Alternative to checking account for short term deposit

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Topic Author
MoDosh
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Joined: Tue Feb 05, 2019 3:54 pm

Alternative to checking account for short term deposit

Post by MoDosh » Mon Feb 11, 2019 3:09 pm

We have a sum of money coming to us soon that will sit in our checking account for several months. Money probably will go to Vanguard funds eventually. In the meantime what to do rather than sitting in bank account with zero interest.

What about Betterment smart saver this seems to be not a bad option?

https://www.betterment.com/smart-saver/

Wondering what Vanguard has, do they have a similar Product, some type of CD or money market fund that would only be used for two months then probably cleaned out. Obviously I don't want to pay fees or penalties for early withdrawal etc. etc.

Also what about betterment in general, they seem to have quite an aggressive advertising program on various podcast I listen to?

Rupert
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Re: Alternative to checking account for short term deposit

Post by Rupert » Mon Feb 11, 2019 3:16 pm

Vanguard's Prime Money Market fund is presently paying about 2.5%. Alternatively, there are lots of online savings accounts with FDIC insurance that are paying 2+% right now.

wriley4409
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Location: Little Rock,AR

Re: Alternative to checking account for short term deposit

Post by wriley4409 » Mon Feb 11, 2019 3:19 pm

T-bills wouldn't be a bad choice either.

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Clever_Username
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Re: Alternative to checking account for short term deposit

Post by Clever_Username » Mon Feb 11, 2019 3:26 pm

Vanguard's money market account VMMXX sounds like a natural place, especially if it's already likely going to Vanguard. Current rate is about 2.5%.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

nguy44
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Re: Alternative to checking account for short term deposit

Post by nguy44 » Mon Feb 11, 2019 3:35 pm

Agree with others, VMMXX seems a natural for your situation. I did this for an unexpected inheritance I received.

gmehta
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Re: Alternative to checking account for short term deposit

Post by gmehta » Mon Feb 11, 2019 3:50 pm

How short is your short term? I have put money in VCADX for now. It is intermediate Muno Bond Fund. Returns are Federal and State Tax exempt.

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fortfun
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Re: Alternative to checking account for short term deposit

Post by fortfun » Mon Feb 11, 2019 3:54 pm

MoDosh wrote:
Mon Feb 11, 2019 3:09 pm
We have a sum of money coming to us soon that will sit in our checking account for several months. Money probably will go to Vanguard funds eventually. In the meantime what to do rather than sitting in bank account with zero interest.

What about Betterment smart saver this seems to be not a bad option?

https://www.betterment.com/smart-saver/

Wondering what Vanguard has, do they have a similar Product, some type of CD or money market fund that would only be used for two months then probably cleaned out. Obviously I don't want to pay fees or penalties for early withdrawal etc. etc.

Also what about betterment in general, they seem to have quite an aggressive advertising program on various podcast I listen to?
ally no penalty cd 2.3%

Topic Author
MoDosh
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Joined: Tue Feb 05, 2019 3:54 pm

Re: Alternative to checking account for short term deposit

Post by MoDosh » Mon Feb 11, 2019 4:05 pm

Short term is until I read all the books and decide how to invest :) 2 months .... Some will be no brainers like Vangurard's index funds.

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Wiggums
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Re: Alternative to checking account for short term deposit

Post by Wiggums » Mon Feb 11, 2019 4:08 pm

Another vote for vanguard money market.

Topic Author
MoDosh
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Re: Alternative to checking account for short term deposit

Post by MoDosh » Mon Feb 25, 2019 9:59 am

Will go the Vanguard route now if only it were that easy to open an account we had to send them a bloody fax! Not too confidence inspiring :(

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leeks
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Re: Alternative to checking account for short term deposit

Post by leeks » Mon Feb 25, 2019 10:12 am

A fax?
Our first vanguard account was opened online, easy and fast.
Only transfer of some accounts from other places was more complicated and required any paper. But only by mail, never had to fax anything.
I would also recommend Vanguard Prime Money Market Fund VMMXX.

hlinee
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Re: Alternative to checking account for short term deposit

Post by hlinee » Mon Feb 25, 2019 10:22 am

wriley4409 wrote:
Mon Feb 11, 2019 3:19 pm
T-bills wouldn't be a bad choice either.
Why would people buy T-bills when you can buy a treasury money market for a slightly lower yield (20 basis points or so). I feel like the liquidity is worth it for short term deposits.

Topic Author
MoDosh
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Re: Alternative to checking account for short term deposit

Post by MoDosh » Mon Feb 25, 2019 9:51 pm

We obviously have US accounts and obviously are in the US, had to fax a check to them or snail mail it and now it seems we have to go to our bank and get the check notarized! Strange I thought this was 2019? We signed up online and in the final stage some error message came up. Called them up and told us we had to fax them a form.

nix4me
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Re: Alternative to checking account for short term deposit

Post by nix4me » Mon Feb 25, 2019 10:11 pm

MoDosh wrote:
Mon Feb 25, 2019 9:59 am
Will go the Vanguard route now if only it were that easy to open an account we had to send them a bloody fax! Not too confidence inspiring :(
Yeah Vanguard still thinks it's the 80's. Mailing forms, faxing and terrible website...

But they have good funds - i recommend VMMXX as well.

michaeljmroger
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Re: Alternative to checking account for short term deposit

Post by michaeljmroger » Mon Feb 25, 2019 11:57 pm

nix4me wrote:
Mon Feb 25, 2019 10:11 pm
MoDosh wrote:
Mon Feb 25, 2019 9:59 am
Will go the Vanguard route now if only it were that easy to open an account we had to send them a bloody fax! Not too confidence inspiring :(
Yeah Vanguard still thinks it's the 80's. Mailing forms, faxing and terrible website...

But they have good funds - i recommend VMMXX as well.
I fully agree with this. The way I usually summarize Vanguard is: best funds, worst website.

krafty81
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Location: San Diego, CA

Re: Alternative to checking account for short term deposit

Post by krafty81 » Tue Feb 26, 2019 1:06 am

Don't mean to hijack, but what about a good Schwab fund, same situation?

hornet1
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Re: Alternative to checking account for short term deposit

Post by hornet1 » Tue Feb 26, 2019 10:40 am

I really like the options of doing 2-2.3% online savings accounts
There's plenty of options to choose from. My discover one is at 2.2% and insured by FDIC unlike the robin hood one lol

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RickBoglehead
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Re: Alternative to checking account for short term deposit

Post by RickBoglehead » Tue Feb 26, 2019 10:42 am

MoDosh wrote:
Mon Feb 25, 2019 9:51 pm
We obviously have US accounts and obviously are in the US, had to fax a check to them or snail mail it and now it seems we have to go to our bank and get the check notarized! Strange I thought this was 2019? We signed up online and in the final stage some error message came up. Called them up and told us we had to fax them a form.
Never heard of having a check notarized...

Most people open an account online, connect to a bank, and fund via the bank, which Vanguard credits that day. Clearly something is unusual about what you're doing.
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Topic Author
MoDosh
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Joined: Tue Feb 05, 2019 3:54 pm

Re: Alternative to checking account for short term deposit

Post by MoDosh » Wed Feb 27, 2019 11:23 pm

The check had an incorrect address on it, we rarely use checks.

While we are waiting to get the account set up I’ve been going down the rabbit hole of Betterment vs Vanguard and reading done forum posts on the topic.

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