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 » Thu Feb 07, 2019 10:23 pm

Is there any investment which is both Tax efficient and FDIC insured?

AlohaJoe
Posts: 4840
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: Tax efficient and FDIC insured

Post by AlohaJoe » Thu Feb 07, 2019 10:40 pm

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: 46
Joined: Fri Nov 06, 2009 1:05 pm

Re: Tax efficient and FDIC insured

Post by Revision17 » 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.

UpperNwGuy
Posts: 2531
Joined: Sun Oct 08, 2017 7:16 pm

Re: Tax efficient and FDIC insured

Post by UpperNwGuy » Thu Feb 07, 2019 10:58 pm

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: 505
Joined: Fri Sep 21, 2018 10:54 am

Re: Tax efficient and FDIC insured

Post by michaeljmroger » 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.

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

Re: Tax efficient and FDIC insured

Post by Epsilon Delta » Thu Feb 07, 2019 11:31 pm

An IRA holding CDs.

rkhusky
Posts: 7407
Joined: Thu Aug 18, 2011 8:09 pm

Re: Tax efficient and FDIC insured

Post by rkhusky » Fri Feb 08, 2019 8:17 am

My savings account paying 0.01% interest.

User avatar
happenstance
Posts: 98
Joined: Sun Jul 26, 2015 11:24 am
Location: NYC

Re: Tax efficient and FDIC insured

Post by happenstance » Fri Feb 08, 2019 9:06 am

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 » Fri Feb 08, 2019 12:43 pm

Thank you all :happy

ftobin
Posts: 1039
Joined: Fri Mar 20, 2009 3:28 pm

Re: Tax efficient and FDIC insured

Post by ftobin » Sun Feb 10, 2019 6:32 am

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: 7376
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Tax efficient and FDIC insured

Post by Call_Me_Op » Sun Feb 10, 2019 8:18 am

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: 2624
Joined: Thu Dec 24, 2009 12:10 am

Re: Tax efficient and FDIC insured

Post by tj » Sun Feb 10, 2019 10:54 pm

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

Post Reply