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Not missing. “ The cash portion should be kept in a money market fund investing only in short-term U.S. Treasury securities, so that you don’t have to evaluate
by dalyons 3y ago
Not missing.
“ The cash portion should be kept in a money market fund investing only in short-term U.S. Treasury securities, so that you don’t have to evaluate credit risk. These securities are safer than bank accounts”
- dehrmann 3y agoThe funny lesson I got from SVB was why bother putting cash in a bank when they're just going to put it in treasuries, MBSes, etc. It's not exactly insured, but a short-term government money market fund seems safer, or a state muni fund if you're worried about the federal government defaulting.
- ghaff 3y ago>why bother putting cash in a bank In general, banks are set up to deliver consumer services that brokerages are not. However, in these days where treasury funds have ~5% interest rates, it makes sense to keep checking account balances at a level that they have a comfortable buffer for your preferences but no higher. I see my brokerage makes the case for maybe not needing a separate bank. Which may be true at this point. On the other hand having one doesn't really cost me much and would probably be a bit of a pain to change.