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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Gone Fishing on July 24, 2015, 02:14:48 PM

Title: Good money market alternatives?
Post by: Gone Fishing on July 24, 2015, 02:14:48 PM
I like keep some cash on hand for larger planned expenses, but the Vanguard Money Market account is paying nothing.  Right now I have my cash in a local credit union that pays 1%, but they do not allow drafts or checks off of the account, I have to physically go in and get a check (or transfer to one of their checking accounts that includes a fee), which I do not care for.  Any other options out there?  Short term bond funds an option?
Title: Re: Good money market alternatives?
Post by: forummm on July 24, 2015, 02:33:37 PM
There are online banks that have 1% savings accounts. But what does "larger" mean? I keep about $3k on hand. For anything larger than that I have credit cards, cash flow from work, VG funds, etc.
Title: Re: Good money market alternatives?
Post by: hodedofome on July 24, 2015, 07:24:42 PM
Interest rates aren't paying anything these days, unless you want to take on extra risk, just realize you won't make money from safe, interest paying accounts.


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Title: Re: Good money market alternatives?
Post by: adamwoods137 on July 27, 2015, 11:11:50 AM
I like keep some cash on hand for larger planned expenses, but the Vanguard Money Market account is paying nothing.  Right now I have my cash in a local credit union that pays 1%, but they do not allow drafts or checks off of the account, I have to physically go in and get a check (or transfer to one of their checking accounts that includes a fee), which I do not care for.  Any other options out there?  Short term bond funds an option?
Consumers credit union requires some legwork but pays 3% on balances up to $10,000.
Title: Re: Good money market alternatives?
Post by: adamwoods137 on July 27, 2015, 11:12:25 AM
I like keep some cash on hand for larger planned expenses, but the Vanguard Money Market account is paying nothing.  Right now I have my cash in a local credit union that pays 1%, but they do not allow drafts or checks off of the account, I have to physically go in and get a check (or transfer to one of their checking accounts that includes a fee), which I do not care for.  Any other options out there?  Short term bond funds an option?

Also, if you have a year, I really like I-Bonds.
Title: Re: Good money market alternatives?
Post by: Scandium on July 27, 2015, 02:36:58 PM
I like keep some cash on hand for larger planned expenses, but the Vanguard Money Market account is paying nothing.  Right now I have my cash in a local credit union that pays 1%, but they do not allow drafts or checks off of the account, I have to physically go in and get a check (or transfer to one of their checking accounts that includes a fee), which I do not care for.  Any other options out there?  Short term bond funds an option?

Also, if you have a year, I really like I-Bonds.

Except they currently yield 0.0% so there is literally no reason to buy at this point. New rates in November..
Title: Re: Good money market alternatives?
Post by: Yankuba on July 28, 2015, 06:30:30 AM
I put my cash in a Vanguard muni bond fund for my state. The yield is about 2 percent but you have to worry that the fund will lose value when they raise interest rates.
Title: Re: Good money market alternatives?
Post by: hodedofome on July 28, 2015, 08:05:13 AM
I've used SHY as my 'cash' component in brokerage accounts, I never look at the yield because I'm not trying to make money off of it. Reaching for yield in this environment will get you into trouble, just expect you will have lower returns than you had in the past.
Title: Re: Good money market alternatives?
Post by: RichWard on July 28, 2015, 06:22:34 PM
I guess it depends how much you're keeping on hand. If you're only keeping a few grand on hand, 1% probably is okay. Getting 3% vs 1% on $5K is $100.

I typically just accept the fact that interest rates are low so my short-term funds/emergency fund isn't going to grow. At the same time, investment growth isn't the purpose of these funds. Every bit counts, but at some point, your marginal return on is too low.