What would solve my problem and add convenience is keeping extra cash in a Merrill CMA that uses a sweep account with a return comparable to the upper-end savings/MMA APYs.
Merrill is key for the convenience part since our main household checking account is with Bank of America, so that’s the account that sees most of the transfer action in/out.
I’ve seen a similar tactic at Fidelity discussed elsewhere (possibly even in this thread ), but haven’t made an honest effort at trying something similar at Merrill.
Fidelity SPAXX is not and tracks with the market. would be easy to sell into and out of.
1 month bonds currently trading around 4.5 or greater. 3 months even higher.
you can’t possibly need more than 1 month liquidity.
i haven’t seen anything shorter than 6 months in the 5’s. any examples?
again, in this market, this is the complete opposite of what is actually happening. rates are not falling and short term bonds are an incredibly attractive proposition.
i’m pretty sure merrill lets you buy either vanguard or fidelity shares like SPAXX and I know merrill lets you buy treasury securities.
When interest rates were close to zero there was only one direction for bond prices. I had not touched bonds for 2 years but recently started allocating a small fraction in my 401K. Otherwise I keep most of my liquid savings in short term treasuries.
Different people have different needs. This isn’t an emergency fund, this is in part just for bumping through life.
Off the top of my head, if you’ll forgive the pun, I’m having a cosmetic procedure done in April that costs more than all of our regular monthly expenses combined.
If I want to write a check for a one-pay lease, the money should be sitting there.
I don’t consider buying a security to be anywhere comparable to depositing money in a liquid savings account. I don’t want to have to sell shares of a bond fund - or plasma - in order to pay for a larger purchase.
If anyone is looking for some serious risk/reward. Jepi pays 12% divi currently. The market will have to really tank to lose money, which is very possible. But I have some funds in there since $51. It spiked to $57 in a couple months and I thought I was a genius now it’s back down. I might have to buy some more. I also hate jpm but like money more then I hate them…
This is very important to people like me. I’m pretty liquid and still had a problem trying to get everything into one account to write a check for my last one pay. I had to call my sister and tell her to round up some cash and meet me at the bank so I had enough to write the check and keep the minimum balance. She was willing and able, but that might not always be the case. Everything cleared the next day, but the timing was very tight. Some places take several days to transfer your money.
When we purchased a used car for my mother off Craigslist, I needed the cash that day. That’s the kind of liquidity some people are taking about.
Can always use a credit card cash advance check and just pay it off…
Anyone with significant assets should always have 10k or so liquid at all times jic. I keep it in cash. Not too worried about losing 3% on that a year if I need cash for an emergency.
Routine expenses are substantially predictable, but I don’t wan to f around when something else comes up.
Plus we have both have the option to put some reimbursable work expenses on personal credit cards, which also has its advantages (rewards), but it’s not uncommon for there to be a gap between when the bill’s due and when the reimbursements land. We have about $16,000 outstanding right now.
Exactly: cash or cash equivalents — like a money market that can deposit into your checking account in 24 hours.
T-Bill and bonds are swell, but they have to be sold and settle. I keep about 10% of EF in checking/savings (no liquidation delay), 60% MM (1 biz day liquidation), 30% in Bills/Bonds/CDs (1-104 week maturity) — mostly because of the spreads.
Credit card cash advance is a fire alarm, under glass, that explodes neon paint — so last resort it’s not even on the plan.
It’s a VUCA world, and most explosives don’t have an audible timer to warn you.
I have that benefit too, and it’s awesome because I reap a lot of rewards from it. But same deal, sometimes it takes a little while for the reimbursement to be processed. You don’t want to end up with a late fee or interest charges while trying to earn rewards with work expenses you get reimbursed for.
great suggestion. I didn’t think about that at the time!
Be careful with this thing as the chart looks awful. It gets rejected at the 200 DMA like clockwork (5 times since November). I would probably wait until it clears the 200 DMA and shows some resemblance of uptrend. As a general rule of thumb I wouldn’t buy anything below its 200 DMA. I would break this rule only in my 401K where my horizon is 20 years+ and I can average out if I am wrong.
Back when most of your CC mailed 0%/$0 fee balance transfer checks, I might have considered it. Now, even if it’s a bridge: the rate is usury, the fee is generous, and the spike in credit utilization will be apparent on your credit (if only temporarily). There is almost always a better option.
well then what you want is a high interest checking account. many of them earn better than savings at the moment. if you’re trying to beat the current savings rate then these are two entirely different things. you’re not writing down checks from savings either way and many of the garbage banks like DSD take forever to get your money out of. closing out a position in 24 hours would definitely be quicker.
again, putting money into a savings account and getting that money out of the savings account are not the same thing. good luck trying to get the money out of dollar savings in less than a day.
cash advance deals aren’t like they used to be, sadly.
any large brokerage would be able to sell and settle within 24 hours not to mention treasuries could be resold before maturity. judging by some of these posts i’m sure many people wouldn’t be able to figure out if they were going to be buying a car with more than 10 minutes notice, but for the remainder of the populace i’m sure it could be sorted in a timely manner.
Look into brokerage margin account with checks and debit card. You can still own treasuries but if you have an emergency you can write a check on margin while the funds from the treasury sale settle.
4.55% is nice though. Matches the Wealthfront APY. I believe that’s still the best high yield savings rate currently available. Probably the best place to continue to park low balances short term (<$200k).
), but haven’t made an honest effort at trying something similar at Merrill.
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