Have an extra $150 per month -- what to do with it?

[DK82]

I feel dumb for asking this question.  Especially on this forum. 

I have a mortgage at 2.85%.  Auto loan at 2.19%.  I've been rounding up and paying an extra ~50 per month on the car loan and an extra ~100 on the home loan.  Very slowly reducing the total amount spent towards interest and shaving off a couple months of the lifetime loan.  My SoFi savings interest rate recently went up to 3.25%.  It seems so obvious, but some of the online calculators are giving different outputs --- very simply put, it makes sense to instead put that $140 per month into the SoFi account while the rate is that high, right? 

(Not looking to do anything additional with 401k or 529s at the moment)

[SweatingInAR]

That move makes sense! A 3.25% savings account is a slightly better place to put that money every month.

When you are ready to consider other accounts, check out the Investment Order post. It advises not paying off any debt whose interest rate is lower than 3% above the current 10 year treasury yield. That yield is 3.7% today, so the mathematically efficient thing is to pay the minimum on all debt below 6.7%! This investment order doesn't take into account emotional and behavioral impacts of money because they are different for every person, but it is an awesome starting place to read about the different opportunities and types of accounts.

https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153

[Gremlin]

I don't know the right answer in your jurisdiction, but raw interest rates don't always tell the full story.

Have an estimate as to what the after tax implications are, not the raw interest rate numbers.  If the interest earned on the savings account is taxed, you still might be better off paying down the debt.

[nereo]

Do you have an investor policy statement (IPS)?  What does it say you should do?

[uniwelder]

I used to pay extra toward my mortgage, but stopped after reading advice here. There are two (3 in your case) big reasons why- 1) if the house is foreclosed, the bank doesn’t care about that extra money paid in. It’s lost to you. 2) The extra money you pay in isn’t easily accessible to use for other things. 3) In your case, you’ll get a better return putting it in a savings account.

[Dicey]

I don't know the right answer in your jurisdiction, but raw interest rates don't always tell the full story.

Have an estimate as to what the after tax implications are, not the raw interest rate numbers.  If the interest earned on the savings account is taxed, you still might be better off paying down the debt.

Hmmm, how does the story change when you factor in inflation?

@DK82, have you looked into ibonds?

+1 on the Investment Order advice.

[sonofsven]

Do you have an emergency fund? I keep mine in an online high interest savings account that is at 3% currently. I like to keep around $25k in there (which would cover me for a year) because I move around as much as half of it doing bank bonuses. I also use it as a slush fund to pay off taxes, etc.
But every bit of extra savings (after HSA and tIRA) goes in there.
I believe that Sofi account requires direct deposits every month to keep that 3.25%, so if you have that, great!
If you need a "goal" for the extra savings, you could think of it as saving to pay off the car entirely and save until you have that amount.
Although it's likely you'll value the savings more than the payoff at that point.

[cool7hand]

Questions like this always prompt the same response from me. You have to do what's right for you. There's the math and there's what's going to best motivate you. Do the latter, even if it's less efficient.