Author Topic: Need Help With Cash Savings Placement  (Read 338 times)

dbfire

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Need Help With Cash Savings Placement
« on: March 02, 2021, 04:28:32 AM »
Hi all, I know this is a common topic so apologies for starting a new thread. It's specific to this moment in time.

I am almost FIRE and I have emergency cash of about a year's worth of expenses in a Sallie Mae money market account (not fund). That interest rate started at 1.5% whenever I started it and is now down to 0.40%. I am starting to wonder if I can do better. I know very little about treasury bonds and I see people on the boards here talking about how those returns are up recently. I want access to this emergency fund with a few business days at all times.

100% of my other investments are in stocks (with Fidelity) and I am comfortable with that risk.

Do you think I should just the emergency cash alone and don't chase a better rate, or there is a place that makes sense based on where the low-risk returns are right now?

Thank you!

cool7hand

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Re: Need Help With Cash Savings Placement
« Reply #1 on: March 02, 2021, 05:17:57 AM »
This is a question that's hard for someone else to answer because your investing situation/goals/philosophy are the most important factors. For example, we have a stash in excess of 25x our yearly expenditures. We also use a low volatility portfolio called All Seasons (aka All Weather). So we don't maintain an emergency fund. Our emergency monies are invested.

If that's not a good fit for you, how about something like VMMXX?

dbfire

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Re: Need Help With Cash Savings Placement
« Reply #2 on: March 02, 2021, 07:18:42 AM »
This is a question that's hard for someone else to answer because your investing situation/goals/philosophy are the most important factors. For example, we have a stash in excess of 25x our yearly expenditures. We also use a low volatility portfolio called All Seasons (aka All Weather). So we don't maintain an emergency fund. Our emergency monies are invested.

If that's not a good fit for you, how about something like VMMXX?

Thanks @cool7hand, I guess I should be more specific. I don't want to "invest" this money in the sense that it will not be placed anywhere where any loss is acceptable. Which is why it's in a money market account and I brought up treasury bonds. So no stocks, bond funds, speculative stuff, etc. I figure the three options are keep it in the money market account, find a better money market account, or have someone here explain to be why/how treasuries are the better option right now. Thanks for pointing out the Vanguard money market fund, I'll see if Fidelity has a similar option although I'm still looking for the why behind the options.