Gut check on my down payment stash locations

[halfling]

After a very demoralizing foray into the housing market last spring, I could use some advice. If anyone has the psychic hotline for the housing market for the next couple of years, that'd be even better haha. About 40% of my assets are in cash right now due to focusing on home savings. The APYs on savings accounts right now are exponentially better than anything I've seen in my adult life, but I'm still feeling uncertain and concerned that my cash will continue to "deflate" relative to the cost of housing.

I've saved up about $80K in cash so far and I'm targeting $120K by this time next year. Capital One and SoFi are offering between 3.5-4.00% APY right now, and I have 99% of my cash split between the two. I recently revisited my (empty) taxable brokerage account too, briefly considering diversifying back into stocks a bit, and I found out Vangaurd's Money Market settlement fund is giving 3.10% and is FDIC insured.

I got locked out of the Treasury Direct website trying to buy I-Bonds and could not get ahold of any bankers near me willing or able to stamp that stupid form lol. Will take any leads I can get there as well.

Is there any other secure savings vehicle I'm missing? Any upside I can get makes a difference, given home prices and mortgage rates.

[therethere]

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

[halfling]

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

Interesting. I wonder why I'm seeing only 3.1%, must be looking in the wrong place. Is that rate on that fund variable in the same way as it would be on a savings account, or does it have a longer-term guaranteed return?

[ender]

Ally has 4.75% APR CDs for 11 months (no penalty, so if you withdraw early you don't lose anything).

[cincystache]

Ally has 4.75% APR CDs for 11 months (no penalty, so if you withdraw early you don't lose anything).

came here to say this, also FDIC insured.

[billygoatjohnson]

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

Interesting. I wonder why I'm seeing only 3.1%, must be looking in the wrong place. Is that rate on that fund variable in the same way as it would be on a savings account, or does it have a longer-term guaranteed return?

VMFXX is not fdic insured. It's a money market. currently yielding 4.77% but not locked in at that.

[Dicey]

Ally has 4.75% APR CDs for 11 months (no penalty, so if you withdraw early you don't lose anything).

Slightly off topic, but I'm new president of a nonprofit.  We're looking for a safe place to stash about 50k. Can we open an account at Ally and buy CDs?

[cool7hand]

We had the same problem with I Bonds. Schwab helped us fix it.

[therethere]

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

Interesting. I wonder why I'm seeing only 3.1%, must be looking in the wrong place. Is that rate on that fund variable in the same way as it would be on a savings account, or does it have a longer-term guaranteed return?

VMFXX is not fdic insured. It's a money market. currently yielding 4.77% but not locked in at that.

Honest question, how much risk is there really that VMFXX would lose value? I totally understand the rate fluctuates daily. But losing value seems like a very low possibility? Wondering if I need to rethink keeping money there.

[halfling]

We had the same problem with I Bonds. Schwab helped us fix it.

Thanks!

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

Interesting. I wonder why I'm seeing only 3.1%, must be looking in the wrong place. Is that rate on that fund variable in the same way as it would be on a savings account, or does it have a longer-term guaranteed return?

VMFXX is not fdic insured. It's a money market. currently yielding 4.77% but not locked in at that.

Got it. They just raised the rate in the (insured) settlement fund jsyk!

Ally has 4.75% APR CDs for 11 months (no penalty, so if you withdraw early you don't lose anything).

I just saw 5.00% for 12 months at Ally!

[ender]

Ally has 4.75% APR CDs for 11 months (no penalty, so if you withdraw early you don't lose anything).

I just saw 5.00% for 12 months at Ally!

Note that meaningfully worse terms.

If I withdraw my no penalty CD I lose nothing. I get full interest to the day I withdraw.


With normal CDs early withdrawals cost you 3 months of interest.

So unless you think there’s super high odds you don’t withdraw it IMO it’s not worth 0.25% more interest for much worse penalties if you withdraw early.

[Smokystache]

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

Interesting. I wonder why I'm seeing only 3.1%, must be looking in the wrong place. Is that rate on that fund variable in the same way as it would be on a savings account, or does it have a longer-term guaranteed return?

VMFXX is not fdic insured. It's a money market. currently yielding 4.77% but not locked in at that.

Honest question, how much risk is there really that VMFXX would lose value? I totally understand the rate fluctuates daily. But losing value seems like a very low possibility? Wondering if I need to rethink keeping money there.

Yes, I'm curious about this too. When I research MMFs, history suggests that there are only a handful (2??) times in history when a MMF didn't return the depositor's full principal. And in those cases, either the Treasury stepped in OR depositors were paid 97 cents on the dollar. It just seems reasonable that a company with assets like Vanguard would move heaven and earth to make sure their MMFs never "broke the buck" and returned less than the principal. Or in other words, it would take a financial disaster much worse than the 2008  recession to have a Vanguard MMF lose someone's principal? 

Am I thinking about this correctly?

[EchoStache]

I have mine all in VMFXX in Vanguard. It's a money market fund so shouldn't lose value. It's paying around 4.28%.

Interesting. I wonder why I'm seeing only 3.1%, must be looking in the wrong place. Is that rate on that fund variable in the same way as it would be on a savings account, or does it have a longer-term guaranteed return?

VMFXX is not fdic insured. It's a money market. currently yielding 4.77% but not locked in at that.

Honest question, how much risk is there really that VMFXX would lose value? I totally understand the rate fluctuates daily. But losing value seems like a very low possibility? Wondering if I need to rethink keeping money there.

AFAIK, VMFXX is all US goverment treasuries.  If the United States(the same country that provides FDIC insurance) fails, you could lose money.