What should I do with the money in my savings account?
I’ve about 80k in one money market account and I’m wondering if I should just let it stay there? It’s not a big enough amount to worry too much but still what is the best saving/investment strategy that is completely risk free and allows for liquidity (don’t want to move it in retirement acc either)? Buy CDs? Distribute it in other bank’s MMA accounts for better APY? Something else?
It is fine.
Of course…it depends a bit on how much money you have in general. Some people have that much in their checking account…but I’m assuming that isn’t you.
If you want it to be safe, liquid and under your control, a standard money market account at a bank is fine. CD’s are okay too so long as they are less than 18 months. Current rates being what they are, using them right now doesn’t make much sense. Ditto US Treasury Bills at TreasuryDirect.gov.
If you want some of this money to be safe and liquid over a long period of time (5 years+), you could set up an account at TreasuryDirect and buy the yearly limit of $5000 in I-Savings bonds every year for a couple of years. (Inflation hedge for the long term portion of your savings).
Other than that, I would suggest INGDirect.com or Vanguard Prime Money Market fund for money market accounts if you are interested in comparing what you currently have.
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The FDIC coverage has changed to $250,000 until December 2013 so you do not need to distribute it thoughout other banks. I would reccomend calling other local banks and seeing what the best rate on their CDs and Savings accounts are. If you plan on using the money, I would try to set up a short term cd. For example, a 6 month CD paying 1.10%. That way your money isn’t locked in for as long. But if you’re getting a good rate on your money market, then you might be better off keeping it in there and letting it earn interest.
References :
It is fine.
Of course…it depends a bit on how much money you have in general. Some people have that much in their checking account…but I’m assuming that isn’t you.
If you want it to be safe, liquid and under your control, a standard money market account at a bank is fine. CD’s are okay too so long as they are less than 18 months. Current rates being what they are, using them right now doesn’t make much sense. Ditto US Treasury Bills at TreasuryDirect.gov.
If you want some of this money to be safe and liquid over a long period of time (5 years+), you could set up an account at TreasuryDirect and buy the yearly limit of $5000 in I-Savings bonds every year for a couple of years. (Inflation hedge for the long term portion of your savings).
Other than that, I would suggest INGDirect.com or Vanguard Prime Money Market fund for money market accounts if you are interested in comparing what you currently have.
References :
If you do not need the funds, you can invest about $50,000 in insurance, fixed annuities. The only draw back is you have to tie it up for 5 or 6 years but can wuithdraw 10% per year without being penalized. They might only pay 5 or 6% but you can’t lose. It has nothing to do with the stock market. If you’d like more info, let me know.
References :
Retired bill collector 35 years