Author Topic: Best Online Savings / CD Accounts Currently Available?  (Read 2558 times)

Cottonswab

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Best Online Savings / CD Accounts Currently Available?
« on: January 14, 2017, 03:46:22 AM »
I recently liquidated some of my stock holdings to cash, as I plan to FIRE in March of this year.  Since my asset allocation has changed due to lack of employment income, I now plan to hold significantly more money in short-term, liquid accounts. 

I am therefore looking for the best available savings accounts and CD ladders.  In general, I want to maximize yield, with minimal hassle and fees.  I currently have accounts at https://www.dollarsavingsdirect.com, which I started many years ago.  However, I want to evaluate the options currently available and potentially move my money to a better account.  I have no real compliants with DSD, other than the relatively low interest rates.

From the research I have done so far, it would seem that https://www.ally.com/bank/ is likely the best currently available, but I would like to hear from other Mustachians, before I jump ship!

2Birds1Stone

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #1 on: January 14, 2017, 05:30:27 AM »
I just signed up for Capital One 360 Money Market account. 1% APY

This past August I began using my savings to churn bank accounts (savings/checking) for signup bonuses. I Have made $2,500 across those bonuses using $40k in cash over the course of 6 months. It's better than just sitting there earning 1% APY.

Indexer

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #2 on: January 14, 2017, 06:26:52 AM »
Nerdwallet keeps a list. I just check the list from time to time.

https://www.nerdwallet.com/rates/savings-account

Ally normally is near the top of the list.


Something to keep your eyes on, with rates rising, investment money market accounts are making a comeback. VMMXX was at 0.01% for years. Now it is at 0.76%. These funds normally adjust to rate changes faster than bank savings accounts so if rates go up some more it might pass Ally.

Radagast

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #3 on: January 14, 2017, 04:59:04 PM »
5 year treasury STRIPS are yielding about 2% right now, which is comparable to 5 year CD's. However treasury bonds are more liquid and you can keep them all in the same account, even a tax sheltered account, so you might prefer them for making a ladder.

Parkingmeter

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #4 on: January 15, 2017, 01:41:02 PM »
5 year treasury STRIPS are yielding about 2% right now, which is comparable to 5 year CD's. However treasury bonds are more liquid and you can keep them all in the same account, even a tax sheltered account, so you might prefer them for making a ladder.

Interesting. They avoid the current tax penalty that comes with interest being treated as regular income?

I assume anything held over a year is long-term capital gains?

These are subject to interest rate risk unless held to term though, correct? Not generally what people who are looking for bank accounts/CDs.


I'd be interested in knowing if any mustachians read any blogs or other sources that follow great CD rate deals that sometimes pop up.

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MDM

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #6 on: January 15, 2017, 02:33:11 PM »
From Investment Order,
Quote
You might consider one of these online banks:           
   http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001

Seems to be updated monthly.

Radagast

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #7 on: January 15, 2017, 07:52:07 PM »
5 year treasury STRIPS are yielding about 2% right now, which is comparable to 5 year CD's. However treasury bonds are more liquid and you can keep them all in the same account, even a tax sheltered account, so you might prefer them for making a ladder.

Interesting. They avoid the current tax penalty that comes with interest being treated as regular income?
They generate phantom dividends which are taxed annually like regular bond income, could be a little inconvenient.

I assume anything held over a year is long-term capital gains?
Correct

These are subject to interest rate risk unless held to term though, correct? Not generally what people who are looking for bank accounts/CDs.
That is correct, though usually the price goes up as they approach maturity which should make that unlikely. As most CD's have an early withdrawal penalty I think the CD's would rarely have a significant advantage unless it came from the base rate.

I'd be interested in knowing if any mustachians read any blogs or other sources that follow great CD rate deals that sometimes pop up.

the_fella

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #8 on: January 15, 2017, 08:18:15 PM »
NetSpend (and a few other prepaid card services) offer 5% APY on balances of $1,000 or less. This is offered through a separate savings account. I've found that the best way to get money out of the account is to do an ACH pull from your "main" bank (in my case, Ally). Fwiw, it is recommended that you NOT use a Chase account with NetSpend. For whatever, reason, it doesn't seem to go well, and many people have experienced issues with using Chase accounts with NetSpend.

Cottonswab

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Re: Best Online Savings / CD Accounts Currently Available?
« Reply #9 on: January 16, 2017, 03:23:58 AM »
Thanks to everyone who responded!