4 ms·

While saving 6 months might be possible, I would love for you to point me to a high-yield savings account.

albatross13 4y ago
$GME
anonAndOn 4y ago
You can only deposit 10k/yr but how does 9.62% sound?[0] [0]https://treasurydirect.gov/indiv/products/prod_ibonds_glance.htm https://treasurydirect.gov/indiv/products/prod_ibonds_glance...
- rcstank 4y ago
  To add to this for next year, you can also purchase $5k more with a tax refund, for a total of $15k per year. A basic strategy is to plan ahead and over pay with your final paycheck of the tax year by updating your W-4 to withhold more to enable a tax refund if you weren't already expecting one.
  - frumper 4y ago
    To add for those that are married and/or have kids then everyone in the family can buy 10k, a trust can buy another 10k, and if you have a small business that can buy 10k.
- SilasX 4y ago
  That's not emergency fund material since there are big penalties for early (pre-12 months) withdrawal.
  - anonAndOn 4y ago
    If you buy 10x $1000 (or 20x $500) bonds and cash out less than the full amount over the course of a year, you'll still come out ahead of whatever interest $BANK was going to pay you for the same funds in your savings account.
  - frumper 4y ago
    It's not a good emergency fund at first, but if you roll a few years into bonds then it can act as your fund after a few years.
    - hirvi74 4y ago
      The part of this that escapes me is that after a certain point one would more than likely have been, by historical accounts, better off the invest in equites. Then again, I am more of a proponent for emergency plans instead of just emergency funds. However, if one wants to hold a portion of bonds and a sub-portion of said bonds happen to be I-Bonds, then I see no issues with that.
      - frumper 4y ago
        I’d agree that long term you’d be better off with more typical investment strategies. I-bonds are good right now, but as the bulk of any young persons investment it wouldn’t make sense. Savings rates have been low for some time now so I-bonds can serve a role for emergency funds if you can get them to older than 12 months safely.
deleted 4y ago
[deleted]
nawgz 4y ago
Literal titular HYSAs go for 1% right now, which is up quite a bit! Maybe T-bonds are better, but I'm clueless. Nonetheless, the point is more that: you need risk-free cash to live sometimes, keeping 6 months of your current costs in a low-risk account is pretty base levels of financial literacy
CameronNemo 4y ago
HYSA is a term typically used to describe savings accounts where the interest rate tracks the federal interest rates and is competitive with other "HYSAs". Right now 1% is the norm, and you can get that from several credit unions and banks. Some banks, however, use their name recognition to attract customers and offer lower yields. For example, a Wells Fargo savings account will not yield 1% at the moment.
- hirvi74 4y ago
  The 'H' should be changed to "Higher" instead of "High" since I believe 1% is far from what anyone would consider to be a high return.
- UncleEntity 4y ago
  Any savings account which pays less than inflation is just paying the bank to hold your cash for you. Which is the point, saving money is bad for the economy because reasons so it must be penalized.
throwaway5959 4y ago
Ally/Marcus has 1% savings account with basically no risk. These accounts aren’t meant to grow, they’re meant to be risk free hence a relatively low rate compared to equities.

$GME

You can only deposit 10k/yr but how does 9.62% sound?[0] [0]https://treasurydirect.gov/indiv/products/prod_ibonds_glance.htm https://treasurydirect.gov/indiv/products/prod_ibonds_glance...

rcstank 4y ago
To add to this for next year, you can also purchase $5k more with a tax refund, for a total of $15k per year. A basic strategy is to plan ahead and over pay with your final paycheck of the tax year by updating your W-4 to withhold more to enable a tax refund if you weren't already expecting one.
- frumper 4y ago
  To add for those that are married and/or have kids then everyone in the family can buy 10k, a trust can buy another 10k, and if you have a small business that can buy 10k.
SilasX 4y ago
That's not emergency fund material since there are big penalties for early (pre-12 months) withdrawal.
- anonAndOn 4y ago
  If you buy 10x $1000 (or 20x $500) bonds and cash out less than the full amount over the course of a year, you'll still come out ahead of whatever interest $BANK was going to pay you for the same funds in your savings account.
- frumper 4y ago
  It's not a good emergency fund at first, but if you roll a few years into bonds then it can act as your fund after a few years.
  - hirvi74 4y ago
    The part of this that escapes me is that after a certain point one would more than likely have been, by historical accounts, better off the invest in equites. Then again, I am more of a proponent for emergency plans instead of just emergency funds. However, if one wants to hold a portion of bonds and a sub-portion of said bonds happen to be I-Bonds, then I see no issues with that.
    - frumper 4y ago
      I’d agree that long term you’d be better off with more typical investment strategies. I-bonds are good right now, but as the bulk of any young persons investment it wouldn’t make sense. Savings rates have been low for some time now so I-bonds can serve a role for emergency funds if you can get them to older than 12 months safely.

deleted 4y ago

[deleted]

nawgz 4y ago

Literal titular HYSAs go for 1% right now, which is up quite a bit! Maybe T-bonds are better, but I'm clueless. Nonetheless, the point is more that: you need risk-free cash to live sometimes, keeping 6 months of your current costs in a low-risk account is pretty base levels of financial literacy

CameronNemo 4y ago

HYSA is a term typically used to describe savings accounts where the interest rate tracks the federal interest rates and is competitive with other "HYSAs". Right now 1% is the norm, and you can get that from several credit unions and banks. Some banks, however, use their name recognition to attract customers and offer lower yields. For example, a Wells Fargo savings account will not yield 1% at the moment.

hirvi74 4y ago
The 'H' should be changed to "Higher" instead of "High" since I believe 1% is far from what anyone would consider to be a high return.
UncleEntity 4y ago
Any savings account which pays less than inflation is just paying the bank to hold your cash for you. Which is the point, saving money is bad for the economy because reasons so it must be penalized.

throwaway5959 4y ago

Ally/Marcus has 1% savings account with basically no risk. These accounts aren’t meant to grow, they’re meant to be risk free hence a relatively low rate compared to equities.