Between tax returns and stimulus payments, my passbook savings account has crossed the 5 figure threshold.

Needless to say, interest on passbook savings is an insult. I'd like to move that money into something that pays decent interest but is still available on short notice for emergencies.

I don't know diddly about finances, never having had much in the way of spare cash before.

Suggestions?

I've used money market accounts in the past but right now interest rates suck there as well.

It seems as though keeping a liquid account comes with the penalty of not getting anything for it.

I have some money in a money market Accelerated Savings Account. It started at 2.5% and every time the FED lowered interest rates it went down. It is now at .05% and from what I see that's pretty standard.
Until the FED quits giving away free money to the banks they have no need to pay interest on your money.

See recent threads on Roth IRA's, let me find a ink

You can still put in $7k for 2020 until Apr 15th and another $7k for 2021

https://sigforum.com/eve/forums...0601935/m/4140034084

Yep. Interest rates are currently at historic lows. So you won't be able to find any kind of money market or savings account that will appreciably grow it, or even keep up with inflation.

Even the very highest yield savings or money market accounts are offering a few tenths of a percent currently. Most are a few hundredths of a percent.

Investing is the only way to get a decent return right now. And that comes with some risk.

quote:

Originally posted by RogueJSK:
Yep. Interest rates are currently at historic lows. So you won't be able to find any kind of money market or savings account that will appreciably grow it, or even keep up with inflation.

Even the very highest yield savings or money market accounts are offering a few tenths of a percent currently. Most are a few hundredths of a percent.

Investing is the only way to get a decent return right now. And that comes with some risk.

agree with this

nothing wrong with having a stout savings account these days

but the 'top' accounts are only returning around .5% interest currently. (half of one percent)

to get more potential return you'd have to risk principal (which you already are as Rogue mentions losing to inflation ...)

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My emergency fund, which is 5 figures, sits in a money market account. I need liquid money for emergencies, its not an investment. I have it at CIT bank which is sitting at around half a percent interest. They were just over 2% when I opened it a year ago.

I use a lock box. They don't know you have it then. Only slightly less interest.

Well, shit.

The Good News is, I don't have to mess with it.

I really, REALLY hate the bank having the use of my money for nothing. I kinda lean toward the idea of a cash box in my safe just out of spite.

Buy that Kubota excavator! you can earn good money with it by doing work local to you.

Second thing you could do is invest some in local RE. If you buy the right piece for the right price it will make you a good profit over time.

You can make money with your money. It just takes a bit of ingenuity right know.


Diversify

Buy the excavator
Buy a plot of land
Invest $28k in your roth Ira's.

Wala!

Edit: Sorry i was thinking six figures

We have a realtor coming today to see what she thinks we could sell this place for.

If the numbers work, we'll revive the plan from a couple of years back to put up a new modular on our daughter's land near town.

Kind of a left-handed way to "invest" in real estate by taking our equity out of this place and turning it into a new house and shop/garage.

I'm a bit ambivalent about the whole process. A new house and heated shop would be great. The hassle of selling/building/moving not so much.

Has anyone considered an Ultra short bond fund? Looks like some are returning 1.5 - 2.0%, without much risk to principle. I wouldn't say NO risk, but these seldom lose principle, and when they do, the amount is small.

Amex has a savings account which pays a whopping 0.4% same as Capital One..

Interest is bad everywhere now on anything safe and liquid.
I'd go for convenience and it sounds like you're already there.

I’ve maxed out the Roth IRAs for my wife and I.

Now moving the “excess” savings to a Fidelity trade account. Nothing crazy, the same somewhat conservative mutual funds that are in the Roth accounts. I am working on a a 5+ year plan, hoping for 8-9%, anything more is gravy.

Still have 6mo expenses “emergency fund” in savings.

Worst case scenario, most the money I have with Fidelity would be available in a few days if needed.

Yep. Stock or mutual fund investments in a brokerage account are relatively liquid, if needed. Not same-day like a bank or ATM withdrawal, but just a few days to sell, transfer, and post to bank account.

Doing so can cause tax implications, though.

And there are sometimes catches to when you can liquidate certain investments. For example, if trading is temporarily halted on a certain stock, or if a mutual fund imposes a gate on redemptions for a period.

Ya know, since we are mentioning IRA contributions and I'm feeling lazy, can I use appreciated stock to fund an IRA, or do I have to sell the stock and use cash to fund the IRA?

You can't move stocks directly into an IRA. You'd have to move money into the IRA, and then purchase stocks within the IRA.

And you'd have to have at least that amount in "earned income" that year to contribute to the IRA. You can't directly contribute the money from the sale of a stock to an IRA, since stock gains aren't "earned income". You'd need an income source outside of stock sales to fund your IRA.

But as long as you can prove to the IRS that you earned at least $6k/$7k per year from a job, you can fully fund your IRA. You're effectively putting in that $6k/$7k of "earned income" from your job into your IRA, and then refilling your bank account with the $6k/$7k in stock revenue.

Paul like many have said the interest rates on saving accounts are practically nil.

If you have access to a credit Union like Penfed they are paying .5% which isn’t much but is safe and easily accessible.

https://www.penfed.org/account...emium-online-savings

Sooner or later, interest rates are going up.