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Tax efficient and FDIC insured

Posted: Thu Feb 07, 2019 10:23 pm
by kmn99
Is there any investment which is both Tax efficient and FDIC insured?

Re: Tax efficient and FDIC insured

Posted: Thu Feb 07, 2019 10:40 pm
by AlohaJoe
kmn99 wrote:
Thu Feb 07, 2019 10:23 pm
Is there any investment which is both Tax efficient and FDIC insured?
No, there isn't.

Re: Tax efficient and FDIC insured

Posted: Thu Feb 07, 2019 10:45 pm
by Revision17
While not FDIC insured, very short term treasuries are likely just as safe safe and their interest paid is state income tax free.

A little bit more risky, but more tax efficient, are funds which mostly have high quality municipal bonds, including pre-refunded ones.

Re: Tax efficient and FDIC insured

Posted: Thu Feb 07, 2019 10:58 pm
by UpperNwGuy
If you crave FDIC insurance, then you shouldn't be investing. FDIC insurance is for saving, not for investing, and it isn't tax efficient.

Re: Tax efficient and FDIC insured

Posted: Thu Feb 07, 2019 11:20 pm
by michaeljmroger
Revision17 wrote:
Thu Feb 07, 2019 10:45 pm
While not FDIC insured, very short term treasuries are likely just as safe safe and their interest paid is state income tax free.

A little bit more risky, but more tax efficient, are funds which mostly have high quality municipal bonds, including pre-refunded ones.
As far as I know, pre-refunded municipal bonds with US Treasury collaterals are basically just as safe as standard treasuries, but they have the huge benefit of being entirely tax-free. I’m not sure why they’re not popular on this forum.

Re: Tax efficient and FDIC insured

Posted: Thu Feb 07, 2019 11:31 pm
by Epsilon Delta
An IRA holding CDs.

Re: Tax efficient and FDIC insured

Posted: Fri Feb 08, 2019 8:17 am
by rkhusky
My savings account paying 0.01% interest.

Re: Tax efficient and FDIC insured

Posted: Fri Feb 08, 2019 9:06 am
by happenstance
michaeljmroger wrote:
Thu Feb 07, 2019 11:20 pm
Revision17 wrote:
Thu Feb 07, 2019 10:45 pm
While not FDIC insured, very short term treasuries are likely just as safe safe and their interest paid is state income tax free.

A little bit more risky, but more tax efficient, are funds which mostly have high quality municipal bonds, including pre-refunded ones.
As far as I know, pre-refunded municipal bonds with US Treasury collaterals are basically just as safe as standard treasuries, but they have the huge benefit of being entirely tax-free. I’m not sure why they’re not popular on this forum.
Under the new tax law of 2018, interest from pre-refunded bonds was made taxable. This is expected to basically eliminate them from the muni bond market.

Re: Tax efficient and FDIC insured

Posted: Fri Feb 08, 2019 12:43 pm
by kmn99
Thank you all :happy

Re: Tax efficient and FDIC insured

Posted: Sun Feb 10, 2019 6:32 am
by ftobin
While not technically FDIC insured, savings bonds are have effectively the same amount of protection, and are tax efficient in that the they are tax-deferred until redemption.

Re: Tax efficient and FDIC insured

Posted: Sun Feb 10, 2019 8:18 am
by Call_Me_Op
Savings bonds are tax efficient - and are even safer than FDIC-insured instruments.

Re: Tax efficient and FDIC insured

Posted: Sun Feb 10, 2019 10:54 pm
by tj
Sure, accounts that are non-interest bearing. But wouldn't you rather generate the income and pay the tax?