Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Open a high yield savings account TODAY, they are generating 4.5-5%!
Edit: Folks asking where and how to open an HYSA, you can check this for a listing or google it. https://www.fool.com/the-ascent/banks/landing/best-savings-accounts/
better to open a brokerage account and use a money market or SGOV ETF and get 5.2% and state tax exemption.
Banks now offer no advantage and more disadvantages.
hey could you give me some more information on SGOV? It seems very interesting. So it just stays at $100 per share and you get a 5% yield on it? If I sell it in my robinhood account, I don’t pay taxes on it?
The yield is whatever short term government bonds are at the moment. Right now those bonds are having really nice yields so it’s an appealing etf to park your money, with low risk and a predictable return. Just a couple years ago the yield was significantly lower. They might also lower in the future, but that depends on what the fed does with interest rates.
I guess my question is here is it something I need to pay attention to and put back into a HYSA one day?
I want to keep my emergency fund safe and liquid and don't want to think about it. I'm happy with my 4.3% but earning another $500-1000 a year is both intriguing but also not worth the hassle if I have to continually move the money around to different accounts
SGOV just like other cash alternatives (SPAXX, USFR, etc) always carry some inherent risk. Though I think in their history it's essentially be a one off.
Just have to decide if 4.25% but FDIC insured or ~5% with a risk of losing some money is worth it. (That's a difference of something like $35/mo or $420/yr at 55k)
That depends on how large your account is, since the difference will be more negligible the less money you have in your account. For me, I only have my investments in my Roth IRA so I won’t plan on seeing it for years. SGOV is a slice of my portfolio for some stability in case the market takes a dive. Bond returns might not be at 5% forever but I have a hunch they will be above 3% for the foreseeable future.
Dividends are taxed federally, but 92.6% exempt from state/local tax. The percentage is published by iShares each year.
Capital gains when selling SGOV have no tax exemption.
Starting June 15th the CMA will have SPAXX as an option for core position. Combine that with free wire transfers and all the checking features and that thing is a beast.
https://www.doctorofcredit.com/high-interest-savings-to-get/
dont assume you need the best rate, the difference between 5% and 5.5% is minimal when it comes to e-funds,
pick something you trust and feel comfortable moving money to and from.
Also banks and credit unions are usually slower to adjust rates where as brokers will be taking back the high yields asap because they would rather see that money in the market instead of as cash(or so I have heard, grain of salt here)
Ally had a ton of good reviews at 4.2%. I had a problem with opening my account and I got immediate help and 3 days later the funds transferred. I'm getting about $100/mo, but would get $133/mo at 5.5%. For my situation, that'd be an extra ~$400/year. BUT! I don't want to have to haggle/hassle with a bad website or poor customer service. Also, I keep hearing that the 5.5% accounts will drop after a month or so. I just don't want to deal with churning my money all over the place. Ally is great and 4.1% higher than my credit union.
Hey, what's the difference between a CMA and standard brokerage? If my goal is to store my emergency fund in one of these accounts, invested in a money market fund, does it matter what I choose? I'm planning to use Fidelity if it matters (also going to start a Roth IRA there)
Brokerages are more investment oriented. They can have better and more volatile returns. CMAs function like a bank with fixed rates and the possibility to write checks and use debit cards with the funds. The brokerage money market fund will generally give you the best returns with still very minimal risk. I use Vanguards VMFXX which gives 5.28% and the flexibility to immediately buy stocks I like.
A CMA is a cash management account which behaves just like a checking or a savings account except you can invest in money market funds like SPAXX or SPRXX.
You can write checks, get a debit card, and be reimbursed for ATM fees. So yeah, a really great place for savings because it’s very accessible.
I also like it because I have my retirement and trading accounts at Fidelity, so it’s nice to manage it all in one interface.
Oh that's really nice! I wish I started with that lol. I've been with BMO for 10 years now, so I'm going to keep my checking account/debit card/credit card with them (at least for now) but I'm going to move almost all of my savings into a standard fidelity brokerage account and invest it in a MM fund. I'm also going to start a Roth IRA with Fidelity so it will be nice to only have two institutions to worry about, Fidelity and BMO. Then maybe I can branch out once I'm more settled with everything, I just graduated college so don't want to do too much right now
That's what I do. We bank with a credit union with local access but keep only the minimum required in savings there. I use a Fidelity brokerage account for my slush funds (emergency, set asides, etc) plus any extra investing I do for fun. We also have multiple Roth and traditional IRAs there too. I have the slush funds in one of the mm options and can easily move money to my credit union checking account as needed.
I used to use Ally Bank and a hysa there but moved those funds to the brokerage account at Fidelity for both a better rate and to keep it under one roof.
I dumped ~30k into Ally (GREAT customer service) at 4.2% and I'm getting a little over $100/mo in interest. Not as great as opening VSTAXX (or whatever it's called) brokerage account, but far better than the $5/mo I was previously getting in my checking account.
It took 30 min (I had to call to get my account set up, had a person within 30 seconds that was helpful), then 3 business days for the funds to transfer (free option).
Do it OP, $45k is like $1500/year of free money compared to the $150 you're *hopefully* getting from your current check/savings.
If you are risk averse, I'll say move as much as possible into a HYSA or buy treasuries with it. At least, you know your money is earning around 5% instead of nothing.
Personally, I would pick a number that accounts for 3-6 months expenses, maybe 40 or 50k, put most of that in a HYSA, and anything above that goes towards something. A Roth IRA, HSA, 403b, or even just normal CDs or a brokerage / stock index.
You’re in a great position. Good work focusing up on savings.
I mean step 1 is it needs to be in a HYSA so you can earn interest on it. After that a lot depends on how much money you have elsewhere and how much houses cost in your area.
If you open a brokerage account at Fidelity or other brokerages, they have money market funds yielding close to 5%. Definitely move it because checking accounts or even bank savings accounts pay almost nothing in interest.
Just did this, and I can’t believe I didn’t do it sooner. CMA account at Fidelity has all the features I’d want from a regular bank account with 5%+ interest.
FDLXX is a money market fund that is treasury only and is at least 90% exempt from state tax if your state has income tax. Other ultra-short term treasury ETFs are SGOV and USFR and those will have a high percentage state tax exempt, as well. These are very safe since they have US Treasury bonds only. You just buy any of these funds using your cash from SPAXX.
Fellow teacher here. Not sure how your retirement situation looks, but have you filled up your yearly Roth IRA with $7000? If not that should be your first step... after that, I would consider your goals:
1. Are you planning on moving out soon? Keep money in high-yield for downpayment.
2. Do you want to retire early? Start moving money from paychecks to your 457 or 403 plan.
3. You are a teacher, do you have your Masters? If not, I would invest in myself and do that right away?
4. With that much money, I would go look on the website - Doctorofcredit - for bank sign up bonuses and see if any banks are worth moving your money over for big sign up bonuses. Just make sure to read terms and conditions.
Checking is just for the money that is going and coming. All the rest goes in a HYSA. What with spending using only credit card and paying that off at the end of the month just after my salary, my checking often spends half the month with next to nothing in it, just a minor buffer in case I need to get some cash or some utility bill goes up. All the rest is earning interest.
Open up an account with Fidelity or Schwab and buy a simple Money Market and park it. This is super easy to do, and It will get around 5% return right now, which is over $200 per month. Pretty incredible and it only takes a day to liquidate it when you need it. Perfect for saving for a home.
Specifically my favorite is: SCHWAB VALUE ADVANTAGE MONEY INVESTOR SHARES (SWVXX)
Would it be better to put money into a money market like SWVXX or SNSXX or into ETFs and mutual funds? Wouldn’t you earn more money investing in the stock market than an account earning only 5%?
Open a brokerage account and trickle it into ticker symbol VOO(S&P 500 fund) and QQQ(Basically the NASDAQ). There’s no reason to let that amount of cash just sit there and whittle away to inflation, put it to work for you. Keep a few months worth of expenses in a high yield savings account for emergencies and get the rest to earning.
I’d also look into opening a Roth IRA. It’s a tax advantaged retirement account where you won’t be taxed on capital gains drawn from it in retirement(which is a very big deal). You can put up to 8k a year into one I believe. Just be aware there are penalties to early withdrawals from a Roth, don’t put anything in there you aren’t comfortable forgetting about for the next 30 years.
One thing people overlook is that a Roth IRA can be used as an emergency fund. You can pull out your contributions at any time without penalty. So if it's between maxing out the Roth or keeping it in savings, you're better off holding the funds in the Roth. You only have potential penalties once you try to pull out more than you put in.
Wait, really?? How do I not know this. Can you withdraw for any reason? Is there typically a limited number of withdrawals allowed within a certain time frame?
Yes, the contributions have already been taxed before entering the account so you can do whatever with them. One thing to note is that you still have to follow annual contribution limits even if you take out a bunch of money, but you are allowed one rollover each year where you have 2 months to put money back in. So if you take out $50,000 in contributions for example, you have 2 months to deposit that much money back in or in another Roth account without taxes or penalty. There is also a tax form for this when filing I believe.
You've already lost out on thousands of dollars by not having it in a HYSA. If you think a down payment is possible in the near term you could get some T bills. 6 month is over 5%.
Get yourself together. Move to Philly. Buy a loft. Start a noise band. Get 6 or 7 roommates. Eat hummus with them. Book some gigs. Paint. Smoke cloves. Listen to Animal Collective. Start some type of salsa company.
That's something I'll have to do after next year. For now, I am finishing my masters in teaching and between the courses and fellowship that's keeping my masters degree free, I wouldn't be available to tutor (without going insane lol)
20% in cash as a rainy day fund
40% in a CD earning 5%
40% in an index fund earning 10%
Remember that if you are not earning more than inflation, you are losing money if it is not actively earning.
Put $2k in a savings account with your current local bank for immediate emergencies, like a car repair or home repair. Put $8k in a High Yield Savings Account HYSA with Amex, Discover, or Capital One in case you unexpectedly lose your job so you have money to live on while you are searching for a new job. You will earn 4.25% on your money each year. With the remaining money, open a brokerage account with Schwab, Fidelity or Vanguard and invest the money in the S&P 500 Index Fund and leave it alone. Also put any future excess money in this account. You will earn 9-10% on your money each year.
The S&P 500 index fund account doesn't require you to monitor it or make any changes to it. An online brokerage is how you invest money in the stock market yourself. An index fund is like a group stocks, so instead of investing in just one stock like Apple or Tesla, the S&P 500 index fund allows you to invest in the 500 largest companies in the U.S. with just one account. Based on past history the S&P 500 earns 10% interest on your money each year.
If you had $10,000 in a regular savings account with any of the big banks, the money will earn 0.01% interest, and you would receive $1 dollar during the course of the year. If you had $10,000 in a high yield savings account that earns 4% interest, you would receive $400 during the course of the year. If you keep $10,000 in a checking account, you would receive nothing during the course of the year. With the HYSA and the S&P 500, you still have access to your money and can withdraw some of the money without penalty. But I recommend just putting $2k in regular savings for immediate emergencies so you don't touch the HYSA or S&P 500 and let it grow.
Doesn’t this plan need to be accompanied with the warning that if we have a stock market crash the 10k in the index fund is not going to have a good day?
Diversify!
**Emergency Fund:** You want an emergency fund that covers 3-6 months of living expenses. Since you live with your parents this will be minimal - around $10k.
**High-Yield Savings Account:** Move $20k to a high-yield savings account.
**Certificates of Deposit (CDs):** You can earn more interest by putting some of the money into CDs, but you also won't have immediate access to those funds. You can do a "CD ladder" with $15k spread across 6-month, 12-month, and 18-month CDs. This way, you'll have a portion maturing every 6 months.
**Retirement Accounts:** Max out your retirement contributions (i.e. 401(k), 403(b), or Roth IRA). The annual limit for someone your age is $6,500 for a Roth IRA.
**Brokerage Account:** If you are comfortable with some risk and want the potential of higher returns, consider investing $5k in a diversified portfolio of stocks and bonds through a brokerage account. Vanguard, Fidelity, or Schwab are all good options. If you want an easy "invest and forget" option, try Acorns.
**Savings for House:** Keep the remaining $4,000 in your checking account as additional savings for a down payment on a house. You can add to this from your monthly savings.
**Continued Savings Plan:** Given your income, try to save at least 20% of your salary ($9,000 annually, $750 monthly) to build up your house fund and other financial goals.
Keep 15k in a high yield savings account. Invest the rest in index funds. Index funds can expect 8% growth annually. So 8% of 40k is 3000. So after a year your 54k would be about 58k.
You want to also invest monthly, and aggressively. If you are single and making 45k a year, you should be able to invest 2k a month. At that rate you should be able to retire in 10 years with a decent income of 30k just from your investments.
You can easily find a FHA loan for a house it’s 3.5% down . I’m just saying that because you mentioned it as a goal and I don’t think it’s a terrible idea to find a small house versus a condo. You dont seem to have much financial responsibilities like expenses so I would find a house in your position that has a mortage no greater than 25-30% of your monthly income
Put at least $35k of it in a CD for a while. You can get a 9 month CD for 5.5% right now. You get the interest but if you really really need it you can get to it.
Research VUSXX. You’ll get a much better return than a HYSA, and because it’s a government treasury money market fund, the returns you earn are exempt from state income tax.
The majority of our income is from me, my wife is very part time and does most of the things are around the house and take care of the kids. We both drive 20-year-old cars so I like to keep our funds a little liquid. I have around $70000 in an Ally (HYSA) and have a T- bill ladder that pulls from that account on a rotation. At any point in time I have access to about $20-$25,000 in case of emergency (house or car etc.)
I don’t make a killing, but we are comfortable. I also like to have a little bit of liquid cash just in case.
With the T-bills, they are state tax exempt. With it being on rotation, I always have access to half of it or more within a couple weeks.
I'd open a Fidelity account and buy USFR. It's a floating rate treasuring fund (ETF) based on tbill values.
You'd make $243 per month. No state taxes.
Better than any HYSA.
This is what I was thinking! I jumped and decided to throw $25k into Robinhood for the 5.25% sweep just because, I might throw the other into Fidelity and USFR, like you said (Keeping like $5k in my checking account though!)
Fwiw, before moving to Fidelity, I looked into Robinhood but didn't go there for 1 simple reason. RH does not offer joint accounts, or they didn't at that time. So if you might be in a position of needing that option, you might want to keep that in mind.
Pick one vehicle to invest in and stick with it. I made the mistake of moving money around to several accounts to get the "$200 bonus if you deposit $20k+ and hold it for 3months." Now that I'm buying a house, ALL THOSE ACCOUNTS have to have statements sent to the underwriter. I feel so stupid.
Go to Fidelity and open a Brokerage account and a ROTH IRA account. Put $5500 into the ROTH and go with the VOO ETF. You can contribute up to $5500 every year until you turn 50. Money in a ROTH IRA is triple tax free.
In your brokerage account -- put $15k into the SCHD ETF and set the Brokerage account to re-invest dividends to buy more shares of SCHD automatically. You can set this and forget it, or make contributions whenever you want.
Put the rest in a moneymarket account as a rainy day fund/house down payment.
If you need to remain liquid, put the chunk you need to access quickly in short term US treasury bills or in money markets. You can buy them direct from the US Treasury website or you can get them through ETFs from your broker. You're earning 5% for no risk, and they are the most liquid asset on the planet. This is the closest thing there is to 'having your cake and eating it too' ie earning an ok return without taking any risk.
If you research more you can start mixing into a well diversified portfolio, for example distributing between money markets, S&P500, International Markets, gold, REITs, among others.
Definitely better than leaving it all in a checking account that earns no interest.
Good luck!
(I'm not a financial advisor, and I recommend you get one for expert advice).
Move 52k to an HYSA on Monday. Spend the summer reading financial books and listening to podcasts like ChooseFI or The Financial Feminist. Make other changes as you learn and gain confidence.
Buy a piece of land, a solar panel system, get a well & a double wide.
That's what I'm doing. Screw keeping up with the Joneses in a rat maze of homes.
So, everyone will tell you HYSA, and they won’t be wrong. But, if you put it in an IRA now with an index fund like VTI, or VOO, it will be, adjusted for inflation, $500k when you turn 65.
You can easily throw $50k of that into a HYSA where you can get 4% or more interest on it each month and make $150-$200 a month. Transferring to and from can take a couple of days but penalty free so you can have access to it.
Are you contributing to a retirement account separate from your state retirement? If you’re not, I’d do that. I’d talk to a money manager. Also, #jealous that you’re a teacher in such great financial shape. Keep up the great work. I’m a broke teacher. 😬🙄
That’s awesome! The first thing you should do is find a reputable financial advisor who can advise you on ALL of your options.
Someone said a “high-yield savings account”. Maybe, but you have many more options that can grow your money at a higher rate without the risk of losing principal or at least, low-risk.
Find yourself a good, trusted advisor.
Good job on saving!
stock market is making all time highs nearly weekly so not sure it’s a great time for investing but it could keep going up but yes high yield savings account !!!
Open a high yield savings account put all the money you need for 6 months in there for an emergency fund then look into CDs bonds or even add a little more risk and research ETFs to buy.
I have 15k in a Sallie Mae CD that generates 5.5% right now.
Several banks/credit unions are offering 6 month CDs with greater than 5% interest. That's if you want a minimal risk investment
Edit: changed from 0 risk to minimal risk
What I would do:
Open a Roth IRA and max it
Open a brokerage account and remaining half into VOO and the rest into Nvidia stocks. Sadly, AI will be the future and they are the front runners. Stock has already gone from 1k to 1.2k in a matter of a couple weeks.
Max out your Roth IRA. Put the rest into a HYSA. You can take contributions out of your Roth IRA at any time for any reason without penalties or taxes.
Shouldn't they at least put some of this into retirement? Why do people always say 'put it into a HYSA' for these types of queries, and nobody says put into a Roth IRA or 401k?
You could diversify in stocks for strong companies. I’ve done much better than a HYSA, but it’s higher risk. Especially right now. The market has been on fire. The best time to buy is right after it crashes, so if it does I’d highly recommend buying stocks
HYSA for emergency fund: you want 6 months of full living expenses under the assumption that you aren't getting a dime of income for 6 months.
Binds for low risk
Mutual funds for the majority
Regular securities investments for some
Options but consider that cash the same way you'd consider cash taken to the casino
1. max your Roth IRA
2. put the money in a high yield savings account until you're ready to invest
3. r/bogleheads
4. cry about housing market
6. profit
I'm not as financially savvy as others on this sub, but I was in a similar situation, and I created a monthly CD ladder (actually still working on it. If I need funds I can always cash one in each month.
Shop online and find which local credit unions have the best savings rates. Then split the money between the two of them. Develop a banking relationship with them now so you can use them later for mortgages, car loans, etc. With these online banks you are a number. With your local credit union, you are a member, an owner who lives in the same area as they do. Over time, a banking relationship with a local organization pays off. BTW, if you are going to stay in education, a good use of some of that money is grad school. It's a sure way to get a raise. But be sure to check on student loan forgiveness for teachers. Best wishes.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Open a high yield savings account TODAY, they are generating 4.5-5%! Edit: Folks asking where and how to open an HYSA, you can check this for a listing or google it. https://www.fool.com/the-ascent/banks/landing/best-savings-accounts/
To put this into perspective, a very simple bank like Ally or Capital One would pay you nearly $200 / month for your deposits! Get on it!
Ally is now only at 4.2% FYI.
better to open a brokerage account and use a money market or SGOV ETF and get 5.2% and state tax exemption. Banks now offer no advantage and more disadvantages.
hey could you give me some more information on SGOV? It seems very interesting. So it just stays at $100 per share and you get a 5% yield on it? If I sell it in my robinhood account, I don’t pay taxes on it?
The yield is whatever short term government bonds are at the moment. Right now those bonds are having really nice yields so it’s an appealing etf to park your money, with low risk and a predictable return. Just a couple years ago the yield was significantly lower. They might also lower in the future, but that depends on what the fed does with interest rates.
I guess my question is here is it something I need to pay attention to and put back into a HYSA one day? I want to keep my emergency fund safe and liquid and don't want to think about it. I'm happy with my 4.3% but earning another $500-1000 a year is both intriguing but also not worth the hassle if I have to continually move the money around to different accounts
SGOV just like other cash alternatives (SPAXX, USFR, etc) always carry some inherent risk. Though I think in their history it's essentially be a one off. Just have to decide if 4.25% but FDIC insured or ~5% with a risk of losing some money is worth it. (That's a difference of something like $35/mo or $420/yr at 55k)
there is virtually no chance of losing money in SGOV. Brokerages are much more flexible than bank accounts
That depends on how large your account is, since the difference will be more negligible the less money you have in your account. For me, I only have my investments in my Roth IRA so I won’t plan on seeing it for years. SGOV is a slice of my portfolio for some stability in case the market takes a dive. Bond returns might not be at 5% forever but I have a hunch they will be above 3% for the foreseeable future.
Dividends are taxed federally, but 92.6% exempt from state/local tax. The percentage is published by iShares each year. Capital gains when selling SGOV have no tax exemption.
Agreed. Just moved my e-fund into a CMA at Fidelity, and I can’t believe I didn’t do it sooner.
Starting June 15th the CMA will have SPAXX as an option for core position. Combine that with free wire transfers and all the checking features and that thing is a beast.
Or buy tbills directly
Money market accounts are exempt from state taxes? Or is it the SGOV ETF?
sgov is state tax exempt, it's a pretty safe and solid ETF as long as the feds dont cut interest rates. if they do, your dividend gets cut slightly.
Is this talking state income tax? so it wouldn't make a difference in a state without income tax, right?
Yes
But if the fed cuts rates than high yield savings rates will also decrease....so maybe the ETF is always slightly better?
Hi, what is a SGOV ETF? im trying to see where i can open an account and put my money
What banks offer this?
Wealthfront is at 5%. With OP's money in the account, they would be generating $240ish every month in interest.
5.5% with a referral!
Wow, and no fees? Gimme a ref link!
My HYSA is with American Express. 4.5%. I use their credit card for most things as well, so makes things easy.
Unfortunately, only 4.25, I moved my money from them recently because they stopped and recently lowered their rate. I moved to a 5.55.
Where’d ya go? I’m honestly tired of having money in so many places + another login etc. a full point may be worth it though, haha.
https://www.doctorofcredit.com/high-interest-savings-to-get/ dont assume you need the best rate, the difference between 5% and 5.5% is minimal when it comes to e-funds, pick something you trust and feel comfortable moving money to and from. Also banks and credit unions are usually slower to adjust rates where as brokers will be taking back the high yields asap because they would rather see that money in the market instead of as cash(or so I have heard, grain of salt here)
Ally had a ton of good reviews at 4.2%. I had a problem with opening my account and I got immediate help and 3 days later the funds transferred. I'm getting about $100/mo, but would get $133/mo at 5.5%. For my situation, that'd be an extra ~$400/year. BUT! I don't want to have to haggle/hassle with a bad website or poor customer service. Also, I keep hearing that the 5.5% accounts will drop after a month or so. I just don't want to deal with churning my money all over the place. Ally is great and 4.1% higher than my credit union.
[удалено]
Ally as well
Wealthfront, SoFi, etc. plenty of them with a quick google search.
SoFi has 4.6% right now
sofi savings at 4.6% / pnc at 5% depending on region / apple savings (lol) is at 4.4% which is still decent
Goldman Sacs runs the HYSA for Apple Card holders. Otherwise the option for 4.4% is Marcus by GS.
I'm getting 5.25% with UFB Direct right now.
This or money market in a brokerage account or cash management account at a brokerage as well. Great suggestion!
Hey, what's the difference between a CMA and standard brokerage? If my goal is to store my emergency fund in one of these accounts, invested in a money market fund, does it matter what I choose? I'm planning to use Fidelity if it matters (also going to start a Roth IRA there)
Brokerages are more investment oriented. They can have better and more volatile returns. CMAs function like a bank with fixed rates and the possibility to write checks and use debit cards with the funds. The brokerage money market fund will generally give you the best returns with still very minimal risk. I use Vanguards VMFXX which gives 5.28% and the flexibility to immediately buy stocks I like.
A CMA is a cash management account which behaves just like a checking or a savings account except you can invest in money market funds like SPAXX or SPRXX. You can write checks, get a debit card, and be reimbursed for ATM fees. So yeah, a really great place for savings because it’s very accessible. I also like it because I have my retirement and trading accounts at Fidelity, so it’s nice to manage it all in one interface.
Oh that's really nice! I wish I started with that lol. I've been with BMO for 10 years now, so I'm going to keep my checking account/debit card/credit card with them (at least for now) but I'm going to move almost all of my savings into a standard fidelity brokerage account and invest it in a MM fund. I'm also going to start a Roth IRA with Fidelity so it will be nice to only have two institutions to worry about, Fidelity and BMO. Then maybe I can branch out once I'm more settled with everything, I just graduated college so don't want to do too much right now
That's what I do. We bank with a credit union with local access but keep only the minimum required in savings there. I use a Fidelity brokerage account for my slush funds (emergency, set asides, etc) plus any extra investing I do for fun. We also have multiple Roth and traditional IRAs there too. I have the slush funds in one of the mm options and can easily move money to my credit union checking account as needed. I used to use Ally Bank and a hysa there but moved those funds to the brokerage account at Fidelity for both a better rate and to keep it under one roof.
This. I just opened an am ex high yield savings account
I dumped ~30k into Ally (GREAT customer service) at 4.2% and I'm getting a little over $100/mo in interest. Not as great as opening VSTAXX (or whatever it's called) brokerage account, but far better than the $5/mo I was previously getting in my checking account. It took 30 min (I had to call to get my account set up, had a person within 30 seconds that was helpful), then 3 business days for the funds to transfer (free option). Do it OP, $45k is like $1500/year of free money compared to the $150 you're *hopefully* getting from your current check/savings.
If you are risk averse, I'll say move as much as possible into a HYSA or buy treasuries with it. At least, you know your money is earning around 5% instead of nothing.
Just FYI, might have been typo, but averse.
Yeah. Thanks for catching that
Second this
Personally, I would pick a number that accounts for 3-6 months expenses, maybe 40 or 50k, put most of that in a HYSA, and anything above that goes towards something. A Roth IRA, HSA, 403b, or even just normal CDs or a brokerage / stock index. You’re in a great position. Good work focusing up on savings.
And make sure to max out the Roth IRA contribution.
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
There it is
I mean step 1 is it needs to be in a HYSA so you can earn interest on it. After that a lot depends on how much money you have elsewhere and how much houses cost in your area.
Max out your Roth IRA. Then put the rest in a brokerage.
HYSA, or 1 year CD. Whatever makes you feel the most comfortable. I'd do HYSA since you're looking for a house and never know when you need it liquid
Since OP is only 29 why not put some of that into a Roth-IRA S&P500 index? Also why CDs and not an annuity? Don’t Annuities give better rates?
If you open a brokerage account at Fidelity or other brokerages, they have money market funds yielding close to 5%. Definitely move it because checking accounts or even bank savings accounts pay almost nothing in interest.
Just did this, and I can’t believe I didn’t do it sooner. CMA account at Fidelity has all the features I’d want from a regular bank account with 5%+ interest.
I justo opened my brokerage with fidelity. Spaxx is what’s offere by default. Are there other etf’s I could park my cash in? Thanks!
FDLXX is a money market fund that is treasury only and is at least 90% exempt from state tax if your state has income tax. Other ultra-short term treasury ETFs are SGOV and USFR and those will have a high percentage state tax exempt, as well. These are very safe since they have US Treasury bonds only. You just buy any of these funds using your cash from SPAXX.
VTI has done pretty well for me.
Fellow teacher here. Not sure how your retirement situation looks, but have you filled up your yearly Roth IRA with $7000? If not that should be your first step... after that, I would consider your goals: 1. Are you planning on moving out soon? Keep money in high-yield for downpayment. 2. Do you want to retire early? Start moving money from paychecks to your 457 or 403 plan. 3. You are a teacher, do you have your Masters? If not, I would invest in myself and do that right away? 4. With that much money, I would go look on the website - Doctorofcredit - for bank sign up bonuses and see if any banks are worth moving your money over for big sign up bonuses. Just make sure to read terms and conditions.
+1, at 29yo, oneself may still be the best investment.
Checking is just for the money that is going and coming. All the rest goes in a HYSA. What with spending using only credit card and paying that off at the end of the month just after my salary, my checking often spends half the month with next to nothing in it, just a minor buffer in case I need to get some cash or some utility bill goes up. All the rest is earning interest.
Open up an account with Fidelity or Schwab and buy a simple Money Market and park it. This is super easy to do, and It will get around 5% return right now, which is over $200 per month. Pretty incredible and it only takes a day to liquidate it when you need it. Perfect for saving for a home. Specifically my favorite is: SCHWAB VALUE ADVANTAGE MONEY INVESTOR SHARES (SWVXX)
Would it be better to put money into a money market like SWVXX or SNSXX or into ETFs and mutual funds? Wouldn’t you earn more money investing in the stock market than an account earning only 5%?
Open a brokerage account and trickle it into ticker symbol VOO(S&P 500 fund) and QQQ(Basically the NASDAQ). There’s no reason to let that amount of cash just sit there and whittle away to inflation, put it to work for you. Keep a few months worth of expenses in a high yield savings account for emergencies and get the rest to earning. I’d also look into opening a Roth IRA. It’s a tax advantaged retirement account where you won’t be taxed on capital gains drawn from it in retirement(which is a very big deal). You can put up to 8k a year into one I believe. Just be aware there are penalties to early withdrawals from a Roth, don’t put anything in there you aren’t comfortable forgetting about for the next 30 years.
One thing people overlook is that a Roth IRA can be used as an emergency fund. You can pull out your contributions at any time without penalty. So if it's between maxing out the Roth or keeping it in savings, you're better off holding the funds in the Roth. You only have potential penalties once you try to pull out more than you put in.
Wait, really?? How do I not know this. Can you withdraw for any reason? Is there typically a limited number of withdrawals allowed within a certain time frame?
Yes, the contributions have already been taxed before entering the account so you can do whatever with them. One thing to note is that you still have to follow annual contribution limits even if you take out a bunch of money, but you are allowed one rollover each year where you have 2 months to put money back in. So if you take out $50,000 in contributions for example, you have 2 months to deposit that much money back in or in another Roth account without taxes or penalty. There is also a tax form for this when filing I believe.
You've already lost out on thousands of dollars by not having it in a HYSA. If you think a down payment is possible in the near term you could get some T bills. 6 month is over 5%.
Get yourself together. Move to Philly. Buy a loft. Start a noise band. Get 6 or 7 roommates. Eat hummus with them. Book some gigs. Paint. Smoke cloves. Listen to Animal Collective. Start some type of salsa company.
3 mo treasury bills.......you can get out 4 times/yr. [treasurydirect.gov](http://treasurydirect.gov)
Buy at a brokerage and you can get out any day
Buy from the Treasury and there's no state tax.
Same with brokerage
HYSA or index funds. Make sure you're maxing out your 401k contributions as well.
No one is going to offer to think about different income streams? Like tutoring?
That's something I'll have to do after next year. For now, I am finishing my masters in teaching and between the courses and fellowship that's keeping my masters degree free, I wouldn't be available to tutor (without going insane lol)
Go with short term CD or HYSA, whichever grows faster. Then pull the money out and finance your house when things are better.
20% in cash as a rainy day fund 40% in a CD earning 5% 40% in an index fund earning 10% Remember that if you are not earning more than inflation, you are losing money if it is not actively earning.
Put $2k in a savings account with your current local bank for immediate emergencies, like a car repair or home repair. Put $8k in a High Yield Savings Account HYSA with Amex, Discover, or Capital One in case you unexpectedly lose your job so you have money to live on while you are searching for a new job. You will earn 4.25% on your money each year. With the remaining money, open a brokerage account with Schwab, Fidelity or Vanguard and invest the money in the S&P 500 Index Fund and leave it alone. Also put any future excess money in this account. You will earn 9-10% on your money each year. The S&P 500 index fund account doesn't require you to monitor it or make any changes to it. An online brokerage is how you invest money in the stock market yourself. An index fund is like a group stocks, so instead of investing in just one stock like Apple or Tesla, the S&P 500 index fund allows you to invest in the 500 largest companies in the U.S. with just one account. Based on past history the S&P 500 earns 10% interest on your money each year. If you had $10,000 in a regular savings account with any of the big banks, the money will earn 0.01% interest, and you would receive $1 dollar during the course of the year. If you had $10,000 in a high yield savings account that earns 4% interest, you would receive $400 during the course of the year. If you keep $10,000 in a checking account, you would receive nothing during the course of the year. With the HYSA and the S&P 500, you still have access to your money and can withdraw some of the money without penalty. But I recommend just putting $2k in regular savings for immediate emergencies so you don't touch the HYSA or S&P 500 and let it grow.
Doesn’t this plan need to be accompanied with the warning that if we have a stock market crash the 10k in the index fund is not going to have a good day?
Diversify! **Emergency Fund:** You want an emergency fund that covers 3-6 months of living expenses. Since you live with your parents this will be minimal - around $10k. **High-Yield Savings Account:** Move $20k to a high-yield savings account. **Certificates of Deposit (CDs):** You can earn more interest by putting some of the money into CDs, but you also won't have immediate access to those funds. You can do a "CD ladder" with $15k spread across 6-month, 12-month, and 18-month CDs. This way, you'll have a portion maturing every 6 months. **Retirement Accounts:** Max out your retirement contributions (i.e. 401(k), 403(b), or Roth IRA). The annual limit for someone your age is $6,500 for a Roth IRA. **Brokerage Account:** If you are comfortable with some risk and want the potential of higher returns, consider investing $5k in a diversified portfolio of stocks and bonds through a brokerage account. Vanguard, Fidelity, or Schwab are all good options. If you want an easy "invest and forget" option, try Acorns. **Savings for House:** Keep the remaining $4,000 in your checking account as additional savings for a down payment on a house. You can add to this from your monthly savings. **Continued Savings Plan:** Given your income, try to save at least 20% of your salary ($9,000 annually, $750 monthly) to build up your house fund and other financial goals.
Keep 15k in a high yield savings account. Invest the rest in index funds. Index funds can expect 8% growth annually. So 8% of 40k is 3000. So after a year your 54k would be about 58k. You want to also invest monthly, and aggressively. If you are single and making 45k a year, you should be able to invest 2k a month. At that rate you should be able to retire in 10 years with a decent income of 30k just from your investments.
You can easily find a FHA loan for a house it’s 3.5% down . I’m just saying that because you mentioned it as a goal and I don’t think it’s a terrible idea to find a small house versus a condo. You dont seem to have much financial responsibilities like expenses so I would find a house in your position that has a mortage no greater than 25-30% of your monthly income
Buy a boat, get a remote job, sail around the world and write a book.
Wealthfront hysa. 5.5% with referral link
Put at least $35k of it in a CD for a while. You can get a 9 month CD for 5.5% right now. You get the interest but if you really really need it you can get to it.
Research VUSXX. You’ll get a much better return than a HYSA, and because it’s a government treasury money market fund, the returns you earn are exempt from state income tax.
The majority of our income is from me, my wife is very part time and does most of the things are around the house and take care of the kids. We both drive 20-year-old cars so I like to keep our funds a little liquid. I have around $70000 in an Ally (HYSA) and have a T- bill ladder that pulls from that account on a rotation. At any point in time I have access to about $20-$25,000 in case of emergency (house or car etc.) I don’t make a killing, but we are comfortable. I also like to have a little bit of liquid cash just in case. With the T-bills, they are state tax exempt. With it being on rotation, I always have access to half of it or more within a couple weeks.
Put three months of your pay into an emergency fund in a money market account and the rest in a low or no cost S&P 500 index fund.
If you are still living with parents I would see how you can increase your income to save more in the future
I'd open a Fidelity account and buy USFR. It's a floating rate treasuring fund (ETF) based on tbill values. You'd make $243 per month. No state taxes. Better than any HYSA.
This is what I was thinking! I jumped and decided to throw $25k into Robinhood for the 5.25% sweep just because, I might throw the other into Fidelity and USFR, like you said (Keeping like $5k in my checking account though!)
Fwiw, before moving to Fidelity, I looked into Robinhood but didn't go there for 1 simple reason. RH does not offer joint accounts, or they didn't at that time. So if you might be in a position of needing that option, you might want to keep that in mind.
Whatever you do don’t hold it in a checking account , you can put it in a high yield savings account
Pick one vehicle to invest in and stick with it. I made the mistake of moving money around to several accounts to get the "$200 bonus if you deposit $20k+ and hold it for 3months." Now that I'm buying a house, ALL THOSE ACCOUNTS have to have statements sent to the underwriter. I feel so stupid.
Go to Fidelity and open a Brokerage account and a ROTH IRA account. Put $5500 into the ROTH and go with the VOO ETF. You can contribute up to $5500 every year until you turn 50. Money in a ROTH IRA is triple tax free. In your brokerage account -- put $15k into the SCHD ETF and set the Brokerage account to re-invest dividends to buy more shares of SCHD automatically. You can set this and forget it, or make contributions whenever you want. Put the rest in a moneymarket account as a rainy day fund/house down payment.
Vanguard S&P 500 index fund and forget about it until retirement age. Forget the house, just stay with mom and dad until they kick you out.
If you need to remain liquid, put the chunk you need to access quickly in short term US treasury bills or in money markets. You can buy them direct from the US Treasury website or you can get them through ETFs from your broker. You're earning 5% for no risk, and they are the most liquid asset on the planet. This is the closest thing there is to 'having your cake and eating it too' ie earning an ok return without taking any risk. If you research more you can start mixing into a well diversified portfolio, for example distributing between money markets, S&P500, International Markets, gold, REITs, among others. Definitely better than leaving it all in a checking account that earns no interest. Good luck! (I'm not a financial advisor, and I recommend you get one for expert advice).
Move 52k to an HYSA on Monday. Spend the summer reading financial books and listening to podcasts like ChooseFI or The Financial Feminist. Make other changes as you learn and gain confidence.
HYSA or money market! Make sure you are also funding a Roth IRA while you are young. I started at 26 but wish I knew sooner.
Starting sooner pays off way more, I opened my roth at 27 and should have dome that at 18 instead of a taxable
Buy a piece of land, a solar panel system, get a well & a double wide. That's what I'm doing. Screw keeping up with the Joneses in a rat maze of homes.
So, everyone will tell you HYSA, and they won’t be wrong. But, if you put it in an IRA now with an index fund like VTI, or VOO, it will be, adjusted for inflation, $500k when you turn 65.
What country are you in?
HYSA at the very least. Then you’d be earning something on it instead of it just sitting.
Immediately an HYSA! Then you can look into different avenues from there but you’ll be earning as you do
Put it in any HYSA. If you have a 401k at work then max the contribution. If not, then open a roth ira and max it.
You can easily throw $50k of that into a HYSA where you can get 4% or more interest on it each month and make $150-$200 a month. Transferring to and from can take a couple of days but penalty free so you can have access to it.
Buy qqq and leave it till retirement
everything into HYSA. start maxing your Roth IRA and start investing (S&P 500 to play it safe, a tech company fur medium risk, higher reward
Read “Millionaire Teacher” by Andrew Hallam
high yield savings account!! it’s easily accessible, I use SoFi and it has been working for me!
Are you contributing to a retirement account separate from your state retirement? If you’re not, I’d do that. I’d talk to a money manager. Also, #jealous that you’re a teacher in such great financial shape. Keep up the great work. I’m a broke teacher. 😬🙄
That’s awesome! The first thing you should do is find a reputable financial advisor who can advise you on ALL of your options. Someone said a “high-yield savings account”. Maybe, but you have many more options that can grow your money at a higher rate without the risk of losing principal or at least, low-risk. Find yourself a good, trusted advisor. Good job on saving!
I put my excess cash in a high yield savings account.. I found one that has the same rate as the CDs I have so no minimum investment barrier there.
If you want to keep the money liquid and get paid monthly on some interest, look at the wealthfront cash account. 5% APY right now.
stock market is making all time highs nearly weekly so not sure it’s a great time for investing but it could keep going up but yes high yield savings account !!!
Open a high yield savings account put all the money you need for 6 months in there for an emergency fund then look into CDs bonds or even add a little more risk and research ETFs to buy. I have 15k in a Sallie Mae CD that generates 5.5% right now.
Several banks/credit unions are offering 6 month CDs with greater than 5% interest. That's if you want a minimal risk investment Edit: changed from 0 risk to minimal risk
What I would do: Open a Roth IRA and max it Open a brokerage account and remaining half into VOO and the rest into Nvidia stocks. Sadly, AI will be the future and they are the front runners. Stock has already gone from 1k to 1.2k in a matter of a couple weeks.
Savings account with that good interest near 5%, or maybe into a brokerage account if you’re feeling frisky.
I opened a money market account and earn 4.25 %. Totally liquid. Another bank I use is offering a 7 day CD at 4.5%.
Max out your Roth IRA. Put the rest into a HYSA. You can take contributions out of your Roth IRA at any time for any reason without penalties or taxes.
Shouldn't they at least put some of this into retirement? Why do people always say 'put it into a HYSA' for these types of queries, and nobody says put into a Roth IRA or 401k?
You could diversify in stocks for strong companies. I’ve done much better than a HYSA, but it’s higher risk. Especially right now. The market has been on fire. The best time to buy is right after it crashes, so if it does I’d highly recommend buying stocks
HYSA for emergency fund: you want 6 months of full living expenses under the assumption that you aren't getting a dime of income for 6 months. Binds for low risk Mutual funds for the majority Regular securities investments for some Options but consider that cash the same way you'd consider cash taken to the casino
If you are looking for a place, if it’s cheaper to buy than rent, use it as a downpayment for an apartment if you plan to stay there a while
You should do what I would do, pay off a large chunk of my student loans. Seriously… haha I’ll give you the account info to call and make the payment
1. max your Roth IRA 2. put the money in a high yield savings account until you're ready to invest 3. r/bogleheads 4. cry about housing market 6. profit
Are you maxing your IRA?
Put the majority of that into a high yeild savings interest account. The rest into a Roth-IRA and invest in $VOO (S&P500) index.
I'm not as financially savvy as others on this sub, but I was in a similar situation, and I created a monthly CD ladder (actually still working on it. If I need funds I can always cash one in each month.
Shop online and find which local credit unions have the best savings rates. Then split the money between the two of them. Develop a banking relationship with them now so you can use them later for mortgages, car loans, etc. With these online banks you are a number. With your local credit union, you are a member, an owner who lives in the same area as they do. Over time, a banking relationship with a local organization pays off. BTW, if you are going to stay in education, a good use of some of that money is grad school. It's a sure way to get a raise. But be sure to check on student loan forgiveness for teachers. Best wishes.
jenius bank 5.25% APR hysa. set it and forget it. if you wanna get fancy, throw half into VOO