4 ms·

Already done. 4.9% is lovely right now. https://www.cit.com/cit-bank/bank/cds/no-penalty-cd https://www.cit.com/cit-bank/bank/cds/no-penalty-cd

ghaff 4y ago
There's this somewhat odd bifurcation right now between: - Basically zero interest rate accounts which are presumably counting on a combination of small accounts and lazy money not bothering to chase market-level interest rates and - Banks/brokerages actively chasing people willing to park a lot of money in cash at current low-risk interest rates 4-5% may not beat inflation but it looks pretty good in a very uncertain economic environment.
- dragontamer 4y ago
  CPI's latest number is 4.9% YoY and 0.4% MoM. So the VMFXX's 5.01% rate is beating the latest estimates on inflation.
  - ghaff 4y ago
    In any case, you're at least very close to treading water. (And what your personal inflation rate is will vary.) Which looks pretty good compared to a lot of riskier investments right now.
    - latchkey 4y ago
      DeFi enables far higher rates, but much risker.
      - ghaff 4y ago
        Lots of things offer the promise of higher rates but are much riskier.
      - deleted 4y ago
        [deleted]
    - bagacrap 4y ago
      I mean a MMF is not really an investment. It's a place to park your cash when you don't want to invest. Obviously other investments are riskier in the short term, but there's less risk long term in that you aren't guaranteed to lose purchasing power as you are with a MMF.
      - ghaff 4y ago
        Depending on circumstances, it would seem like "I want maintain my pile of cash at roughly its current purchasing power value" is as valid as "I want to bet on making it bigger--based on long-term trends for certain investment classes" (or some combination thereof) as investment strategies.
        bagacrap 4y ago
        Except an MMF is literally not an investment. It's a form of savings. There's nothing invalid about saving. However whether you want to invest or save has very little to do with "circumstances" and everything to do with personal inclinations and needs.
        ghaff 4y ago
        I must have missed the day in finance class when they covered the magic return/risk point where it went from being an investment to being just savings.
        bagacrap 4y ago
        Well, for starters, zero seems like an important point, as in if it's risk free then it's qualitatively different from something that has risk. Even govt bonds have risk because although they have a predefined payout, their market price can fluctuate, sometimes a lot. But MMFs --- negligible risk.
        dragontamer 4y ago
        The debate IIRC is somewhere between 3 month bill and and 1 year notes. MMFs that are majorly composed of overnight 1-day loans is so cash-money that when people say 'money' in finance, they usually mean MMFs. ------ Legally speaking, 3 month bills / loans to the government are considered so reliable, that they are considered money-within-a-week in various regulations. Like Savings accounts or Money Market accounts. IE: so many 3 month bills are being traded around, that it acts pretty damn like cash in practice, like real banking regulations. ------- Yes, there is a sliding scale of money/cash into 30 year loans. But financers call even 1 month stuffs basically money, pretty often. A MMF with overnight loans is absolutely more cash-like than anything else.
dragontamer 4y ago
Pretty good, though locking it up in a CD could be a good or bad thing given the circumstances. I'm talking: https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx https://investor.vanguard.com/investment-products/mutual-fun... Which is 60%+ Fed Repos and the rest is US Treasuries of ~14 days of maturity or so on the average.
- anonymousiam 4y ago
  Expect those Treasuries to crash within a month if the US defaults on debt.
  - xnx 4y ago
    I thought risky investments paid out higher interest.
    - latchkey 4y ago
      Took me a few times reading this before I "got it". Excellent hilarious comment!
  - latchkey 4y ago
    I've been paying attention over the last few years. These sorts of headline news things about ceilings have historically ended up magically being resolved before shit hits the fan. It sounds awful in the news and they make a big deal about it, but I think it is more for politics than it is an actual problem. I'd be super surprised that they don't work something out.
- latchkey 4y ago
  "No Penalty CD". It is a 7 day lock up. I've already 'upgraded' it from 4.85... which was a simple process of opening a new account and transferring it from the old account (all online on their website). Funny enough, this bank is linked from the Ally website as their 'competitor' rates... https://www.ally.com/bank/no-penalty-cd/ https://www.ally.com/bank/no-penalty-cd/

ghaff 4y ago

There's this somewhat odd bifurcation right now between: - Basically zero interest rate accounts which are presumably counting on a combination of small accounts and lazy money not bothering to chase market-level interest rates and - Banks/brokerages actively chasing people willing to park a lot of money in cash at current low-risk interest rates 4-5% may not beat inflation but it looks pretty good in a very uncertain economic environment.

dragontamer 4y ago
CPI's latest number is 4.9% YoY and 0.4% MoM. So the VMFXX's 5.01% rate is beating the latest estimates on inflation.
- ghaff 4y ago
  In any case, you're at least very close to treading water. (And what your personal inflation rate is will vary.) Which looks pretty good compared to a lot of riskier investments right now.
  - latchkey 4y ago
    DeFi enables far higher rates, but much risker.
    - ghaff 4y ago
      Lots of things offer the promise of higher rates but are much riskier.
    - deleted 4y ago
      [deleted]
  - bagacrap 4y ago
    I mean a MMF is not really an investment. It's a place to park your cash when you don't want to invest. Obviously other investments are riskier in the short term, but there's less risk long term in that you aren't guaranteed to lose purchasing power as you are with a MMF.
    - ghaff 4y ago
      Depending on circumstances, it would seem like "I want maintain my pile of cash at roughly its current purchasing power value" is as valid as "I want to bet on making it bigger--based on long-term trends for certain investment classes" (or some combination thereof) as investment strategies.
      - bagacrap 4y ago
        Except an MMF is literally not an investment. It's a form of savings. There's nothing invalid about saving. However whether you want to invest or save has very little to do with "circumstances" and everything to do with personal inclinations and needs.
        ghaff 4y ago
        I must have missed the day in finance class when they covered the magic return/risk point where it went from being an investment to being just savings.
        bagacrap 4y ago
        Well, for starters, zero seems like an important point, as in if it's risk free then it's qualitatively different from something that has risk. Even govt bonds have risk because although they have a predefined payout, their market price can fluctuate, sometimes a lot. But MMFs --- negligible risk.
        dragontamer 4y ago
        The debate IIRC is somewhere between 3 month bill and and 1 year notes. MMFs that are majorly composed of overnight 1-day loans is so cash-money that when people say 'money' in finance, they usually mean MMFs. ------ Legally speaking, 3 month bills / loans to the government are considered so reliable, that they are considered money-within-a-week in various regulations. Like Savings accounts or Money Market accounts. IE: so many 3 month bills are being traded around, that it acts pretty damn like cash in practice, like real banking regulations. ------- Yes, there is a sliding scale of money/cash into 30 year loans. But financers call even 1 month stuffs basically money, pretty often. A MMF with overnight loans is absolutely more cash-like than anything else.

dragontamer 4y ago

Pretty good, though locking it up in a CD could be a good or bad thing given the circumstances. I'm talking: https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx https://investor.vanguard.com/investment-products/mutual-fun... Which is 60%+ Fed Repos and the rest is US Treasuries of ~14 days of maturity or so on the average.

anonymousiam 4y ago
Expect those Treasuries to crash within a month if the US defaults on debt.
- xnx 4y ago
  I thought risky investments paid out higher interest.
  - latchkey 4y ago
    Took me a few times reading this before I "got it". Excellent hilarious comment!
- latchkey 4y ago
  I've been paying attention over the last few years. These sorts of headline news things about ceilings have historically ended up magically being resolved before shit hits the fan. It sounds awful in the news and they make a big deal about it, but I think it is more for politics than it is an actual problem. I'd be super surprised that they don't work something out.
latchkey 4y ago
"No Penalty CD". It is a 7 day lock up. I've already 'upgraded' it from 4.85... which was a simple process of opening a new account and transferring it from the old account (all online on their website). Funny enough, this bank is linked from the Ally website as their 'competitor' rates... https://www.ally.com/bank/no-penalty-cd/ https://www.ally.com/bank/no-penalty-cd/