Author Topic: High Interest Savings or CD for $20,000?  (Read 2315 times)

Ives

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High Interest Savings or CD for $20,000?
« on: July 21, 2018, 04:22:22 PM »
There are so many to choose from.  Anyone recently done lots of research and chosen one, want to share your findings? 

JCGreen

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Re: High Interest Savings or CD for $20,000?
« Reply #1 on: July 21, 2018, 05:02:21 PM »
What investment type to use depends on how quickly you will need/want the money. What are your plans for this money?

nalor511

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Re: High Interest Savings or CD for $20,000?
« Reply #2 on: July 21, 2018, 05:10:35 PM »
Vanguard prime money market is over 2%, and you can access the funds next business day. No fdic.

Ives

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Re: High Interest Savings or CD for $20,000?
« Reply #3 on: July 22, 2018, 11:29:56 AM »
It's our savings for buying a house, which has not happened in the last 3 years, and isn't happening in the next year, probably 2 years, or more. So it's time to get it out of Bank of America Preferred Rewards Savings at .04% APY!

LAGuy

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Re: High Interest Savings or CD for $20,000?
« Reply #4 on: July 22, 2018, 11:52:19 AM »
I'd just put it in an Ally.com online savings account. Current yield is 1.75% and you have easy access to your money. Sure, you can probably find a year (or more) CD yielding nearly 2.5%, but if you believe interest rates are likely to continue to increase over the next 6 months at least, then the online savings account will be yielding that same 2.5% soon enough. Personally, I wouldn't bother looking at a CD until the Fed stops hiking interest rates. The difference between a CD and the Ally savings account is only going to amount to a few extra bucks one way or the other anyways, so might as well just choose the option that gives you the most immediate access to your funds.

Gatzbie

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Re: High Interest Savings or CD for $20,000?
« Reply #5 on: July 22, 2018, 12:03:58 PM »
Vanguard prime money market is over 2%, and you can access the funds next business day. No fdic.

Even though no FDIC, odds of losing for the most part non-existent?

Paul der Krake

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Re: High Interest Savings or CD for $20,000?
« Reply #6 on: July 22, 2018, 12:51:11 PM »
Vanguard prime money market is over 2%, and you can access the funds next business day. No fdic.

Even though no FDIC, odds of losing for the most part non-existent?
Let's just say that if Vanguard's money market loses even 1% of your principal, it will be the last of your worries.

frugaliknowit

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Re: High Interest Savings or CD for $20,000?
« Reply #7 on: July 22, 2018, 02:02:47 PM »
The interest rate risk of a CD (likelihood there will be missed opportunities at higher rates) is not worth it.  Use Money Market or find a bank with high interest savings OR look for special deals on high yield checking accounts (which are a lot of work, jumping through hoops like required debit card purchases).

Curmudgeon

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Re: High Interest Savings or CD for $20,000?
« Reply #8 on: July 22, 2018, 03:02:05 PM »
I'd just put it in an Ally.com online savings account. Current yield is 1.75% and you have easy access to your money.

LiveOak has CDs starting at 2% APY for a 6 month CD, stretching up to 2.8% for a 2yr.   If you're sure you won't need it for 2 years, I think a 2yr CD (or maybe a mini-ladder) would get you better return than trying to ride the yield curve up on a savings account.  Just a guess, though.

Mr. Green

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Re: High Interest Savings or CD for $20,000?
« Reply #9 on: July 22, 2018, 03:40:30 PM »
Synchrony Bank is up to 2.4% for a 12 month CD. Based on current Fed positioning I wouldn't go too long because a year from now rates are likely to be another percent higher. The Vanguard Money Market option sounds very tempting as well. I like the no penalty access.

DreamFIRE

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Re: High Interest Savings or CD for $20,000?
« Reply #10 on: July 22, 2018, 05:03:11 PM »
Here are the VG Prime MM compounded YLD and highest 2 year CD YLD through Vanguard 2 months ago and today:

May 23, 2018

2 year CD -  2.8% YLD
VG Prime MM - 1.89% compounded

July 22, 2018

2 year CD -  2.8% YLD
VG Prime MM - 2.07% compounded
« Last Edit: July 22, 2018, 05:09:45 PM by DreamFIRE »