where to park cash ?

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HotRod140
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Joined: Tue Apr 15, 2008 12:24 pm

where to park cash ?

Post by HotRod140 » Sat Mar 14, 2009 10:09 am

I just looked at my internet bank savings account, under 2 percent now. Where is everyone keeping their cash. This money is not needed to pay bills. would anyone suggest maybe a dividend fund or utility stock? I just want to earn a little more than the under two percent.

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Grandpaboys
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Post by Grandpaboys » Sat Mar 14, 2009 10:17 am

I have moved from Prime to using Short Term Investment Grade Corp.. However, remember that all selling is a tax event.
Good Day | GP

bozo
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Post by bozo » Sat Mar 14, 2009 11:17 am

For money you really, truly, don't need to pay bills (i.e., an emergency fund), I'd suggest a combination CD ladder/savings account. Take what you need for an emergency fund, and park that in a savings account. Don't feel bad if it's just 2%, we get 2.75% at our credit union. Ease of access, liquidity and NCUA or FDIC insurance trump rates. With the balance left (after the emergency funds), consider a CD (or a CD ladder, if you can). You can generally get higher rates the longer out you go, and the more you have (some credit unions offer higher rates for amounts over $25K). However, for reasons I need not go into, I wouldn't go out over two years at this time. Maybe a ladder of 6 mos, 1 year and 2 years might fit your program.

Feel free to PM me if you have any questions. Google "bankrate" and "bankdeals" for sites that explore the best rates and terms.

Bozo

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DaveTH
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Post by DaveTH » Sat Mar 14, 2009 4:09 pm

would anyone suggest maybe a dividend fund or utility stock? I just want to earn a little more than the under two percent.
How much risk are you willing to accept?

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gotherelate
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Post by gotherelate » Sat Mar 14, 2009 4:32 pm

DaveTH wrote:
would anyone suggest maybe a dividend fund or utility stock? I just want to earn a little more than the under two percent.
How much risk are you willing to accept?
Bingo!


-Grandpa
-Grandpa | I'd rather see where I'm going than see where I've been.

Topic Author
HotRod140
Posts: 86
Joined: Tue Apr 15, 2008 12:24 pm

where to park cash ?

Post by HotRod140 » Sun Mar 15, 2009 7:13 am

Bozo, thanks for the help, Dave, I understand if I move out of regular savings I must accept some risk. Hopefully I wont need this cash for at least 10 yrs. Lets say aggressive conservative if that is a category

JOJO123
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Post by JOJO123 » Sun Mar 15, 2009 7:35 am

*****
Last edited by JOJO123 on Thu Dec 19, 2019 8:53 pm, edited 1 time in total.

Gekko
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Post by Gekko » Sun Mar 15, 2009 7:45 am

i like squirreling cash away in a few different places -

VG Prime MM
VG Treasury MM
VG Muni Tax Exempt MM
Bank Savings Account (Only $3K - Minimum Required for Free Services)

Gekko
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Post by Gekko » Sun Mar 15, 2009 7:46 am

Grandpaboys wrote:I have moved from Prime to using Short Term Investment Grade Corp.. However, remember that all selling is a tax event.
good point on the tax event.

bozo
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Post by bozo » Sun Mar 15, 2009 7:56 am

FD wrote:Also look at https://www.penfed.org/productsAndRates ... icates.asp
Penfed is one of the largest and oldest CU....very easy to join and have other great benefits like
VISA CC with 2% supermarket and 5% any gas paid every month.

Their certificate pays
Term.......APY

6-Month 1.75%

1-Year 2.00%

2-Year 2.25%

3-Year 3.50%

4-Year 3.75%

5-Year 4.00%

7-Year 4.00%
Alliant Credit Union is a tad more generous these days on the shorter durations (3% APY for savings, 3.15% for 12 -23 mos, and 3.30% for 24 mos) but also peeters out at 4% on the higher durations. That's why I suggest going out no more than 2 years in this rate environment.

Bozo

CaptMidnight
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Post by CaptMidnight » Sun Mar 15, 2009 8:25 am

bozo wrote:
FD wrote:Also look at https://www.penfed.org/productsAndRates ... icates.asp
Penfed is one of the largest and oldest CU....very easy to join and have other great benefits like
VISA CC with 2% supermarket and 5% any gas paid every month.

Their certificate pays
Term.......APY

6-Month 1.75%

1-Year 2.00%

2-Year 2.25%

3-Year 3.50%

4-Year 3.75%

5-Year 4.00%

7-Year 4.00%
Alliant Credit Union is a tad more generous these days on the shorter durations (3% APY for savings, 3.15% for 12 -23 mos, and 3.30% for 24 mos) but also peeters out at 4% on the higher durations. That's why I suggest going out no more than 2 years in this rate environment.

Bozo
Are you Ukrainian-born or first generation Ukrainian-American? If so you can get 4.34% NCUA-insured at the Self-Reliance Credit Union.

http://www.selfrelianceny.org/default.htm
The history of thought and culture is ... a changing pattern of great liberating ideas that inevitably turn in suffocating straightjackets... | --Isaiah Berlin

tutaloo
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Post by tutaloo » Sun Mar 15, 2009 8:36 am

xx
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jimdigriztn
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Post by jimdigriztn » Sun Mar 15, 2009 9:31 am

Grandpaboys wrote:I have moved from Prime to using Short Term Investment Grade Corp.. However, remember that all selling is a tax event.
I don't understand. I get taxed on my money market fund whether I sell or not. To my knowledge, I've never been taxed more when I've withdrawn large amounts.

schwarm
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Post by schwarm » Sun Mar 15, 2009 9:37 am

jimdigriztn wrote:
Grandpaboys wrote:I have moved from Prime to using Short Term Investment Grade Corp.. However, remember that all selling is a tax event.
I don't understand. I get taxed on my money market fund whether I sell or not. To my knowledge, I've never been taxed more when I've withdrawn large amounts.
MM funds have a constant value, bond funds do not. If your bond fund's NAV has increased since you bought it, you pay tax on the difference.

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DA
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Post by DA » Sun Mar 15, 2009 9:58 am

jimdigriztn wrote:
Grandpaboys wrote:I have moved from Prime to using Short Term Investment Grade Corp.. However, remember that all selling is a tax event.
I don't understand. I get taxed on my money market fund whether I sell or not. To my knowledge, I've never been taxed more when I've withdrawn large amounts.
You'll probably have a capital gain or loss when you sell shares of Short Term Investment Grade, thus the tax event. Money market funds maintain a constant $1 NAV, so there's no capital gain or loss.

Dividends from either fund are taxed as ordinary income.

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