Author Topic: [SOLVED]  (Read 4958 times)

FIRE Back

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    • My journey from poverty to FIRE by 34
[SOLVED]
« on: January 12, 2016, 03:10:06 PM »
...
« Last Edit: July 26, 2019, 10:37:53 AM by FIRE Back »

matchewed

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #1 on: January 12, 2016, 04:22:04 PM »
I'm assuming you also need it safe given you want it insured. Then the CD/Savings is the best route for you.

SwordGuy

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #2 on: January 12, 2016, 05:00:44 PM »
I believe you can set up an account for yourself, another for your spouse, and a third for the two of you, all at the same bank and all fdic insured.

Our laws are stupid, what can I say?

bobechs

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #3 on: January 12, 2016, 05:09:17 PM »
It's not so safe, but the return could be substantial:

Park it in Powerball lottery tickets for a day.

MustacheAndaHalf

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #4 on: January 12, 2016, 05:57:14 PM »
Does something prevent you from parking the money in an online bank like Ally or Discover Bank?  Your restriction "insured in Orange County CA" greatly limits your options.  Online savings offers about 1% interest, while most local banks will offer you just above 0%.

http://www.bankrate.com/financing/investing/cdars-protects-your-money-but-what-about-the-cd-rates/
Quote
One drawback to the service is that you have no control over the CD rates you receive, and you get the same rate on all the CDs issued at that time.

Typically the yield through CDARS will be lower than the highest yields available. Banks pay transaction fees in the CDARS network and the cost is translated into lower CD rates.

GGNoob

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #5 on: January 12, 2016, 06:23:01 PM »
I don't think there is any interest with this account, but you can park all of your cash and it's insured up to $1,250,000: https://www.fidelity.com/cash-management/fidelity-cash-management-account/overview

protostache

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #6 on: January 12, 2016, 06:42:28 PM »
The US Treasury.

http://www.treasurydirect.gov/

Getting the money back is a little awkward, because the Treasury doesn't let you sell bonds directly. You have to transfer them to a bank or broker and have that entity sell them for you. That said, you can't get safer than T-bonds held directly.

MustacheAndaHalf

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #7 on: January 12, 2016, 11:46:22 PM »
So I looked up "orange county credit union rates", and found their FDIC insured savings is 0.05%.  When you keep $200,000 at 0.05%, you are receiving about $8/month.  If you trust just one online bank with your money, the FDIC insured $200,000 earns 1%/year, or $165/month.  Would you switch banks if they give you $150/month to switch?   Because.. they do!

I personally like Ally (customer service and high rates), but you can find several online savings offering 1% rates on savings.  If you're nervous, try this small step first: deposit $10,850 in an online savings (which is FDIC insured) and $200,000 in your local bank (earning 0.05%).  And when you see $200,000 earning $8.33 while the $10,850 earns $9.00 it might convince you.  :)  Good luck.

OldStachesRule

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Re: Where to park $600k for 6-12 months liquid and insured
« Reply #8 on: January 13, 2016, 12:07:54 AM »

I recommend you research "Private Banking" which cater to high net worth individuals.  Typically you need +1M liquid assets, but there are exceptions.  With 600K you fall into what is called the mass-affluent or merging-affluent market.  Some smaller, local relationship-oriented banks may cater to you.  In private banking, the bigger you are the greater the perks, no different than whales in Vegas.  Everything is negotiable including CD rates.  Good luck.

act0fgod

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Re: [SOLVED] Where to park $600k for 6-12 months liquid and insured
« Reply #9 on: January 13, 2016, 04:36:14 PM »
What is the solution you went with?

Another Reader

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Re: [SOLVED] Where to park $600k for 6-12 months liquid and insured
« Reply #10 on: January 13, 2016, 04:44:59 PM »
You can find several of Ally's competitors offering similar or better rates over at www.depositaccounts.com.  I have relied on that source for many years, and it's thorough and accurate. If you want to go the CD route for 12 months, there are several at 1.25 percent.  I just opened a CD at Synchrony for 14 months at 1.30 percent. 

MustacheAndaHalf

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Re: [SOLVED] Where to park $600k for 6 months liquid and insured
« Reply #11 on: January 14, 2016, 12:19:52 AM »
Glad the advice was helpful.  I found Ally bank after reading "I Will Teach You To Be Rich", which is a bit of a modern, young, practical take on dealing with money.  (Right now, $2 for kindle version, or free at your library)
http://www.amazon.com/Will-Teach-You-Be-Rich/dp/0761147489/ref=sr_1_1