Author Topic: Where to park $155k for 3 to 12 months?  (Read 4584 times)

HAL9000

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Where to park $155k for 3 to 12 months?
« on: May 15, 2015, 11:56:36 AM »
I sold my home and need to part $155k for 3-12 months while we figure out what our next home move is. We are planning on using this as our down payment for our next home, but I am not sure when we will pull the trigger on that.

We currently have the money in a ultra-low yield savings accounts.  Any ideas on where I can park this money beyond the typical CD's?

DangleStash

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Re: Where to park $155k for 3 to 12 months?
« Reply #1 on: May 15, 2015, 12:29:10 PM »
Ally Bank High Yield Savings Account.  Current rate is 0.99%, it's where I park all my cash.  The rate is better than many CDs!

MDM

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Re: Where to park $155k for 3 to 12 months?
« Reply #2 on: May 15, 2015, 01:10:11 PM »

Parkingmeter

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Re: Where to park $155k for 3 to 12 months?
« Reply #3 on: May 15, 2015, 01:12:47 PM »
HSBC has a promotional rate savings account of 1.5% uncapped until January 2016 for new money

TheOldestYoungMan

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Re: Where to park $155k for 3 to 12 months?
« Reply #4 on: May 15, 2015, 01:18:53 PM »
I would invest it, but I'm also willing to camp in the woods if the market tanks in the interim.

Interest Compound

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Re: Where to park $155k for 3 to 12 months?
« Reply #5 on: May 15, 2015, 01:39:35 PM »
For that short of a time-period, only a savings account makes sense.  Put it in the best yielding account you can find.  Here's a good place to start your search:

https://www.depositaccounts.com/savings/

I've heard good things about Ally Bank, I think they'd be a good choice.

forummm

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Re: Where to park $155k for 3 to 12 months?
« Reply #6 on: May 15, 2015, 02:30:52 PM »
Bet it on red.

But seriously, if you need the money as soon as 3 months, just leave it in a savings account. You won't find anywhere safer.

GGNoob

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Re: Where to park $155k for 3 to 12 months?
« Reply #7 on: May 15, 2015, 05:50:36 PM »
I'll hold onto it for you ;)

Just put it in a "high-yield" online savings account. http://www.nerdwallet.com/rates/savings-account/

Roland of Gilead

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Re: Where to park $155k for 3 to 12 months?
« Reply #8 on: May 15, 2015, 10:10:52 PM »
Capital one gives you $600 for opening an investment account with them for 90 days with $125,000.

$600/125,000 = 0.48% for a 90 day period, which is a annual rate of 1.93%

Mighty-Dollar

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Re: Where to park $155k for 3 to 12 months?
« Reply #9 on: May 16, 2015, 04:29:51 PM »
All depends on how much of a gambler you are. You could invest SOME of that money in stocks and bonds and put that money to work for you. Making money has been easy for the last few years. Fed printing money. All that money has to have a home. Stocks.

forummm

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Re: Where to park $155k for 3 to 12 months?
« Reply #10 on: May 16, 2015, 06:43:35 PM »
All depends on how much of a gambler you are. You could invest SOME of that money in stocks and bonds and put that money to work for you. Making money has been easy for the last few years. Fed printing money. All that money has to have a home. Stocks.

The Fed is signaling a tightening of money this year. If there's a portion of it you don't need, then feel free to invest in stocks. If you think you'll need all of it, then don't gamble it.

theoverlook

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Re: Where to park $155k for 3 to 12 months?
« Reply #11 on: May 18, 2015, 08:26:15 AM »
I hope you won't need all of it, a 20% down payment of $155k makes it a $775k house!  Put the amount that is 20% of the house you might buy - ie, if a $400k house, then put $80k of it - into a high yield savings account and put the rest into your investments according to your target allocation.  At current and immediately foreseeable mortgage rates that makes more sense than minimizing your mortgage, in my opinion.

Aphalite

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Re: Where to park $155k for 3 to 12 months?
« Reply #12 on: May 18, 2015, 08:35:56 AM »
Write 18 put options for Hershey's at 85 for January 2016, bank (1800*2.15) $3,870 for 2.5% instant return, put that into the market. If forced to buy Hershey's stock at 85, congrats you have just bought one of the best companies out there for a discount to instrinsic (according to current market) value

Seriously tho, be happy with a high yield savings account for that short of a time frame

I hope you won't need all of it, a 20% down payment of $155k makes it a $775k house!  Put the amount that is 20% of the house you might buy - ie, if a $400k house, then put $80k of it - into a high yield savings account and put the rest into your investments according to your target allocation.  At current and immediately foreseeable mortgage rates that makes more sense than minimizing your mortgage, in my opinion.

He might want a lower mortgage/higher equity than just 20% in the new home, you don't know
« Last Edit: May 18, 2015, 08:38:10 AM by Aphalite »

Roland of Gilead

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Re: Where to park $155k for 3 to 12 months?
« Reply #13 on: May 18, 2015, 09:30:24 AM »
Write 18 put options for Hershey's at 85 for January 2016, bank (1800*2.15) $3,870 for 2.5% instant return, put that into the market. If forced to buy Hershey's stock at 85, congrats you have just bought one of the best companies out there for a discount to instrinsic (according to current market) value

Meh, I would go for put options or covered calls on Corning.   Half the PE of Hershey and the S&P500, billions in cash, top notch research division and specialty glass maker.   Buy stock at $21.40, sell covered call for Jan 2016 $22 strike for $1.30, pocket the 2.3% dividend and the 6% call premium.

Aphalite

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Re: Where to park $155k for 3 to 12 months?
« Reply #14 on: May 18, 2015, 09:52:06 AM »
Meh, I would go for put options or covered calls on Corning.   Half the PE of Hershey and the S&P500, billions in cash, top notch research division and specialty glass maker.   Buy stock at $21.40, sell covered call for Jan 2016 $22 strike for $1.30, pocket the 2.3% dividend and the 6% call premium.

Well the numbers do look better than my scenario. I'm sold!

theoverlook

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Re: Where to park $155k for 3 to 12 months?
« Reply #15 on: May 18, 2015, 03:12:45 PM »

I hope you won't need all of it, a 20% down payment of $155k makes it a $775k house!  Put the amount that is 20% of the house you might buy - ie, if a $400k house, then put $80k of it - into a high yield savings account and put the rest into your investments according to your target allocation.  At current and immediately foreseeable mortgage rates that makes more sense than minimizing your mortgage, in my opinion.

He might want a lower mortgage/higher equity than just 20% in the new home, you don't know

Sure, but I thought I kinda covered that in the last sentence.  In my opinion, it makes more sense to put 20% down and invest the rest than to minimize your mortgage.  Not exactly a confusing statement.