Author Topic: highest rate of return on a savings account  (Read 1398 times)

VladTheImpaler

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highest rate of return on a savings account
« on: September 21, 2016, 05:32:07 PM »
I have a credit card with $10K balance at 0% Promo rate that expires July 2017.
I have the money to pay it off now, but would like to put it in something safe that earns interest and pay off the CC with one lump sum in 9 months.

The highest APY I can find is around 1.1% in savings accounts.
Does anyone know of any teaser rates or promotions from credit unions or banks offering a higher return?


badbear

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Re: highest rate of return on a savings account
« Reply #1 on: September 21, 2016, 06:06:39 PM »
What state are you in? A lot of credit unions require you or an immediate family member to reside in the state where they operate. Try shopping around the different credit unions and banks in your state and see what you can find.

My wife and I currently get 2% interest on the first $10,000 in our checking accounts at our credit union in Washington state, with the requirement that we each make 12 debit card transactions per month and get online statements. We use it for our liquid cash/emergency fund. For us the interest rate is good enough to make sure that we make enough small purchases with the debit card each month. Perhaps you can find something similar in your state.

Another credit union in our state offers 4.07% on the first $500 in a checking and a savings account. We keep $2,000 there (2 checking, 2 savings) at all times as part of our emergency fund.

As far as nationally available opportunities, maybe some other people can chime in. I wouldn't mind finding some higher yield as we increase the size of our emergency fund.

Shor

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Re: highest rate of return on a savings account
« Reply #2 on: September 22, 2016, 10:34:23 AM »
Netspend and some of the other high yielding tricks are mostly dried up now. Last I heard it's capped at the first $1k
All other banks are sub par in return <1% even on large levels of capital.

Optimal route would be to just throw the additional capital in to the investment account.
As you approach the payoff date, start setting aside a portion for the big payoff.

A slightly safer approach would be to divvy the 10k for each month until July 2017, and pay a portion of it off for each month. This ensures minimal chance of a surprise "bad timing" event when the CC bill comes due, since it'll be paid down by then to just one more monthly $1000 payment

badbear

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Re: highest rate of return on a savings account
« Reply #3 on: September 22, 2016, 11:36:39 AM »
A short term corporate bond fund might be a good option for at least some of the money to get higher yield with very limited risk. Vanguard's short corporates have an SEC yield of 1.73% right now.

Vanguard Short-Term Corporate Bond Index Fund Admiral Shares (VSCSX),
or its ETF equivalent,
Vanguard Short-Term Corporate Bond ETF (VCSH)

If you're willing to take on a little bit more risk, something like the Vanguard LifeStrategy Income Fund (VASIX) with its 20% stocks/80% bonds might be attractive (SEC Yield 1.93%).