sentiment on having bank services through a brokerage firm. But, my thought process lines up with this thread in that I was considering moving my emergency fund from a high yield online money market account to a vanguard money market fund. So I would have access to check writing and debit but would not be relying on it everyday. Just for emergencies. If I have to wait 2 days to transfer funds in an emergency then to me that’s not liquidating fast enough. I’d like to be able to go to a bank and withdraw or write a check. If Vanguard gave me that through my taxable brokerage account at my balance it would be helpful.

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Re: Is it time to dump high yield savings for prime money market?

Post by Doc » Fri Apr 13, 2018 6:31 am

guyesmith wrote:
Thu Apr 12, 2018 7:58 pm
I agree with your sentiment on having bank services through a brokerage firm. But, my thought process lines up with this thread in that I was considering moving my emergency fund from a high yield online money market account to a vanguard money market fund. So I would have access to check writing and debit but would not be relying on it everyday. Just for emergencies. If I have to wait 2 days to transfer funds in an emergency then to me that’s not liquidating fast enough. I’d like to be able to go to a bank and withdraw or write a check. If Vanguard gave me that through my taxable brokerage account at my balance it would be helpful.
Consider a margin account. You can usually get the dollars from an in house mutual fund into your bank by start of business next business day. Sooner if wire transfer but with the cost of the wire + one days interest.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Is it time to dump high yield savings for prime money market?

Post by dkturner » Fri Apr 13, 2018 7:37 am

guyesmith wrote:
Thu Apr 12, 2018 2:52 pm
dkturner wrote:
Wed Mar 21, 2018 10:43 am
For most of us it depends on a combination of yield, security and convenience. Personally I prefer the Vanguard Advantage Account to online bank money market accounts. As to yield the current number for the VAA Account settlement fund is 1.41%, with no fees. The settlement fund is invested in the Federal Money Market Fund, but, with the click of the mouse we can move funds to or from the Prime Money Market Fund with its slightly higher yield. As to security the settlement fund assets are invested in US government securities and repurchase agreements collateralized by US government securities. As to convenience we can write an unlimited number of checks, with no minimum amount, or take advantage of online bill payments. We can “push” or “pull” funds between our VAA Account and our regular bank checking account.
How do you open and qualify for a Vanguard Advantage Account? I can't find it on their site.
Go to the Vanguard website search box and type in “vanguardadvantage”, as a single word - if you type “vanguard advantage” it won’t show you anything about the Advantage Account. I know, it’s kind of nutty, but that our friends at the Vanguard Group.

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Re: Is it time to dump high yield savings for prime money market?

Post by longinvest » Fri Apr 13, 2018 7:54 am

Deleted.
Last edited by longinvest on Fri Apr 13, 2018 7:59 am, edited 1 time in total.
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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Fri Apr 13, 2018 7:56 am

dkturner wrote:
Fri Apr 13, 2018 7:37 am
guyesmith wrote:
Thu Apr 12, 2018 2:52 pm
dkturner wrote:
Wed Mar 21, 2018 10:43 am
For most of us it depends on a combination of yield, security and convenience. Personally I prefer the Vanguard Advantage Account to online bank money market accounts. As to yield the current number for the VAA Account settlement fund is 1.41%, with no fees. The settlement fund is invested in the Federal Money Market Fund, but, with the click of the mouse we can move funds to or from the Prime Money Market Fund with its slightly higher yield. As to security the settlement fund assets are invested in US government securities and repurchase agreements collateralized by US government securities. As to convenience we can write an unlimited number of checks, with no minimum amount, or take advantage of online bill payments. We can “push” or “pull” funds between our VAA Account and our regular bank checking account.
How do you open and qualify for a Vanguard Advantage Account? I can't find it on their site.
Go to the Vanguard website search box and type in “vanguardadvantage”, as a single word - if you type “vanguard advantage” it won’t show you anything about the Advantage Account. I know, it’s kind of nutty, but that our friends at the Vanguard Group.
I found it. Thank you.

Unfortunately I'm only a 'Voyager' based on their guidelines and therefore it doesn't look like I qualify anyway. :oops:

See:

Investors with $50,000 to $500,000*

You're a Voyager client at Vanguard, and the benefits you'll receive will help you manage your assets as your portfolio grows.

In addition to commission-free Vanguard mutual funds and ETFs, your Voyager® benefits include:

Reduced commissions for stock and non-Vanguard ETF online trades,** and no account service fees on most account types.†
Investment professionals who will listen to you, address your questions, and direct you to an advice solution that best suits your needs.
Access to ongoing investment management through Vanguard Personal Advisor Services®.

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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Fri Apr 13, 2018 12:26 pm

Spoke with Vanguard. Even though I don't qualify for a Vanguard Advantage Account, I am able to write checks to a specified money market fund. These seems ideal for an emergency fund that is only written from a couple times per year at most (God-willing). It simplifies my financial life to have one bank and one brokerage firm.

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Re: Is it time to dump high yield savings for prime money market?

Post by hoops777 » Fri Apr 13, 2018 12:38 pm

Any Schwab customers using their option?
K.I.S.S........so easy to say so difficult to do.

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Re: Is it time to dump high yield savings for prime money market?

Post by Doc » Fri Apr 13, 2018 5:53 pm

hoops777 wrote:
Fri Apr 13, 2018 12:38 pm
Any Schwab customers using their option?
Schwab is in the process of moving sweep accounts to Schwab bank so I'm not sure the question is relevant. But setting up transfers to your bank, then doing a xfer of t1 funds to your bank and simultaneously writing a check on your bank should get you to the same place.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Is it time to dump high yield savings for prime money market?

Post by hoops777 » Fri Apr 13, 2018 6:02 pm

What I meant to ask was that Schwab has a purchased money fund that is at 1.61 I believe but it is not a sweep acct.You have to buy and sell it like a mutual fund.I am assuming it is equivalent to vanguard’s money market?
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Re: Is it time to dump high yield savings for prime money market?

Post by Rainmaker41 » Fri Apr 13, 2018 6:13 pm

Cash is cash. Money Market Fund is near-cash, but is not the same. Is a 0.1% interest rate advantage worth the risk of the MMF having a redemption gate imposed during a financial crisis?
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Re: Is it time to dump high yield savings for prime money market?

Post by z3r0c00l » Fri Apr 13, 2018 6:15 pm

Easier to have short term cash linked directly to credit cards and direct deposit from work! If it was worth $50 per month or something, sure I'd do it. But this might earn me a dollar or two per month more.

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Re: Is it time to dump high yield savings for prime money market?

Post by SandraBumble » Fri Apr 13, 2018 6:34 pm

Hi, based on this conversation I perked my ears up at a 4.59% rewards debit account for keeping an emergency fund/buffer. (My income is erratic so I always keep about $15k or so liquid, which of course has an opportunity cost.)

Does anyone have thoughts on using the Consumer Credit Union? I make all my purchases with credit cards for the points, but could direct a few small ones to this each month to qualify.

http://www.mymoneyblog.com/consumers-cr ... eview.html

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Re: Is it time to dump high yield savings for prime money market?

Post by fortyofforty » Fri Apr 13, 2018 6:41 pm

Rainmaker41 wrote:
Fri Apr 13, 2018 6:13 pm
Cash is cash. Money Market Fund is near-cash, but is not the same. Is a 0.1% interest rate advantage worth the risk of the MMF having a redemption gate imposed during a financial crisis?
Couldn't any financial institution impose a "redemption gate" in a time of grave financial crisis?
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

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Re: Is it time to dump high yield savings for prime money market?

Post by patrick » Fri Apr 13, 2018 6:50 pm

Rainmaker41 wrote:
Fri Apr 13, 2018 6:13 pm
Cash is cash. Money Market Fund is near-cash, but is not the same. Is a 0.1% interest rate advantage worth the risk of the MMF having a redemption gate imposed during a financial crisis?
Popular Direct has a 2% savings account. Since the MMF advantage is actually negative I doubt it's worth the risk.

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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Fri Apr 13, 2018 6:52 pm

fortyofforty wrote:
Fri Apr 13, 2018 6:41 pm
Rainmaker41 wrote:
Fri Apr 13, 2018 6:13 pm
Cash is cash. Money Market Fund is near-cash, but is not the same. Is a 0.1% interest rate advantage worth the risk of the MMF having a redemption gate imposed during a financial crisis?
Couldn't any financial institution impose a "redemption gate" in a time of grave financial crisis?
Aren’t redemption gates short term? Black rock says up to 10 days in a 90 day span. I figure if we get into a Great Depression type scenario we are all in the same boat no matter where our money is. Even cash is far less valuable. That’s when you need prepper stores of food.

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Re: Is it time to dump high yield savings for prime money market?

Post by fortyofforty » Fri Apr 13, 2018 7:27 pm

guyesmith wrote:
Fri Apr 13, 2018 6:52 pm
fortyofforty wrote:
Fri Apr 13, 2018 6:41 pm
Rainmaker41 wrote:
Fri Apr 13, 2018 6:13 pm
Cash is cash. Money Market Fund is near-cash, but is not the same. Is a 0.1% interest rate advantage worth the risk of the MMF having a redemption gate imposed during a financial crisis?
Couldn't any financial institution impose a "redemption gate" in a time of grave financial crisis?
Aren’t redemption gates short term? Black rock says up to 10 days in a 90 day span. I figure if we get into a Great Depression type scenario we are all in the same boat no matter where our money is. Even cash is far less valuable. That’s when you need prepper stores of food.
Well, a bank can close its doors to prevent a run on cash. It's depicted in the classic Jimmy Stewart film "It's a Wonderful Life". People go to the bank and try to pull out cash, only to be told they cannot (although Bailey Building & Loan pulls through, barely). What would cash (meaning physical currency) be worth in that environment? It's frightening to contemplate, and we hope we never have to live through one.

Here's a good George Bailey quote:
Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying! And why? Because we’re panicking and he’s not. That’s why.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

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Re: Is it time to dump high yield savings for prime money market?

Post by WanderingDoc » Sat Apr 14, 2018 1:39 am

bhsince87 wrote:
Tue Mar 20, 2018 10:39 pm
BogleMelon wrote:
Tue Mar 20, 2018 11:04 am
In my case I am not sure if 0.16% difference worth the hassle (My savings is earning 1.45% at Ally currently). To make things worse, this 0.16% is taxable so it is only 0.13% ($13 more per year for every $10K also not FDIC) :D
Your savings account is taxable too.
Same exact tax rate?
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Re: Is it time to dump high yield savings for prime money market?

Post by MotoTrojan » Sat Apr 14, 2018 12:23 pm

WanderingDoc wrote:
Sat Apr 14, 2018 1:39 am
bhsince87 wrote:
Tue Mar 20, 2018 10:39 pm
BogleMelon wrote:
Tue Mar 20, 2018 11:04 am
In my case I am not sure if 0.16% difference worth the hassle (My savings is earning 1.45% at Ally currently). To make things worse, this 0.16% is taxable so it is only 0.13% ($13 more per year for every $10K also not FDIC) :D
Your savings account is taxable too.
Same exact tax rate?
Yup regular income. Over $10 they’ll send a 1099. Under and you’re supposed to self-report (only a full audit could catch, for many years I didn’t purely out of ignorance).

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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Sat Apr 14, 2018 12:32 pm

MotoTrojan wrote:
Sat Apr 14, 2018 12:23 pm
WanderingDoc wrote:
Sat Apr 14, 2018 1:39 am
bhsince87 wrote:
Tue Mar 20, 2018 10:39 pm
BogleMelon wrote:
Tue Mar 20, 2018 11:04 am
In my case I am not sure if 0.16% difference worth the hassle (My savings is earning 1.45% at Ally currently). To make things worse, this 0.16% is taxable so it is only 0.13% ($13 more per year for every $10K also not FDIC) :D
Your savings account is taxable too.
Same exact tax rate?
Yup regular income. Over $10 they’ll send a 1099. Under and you’re supposed to self-report (only a full audit could catch, for many years I didn’t purely out of ignorance).
What’s the tax savings value of the state specific municipal money markets for low tax brackets? 12%. It says it’s good for high tax brackets, but I’m wondering if I’ll save any taxes compared to using the prime money market with the higher yield and just paying tax.

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Re: Is it time to dump high yield savings for prime money market?

Post by Waba » Sat Apr 14, 2018 12:59 pm

SandraBumble wrote:
Fri Apr 13, 2018 6:34 pm
Does anyone have thoughts on using the Consumer Credit Union? I make all my purchases with credit cards for the points, but could direct a few small ones to this each month to qualify.

http://www.mymoneyblog.com/consumers-cr ... eview.html
I'm a happy customer of them. Note that you need to put $1000 on the credit card each month and make 12 debit card purchases to qualify for the 4.59% APY. Their online banking site has a nice dashboard that shows you how far along you are to qualify, so you don't need to guess.

I put a little over $1000 in recurring monthly bills on their credit card and use their debit card whenever I buy a bagel for breakfast.

The only drawback is that they don't have an auto-payment option for the credit card. You need to manually schedule payment each month. It's just a few clicks but if you forget you get dinged with fees.

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Re: Is it time to dump high yield savings for prime money market?

Post by MotoTrojan » Sat Apr 14, 2018 3:59 pm

guyesmith wrote:
Sat Apr 14, 2018 12:32 pm
MotoTrojan wrote:
Sat Apr 14, 2018 12:23 pm
WanderingDoc wrote:
Sat Apr 14, 2018 1:39 am
bhsince87 wrote:
Tue Mar 20, 2018 10:39 pm
BogleMelon wrote:
Tue Mar 20, 2018 11:04 am
In my case I am not sure if 0.16% difference worth the hassle (My savings is earning 1.45% at Ally currently). To make things worse, this 0.16% is taxable so it is only 0.13% ($13 more per year for every $10K also not FDIC) :D
Your savings account is taxable too.
Same exact tax rate?
Yup regular income. Over $10 they’ll send a 1099. Under and you’re supposed to self-report (only a full audit could catch, for many years I didn’t purely out of ignorance).
What’s the tax savings value of the state specific municipal money markets for low tax brackets? 12%. It says it’s good for high tax brackets, but I’m wondering if I’ll save any taxes compared to using the prime money market with the higher yield and just paying tax.
Simple math based on tax-rates and yields. No need to wonder, just bust out the calculator.

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Re: Is it time to dump high yield savings for prime money market?

Post by Dominic » Sat Apr 14, 2018 4:34 pm

BogleMelon wrote:
Tue Mar 20, 2018 11:04 am
In my case I am not sure if 0.16% difference worth the hassle (My savings is earning 1.45% at Ally currently). To make things worse, this 0.16% is taxable so it is only 0.13% ($13 more per year for every $10K also not FDIC) :D
Speaking of taxes, Treasury money market funds are probably higher yield than savings, and they're state tax-free. Depending on the situation, those are worth a look.

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Re: Is it time to dump high yield savings for prime money market?

Post by guyesmith » Sat Apr 14, 2018 9:18 pm

MotoTrojan wrote:
Sat Apr 14, 2018 3:59 pm
guyesmith wrote:
Sat Apr 14, 2018 12:32 pm
MotoTrojan wrote:
Sat Apr 14, 2018 12:23 pm
WanderingDoc wrote:
Sat Apr 14, 2018 1:39 am
bhsince87 wrote:
Tue Mar 20, 2018 10:39 pm


Your savings account is taxable too.
Same exact tax rate?
Yup regular income. Over $10 they’ll send a 1099. Under and you’re supposed to self-report (only a full audit could catch, for many years I didn’t purely out of ignorance).
What’s the tax savings value of the state specific municipal money markets for low tax brackets? 12%. It says it’s good for high tax brackets, but I’m wondering if I’ll save any taxes compared to using the prime money market with the higher yield and just paying tax.
Simple math based on tax-rates and yields. No need to wonder, just bust out the calculator.
Do you mean the yield just has to be at least 12% higher to be ahead?

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Re: Is it time to dump high yield savings for prime money market?

Post by MotoTrojan » Sat Apr 14, 2018 10:28 pm

guyesmith wrote:
Sat Apr 14, 2018 9:18 pm
MotoTrojan wrote:
Sat Apr 14, 2018 3:59 pm
guyesmith wrote:
Sat Apr 14, 2018 12:32 pm
MotoTrojan wrote:
Sat Apr 14, 2018 12:23 pm
WanderingDoc wrote:
Sat Apr 14, 2018 1:39 am


Same exact tax rate?
Yup regular income. Over $10 they’ll send a 1099. Under and you’re supposed to self-report (only a full audit could catch, for many years I didn’t purely out of ignorance).
What’s the tax savings value of the state specific municipal money markets for low tax brackets? 12%. It says it’s good for high tax brackets, but I’m wondering if I’ll save any taxes compared to using the prime money market with the higher yield and just paying tax.
Simple math based on tax-rates and yields. No need to wonder, just bust out the calculator.
Do you mean the yield just has to be at least 12% higher to be ahead?
Not including state tax, that is correct.

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Re: Is it time to dump high yield savings for prime money market?

Post by pascalwager » Sat Apr 14, 2018 11:24 pm

I question the use of the word "dump" in the thread title. Yes, I know it's only an investment implementation, but it still seems unnecessarily harsh and disrespectful. I would have used, maybe, "relinquish".

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Re: Is it time to dump high yield savings for prime money market?

Post by hoops777 » Sun Apr 15, 2018 11:42 am

pascalwager wrote:
Sat Apr 14, 2018 11:24 pm
I question the use of the word "dump" in the thread title. Yes, I know it's only an investment implementation, but it still seems unnecessarily harsh and disrespectful. I would have used, maybe, "relinquish".
With the way investors have been treated by their saving accounts I believe some disrespect is completely warranted :happy
K.I.S.S........so easy to say so difficult to do.

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Re: Is it time to dump high yield savings for prime money market?

Post by sperry8 » Sun Apr 15, 2018 11:48 am

hoops777 wrote:
Fri Apr 13, 2018 6:02 pm
What I meant to ask was that Schwab has a purchased money fund that is at 1.61 I believe but it is not a sweep acct.You have to buy and sell it like a mutual fund.I am assuming it is equivalent to vanguard’s money market?
I keep $6k+ in Schwab as they are my primary debit card... but it earns no interest of note. Do they have a sweep account (or alternative) where I can keep $5k of the money and easily move back/forth as needed? What is the 1.61% one called?
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Re: Is it time to dump high yield savings for prime money market?

Post by Doc » Sun Apr 15, 2018 2:38 pm

sperry8 wrote:
Sun Apr 15, 2018 11:48 am
What is the 1.61% one called?
"No longer available."
*Schwab no longer allows new enrollments into sweep money market funds (MMFs), with the exception of international accounts, Schwab Managed Accounts, Schwab Charitable accounts, and certain existing ERISA plans. Existing accounts with sweep MMFs will be migrated to the Bank Sweep feature over a period of years. Please see your Cash Features Disclosure Statement for additional details.
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Re: Is it time to dump high yield savings for prime money market?

Post by celia » Sun Apr 15, 2018 3:01 pm

BogleMelon wrote:
Tue Mar 20, 2018 11:22 am
mhadden1 wrote:
Tue Mar 20, 2018 11:12 am
I anticipate making changes like this. I am the sort that will accept an extra $20 a month, if I can do it with some mouse clicks while drinking coffee on a rainy morning. For me, not there yet - it could well happen this year.
The hassle for me is:
- Getting my spouse to know and to remember where our money is, and never forget that, in case I am not around.
- The rates are changing anyways, next week it could be the other way around (banks higher). And to keep move the funds back and forth means lost interest while the money is in the limbo (that 2 days you wait till the money arrives the other institution). 2 days a week, is equal to 104 days of lost interest.
- This goes contrary to the idea of simplicity. It is not only my DH and executor/successor trustee who needs to know where to find my assests, but **I** am starting to misplace things and not remember where I put them. A few minutes ago, I had to call my cell phone (again) to find it. I was standing right next to it!

- Another account means another mailing and possibly another tax form come year end. I already have too many statements and am trying to consolidate, where possible. (I'm still waiting for Vanguard to fix the links to our checking accounts for new trust accounts we opened last week as part of our consolidation plan. I've only talked to them about 3 times before I sent in the paperwork, and 4 times since. Things are still not right.) So I guess that brings up my last point:

- You'll have another account to maintain (be sure it's titled correctly, update beneficiaries, check on it occasionally to see if transactions are happening as you expect).

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Re: Is it time to dump high yield savings for prime money market?

Post by hoops777 » Sun Apr 15, 2018 5:17 pm

Doc wrote:
Sun Apr 15, 2018 2:38 pm
sperry8 wrote:
Sun Apr 15, 2018 11:48 am
What is the 1.61% one called?
"No longer available."
*Schwab no longer allows new enrollments into sweep money market funds (MMFs), with the exception of international accounts, Schwab Managed Accounts, Schwab Charitable accounts, and certain existing ERISA plans. Existing accounts with sweep MMFs will be migrated to the Bank Sweep feature over a period of years. Please see your Cash Features Disclosure Statement for additional details.
SWVXX is a money fund that is yielding 1.63.You have to buy and sell it like a mutual fund.
K.I.S.S........so easy to say so difficult to do.

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Re: Is it time to dump high yield savings for prime money market?

Post by pascalwager » Sun Apr 15, 2018 9:16 pm

hoops777 wrote:
Sun Apr 15, 2018 11:42 am
pascalwager wrote:
Sat Apr 14, 2018 11:24 pm
I question the use of the word "dump" in the thread title. Yes, I know it's only an investment implementation, but it still seems unnecessarily harsh and disrespectful. I would have used, maybe, "relinquish".
With the way investors have been treated by their saving accounts I believe some disrespect is completely warranted :happy
Okay, then how about: "Is it time to dump FDIC protection for 22 bp of yield?"

I guess I could spread my money around, $50k each:

-bank HY savings (FDIC)
-Prime MM
-Treasury MM (Full Faith and Credit)
-state MM
-national MM

I think David Swensen does give approval to MM funds with credit risk.

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