I get that…but i did the churning in the past and in many cases it’s more of a PITA than its worth. As @trism said then you have to close the account and I’m lazy. Rather collect my $1100 a month and be lazy than chase a few hundred more.
I think the point was the other way around, if he’s looking to park $200k, maximizing the rate ever so on just 10% of that may not be worth the lift for him.
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I have that account mostly due to a sign up bonus for an extra 6000 miles / points they did 3 or so years ago. When rates were low it was kind of interesting proposition, now with 4% plus rates it’s more worth it to put in your example of 50k @ 4% = 2,000 that you can buy your tickets with. Fun fact that you get a 1099 for the miles though I don’t remember the exact valuation they use. I keep $5000 there mostly to earn some miles and I can appreciate the creativity of this type account.
Admittedly we could take it a step further to analyze with the tax implications but you get the idea.
I think if you’re willing to meet the term requirements (X # of months or years) and minimum purchase $ requirement, then there probably isn’t a good reason. These no-penalty CDs and HYSAs are just convenient because there are no $ minimums, no brokerages, and no minimum term commitments. It’s nice to have for smaller balance flexibility to have cash on hand to deploy when a better opportunity arises. Better place for rainy day funds versus a standard checking or savings account.
I use Marcus by Goldman Sachs and pretty happy with it. Currently they provide a 3.75% HYSA rate and a friend referred me to it. So the first 3 months; its providing an interest rate of 4.75% which is great.
Let me know if anyone wants a referral link for the same for the extra 1% at 3 months.
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Completely understand. I’m saying that a HYSA/MMA will probably be paying at or very close to 5% in 12 months.
I used my 3% Navy Federal CD from a year ago as an example of an idea that looked great at the time, but then had the benefit erode and disappear as the APY on other savings products met - and then surpassed - it.
what does that have to do with with the price of tea in china? you said you wanted something that earned more than dollar savings. you said it needed to be liquid. i pointed you to something that earns 1.25% more right now and is the highest non-cd rate at the moment and is completely liquid.
It means that it isn’t worth it (to me) to open a checking account now to get 5% APY for 12 months, when I expect savings accounts to pay that much by the end of the checking account’s promo term.
The benefit will vanish just like the premium on many 12-month CDs with a similar rate will also vanish over that amount of time.
It’s just an analogy. I know how CDs work. 
I have been using them several years and they are excellent. They have the fastest transfers in and out I have ever seen. Beware of some of these online savings accounts. Transfers out if you ever need the money can take over a week. With Marcus it’s in my bank account the same day. Just something to keep in mind while rate shopping.
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Agreed.
I have an account there as well.
They’re also at 3.75%, and the ACHs are indeed quick.
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Buy a short-term Treasury ETF, like BIL. Very liquid.
And short-term bonds have very little principal risk since their durations are only a few months. If rates go up, they’ll just reinvest at the higher rates.
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Thanks @zaimer for referral link for Wealthfront.
Happy to provide referral link to anyone who needs.
Sorry, I missed the conversation up there.
Are there any comments or opinions on public’s treasury accounts? It seems to have no holding period and advertises 5.2% returns with no holding periods. I am a bit skeptical about the no-holding period claim.
at the bare minimum you’ve got to try to get better sources of information.
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Cap one has a 11 month cd at 5% right now. I know there’s some better deals at smaller banks. I’m not gonna lock yet, waiting for the next rate hike…
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Be careful with these savings accounts because the rate can change on a dime. You can get the same or even better rate state tax free with treasuries, you can lock your rate and you can exit without a penalty because treasuries are super liquid.
Also, just a reminder that rate hikes are priced into the current rates, so the treasury rates are not likely to change by much after the fed meeting.
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next FOMC meeting is the 21st.
I just buy T-bills via Treasury Direct. You’re dealing directly with the US Govt and there’s no federal tax paid on the interest. I’m in the shortest dated bills (4 weeks) and simply reinvest them over every month unless I can invest the money at a higher rate. I’m either getting around 4.6% or I’m getting 10% per annum via hard money 1st Trust Deeds to a property flipper, when they’re available.
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There’s no STATE tax on the interest. Munis are the only federally exempt interest payments.
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