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Thanks for all the replies so far. Guess I need to look into the fine print to make sure there's no extra fees or whatnot.
I guess another thing that concerns me is getting wooed by a super good rate, only to have them drop it after the honeymoon phase is over. This ever happen? I would assume that if so, they would be bombarded with nasty reviews but who knows. Maybe this is a reason to stick with the larger, better known banks?
Synchrony has been pretty consistent with their high yield savings rate. Isn't the highest but it stays competitive and they often promos with good rates on CD's so I like having money in there. Only downside is it takes 3 - 4 days to get your money out via ACH, some places are 2 days.
I guess another thing that concerns me is getting wooed by a super good rate, only to have them drop it after the honeymoon phase is over. This ever happen? I would assume that if so, they would be bombarded with nasty reviews but who knows. Maybe this is a reason to stick with the larger, better known banks?
Good questions. I'd personally stick with more of a known quantity, such as Amex. I dislike opening/closing accounts, though.
How many transactions do you expect to make per month, or per <choose your period of time>?
Good questions. I'd personally stick with more of a known quantity, such as Amex. I dislike opening/closing accounts, though.
How many transactions do you expect to make per month, or per <choose your period of time>?
Yeah I'm not a fan of constantly opening/closing accounts either, although I recently opened a Chase checking/savings combo just to take advantage of the $900 bonus they were offering (that was just too good to turn down).
This is to save for a large purchase. Could be six months. Could be three or four years. Probably transferring "inbound" once a month on average, and ideally not withdrawing till I'm ready to close it out. And the latter thing is another question I have, as some state they have a $25K/month limit for example. That wouldn't apply to when you're making the final withdrawal upon closing, would it?
Yeah I'm not a fan of constantly opening/closing accounts either, although I recently opened a Chase checking/savings combo just to take advantage of the $900 bonus they were offering (that was just too good to turn down). This is to save for a large purchase. Could be six months. Could be three or four years. Probably transferring "inbound" once a month on average, and ideally not withdrawing till I'm ready to close it out.
Given that information, I'll toss out the idea of buying T-bills. Today the yields are 5.4%-5.5% out to six months, and the interest is exempt from state and local income tax. You just need a brokerage account at Fidelity, Schwab, or similar. There's also Treasury Direct if you have no need for any other brokerage services.
T-bills are very liquid, meaning you can easily sell them should you need the money before maturity. I sold a few last year, at Fidelity, and they settled in one day.
Not worth the bother if you're making multiple draws a month, but for your needs it may be fine. The main limiter, at least when buying through a broker, is that bills are purchased in units of approximately $1000. You can't buy, for example, $378.12 worth of T-bills. (Not sure about Treasury Direct in this regard... maybe someone else can comment?)
Given that information, I'll toss out the idea of buying T-bills. Today the yields are 5.4%-5.5% out to six months, and the interest is exempt from state and local income tax. You just need a brokerage account at Fidelity, Schwab, or similar. There's also Treasury Direct if you have no need for any other brokerage services.
T-bills are very liquid, meaning you can easily sell them should you need the money before maturity. I sold a few last year, at Fidelity, and they settled in one day.
Not worth the bother if you're making multiple draws a month, but for your needs it would be perfectly fine IMO.
The only issue I have with that is...when it matures in six months (and from what I understand then reverts to near 0% interest) and I "may" want to pull the money in another three months, that would involve more constant buying and selling than I'm really looking to do. And if I'm stashing a little away each month, that involves buying multiple T-bills in my account all with different maturity dates. Just seems like a bit of a cluster?
Yes, go with an online savings account. If all you want is a straight savings account, then just look for a high rate.
But if you want to combine a checking and savings, you may want a place with more features. Ally may have the most features, and a decent rate. Capital One has been around forever (since I had an ING account) and is fine. Lately LendingClub has the highest rates and is a solid option with basic features for checking and savings.
If I was opening a new account today, and wanted checking and savings with a high yield on both, I'd go with SoFi. The only key is you need to set up direct deposit to get the deals. But they have good investment accounts too (robo advisor style), so definitely a good option for those it may fit.
The only issue I have with that is...when it matures in six months (and from what I understand then reverts to near 0% interest) and I "may" want to pull the money in another three months, that would involve more constant buying and selling than I'm really looking to do. And if I'm stashing a little away each month, that involves buying multiple T-bills in my account all with different maturity dates. Just seems like a bit of a cluster?
Yes, it's a little more work than using a savings account.
Just a couple points of clarity... There's no need to buy multiple maturities. You can put first dollars into, for example, a bill that matures in 6 months. Then just keep adding new money by purchasing more bills with the same CUSIP. After six months pass, all of those bills will mature at the same time. Then you'll have to take action if you want to reinvest. Some brokers offer auto-reinvest, if that would make life simpler. (May not be able to do all of this at Treasury Direct, at least that was the case when I used it many years ago.)
The interest rate you get six months from now will be set by the credit market. It's hard to imagine it will be near zero anytime soon, but in any event you have the same dilemma with a savings account.
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