Short term Cash - where is best return?

[Parkinglotracer]

I’ve lost track of where the best places are to get some return for some short term cash we might need in near future (3-6 months) for retirement expenses now that interest rates are up a little.

Any suggestions? Thank you

[jebmke]

Treasury bills are fairly attractive when compared to say, a high yield savings account.

[JoeRetire]

Get 3 or 6 month CDs.

[MikeG62]

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

[sperry8]

Treasury bills are fairly attractive when compared to say, a high yield savings account.

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

where do we buy these?

[jebmke]

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

certainly more liquid than CDs if you need the money sooner than you think.

[radiowave]

Here's two sites to check current rates for CDs and Savings:

https://www.depositaccounts.com/

https://www.bankrate.com/

[dbr]

Treasury bills are fairly attractive when compared to say, a high yield savings account.

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

where do we buy these?

Probably for Tbills you would use Treasury Direct https://www.treasurydirect.gov/
Alternatively you can buy Tbills at brokers such as Fidelity: https://www.fidelity.com/fixed-income-b ... sury-bonds


Once you have accounts at TD you can also consider holding I bonds.

It could also be that the hassle is not worth it and for your purposes savings accounts, CDs, and even money market funds are much easier and the value of optimizing interest rates on cash is not great.

[MikeG62]

Treasury bills are fairly attractive when compared to say, a high yield savings account.

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

where do we buy these?

I prefer to purchase them through Fidelity (although I've also recently bought them through Merrill Edge). I bought $250K in Treasuries this week (mix of 12 and 24 months). 12-months yielding 3.10% and 24-months yielding 3.40%. This was on Tuesday of this week.

Note, all my purchases were done in the secondary market. I've bought at auction in the past too, but did not want to wait for the auctions given the spike in yields earlier this week. Also, I believe I got a slight yield premium taking bonds off the hands of someone who wanted/needed to sell them.

[whodidntante]

Treasury bills. They are even better if you live in a high-income tax state.

You can also get your money back quickly if needed. The market for T-bills features low spreads. It's possible to lose money if you sell early though if rates have gone up after you bought. You will not lose money if you hold to maturity.

[whodidntante]

Probably for Tbills you would use Treasury Direct https://www.treasurydirect.gov/

You can, but that makes them a pain to sell if you need to sell earlier than planned. Buy at a broker.

[dbr]

Probably for Tbills you would use Treasury Direct https://www.treasurydirect.gov/

You can, but that makes them a pain to sell if you need to sell earlier than planned. Buy at a broker.

True. I would imagine that for Tbills selling them would not be so likely because the terms are so short. It might be if an investor wants the money to come and go at will that a money market fund or a bank account would be simpler. People can do what they prefer.

[papermario]

Wealthfront has a 1.4% cash account https://www.wealthfront.com/cash

[tc101]

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Fidelity and Schwab MMFs are yielding about half of that. This is an example of how Vanguard excels. People talk about moving to Fido or Schwab to get better service, but the service is now terrible at all 3, and the yields are better at Vanguard.

[SchruteB&B]

6 mos treasury is 2.25%

E trade has a savings account paying 1.4%
https://us.etrade.com/bank/premium-savings-account

www.depositaccounts.com has a few 6 mos CDs paying 1.35%

[HDM1004]

https://www.baskbank.com/ 1.5%

[Parkinglotracer]

Thank you - I’ll start looking at these suggestions.. I appreciate the help brothers and sisters.

[cubs1999]

In another thread here, someone mentioned "First Foundation" paying 1.65% now.

[1moreyr]

I buy secondary Tbills on my Schwab account. The rates are similar or slightly higher. it could be timing of post since when I looked.
As far as service, I have $1M in Schwab and I literally have a local guy that answers my call, my mail and gets me the help I need.
i realize not everyone has that amount, but I also don't know what the minimum is to get that kind of service. I found even Schwab service via phone faster and more accurate when moving my vanguard account to Schwab.

either way, it's where I am putting all semi liquid money ( as I plan to hold it there 3-12 months based on the T bill)

I am a little concerned on locking in for 12 months in this climate but that 3% rate looks really appealing. still not sure

[exodusNH]

Treasury bills are fairly attractive when compared to say, a high yield savings account.

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

where do we buy these?

I missed that rate increase. I looked 10 days ago and it was like 0.7. Not only is it better than most HYSA, there's also no 6 withdrawal limit.

[sperry8]

Treasury bills are fairly attractive when compared to say, a high yield savings account.

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Of course some small aggressive banks are at 1.5% and others may move to join them.

Short-term Treasury bills likely to exceed (far exceed) CD yields at this time. For example, 3-month Treasury currently yielding 1.56% and 6-month 2.20%.

where do we buy these?

I missed that rate increase. I looked 10 days ago and it was like 0.7. Not only is it better than most HYSA, there's also no 6 withdrawal limit.

VMFXX is now at 1.27%. And rising.

[Chip]

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Fidelity and Schwab MMFs are yielding about half of that. This is an example of how Vanguard excels. People talk about moving to Fido or Schwab to get better service, but the service is now terrible at all 3, and the yields are better at Vanguard.

Yields are better at Vanguard, but not 2x Fidelity.

Current 7 day yield on VMRXX is 1.22%
VMFXX is 1.27%
FDRXX is 1.03%
FZDXX is 1.18%

I question your assertion that customer service is equally terrible at all 3.

[stocknoob4111]

i'm parking it in 3 month T-Bills at around 1.55% or so, best deal of yield vs duration at the moment imo, of course net of taxes at 32% and inflation return is around -7.5% real

[Creditcardguy]

In another thread here, someone mentioned "First Foundation" paying 1.65% now.

I signed up for this yesterday, good reviews. No fees, except if you close it within 90 days it's $20.

[slickracer]

TD ameritrade has some nice short term CD rates right now.

[JoMoney]

VMFXX (Vanguards fed money market sweep acct) is now yielding 1.19%. That's higher than most high yield savings accounts (but not all). At this point, I may just move money there for simplicity as it's quite competitive.

Fidelity and Schwab MMFs are yielding about half of that. This is an example of how Vanguard excels. People talk about moving to Fido or Schwab to get better service, but the service is now terrible at all 3, and the yields are better at Vanguard.

Yields are better at Vanguard, but not 2x Fidelity.

Current 7 day yield on VMRXX is 1.22%
VMFXX is 1.27%
FDRXX is 1.03%
FZDXX is 1.18%

I question your assertion that customer service is equally terrible at all 3.

Yes, but for what it's worth there was some lag over this past weekend where Vanguard was showing a rate on VMFXX that was almost twice that of the comparable FDRXX or SPAXX Fidelity fund... until they updated the rates this week.

Money Market fund rates have been rising fast, and I expect they'll be leading the way up unless you're willing to hop around to multiple banks chasing whoever has the newest updated promotion/rate.

I've been using FDRXX at Fidelity, because I no longer have an account at Vanguard, it's not worthwhile at this point for me to have the paperwork hassle to open an account just for VMFXX, and I really like the cash management features at Fidelity (i.e. ATM/debit card, Bill Pay, check writing, no fees/atm reimbursement, etc..) on their money market funds... and I already have accounts at Fidelity, so I'm not adding additional account hassle.

[Nowizard]

Our CU paying 3% up to 20K.

Tim

[Chip]

Yes, but for what it's worth there was some lag over this past weekend where Vanguard was showing a rate on VMFXX that was almost twice that of the comparable FDRXX or SPAXX Fidelity fund... until they updated the rates this week.

Money Market fund rates have been rising fast, and I expect they'll be leading the way up unless you're willing to hop around to multiple banks chasing whoever has the newest updated promotion/rate.

Yes. No reasonable way for Fido to overcome the higher expense ratios on its funds. Vanguard should always be leading.

FWIW, the 1 day yield on FDRXX jumped the day after the Fed raise. Using the Fido institutional link provided by Lyrrad in this post, I was able to get the 1, 7 and 30 day yields for FDRXX; shown below.

Code: Select all

Date 	            Yields 		
	       1-Day 	7-Day   30-Day
06/14/2022	0.53%	0.51%	0.47%
06/15/2022	0.53%	0.51%	0.47%
06/16/2022	1.01%	0.58%	0.49%
06/17/2022	1.04%	0.66%	0.51%
06/18/2022	1.04%	0.74%	0.53%
06/19/2022	1.04%	0.81%	0.55%
06/20/2022	1.04%	0.89%	0.57%
06/21/2022	1.03%	0.96%	0.59%