Do you keep moving your cash around chasing yield?

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billthecat
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Do you keep moving your cash around chasing yield?

Post by billthecat » Fri May 01, 2020 9:40 pm

Right now my cash, both my "emergency fund" (2 years spending) and cash portion of my portfolio (5%), are in a money market yielding 0.52%.

Checking Bankrate (https://www.bankrate.com/banking/savings/rates/) I see that Comenity Direct gives 1.70%, or three times as much.

I could see myself moving some or all of my cash there - but then I see myself periodically checking Bankrate and moving it again, and again, and again since who is at the top spot keeps changing. True, I could limit that to once a month, quarter, year or whatever.

What do you do? Do you keep an eye on Bankrate and keep opening new accounts to move cash? Or do you just leave it in one spot (where?) because it's simple, even though you may not be getting the highest yield?
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whodidntante
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Re: Do you keep moving your cash around chasing yield?

Post by whodidntante » Fri May 01, 2020 9:42 pm

No, but I do move it around chasing bank bonuses. That pays more than the disinterest rate.

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billthecat
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Re: Do you keep moving your cash around chasing yield?

Post by billthecat » Fri May 01, 2020 9:44 pm

whodidntante wrote:
Fri May 01, 2020 9:42 pm
No, but I do move it around chasing bank bonuses. That pays more than the disinterest rate.
Yeah I saw your other recent comment about that. It's seems like more work (but more payoff), like you have to meet certain qualifications, like direct deposits, etc.
We cannot direct the winds but we can adjust our sails.

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Re: Do you keep moving your cash around chasing yield?

Post by Sandtrap » Fri May 01, 2020 9:47 pm

I don’t move cash around to chase yield because it is already diversified enough amongst high yield accounts, MM, CDs, etc.
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Ferdinand2014
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Re: Do you keep moving your cash around chasing yield?

Post by Ferdinand2014 » Fri May 01, 2020 9:53 pm

I keep my cash in one spot and care not one drop
of interest it may spot

For you see it is far more important to me to sleep
without need or greed

So let it be said treasury bills ahead
are best while I sleep in bed
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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whodidntante
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Re: Do you keep moving your cash around chasing yield?

Post by whodidntante » Fri May 01, 2020 9:59 pm

billthecat wrote:
Fri May 01, 2020 9:44 pm
whodidntante wrote:
Fri May 01, 2020 9:42 pm
No, but I do move it around chasing bank bonuses. That pays more than the disinterest rate.
Yeah I saw your other recent comment about that. It's seems like more work (but more payoff), like you have to meet certain qualifications, like direct deposits, etc.
It'll give you something to do while you are imprisoned in your house. :happy

Bama12
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Re: Do you keep moving your cash around chasing yield?

Post by Bama12 » Fri May 01, 2020 10:05 pm

same bank for 10 years.

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FrugalInvestor
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Re: Do you keep moving your cash around chasing yield?

Post by FrugalInvestor » Fri May 01, 2020 10:11 pm

I typically don't but recently ended up with some cash from a sale of property that I won't likely need for a number of months. After some input from others here I went ahead and invested that plus much of my Vanguard money market balance into Marcus Bank no penalty CDs.

When things are in flux as they are now I just sleep better having a little more in reserve than normal and knowing that it is FDIC insured. Being able to earn 2.5x the interest is a bonus. And as whodidntante points out, I had some time to fill. :?
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index2max
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Re: Do you keep moving your cash around chasing yield?

Post by index2max » Fri May 01, 2020 10:15 pm

I use high interest rewards checking accounts at credit unions. Beats losing money on those worthless rates at savings accounts in banks and credit unions.

Check out this website for a good comparison search. The editor of the site relies on user-curated reviews and data.

https://www.depositaccounts.com/

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Re: Do you keep moving your cash around chasing yield?

Post by dru808 » Fri May 01, 2020 10:17 pm

No, I don’t
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JackoC
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Re: Do you keep moving your cash around chasing yield?

Post by JackoC » Fri May 01, 2020 10:25 pm

whodidntante wrote:
Fri May 01, 2020 9:42 pm
No, but I do move it around chasing bank bonuses. That pays more than the disinterest rate.
I do both but sometimes it partly overlaps if it's a savings account bonus requiring a fairly large deposit. As opposed to opening lots of new checking accounts with small balances. As another response mentioned, the hang up with checking account bonuses can be what counts as a 'direct deposit' if you don't have something like paycheck or SS that obviously counts (though not all bonuses require that). This site has good info, both on bonuses and what's counted as direct depo various places. But the uncertainty has tended to turn me off to checking acct bonuses. I've done two savings account bonuses just in last few days (one a new account, one a bonus for new deposit in existing account), as well as moving my money between existing accounts when rates have shifted. Also on bonuses more generally, credit card bonuses are tax free, bank account and taxable brokerage account bonuses are ordinary income, IRA account bonuses are basically IRA contributions. I do all three, but you have to factor that into your 'worth it' analysis.
https://www.doctorofcredit.com/

And everybody has their own threshold for 'worth it'.

But MM mutual funds now are just too low yielding to compete with decent yielding savings accounts. I had most cash in VMFXX/VUSXX when the Fed was tightening and their yields were only beaten by the top small handful of bank accounts. Now loads of savings accounts beat VMFXX's SEC yield 0.44% by more than 1%, so I have almost nothing in MMMF's. In the last period of 'zero' rates after 2009 bank account rates stayed much higher.

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JoMoney
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Re: Do you keep moving your cash around chasing yield?

Post by JoMoney » Fri May 01, 2020 10:27 pm

Kind'a ... I have some series I savings bonds that haven't really moved (yet), but I have switched back and forth between a Vanguard MM fund and a High-Yield bank account at Capital One several times over recent years.
I had moved my checking out of Capital One over to Fidelity, because the CMA was better and offered a place to deposit the 2% cash-back from the Fidelity Visa card... I had some hopes of consolidating things at Fidelity, but with the current interest rate situation, my cash is back at Capital One and I won't be unwinding my savings bonds any time soon.
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Re: Do you keep moving your cash around chasing yield?

Post by SevenBridgesRoad » Fri May 01, 2020 10:53 pm

billthecat wrote:
Fri May 01, 2020 9:40 pm
...Do you keep an eye on Bankrate and keep opening new accounts to move cash? Or do you just leave it in one spot (where?) because it's simple, even though you may not be getting the highest yield?
Nope. I do not keep an eye on Bankrate. One spot. I'm in the keep it simple camp. My portfolio doesn't have to be perfect for me to have a great retirement. Good enough works. I can spend my time and energy on other things. But I understand that there are different personalities: those who put in some extra work to optimize.
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Re: Do you keep moving your cash around chasing yield?

Post by 22twain » Fri May 01, 2020 11:03 pm

I'm retired, living off my investments until I finally start Social Security at 70 in a few years. I keep on average about 2%, one year's expenses, in cash (mostly my money market settlement fund) for convenience, so I don't have to sell shares of stock or bond funds too often. It keeps my taxes simple. If I could get another 1% yield on that cash, it would make a difference of 0.02% with respect to my total portfolio. To me, it's not worth the trouble.
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TierArtz
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Re: Do you keep moving your cash around chasing yield?

Post by TierArtz » Fri May 01, 2020 11:14 pm

No; same bank for the last 35 years. But, I did opt for Prime MM at VG for keeping Jan 02 Roth powder working a bit harder.

Trader Joe
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Re: Do you keep moving your cash around chasing yield?

Post by Trader Joe » Sat May 02, 2020 1:16 am

No I do not.

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Re: Do you keep moving your cash around chasing yield?

Post by ballons » Sat May 02, 2020 1:41 am

In the past I would chase any rate. Today I'm down to 6 credit unions and one bank (ally). Money goes to whomever is the highest.

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Re: Do you keep moving your cash around chasing yield?

Post by corpgator » Sat May 02, 2020 1:51 am

I have mine in Ally. They're 2nd tier for rates, but pretty consistently near the top. 1.5% right now. Best you can get now is 1.75%, but since those other banks seem to cut to on a whim sometimes to 0, no sense chasing a few extra dollars a month.

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Re: Do you keep moving your cash around chasing yield?

Post by Dandy » Sat May 02, 2020 7:51 am

When the difference is large and likely to stay that way for awhile I will move. e.g. when the VG Fed Money Market yield dropped lately due to the Fed cutting rates it was paying close to about .60 vs an online bank of 1.5% or more. I actually moved a chuck in my taxable account to a short term CD ladder paying 1.7% at an online bank I already use. I could have put it in their savings account currently paying 1.5% but I wanted to lock in some "higher" yields short term.

You can make a decent return if you want to spend some time chasing different bank bonuses. I haven't done that. But I do keep an eye out for one that might tempt me. Usually, when I check out the bank's reviews on depositaccounts.com I often see a lot of bad ones--especially getting money out and/or hidden fees or requirements, bad service etc.

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Re: Do you keep moving your cash around chasing yield?

Post by Auream » Sat May 02, 2020 8:03 am

index2max wrote:
Fri May 01, 2020 10:15 pm
I use high interest rewards checking accounts at credit unions. Beats losing money on those worthless rates at savings accounts in banks and credit unions.

Check out this website for a good comparison search. The editor of the site relies on user-curated reviews and data.

https://www.depositaccounts.com/
This is the way to go. With the recent rate drops my long-standing mainstay (Heritage Bank) finally dropped from 3% to 1.5. This made it worth it for me to transfer to another credit union I’ve been a member of for over a decade for a 2.25% rate.

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Re: Do you keep moving your cash around chasing yield?

Post by AerialWombat » Sat May 02, 2020 8:10 am

Yes. I don’t chase account opening bonuses, but certainly shuffle money between two brokerages, two banks, and four credit unions to try eeking out a little extra yield.

Right now, I’m mostly split between a CD at a credit union, Discover bank, and VWITX at Vanguard. New money each week is going into Discover at 1.4%.

I’m on the cusp of likely closing some accounts and simplifying, along with closing some of my two dozen credit cards.

Since my AA is 30/70, and I count my EF/cash as part of that as one should, I cannot afford to have the cash earning zero.

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Re: Do you keep moving your cash around chasing yield?

Post by Calhoon » Sat May 02, 2020 8:15 am

On the bank bonuses -- on some you indeed have to jump through hoops where it's a hassle. However, some bonuses are very easy.

Like others had mentioned I'd hit the big ones that are easy and the way you know they're easy is by quickly skimming through the comments for the bonus on that doctor of credit link. You''ll see what problems others ran into and be able to judge if it's worth your time.

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Re: Do you keep moving your cash around chasing yield?

Post by JackoC » Sat May 02, 2020 8:23 am

22twain wrote:
Fri May 01, 2020 11:03 pm
I'm retired, living off my investments until I finally start Social Security at 70 in a few years. I keep on average about 2%, one year's expenses, in cash (mostly my money market settlement fund) for convenience, so I don't have to sell shares of stock or bond funds too often. It keeps my taxes simple. If I could get another 1% yield on that cash, it would make a difference of 0.02% with respect to my total portfolio. To me, it's not worth the trouble.
If I looked at it in % terms I'd tend to agree. I look at it in $ terms. Is it worth it to make at least a few $100 more a year. To constantly open new accounts with *the* highest rate savings bank on
https://www.depositaccounts.com/
or similar at a given moment, no. To move essentially all my cash from VMFXX/VUSXX at <0.50% to existing bank accounts yielding >1.50%, absolutely worth it to me in $'s and I don't even calculate what % it is of overall portfolio return. I also don't calculate the % portfolio impact of switching cell phone plans to save a few $100 a year either. If it's at least a couple $100 for little enough work, I do it, maybe $100 if very little work (recently did a savings account bonus deal with Discover I calc nets me $132 after tax, but it was exceptionally easy to open and fund). Somewhere along the spectrum with bank accounts, between opening new accounts constantly (for either rate, or bonus) and clicking a mouse a few times to get 1% pa more, I reach my indifference point. And no two people's need be the same.

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Re: Do you keep moving your cash around chasing yield?

Post by calvin+hobbes » Sat May 02, 2020 8:48 am

I look out for bonuses, but otherwise keep cash in whatever high yield account and don’t move it around to chase 5 basis points.

Discover, Marcus, And Citi had $300+ bonuses at one point for their high yield accounts. Citi Accelerate Savings has a 10k monthly withdraw limit. Not ideal.

Just opened up with Capital One. They are currently offering $100 per 10k deposit up to $500 for 50k. Money needs to sit for 90 days and no account minimum or fees. Regular yield is 1.50%.

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Re: Do you keep moving your cash around chasing yield?

Post by AerialWombat » Sat May 02, 2020 9:00 am

.....
Last edited by AerialWombat on Sun May 17, 2020 2:54 pm, edited 1 time in total.

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Re: Do you keep moving your cash around chasing yield?

Post by surfstar » Sat May 02, 2020 9:44 am

2 years expenses + 5% -- that's a lot of cash.

Catch 22. You will not notice the extra 1% return because you have more money than others who may chase yield. For some it is worth it.

If I can make $300 by jumping through some hoops, I will. Even better when it can be $500 + $300 + ___ over the course of a year. But again, $1000 in bank bonuses or increased cash yield might mean much less to someone who is worth much more. Catch 22.

Do what you want for your situation.

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Re: Do you keep moving your cash around chasing yield?

Post by Leif » Sat May 02, 2020 9:57 am

Sometimes.

Recently I was using a Muni MM as rates shot up. But the Fed has taken away the punch bowl. I don't shop around for new places, but I keep one eye on yield and move between MMs, Muni MM, and bank "high yield".

I'm repeating what I did in the GFC. With rates at zero I was in bank "high yield", then rates started moving up and I went to brokerage MM, then crisis and brokerage Muni MM jumped. Now rates are back at zero and I'm back with high yield.
Last edited by Leif on Sat May 02, 2020 10:08 am, edited 2 times in total.

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Re: Do you keep moving your cash around chasing yield?

Post by HEDGEFUNDIE » Sat May 02, 2020 10:07 am

My marginal tax rate on dividends / interest is 48%.

So no, I don’t chase yield any more.

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Re: Do you keep moving your cash around chasing yield?

Post by jjbychko » Sat May 02, 2020 10:11 am

I just moved cash from Prime Money Market to Discover savings. I only do this when there is a big difference in interest. Discover is paying at least double what Prime pays. I did the reverse several years ago. I will continue to move money from Prime until I have just a few k left then keep it in Discover until Prime interest exceeds discover. I use Prime to collect dividends and capital gains.

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Re: Do you keep moving your cash around chasing yield?

Post by nisiprius » Sat May 02, 2020 10:14 am

I used to, but I don't any more. I made two serious personal trials, involving tinkering with my financial life to meet the necessary conditions. Both involved that banks that were really offering a meaningful amount more than competitors, not just, say, 0.25% or even 0.50%. In both cases, I didn't have any problems getting the promised rates, but the good times only lasted about 1-1/2 years, followed by a sneaky gradual ramping-down of the benefit. In both cases I of course stuck with the bank for too long because, hey, it was still better than some other accounts.

One involved a "reward checking" deal a few years ago. The bank was offering like 3.99% APY that applied to the first $50,000 of the account balance (and virtually zero for any dollars above that). "Regular" savings accounts were running around 1.25%, 1.5% at the time. Within months of opening the account, they cut the interest rate to 2.99% and only only paid it on the first $25,000. They kept cutting the rate, and then eventually cut the limit to $10,000. What it meant that was that, overall, start to finish, over a period of about three years, I'd earned a grand total of about $1,000 more than I'd have earned in my old bank.

It's part of a general pattern. It is not too hard to score $200 here and $400 there in "free money" deals--like the resort-affiliated credit card that offered a $200 "balance credit" for opening the card. But it's fairly hard work. For example, every time the bank cut the dollar cap, I had to be alert and move the extra out of the account so that it wouldn't earn near-zero, or I would foregone as much interest on those dollars as the extra I was making on the below-the-limit dollars.

I think it's just plain worth a few hundred dollars to places to get you to open an account, and they make certain, one way or another, that it is a one-shot; if it's in the form of a "rate," the rate is always a short-lived teaser.

I think it's hard to chase yield consistently enough to be worth it. It's no better than chasing credit-card rewards, or brokerage signing bonuses, or being really diligent about grocery-store loyalty deals.
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Re: Do you keep moving your cash around chasing yield?

Post by Rudedog » Sat May 02, 2020 10:28 am

I keep my cash at four online banks, Capital One, Synchrony, Ally and Marcus. The accounts are no-penalty CDs or online savings, whichever has the better rate. I have considered opening accounts at Navy Federal and PSECU, but haven't done it yet, not sure I want any more accounts. My wife has her cash at local credit union paying one-tenth of one percent, and she's OK with that.

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Re: Do you keep moving your cash around chasing yield?

Post by MBB_Boy » Sat May 02, 2020 11:36 am

Sort of. I have 5 or 6 accounts from the high yield players and move around between them based on who is highest. It's not worth it anymore to open new accounts, the difference isn't big enough. I

They are all connected to each other, so it's pretty easy to swap around

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Re: Do you keep moving your cash around chasing yield?

Post by sean.mcgrath » Sat May 02, 2020 1:17 pm

No, I do not. It sounds like too much effort for marginal benefit.

I keep 3 - 5 months' cash in our savings account. When it gets to five, I invest it.

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Re: Do you keep moving your cash around chasing yield?

Post by Cycle » Sat May 02, 2020 1:20 pm

I get 2% on balances up to 15k, so long as I have 15 transactions a month. Credit union.
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beernutz
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Re: Do you keep moving your cash around chasing yield?

Post by beernutz » Sat May 02, 2020 1:55 pm

No. I have a Schwab investor checking account and Regions checking and savings accounts I've had for 20+ years.
I'll wait until retirement to consider chasing bank bonuses as its not worth my time or effort now.
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Re: Do you keep moving your cash around chasing yield?

Post by OffGridder » Sat May 02, 2020 1:57 pm

No, I do not. My local credit union currently pays 2% on the first 15K. The rest of my cash is at Ally currently paying 1.5%, sure to drop soon. If you hold a lot of cash, I guess it might be worth chasing bonuses and higher interest rates.
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Re: Do you keep moving your cash around chasing yield?

Post by patrick » Sat May 02, 2020 2:44 pm

I would consider it a waste of time to switch just for an extra 0.05% in interest, especially since the new account might lower the rate. However, with the top savings accounts paying more than 1% higher than money market funds, I do consider the switch out of money market funds to be worth it.

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Re: Do you keep moving your cash around chasing yield?

Post by beyou » Sat May 02, 2020 3:11 pm

Bama12 wrote:
Fri May 01, 2020 10:05 pm
same bank for 10 years.
Same banks for 20+ years

I chase yield outside my bank accounts, among Vanguard bond funds.
THere are so many short term bond funds, muni, federal, treasury, limited term muni, and
of course mmkt funds. Sometimes if I have a loss on my bond fund, I sell to harvest the loss and reduce taxes, take
high yield elsewhere for a while.

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Re: Do you keep moving your cash around chasing yield?

Post by 02nz » Sat May 02, 2020 3:13 pm

billthecat wrote:
Fri May 01, 2020 9:44 pm
whodidntante wrote:
Fri May 01, 2020 9:42 pm
No, but I do move it around chasing bank bonuses. That pays more than the disinterest rate.
Yeah I saw your other recent comment about that. It's seems like more work (but more payoff), like you have to meet certain qualifications, like direct deposits, etc.
It's really not that hard if you can get organized - a spreadsheet helps. Checking account bonus promos typically have direct deposit requirements, savings account promos almost never do.

retire57
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Re: Do you keep moving your cash around chasing yield?

Post by retire57 » Sat May 02, 2020 4:21 pm

I don't chase interest rates. I've considered the amount of time required for the administrative tasks involved and the math just doesn't make it worth the loss of free time. At this stage in my life, I value time over $.

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Re: Do you keep moving your cash around chasing yield?

Post by UpperNwGuy » Sat May 02, 2020 4:56 pm

I recently moved my short and mid-term savings out of Vanguard money market funds into a PenFed high yield savings account and into some Navy Federal Credit Union certificates of deposit. I doubt I'll make any further changes for a year or two. I have had accounts with both credit unions for several decades, so this wasn't a case of establishing new banking relationships in the pursuit of yield.

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Re: Do you keep moving your cash around chasing yield?

Post by petulant » Sat May 02, 2020 5:22 pm

I don't chase but I do have a have a high-yield savings account. Really, for the good ones, you can just sign up and stay at one. I might end up lower than the top by 20-30 bps sometimes, but the switching costs aren't going to be worth it most of the time for me. Anywhere paying .52% right now is not a competitive high yield though.

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Re: Do you keep moving your cash around chasing yield?

Post by JBTX » Sat May 02, 2020 7:07 pm

I have some in discover bank that is now yielding may 1.5%, and about $40k parked at Simple bank earning about that much, after earning $1000 on 2 new bank account bonuses. Maybe I keep around $25k in BOA with effectively no interest which I use for all transactions. Above those amounts we have close to a year in ibonds.

I too will play the bank bonus game for larger bonuses, but have become more selective in doing so.

lws
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Re: Do you keep moving your cash around chasing yield?

Post by lws » Sun May 03, 2020 12:59 pm

Not frequently.
Moved money out of t-bills into existing high yield savings recently.
Looking to do a savings bonus with another high yield savings soon for FDIC protection.

gips
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Re: Do you keep moving your cash around chasing yield?

Post by gips » Sun May 03, 2020 1:59 pm

i do but i’ve allocated a lot of my fi aa to cds rather than bonds. currently have a number of cds > 4%, happy to have them in this env.

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Re: Do you keep moving your cash around chasing yield?

Post by anonsdca » Sun May 03, 2020 2:38 pm

FrugalInvestor wrote:
Fri May 01, 2020 10:11 pm
I typically don't but recently ended up with some cash from a sale of property that I won't likely need for a number of months. After some input from others here I went ahead and invested that plus much of my Vanguard money market balance into Marcus Bank no penalty CDs.

When things are in flux as they are now I just sleep better having a little more in reserve than normal and knowing that it is FDIC insured. Being able to earn 2.5x the interest is a bonus. And as whodidntante points out, I had some time to fill. :?
Same boat here. I sold a rental property and was going to use that to purchase a primary home in another state, but needed to check the state out first. I put it in a local CU CD 2.5% 9-months. That was Feb 2020. Now with what is going down, I really like that cash there and it has changed my view of cash. I may keep it there and sell my current primary contingent on buying in the new state (if I still do).

I originally didn't want the shackles or stress of a contingent sale to buy in the other state, but things have changed.

InvisibleAerobar
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Joined: Mon Jan 15, 2018 12:33 pm

Re: Do you keep moving your cash around chasing yield?

Post by InvisibleAerobar » Sun May 03, 2020 2:55 pm

Could someone clarify the listed yield for money market funds (e.g. VMFXX or SWVXX) and clarify if that factors in the expense ratio?

For instance, SWVXX has 7-day yield of 0.52% and expense ratio of 0.34%. What’s the overall yield? And is there a chance I’ll end up with negative return?

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sergeant
Posts: 1556
Joined: Tue Dec 04, 2007 11:13 pm
Location: The Golden State

Re: Do you keep moving your cash around chasing yield?

Post by sergeant » Sun May 03, 2020 4:53 pm

InvisibleAerobar wrote:
Sun May 03, 2020 2:55 pm
Could someone clarify the listed yield for money market funds (e.g. VMFXX or SWVXX) and clarify if that factors in the expense ratio?

For instance, SWVXX has 7-day yield of 0.52% and expense ratio of 0.34%. What’s the overall yield? And is there a chance I’ll end up with negative return?
Quoted yield is after ER.
AA- 20+ Years of Expenses Fixed Income/The remainder in Equities.

InvisibleAerobar
Posts: 427
Joined: Mon Jan 15, 2018 12:33 pm

Re: Do you keep moving your cash around chasing yield?

Post by InvisibleAerobar » Wed May 06, 2020 10:02 am

sergeant wrote:
Sun May 03, 2020 4:53 pm
InvisibleAerobar wrote:
Sun May 03, 2020 2:55 pm
Could someone clarify the listed yield for money market funds (e.g. VMFXX or SWVXX) and clarify if that factors in the expense ratio?

For instance, SWVXX has 7-day yield of 0.52% and expense ratio of 0.34%. What’s the overall yield? And is there a chance I’ll end up with negative return?
Quoted yield is after ER.
Thanks for taking the time to confirm

Out of curiosity, do you know if this is stated on the prospectus somewhere? Also, is it correct to presume that if the rates are low enough, one’d lose money, as the fees would be greater than the yield?

flyingaway
Posts: 2732
Joined: Fri Jan 17, 2014 10:19 am

Re: Do you keep moving your cash around chasing yield?

Post by flyingaway » Wed May 06, 2020 10:04 am

I personally don't do that.
Because whatever a little bit of more interest that I get, I have to pay taxes on it, which makes the gain less significant.

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