Author Topic: Saving for downpayment- where to keep $$ in meantime?  (Read 3956 times)

essjay43

  • 5 O'Clock Shadow
  • *
  • Posts: 35
Saving for downpayment- where to keep $$ in meantime?
« on: January 03, 2014, 02:47:40 PM »
I have 23k in savings that's a combination of emergency fund and savings for a down payment on a house.

I don't except to buy a house anytime within the next 12 months, but I would like to have the money handy in case I come across one I like.

Any recommendations on where to keep it?

clutchy

  • Bristles
  • ***
  • Posts: 339
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #1 on: January 03, 2014, 02:56:49 PM »
a savings account? 

there just aren't any good intermediaries that have zero risk.  You could find some type of account that yields a bit of interest so that you're not losing so much of it to inflation but that's all I've got.

essjay43

  • 5 O'Clock Shadow
  • *
  • Posts: 35
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #2 on: January 03, 2014, 03:01:28 PM »
That's what I figured. Wasn't sure if there was some secret Mustache strategies.

Miamoo

  • Stubble
  • **
  • Posts: 234
  • Location: Somewhere near Chicago
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #3 on: January 03, 2014, 03:07:03 PM »
Suggestion - talk to a financial advisor at your bank.  We have our "New Roof Fund" eg. in a mutual fund thru American Funds that if we need to access it only takes 3-5 business days to remove the $.  No penalties for withdrawal & a higher rate of return, currently 8+%. 

Vanguard may be even better if you were to research that.

Just make sure the charges are low.

FIreDrill

  • Handlebar Stache
  • *****
  • Posts: 1039
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #4 on: January 03, 2014, 03:17:33 PM »
If your wanting no risk and immediate accessibility Ally has a Money Market account that pays out .84% interest.  You can also access it via checks or debit cards.  I use this account for an "Emergency" fund.

SS

.22guy

  • Stubble
  • **
  • Posts: 131
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #5 on: January 03, 2014, 04:33:14 PM »
Barclay online savings has accounts at .90 and .95. That's where I stash my liquid cash.

Cyrano

  • Stubble
  • **
  • Posts: 123
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #6 on: January 03, 2014, 05:28:07 PM »
If you're going to spend it in the next two years, keep it in the highest rate bank account you can find.

ohyonghao

  • Pencil Stache
  • ****
  • Posts: 635
  • Age: 35
  • Location: Hillsboro, OR
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #7 on: January 03, 2014, 06:15:32 PM »
I recently bought a house after selling some stock.  I actually didn't intend to buy a house last year, but we went from me getting a permanent job to moving into a house in 6 weeks.  During the process of purchasing a house you will have plenty of time to sell stocks or mutual funds, just remember to make plans for any profits.

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5013
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #8 on: January 03, 2014, 06:53:12 PM »
GE Capital Bank and Sallie Mae both pay 0.90 percent.  If you have a credit union near you that offers a reward checking account, you might do better on some or all of the money.  The trade off is usually a direct deposit and a minimum number of debit card transactions.  Check www.depositaccounts.com for rewards checking accounts for which you would qualify.  A one year CD is only slightly better than Sallie Mae/GE Capital and you lose much of the interest if you cash it in early. 

Bank "financial advisors" that put you in mutual funds with loads (American Funds are usually sold with an up front commission known as a "load") should be avoided.  These are sales people with no fiduciary responsibility to you.

Miamoo

  • Stubble
  • **
  • Posts: 234
  • Location: Somewhere near Chicago
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #9 on: January 05, 2014, 11:49:46 AM »

Bank "financial advisors" that put you in mutual funds with loads (American Funds are usually sold with an up front commission known as a "load") should be avoided.  These are sales people with no fiduciary responsibility to you.

Should have written 'load' instead of 'charges'.   My thinking was that if your load is substantially less than your gain and no sort of penalties, it may be something to look at.

nottoolatetostart

  • Bristles
  • ***
  • Posts: 426
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #10 on: January 05, 2014, 12:47:25 PM »
My only tip is Kasasa checking account. You can google it and find a bank that will cover your state. It's a FDIC insured checking account. You need to do like 12 debit card transactions per month, get estatements and have 1 direct deposit or bill pay completed per month. It's my 3rd year doing it. I just moved to a new bank offering the Kasasa which offers 3.05% on up to $20K (I keep $20K+ in there to get the full $600+ in interest per year). While the bank is out of state, I did everything over the internet and talking to one of their sales reps. No fees, reimbursed up to $20 per month or so on ATM charges, free checks. I just monitor each month to ensure I hit more than the 12 debit card transactions so I get the full interest. Hopefully something will fit for your area.

Other than that, ING is .75%

palebluedot

  • Stubble
  • **
  • Posts: 148
  • Location: NJ
Re: Saving for downpayment- where to keep $$ in meantime?
« Reply #11 on: January 05, 2014, 04:07:21 PM »