Where are people keeping their CASH?

[jnc]

Hi everyone,
Where are you keeping your cash /savings that are not invested?

Right now, I see that in my area, the interest rates are as follows:
- high yield savings: 1.75% to 2%
- 1 month CD: 0.5%
- 6 months CD: 2-2.5%

Interestingly though, the US treasury bill rates seem much better:
3 month T-bill: around 3%
6 month T-bill: around 3.3%

Since the 3 month US treasury bill is often considered as the risk-free rate, I am thinking of going for that.
Are there other vehicles that am I missing, or downsides to watch out for?

Thanks!

[PDXTabs]

Mostly I bonds with a little backup in online savings with Ally.

[englishteacheralex]

We're laddering T-Bills. The rate/risk was the best we could find.

[jnc]

We're laddering T-Bills. The rate/risk was the best we could find.

Thanks for sharing your strategy. Which maturity T-bills are you using for your ladder?

[englishteacheralex]

Great question. I'll have to ask my husband. He's the one who set it all up. Now I'm curious, too.

[GuitarStv]

We hold the minimum amount in our savings account to avoid fees.  Other than that, I keep a 5$ bill for when I'm cycling on long rides in case I run into trouble and need to buy something.  Everything else is invested.

[jnc]

We hold the minimum amount in our savings account to avoid fees.  Other than that, I keep a 5$ bill for when I'm cycling on long rides in case I run into trouble and need to buy something.  Everything else is invested.

Love it! Good for you :)

[Dicey]

We keep a fair amount of cushion earning virtually no interest, because we're already FIRE. Sure, it's losing to inflation, but it's a tiny amount of our TNW. We're renovating a condo right now and it's nice not to worry about juggling payments.

We also had to replace the A/C in a rental rather unexpectedly recently. It was $5k and paying the bill was no big deal.

Most of my career was in commission sales, paid monthly. I got used to living on last month's (or three months ago's) money. I would accumulate too much money in my checking account, then move it into investments, because that's what worked for me. Somewhat sub-optimal according to many sources, but we're FatFIRE now and loving life.

[Ladychips]

In my pocket!

[newbie]

I opened an American Express High Yield Savings account and am kicking myself that I didn't do it sooner.  It was so easy and moving money to checking when I need to pay bills is seamless.  The rate has been going up pretty frequently, but I think it is currently at 1.75%.

[RWD]

We've had an Ally account for over a decade now. Savings account is currently at 2.0%

[JAYSLOL]

We hold the minimum amount in our savings account to avoid fees.  Other than that, I keep a 5$ bill for when I'm cycling on long rides in case I run into trouble and need to buy something.  Everything else is invested.

Nice!  This might be the most Mustachian answer I’ve seen here. 

On the other end of the spectrum, I keep a fair bit of cash on me, usually $500 or more, as I’m a sucker for garage sales, and can’t pass up the opportunity to buy something I need, want or can resell for more if it’s crazy cheap.  It’s worth the extra risk and opportunity cost of having that much on me, even if I got mugged twice a year I’d still come out ahead, and fortunately that’s never happened. 

[YttriumNitrate]

I've got a bit in Barclary's online savings losing 6% per year, and also some in a checking account losing close to 8% per year.

[EchoStache]

Citibank online savings account 2%, $47,000.  That's $30,000 more than I want but was holding extra while student loan repayment/interest has been on hold, and would have written a check had student loan cancellation not come to pass.  Now I just have way too much in savings.

I also have $20k in Ibonds since maybe March or so in wife's name.  I've been locked out of my treasury.gov account.  Once I get access, I'll probably move another $10-20k for 30-40k as our emergency fund.  Guaranteed 8-9% for a year sounds pretty tasty right now.  I'll probably keep 5-$10k in online savings once Ibonds are set and available for withdrawal.

I also like to keep at least a months worth of expenses in my checking account.  The peace of mind and user friendliness this offers is worth its weight in gold to me.

[englishteacheralex]

Ok, checked with my husband and we're laddering T-Bills in 6 month increments. We decided not to pay extra on our mortgage and we're going to need the cash for various things in a shorter than 5 year time horizon so we're working on setting it up that a bill matures every month and if we don't need it, we re-invest it.

[ChpBstrd]

My checking account yields 3.04% if I use my debit card 10x per month. Unfortunately I often fail to clear this hurdle.

[Captain Cactus]

I opened an American Express High Yield Savings account and am kicking myself that I didn't do it sooner.  It was so easy and moving money to checking when I need to pay bills is seamless.  The rate has been going up pretty frequently, but I think it is currently at 1.75%.

Tell me more about this American Express savings account.  FDIC insured?  How quickly can you transfer money to checking account?  I’ve got a substantial amount of cash in savings account earning nothing (possible DP on vacation home).  Already maxed ibonds.

[Kevin Aster Tin Obin]

Yieldstreet short term notes are at 5%. Have a mortgage worth invested there

[Kevin Aster Tin Obin]

I opened an American Express High Yield Savings account and am kicking myself that I didn't do it sooner.  It was so easy and moving money to checking when I need to pay bills is seamless.  The rate has been going up pretty frequently, but I think it is currently at 1.75%.

Tell me more about this American Express savings account.  FDIC insured?  How quickly can you transfer money to checking account?  I’ve got a substantial amount of cash in savings account earning nothing (possible DP on vacation home).  Already maxed ibonds.

Amex what? Follow @RWD Just put it in Ally savings as suggested. Its 2% APY on savings account. 

[Another Reader]

A good site for evaluating online savings accounts and CD's.  https://www.depositaccounts.com/

I have the max in i-bonds, but they are more like an investment.  Treasury Direct for those.

You can buy short term T-bills directly using the brokerage accounts - Fido, Schwab, Vanguard, etc.  Bought a 6 month earler this week yielding 3.4 percent.

Leaving cash in a bank at 0.2 percent is a crime.

[alcon835]

$20k in i-bonds, emergency fund in my bank's HYSA which is currently paying 2% (just under at 1.90%). Everything else is pretty much in the market.

[dividendman]

We're laddering T-Bills. The rate/risk was the best we could find.

Thanks for sharing your strategy. Which maturity T-bills are you using for your ladder?

I've been using the 26-week bill, the rates have been over 3% for a while (started the ladder with 4, 8, 12 week). Even the 4-week is at 2.5% if you want more liquidity. I've bought them all from treasurydirect.com.

Rates: https://www.treasurydirect.gov/instit/annceresult/annceresult.htm

[FLBiker]

A good site for evaluating online savings accounts and CD's.  https://www.depositaccounts.com/

Thanks for this!  I was surprised to see that the top rate for a US 1 year CD was 2.85%.  Here in Canada, I get 2% on my savings account and 4.5% on a 1 year GIC (like a CD).

[dividendman]

A good site for evaluating online savings accounts and CD's.  https://www.depositaccounts.com/

Thanks for this!  I was surprised to see that the top rate for a US 1 year CD was 2.85%.  Here in Canada, I get 2% on my savings account and 4.5% on a 1 year GIC (like a CD).

Probably because the bank of canada rate is 3.25% and the federal reserve is at 2.25-2.5%

[FLBiker]

A good site for evaluating online savings accounts and CD's.  https://www.depositaccounts.com/

Thanks for this!  I was surprised to see that the top rate for a US 1 year CD was 2.85%.  Here in Canada, I get 2% on my savings account and 4.5% on a 1 year GIC (like a CD).

Probably because the bank of canada rate is 3.25% and the federal reserve is at 2.25-2.5%

Ha, good call!  I didn't realize there was such a big gap.