Interest earning "spending" account

[davidw]

Hi,

I have sort of a vague idea and I thought I'd bounce it off everyone.

With a few givens:

* We're starting to have some savings
* We are not "hard core" mustachians, so we like to buy ourselves something nice once in a while.

My idea: rather than just buy the nice thing from time to time (we are pretty conscientious and careful, but... hey, once in a while it's nice to get something not strictly necessary) we'd put money in an account that generates some decent monthly returns, and use those as a kind of 'allowance' for frivolous purchase. 

Instead of "saving up to buy something", you're "saving up to generate the interest to buy something".

Anyone done anything like this?  What sort of account would be best?

[jps]

High yield checking accounts are at like 2% right now, is that what you mean?

[davidw]

I'd probably go for something a bit riskier with a bit higher rate of return, but something along those lines. I suppose it'd be nice to have monthly dividends or interest rather than quarterly.

[katsiki]

There are 4% checking account options.  There are some hoops to jump through like 10-12 debits per month, but you can do that easily with Amazon and other options.

[ThatGuy]

I posted in this thread some info about 4% checking accounts. https://forum.mrmoneymustache.com/welcome-to-the-forum/t-mobile-bank-account-4-apy-up-to-3k/

If you're looking for dividends I would suggest looking at ETF's and CEF's that pay dividends. 

https://www.dividend.com/dividend-etfs/

https://etfdb.com/

https://www.cefconnect.com/closed-end-funds-screener

https://www.dividend.com/dividend-stocks/financial/closed-end-fund-equity/

[Enigma]

I use a taxable betterment account myself depositing $250/2wks and constantly pull out of it large chunks of savings.  Maybe not how the account was intented because you can have a risky portfolio with stocks or a conservative portfolio with bonds.  Mostly Vanguard.  I have done well with the 'interest'.  Results will vary greatly.

[Enigma]

Couple of screenshots.... are attached