Author Topic: How much cash do you keep on hand earning no interest?  (Read 9925 times)

the_fella

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Re: How much cash do you keep on hand earning no interest?
« Reply #50 on: January 31, 2017, 11:56:28 AM »
I keep $4K per CD in rolling 6 month CDs at 0.56%. So $24,000 in CDs to more than comfortably cover 6 months of an "oh shit" event. Before we FIRE (3-4 years) I plan on doubling this to $48,000 to more than comfortably cover a year.

I also have a high deductible health plan with a $5,200 family deductible, so I keep $5,200 liquid in my HSA and invest the rest.

I keep some spare cash around the house as well, but probably nothing over $500-$800 at any given time.

I keep a minimum $1K buffer in my checking account for bill paying and sweep the rest to investments once a month.

I hope you have that safe deposit box insured! Their contents are almost never covered by the FDIC.

the_fella

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Re: How much cash do you keep on hand earning no interest?
« Reply #51 on: January 31, 2017, 12:01:57 PM »
Since for the past four years, my job has been teetering on layoffs, I hold $12k cash, or 6 months of job loss at current dpending rate. I keep 4k static in chequing to eliminate $14.95 monthly banking fee. I see that as a 4% return in costs saved. Then $8k in a 0.8% HIS account which is also used as my float for large purchases such as VAB, VCN, VTI or property taxes/home insurance.

I also have a BIG emergency fund in $21k VSB short term bonds in TFSA that is my next source if absolutely needed.  Its lost a couple hundred, but not enough to be concerning.

I also use Ally. The comical thing is that their savings account currently has a higher APY than their Money Market and most of their CDs. Those that are higher than the savings are typically only higher by a fraction of a percent, so I figure it's not worth it. I'll just keep the liquidity of the savings account. Fwiw, you can transfer money between Ally accounts instantly. Ally also has no minimum balance and very few fees (and those they do have tend to be lower than other banks).

Radagast

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Re: How much cash do you keep on hand earning no interest?
« Reply #52 on: January 31, 2017, 08:16:52 PM »
Now that the taxable investing counts are starting to grow to 40k and about to start gliding in bonds I will invest everything over 5,000 every three months. Before I generally kept 10k-15k in cash.

brooklynmoney

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Re: How much cash do you keep on hand earning no interest?
« Reply #53 on: February 01, 2017, 07:40:57 PM »
This is a good reminder I have way too much sitting in checking and savings. And then when I went to take advantage of dips in the market I have to call Vanguard and beg them to process my trade even though the $ hasn't cleared yet ha.

I thought Vanguard automatically went ahead and made the purchase while the transfer from the linked bank account was in progress. Not correct?


I think it's a courtesy. I have a Voyager account so they have done it every time for me.

frugalwitch

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Re: How much cash do you keep on hand earning no interest?
« Reply #54 on: February 02, 2017, 03:55:11 PM »
I keep 1k in a EF and that's about it.

I don't believe in having 3-6 months EF in my case as I never used my entire 1k in one time since I've had it. SO and I have very secured jobs and we have a LOC if ever we need money. I also can cut a lot in my budget if ever a emergency arise and pay the LOC promptly. SO can cover for both of us if needed but we'll be on a tigher budget.

I still put money in different budget categories, so my checking/saving accounts combined is currently at 4.6k. It fluctuates every now in then when expected expenses are due.

tallen

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Re: How much cash do you keep on hand earning no interest?
« Reply #55 on: February 05, 2017, 03:53:36 PM »
I keep no cash immediately "on hand", for reasons. But I have accounts of various liquidity. My primary savings account has a 1% APY, and is with Ally. It is about as liquid as I get. I have just over $4,000 in there. I have another $1,000 in a savings account tied to a NetSpend card. It is somewhat less liquid (it will take time to transfer the money out without incurring a fee). I have this account solely because of the 5% APY (paid out quarterly). Sadly, it is only for balances of $1,000 or less, which makes me sad. I'm considering opening similar accounts with other companies like Brinks, et al. If I went that route, I'd probably want to keep about $2,000 in my Ally account.

I keep $1k in Netspend and another $1k in Brinks. I use USAA for my main bank and to push/pull from those accounts (and others) and whenever I initiate a pull it is available for use immediately.

dcamnc

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Re: How much cash do you keep on hand earning no interest?
« Reply #56 on: February 06, 2017, 04:58:05 PM »
I keep 8k in my credit union, averaging about 1%. This is about 8 months of expenses for me. I also have a Vanguard taxable account I can draw from if needed. I keep $500 cash in my gunsafe for major storm/power outage emergencies/craigslist purchases as well.

bryan995

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Re: How much cash do you keep on hand earning no interest?
« Reply #57 on: February 07, 2017, 07:51:07 AM »
1 months expenses in checking account (as buffer)
3 months expenses in savings account, as emergency fund.
2 weeks expenses as physical cash money money.
40% of a desired down payment, sitting in another savings account.

Loud Noises

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Re: How much cash do you keep on hand earning no interest?
« Reply #58 on: February 07, 2017, 09:20:00 AM »
10k e-fund earning 1%
1k checking account buffer earning 0.1%
250 cash at home for immediate cash only emergencies
20 cash in wallet for same

DavidAnnArbor

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Re: How much cash do you keep on hand earning no interest?
« Reply #59 on: February 07, 2017, 09:59:54 AM »
So what do you do if you have to post bail ? 

Retire-Canada

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Re: How much cash do you keep on hand earning no interest?
« Reply #60 on: February 07, 2017, 10:06:41 AM »
So what do you do if you have to post bail ?

Use my LOC to pay for a bail bond.

boarder42

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Re: How much cash do you keep on hand earning no interest?
« Reply #61 on: February 07, 2017, 11:25:12 AM »
So what do you do if you have to post bail ?

how at risk are you of needing to do this?  my parents have money so that would be my answer here if it was necessary. 
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Mr. Rich Moose

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Re: How much cash do you keep on hand earning no interest?
« Reply #62 on: February 07, 2017, 12:26:57 PM »
So what do you do if you have to post bail ?

Thankfully in Canada bail amounts are much, much lower than in the US and can be adjusted based on ability to pay. ;-)

Even for financially motivated crimes such as mid-level drug dealing in Schedule I drugs (cocaine, fentanyl, heroin, meth) bail is often set at $10,000 or less.
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DavidAnnArbor

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Re: How much cash do you keep on hand earning no interest?
« Reply #63 on: February 07, 2017, 02:40:03 PM »
So what do you do if you have to post bail ?

how at risk are you of needing to do this?  my parents have money so that would be my answer here if it was necessary.

It was just a joke boarder.

Metric Mouse

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Re: How much cash do you keep on hand earning no interest?
« Reply #64 on: February 11, 2017, 01:54:45 AM »
So what do you do if you have to post bail ?
Nothing wrong with spending a weekend inside. Makes one appreciate the comfort of home. And truly a good way to have some 'no spend' days.
Give me one fine day of plain sailing weather and I can mess up anything.

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MoonLiteNite

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Re: How much cash do you keep on hand earning no interest?
« Reply #65 on: February 11, 2017, 02:42:15 AM »
Before i went hardcore into savings and investing i kept around 1000$ in a savings account, linked to my check account for "overdrafts"
Now i just keep around 500$ in the account and ONLY use credit cards to buy items (part of the hard savings is that cash back $$$)

So around 350-850$

TightFistedScot

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Re: How much cash do you keep on hand earning no interest?
« Reply #66 on: February 11, 2017, 06:16:28 AM »
So what do you do if you have to post bail ?
Nothing wrong with spending a weekend inside. Makes one appreciate the comfort of home. And truly a good way to have some 'no spend' days.

Plus they feed you! You're practically making money. :P

dreams_and_discoveries

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Re: How much cash do you keep on hand earning no interest?
« Reply #67 on: February 11, 2017, 10:56:58 AM »
So what do you do if you have to post bail ?
Nothing wrong with spending a weekend inside. Makes one appreciate the comfort of home. And truly a good way to have some 'no spend' days.

Plus they feed you! You're practically making money. :P

Paying to avoid free board and lodgings?

Laserjet3051

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Re: How much cash do you keep on hand earning no interest?
« Reply #68 on: February 11, 2017, 01:38:31 PM »
So what do you do if you have to post bail ?

how at risk are you of needing to do this?  my parents have money so that would be my answer here if it was necessary.

My brother called mom to post bail for him. She refused, in order to teach him a lesson. How sure are you your parents would post bail? Would it depend on the nature of the crime perhaps?

racy

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Re: How much cash do you keep on hand earning no interest?
« Reply #69 on: February 11, 2017, 03:24:21 PM »
$800 in Ally Bank checking account.  $650,000 in Vanguard Short-Term Investment Grade bond fund.  I don't believe in letting inflation erode my money. 
« Last Edit: February 11, 2017, 03:28:23 PM by racy »

Sailor Sam

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Re: How much cash do you keep on hand earning no interest?
« Reply #70 on: February 11, 2017, 03:53:11 PM »
4k earning absolutely zero interest. Another 32k earning less than 1%. One year's worth of expenses, at current spending levels.

Metric Mouse

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Re: How much cash do you keep on hand earning no interest?
« Reply #71 on: February 11, 2017, 08:27:25 PM »
So what do you do if you have to post bail ?
Nothing wrong with spending a weekend inside. Makes one appreciate the comfort of home. And truly a good way to have some 'no spend' days.

Plus they feed you! You're practically making money. :P
Paying to avoid free board and lodgings?

Add in the hedonic adaptation, and I can't see any reason to worry about bail.
Give me one fine day of plain sailing weather and I can mess up anything.

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Mezzie

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Re: How much cash do you keep on hand earning no interest?
« Reply #72 on: February 12, 2017, 09:44:50 AM »
My Roth accounts are new, but lately I've been thinking once they're five years old, I can decrease our on-hand emergency account amount by $11,000. That's how it works, right? We can withdraw our contributions that have been in there five years without penalty?

I admit I haven't thought much about taking money OUT of retirement accounts as that's not something I think of as an option even in the most dire circumstances, but then our emergency money would be growing while not needed.
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Angry_Retail_Banker

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Re: How much cash do you keep on hand earning no interest?
« Reply #73 on: February 12, 2017, 11:06:02 AM »
My emergency fund, like most others here, is in an online bank savings account. Most of them are roughly the same, and you'll find rates on these hovering around the 1% mark. Not bad for an FDIC insured regular savings account.

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Ebrat

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Re: How much cash do you keep on hand earning no interest?
« Reply #74 on: February 12, 2017, 03:48:07 PM »
My Roth accounts are new, but lately I've been thinking once they're five years old, I can decrease our on-hand emergency account amount by $11,000. That's how it works, right? We can withdraw our contributions that have been in there five years without penalty?

I admit I haven't thought much about taking money OUT of retirement accounts as that's not something I think of as an option even in the most dire circumstances, but then our emergency money would be growing while not needed.

You can withdraw Roth contributions penalty free at any time. The 5 year seasoning is for money you roll over from traditional IRAs to Roths.

Mezzie

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Re: How much cash do you keep on hand earning no interest?
« Reply #75 on: February 12, 2017, 07:11:24 PM »
Oh, cool. Even better. :)
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Ebrat

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Re: How much cash do you keep on hand earning no interest?
« Reply #76 on: February 12, 2017, 07:37:58 PM »
Oh, cool. Even better. :)

Yeah, I like knowing I have access to that money, even if I'd have a hard time ever actually using it for "emergency fund" type purposes.

MVal

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Re: How much cash do you keep on hand earning no interest?
« Reply #77 on: April 20, 2017, 08:44:59 PM »
I keep no cash immediately "on hand", for reasons. But I have accounts of various liquidity. My primary savings account has a 1% APY, and is with Ally. It is about as liquid as I get. I have just over $4,000 in there. I have another $1,000 in a savings account tied to a NetSpend card. It is somewhat less liquid (it will take time to transfer the money out without incurring a fee). I have this account solely because of the 5% APY (paid out quarterly). Sadly, it is only for balances of $1,000 or less, which makes me sad. I'm considering opening similar accounts with other companies like Brinks, et al. If I went that route, I'd probably want to keep about $2,000 in my Ally account.

I keep $1k in Netspend and another $1k in Brinks. I use USAA for my main bank and to push/pull from those accounts (and others) and whenever I initiate a pull it is available for use immediately.

Those of you who use Netspend, do you have keep up a monthly direct deposit to avoid the $5 monthly fee? I thought I read somewhere you could just do the direct deposit once, but maybe that was wrong. Also, could an automatic transfer from say, an Ally savings account count as a direct deposit, or does it have to come from your employer? And just one debit transaction per 90 days is all that's needed to keep the fee away?
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DavidAnnArbor

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Re: How much cash do you keep on hand earning no interest?
« Reply #78 on: April 21, 2017, 07:52:22 PM »
I do an automatic transfer from my Chase account every month. So far no fee.

cl_noll

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Re: How much cash do you keep on hand earning no interest?
« Reply #79 on: April 22, 2017, 09:08:35 AM »
Series I-bonds at Treasurydirect are yielding a 2.76% composite rate. I'm guessing in a couple weeks it'll bump up higher to around 3.00%, and who knows how long that will last, but at least the next 6 months. Currently I am rotating my "safe money" into i-bonds in chunks. 

The downside being that you have to let the money sit for at least a year before you can cash it out, and you can only buy 10k/yr per person. So right now I have 2500 in mature ibonds, 5k in non-mature ibonds, 15k in cash, and plan to drop 5k more into ibonds in another couple weeks.

yyc-phil

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Re: How much cash do you keep on hand earning no interest?
« Reply #80 on: April 22, 2017, 12:10:51 PM »
My checking account balance (with Tangerine) is usually under $500 and I cover incoming bills via my regular pay cheque, also deposited in that same account. This checking account gives me a paltry 0.15% interest but that's better than nothing, and it really doesn't bother me as I certainly don't use this type of account to make my money work for me. Once a month or so, I will transfer any balance over $500 into my non-registered investment account with the same bank. If I need cash, I will simply sell some funds from my investment account. Having funds deposited from my investment account into my checking account usually takes a couple of days so I must plan in advance if I need a large sum of money, for example, this summer when I will need about $50K to start building our small retirement house/workshop.
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Babybalrog

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Re: How much cash do you keep on hand earning no interest?
« Reply #81 on: April 22, 2017, 12:23:31 PM »
If I had to set up Betterment or similar service to auto draw and invest my cash. I would set a minimum Threshold at about 2 months expenses, and a max of 4. People say 3-6, but I have a very stable government job in a marketable field, so I feel safe going low. Plus taxable accounts can be liquidated in a few days if i have to put something on the credit card.

For my $1600 monthly expenses, I think I would choose $3,000 and $5,000 for the range to keep in checking.
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Scandium

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Re: How much cash do you keep on hand earning no interest?
« Reply #82 on: April 24, 2017, 11:38:41 AM »
What exactly is the definition of "emergency"? I keep some money in 1% savings account for things I know we'll need to spent it on in a short-ish timeframe. We'll be buying a car in ~next year, so keep $10k at least for that. Our roof might need replacing, so the same $10k covers that too. Plus we have some reno projects. I usually owe some on taxes so keep $3-4k extra until every April. Uncomfortable with less than $13-15k in cash for various medical/home expenses. There always seems to be a use for some cash for unbudgeted large expenses every year.

I guess I could keep this at vanguard. But then I might be buying and selling pretty often when I need cash. And often at a loss. Seems like a hassle. Might not be most optimal, but I don't think the earnings on $15k will make or break me..

boarder42

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Re: How much cash do you keep on hand earning no interest?
« Reply #83 on: April 24, 2017, 11:58:37 AM »
What exactly is the definition of "emergency"? I keep some money in 1% savings account for things I know we'll need to spent it on in a short-ish timeframe. We'll be buying a car in ~next year, so keep $10k at least for that. Our roof might need replacing, so the same $10k covers that too. Plus we have some reno projects. I usually owe some on taxes so keep $3-4k extra until every April. Uncomfortable with less than $13-15k in cash for various medical/home expenses. There always seems to be a use for some cash for unbudgeted large expenses every year.

I guess I could keep this at vanguard. But then I might be buying and selling pretty often when I need cash. And often at a loss. Seems like a hassle. Might not be most optimal, but I don't think the earnings on $15k will make or break me..

its worth 500k give or take at 7% after 50 years.  thats alot. may not break you but still alot of money.  I think the hard part will be once FIREd what to do b/c right now i can cash flow most emergencies.  wondering how to play out the buying and selling but i dont think its too hard at vanguard to sell a little extra when needed for emergency.
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Retire-Canada

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Re: How much cash do you keep on hand earning no interest?
« Reply #84 on: April 24, 2017, 12:04:43 PM »
I think the hard part will be once FIREd what to do b/c right now i can cash flow most emergencies.  wondering how to play out the buying and selling but i dont think its too hard at vanguard to sell a little extra when needed for emergency.

Get a LOC. You can access the cash same day as needed and pay a few % only when you need cash vs. losing market returns all year long just in case you need cash.

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Re: How much cash do you keep on hand earning no interest?
« Reply #85 on: April 24, 2017, 12:16:17 PM »
We keep about 10k liquid these days in could-drive-to-the-bank-and-withdraw money.  Did less in the past (more like 2k) but it led to a few stupid crunches (like needing cash up front for a business trip, plus one of my GF's clients being bad about paying a few grand, plus our single car's engine gave out, all within a week or two) so we've since scaled up the cushion a bit.

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Re: How much cash do you keep on hand earning no interest?
« Reply #86 on: April 24, 2017, 01:07:44 PM »
What exactly is the definition of "emergency"? I keep some money in 1% savings account for things I know we'll need to spent it on in a short-ish timeframe. We'll be buying a car in ~next year, so keep $10k at least for that. Our roof might need replacing, so the same $10k covers that too. Plus we have some reno projects. I usually owe some on taxes so keep $3-4k extra until every April. Uncomfortable with less than $13-15k in cash for various medical/home expenses. There always seems to be a use for some cash for unbudgeted large expenses every year.

I guess I could keep this at vanguard. But then I might be buying and selling pretty often when I need cash. And often at a loss. Seems like a hassle. Might not be most optimal, but I don't think the earnings on $15k will make or break me..

its worth 500k give or take at 7% after 50 years.  thats alot. may not break you but still alot of money.  I think the hard part will be once FIREd what to do b/c right now i can cash flow most emergencies.  wondering how to play out the buying and selling but i dont think its too hard at vanguard to sell a little extra when needed for emergency.

yeah, maybe. But if I routinely pull (and replenish later) $5-10k every year. How much do I really have to gain by putting this into vanguard, maybe few months, before pulling it again? It's not really "emergency" I guess, just storing money for use within <1 year, maybe 1-2. That's where I can't decide if vanguard is worth it.

I do put some into a bond fund for taxes I knew I'd have to pay, only to loose $200 in that time, lol.

farmecologist

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Re: How much cash do you keep on hand earning no interest?
« Reply #87 on: April 25, 2017, 02:37:31 PM »
Are you talking cash in a savings account or at a brokerage?

We keep a nominal amount in our saving account to cover about a month's worth of expenses.

However, I currently have much more cash in the brokerage account.  This obviously varies based on trades and such but lately it has been more than usual due to market valuations.  I'm more of a 'bottom feeder' trader and have not found many investment-worthy trades lately.
« Last Edit: April 25, 2017, 02:39:38 PM by farmecologist »

Retire-Canada

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Re: How much cash do you keep on hand earning no interest?
« Reply #88 on: April 25, 2017, 02:56:41 PM »
Are you talking cash in a savings account or at a brokerage?

It doesn't really matter where the cash is held if it's not earning a return or even keeping pace with inflation.

Khanjar

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Re: How much cash do you keep on hand earning no interest?
« Reply #89 on: April 25, 2017, 10:40:13 PM »
If you were arrested and had to post bail, I assume that trying to deal with that is so hard to do from within jail that you'll need outside help anyways, and the location of your assets wouldn't really matter immediately, so I'd need to call parents/friends/bail bond shops to do so anyways, am I wrong?

MVal

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Re: How much cash do you keep on hand earning no interest?
« Reply #90 on: April 26, 2017, 01:44:30 PM »
I feel most comfortable when I have $10K in a liquid savings account. I was keeping that much in an Ally savings account at 1% interest, but I raided it a quite a bit in the new year for living expenses while front loading my 401K with the majority of my income. I'm down to about $7K now.
Proverbs 13:4
The soul of the sluggard craves and gets nothing, but the soul of the diligent is made fat.

Proverbs 13:11
Wealth obtained by fraud dwindles, but the one who gathers by labor increases it.

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