Tax efficient and FDIC insured

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
kmn99
Posts: 26
Joined: Mon Dec 03, 2018 7:09 pm

Tax efficient and FDIC insured

Post by kmn99 »

Is there any investment which is both Tax efficient and FDIC insured?
AlohaJoe
Posts: 5507
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: Tax efficient and FDIC insured

Post 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.
Revision17
Posts: 48
Joined: Fri Nov 06, 2009 1:05 pm

Re: Tax efficient and FDIC insured

Post 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.
UpperNwGuy
Posts: 3943
Joined: Sun Oct 08, 2017 7:16 pm

Re: Tax efficient and FDIC insured

Post 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.
michaeljmroger
Posts: 524
Joined: Fri Sep 21, 2018 10:54 am

Re: Tax efficient and FDIC insured

Post 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.
User avatar
Epsilon Delta
Posts: 8090
Joined: Thu Apr 28, 2011 7:00 pm

Re: Tax efficient and FDIC insured

Post by Epsilon Delta »

An IRA holding CDs.
rkhusky
Posts: 9983
Joined: Thu Aug 18, 2011 8:09 pm

Re: Tax efficient and FDIC insured

Post by rkhusky »

My savings account paying 0.01% interest.
User avatar
happenstance
Posts: 158
Joined: Sun Jul 26, 2015 11:24 am
Location: NYC

Re: Tax efficient and FDIC insured

Post 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.
Topic Author
kmn99
Posts: 26
Joined: Mon Dec 03, 2018 7:09 pm

Re: Tax efficient and FDIC insured

Post by kmn99 »

Thank you all :happy
ftobin
Posts: 1062
Joined: Fri Mar 20, 2009 3:28 pm

Re: Tax efficient and FDIC insured

Post 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.
Call_Me_Op
Posts: 7963
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Tax efficient and FDIC insured

Post by Call_Me_Op »

Savings bonds are tax efficient - and are even safer than FDIC-insured instruments.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
tj
Posts: 3202
Joined: Thu Dec 24, 2009 12:10 am

Re: Tax efficient and FDIC insured

Post by tj »

Sure, accounts that are non-interest bearing. But wouldn't you rather generate the income and pay the tax?
Post Reply