Rising MMkt rate

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student5
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Rising MMkt rate

Post by student5 »

Hi all,

I just discovered that CIT Bank's latest Money Market rate is 1.75%. FYI, thanks.
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welderwannabe
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Re: Rising MMkt rate

Post by welderwannabe »

That is a good rate. Hoping Ally raises their rates soon.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.
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Doc
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Re: Rising MMkt rate

Post by Doc »

VG Prime MM 7 day yield 1.63%.

Why would you want the hassle of a bank?
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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Toons
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Re: Rising MMkt rate

Post by Toons »

Online Bank.
Click.
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gmaynardkrebs
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Re: Rising MMkt rate

Post by gmaynardkrebs »

student5 wrote: Thu Mar 22, 2018 6:08 pm Hi all,

I just discovered that CIT Bank's latest Money Market rate is 1.75%. FYI, thanks.
3 month T-Bill is 1.71% with no state tax, which means after tax will be higher in many states, especially the ones that got clobbered by the elimination of the SALT deduction.
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simplesimon
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Re: Rising MMkt rate

Post by simplesimon »

Doc wrote: Fri Mar 23, 2018 6:13 am VG Prime MM 7 day yield 1.63%.

Why would you want the hassle of a bank?
FDIC insurance, I guess.

As you probably know, VMMXX was recently paying the market rate of ~0% while Ally, Alliant CU, et al were paying 1%.
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cfs
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Re: Rising MMkt rate

Post by cfs »

VG Prime MM 7 day yield 1.63%. ?
Where have all the "why bonds" gone?
Good luck y gracias por leer / cfs
~ Member of the Active Retired Force since 2014 ~
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gmaynardkrebs
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Re: Rising MMkt rate

Post by gmaynardkrebs »

cfs wrote: Fri Mar 23, 2018 6:58 am VG Prime MM 7 day yield 1.63%. ?
Where have all the "why bonds" gone?
Good luck y gracias por leer / cfs
Don't understand the "why bonds?" comment.
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Doc
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Re: Rising MMkt rate

Post by Doc »

simplesimon wrote: Fri Mar 23, 2018 6:53 am
Doc wrote: Fri Mar 23, 2018 6:13 am VG Prime MM 7 day yield 1.63%.

Why would you want the hassle of a bank?
FDIC insurance, I guess.

As you probably know, VMMXX was recently paying the market rate of ~0% while Ally, Alliant CU, et al were paying 1%.
No I didn't know and would not have cared if I did know. I have little reason to keep large amounts of cash around except for what's under the mattress.

Many people have this fear of losing money in their short term "emergency" bucket and as a result they are forgoing better returns for very little risk. Say a 1-3 Treasury fund for example.
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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cfs
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Re: Rising MMkt rate

Post by cfs »

gmaynardkrebs wrote: Fri Mar 23, 2018 7:00 am
cfs wrote: Fri Mar 23, 2018 6:58 am VG Prime MM 7 day yield 1.63%. ?
Where have all the "why bonds" gone?
Good luck y gracias por leer / cfs
Don't understand the "why bonds?" comment.
Thanks for the note. Oh, in reference to my last comment, members of "the why bonds gang" understand . . . all others please disregard. Muchas gracias por leer ~cfs~
~ Member of the Active Retired Force since 2014 ~
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willthrill81
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Re: Rising MMkt rate

Post by willthrill81 »

welderwannabe wrote: Thu Mar 22, 2018 9:44 pm That is a good rate. Hoping Ally raises their rates soon.
I like Ally, but they don't move quickly when it comes to increasing their rates. From what I've seen and heard, CIT is usually the leader or really close.
“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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simplesimon
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Re: Rising MMkt rate

Post by simplesimon »

Doc wrote: Fri Mar 23, 2018 8:12 am
simplesimon wrote: Fri Mar 23, 2018 6:53 am
Doc wrote: Fri Mar 23, 2018 6:13 am VG Prime MM 7 day yield 1.63%.

Why would you want the hassle of a bank?
FDIC insurance, I guess.

As you probably know, VMMXX was recently paying the market rate of ~0% while Ally, Alliant CU, et al were paying 1%.
No I didn't know and would not have cared if I did know. I have little reason to keep large amounts of cash around except for what's under the mattress.

Many people have this fear of losing money in their short term "emergency" bucket and as a result they are forgoing better returns for very little risk. Say a 1-3 Treasury fund for example.
But for years VMMXX was paying almost nothing while the online banks were paying more than almost nothing.
mega317
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Re: Rising MMkt rate

Post by mega317 »

gmaynardkrebs wrote: Fri Mar 23, 2018 6:49 am
student5 wrote: Thu Mar 22, 2018 6:08 pm Hi all,

I just discovered that CIT Bank's latest Money Market rate is 1.75%. FYI, thanks.
3 month T-Bill is 1.71% with no state tax, which means after tax will be higher in many states, especially the ones that got clobbered by the elimination of the SALT deduction.
Why does SALT have anything to do with it?
https://www.bogleheads.org/forum/viewtopic.php?t=6212
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gmaynardkrebs
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Re: Rising MMkt rate

Post by gmaynardkrebs »

mega317 wrote: Fri Mar 23, 2018 3:34 pm
gmaynardkrebs wrote: Fri Mar 23, 2018 6:49 am
student5 wrote: Thu Mar 22, 2018 6:08 pm Hi all,

I just discovered that CIT Bank's latest Money Market rate is 1.75%. FYI, thanks.
3 month T-Bill is 1.71% with no state tax, which means after tax will be higher in many states, especially the ones that got clobbered by the elimination of the SALT deduction.
Why does SALT have anything to do with it?
If you live in a high income tax state like NY, DC, Md, etc, your effective tax rate on interest is higher now, due to the loss of the the federal deduction for state income tax.
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Doc
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Re: Rising MMkt rate

Post by Doc »

simplesimon wrote: Fri Mar 23, 2018 3:00 pm
Doc wrote: Fri Mar 23, 2018 8:12 am
simplesimon wrote: Fri Mar 23, 2018 6:53 am
Doc wrote: Fri Mar 23, 2018 6:13 am VG Prime MM 7 day yield 1.63%.

Why would you want the hassle of a bank?
FDIC insurance, I guess.

As you probably know, VMMXX was recently paying the market rate of ~0% while Ally, Alliant CU, et al were paying 1%.
No I didn't know and would not have cared if I did know. I have little reason to keep large amounts of cash around except for what's under the mattress.

Many people have this fear of losing money in their short term "emergency" bucket and as a result they are forgoing better returns for very little risk. Say a 1-3 Treasury fund for example.
But for years VMMXX was paying almost nothing while the online banks were paying more than almost nothing.
That was then. This is now.

What do we need to have a big pile of cash for anyway? Taking a little extra term risk in a bucket that we rarely or perhaps never need to use makes a lot of sense to me.

People tend to take the term "safe" too literally. And they tend to give up return just because of the fear of maybe losing a few tenths of a percent if the Fed raises the Federal funds rate by 2% is deemed not safe.

I hope all these people also drive ten MPH less than the speed limit so they can also be safe in their car. :D
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.
mega317
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Re: Rising MMkt rate

Post by mega317 »

But treasuries are not taxed by the state so the effective rate is 0. Am I crazy?
https://www.bogleheads.org/forum/viewtopic.php?t=6212
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gmaynardkrebs
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Re: Rising MMkt rate

Post by gmaynardkrebs »

mega317 wrote: Fri Mar 23, 2018 9:33 pm But treasuries are not taxed by the state so the effective rate is 0. Am I crazy?
You are correct it is 0. In high tax states, bank interest is taxed at around 11%-13% for the top brackets). However, because state taxes were deductible on the federal return for non-AMT filers who itemized deductions, the effective state tax rate on non-federal interest ended up considerably lower. The end of SALT has had no impact on Federal obligations, but it has effectively increased the impact of state taxes on interest earned at banks or on corporate bonds for people who itemize deductions, making them even more disadvantaged vs T-Bills in high tax states. However, if you haven't been itemizing, and won't be anymore, obviously the loss of SALT has no impact on you.
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