HYSA

TheNewKnew2

True. 5 year yield is 4.3 but that locks in your funds. I’m not risk is worth the squeeze. Leave it in HYSA

sharp315

that's worse than his current HYSA yield and also overly complicated.

cloudlet723

I’m 23. I keep an emergency fund in my HYSA. I work 2 jobs and try to max both 401k and Roth IRA every year. I buy only 1 ETF which is VOO since it sounds cool and keeps it simple

NatureNurturerQ

I'd say keep that money in a HYSA as an emergency fund and just start investing into a roth IRA, 401k, traditional IRA, or regular brokerage account depending on your tax situation as much as possible monthly. Having money invested is great, but say the market goes down at the same time some shit happens in life. You'd lose money by selling stocks cheap or go into credit card debt. That money in a HYSA would temporarily shelter you from that happening.

Certain-Arugula8333

Id put 6 months expenses worth in HYSA then the rest into VOO.

__redruM

It sounds like a shitty HYSA, especially if you owe taxes on the wine.

airbud9

The research around the retirement withdraw strategies show us that the thing that depletes a portfolio is volatility plus withdrawals. That is obvious because if you sell at a low point to take a withdraw, that is less money in the account to recover with when the market rebounds. This is why retirees have to add bonds when entering retirement if they want to follow a 4%, 5%, or 6% withdraw rate. Same research does also show if you have a very low withdraw rate, like 1%-2%, you can have a heavier stock allocation as you won't ever be removing a large percentage of the portfolio in the times when the market is down. The same concept applies for 529s, if you will be withdrawing small amounts from the 529 then you could be more aggressive. In most cases the withdrawal rate for a 529 is going to be quite high (most would plan for the account to be near spent at the end of your child's studies), so having a fairly conservative glidepath makes sense. Now you mention you would be able to pay for college without the 529, that seems counterproductive to me as the 529 is tax advantaged for college spending and their are caps for the 529 to Roth conversion, so you would want to use the 529. Also this money you could use to pay for college on the side, is that just cash in a HYSA or is that just future income, or is it you own portfolio. If its just cash or your own portfolio, it seems you could be investing that for yourself and just allow the 529 to become more conservative. If its future income, again you could just have that get invested aggressively when earned and allow the 529 to become more conservative.

owenmills04

HYSA isn’t a tech company?

Emotional-Power-7242

I got some watches. They aren't good investments but they have beat a HYSA.

sushicatbread

A few things..,is her annuity linked to her LTC? If so, a remainder balance should pass to beneficiary anyway. Look for “death benefit” or “premium return” in her policy documents to be sure. Second most plans don’t allow you to receive payments until you actually need it (qualify). If she does, then she’s entitled to it. If it allows her to take it regardless, make sure you’re accounting for any tax implications. I would also make sure your numbers are representative of the places in your mom’s area or your area that she would be going to if needed. In my area cost is more around $130k annually. I would probably plan for at least a full 3 years regardless. That $ doesn’t all have to come from the policy plan. It could be a combo of the savings plus the policy. If she’s comfortable with it and there actually is no death benefit, then I could see maybe drawing down into a different HYSA at another bank to make sure they stay in the FDIC insured threshold with the understanding that she may be losing growth (inflation protection) on the balance of the LTHC plan. … I’d check on that too.

Produff26

To not invest in equities is one thing but an investment portfolio can have a wide variety of products from treasuries to bonds and so on. Whats the advisor's thoughts on those? Just leaving in HYSA is something anyone can do without advice!

SofaProfessor

I doubt they are making more money from that compared to stocks/ETFs/mutual funds. I used to work in this industry (admittedly not for EJ) and HYSA paid the worst of any product. We got 25bps revenue off that. Not to mention, the funds grew slower than pretty much anything else. Meanwhile, putting a client in an index ETF generated revenue of 100bps, on average. Plus the funds grew more over the long term. Maybe their fee structure is different but I doubt it, as this was pretty standard across any firm I was aware of. The only time I wanted to hold HYSA for a client is if they had a specific, short term goal and I didn't want to expose their funds to any market volatility. There was no personal incentive for me to do so other than maintaining my reputation as an advisor that doesn't lose 5% on your downpayment funds you need in a couple months. If anything, there was a disincentive to hold cash from an advisor pay perspective. I'd bet that the advisor fancies themselves some kind of market wizard and thinks they can time things with the cash. Also, potentially, they are worried about a market downturn and are afraid to have a hard conversation about staying invested long term despite paper losses. Instead, they can say, "Good thing we held back these funds that you can throw in now that markets are down." I'm sure their analysis will conveniently ignore any missed dividends that could have been reinvested along the way.

InfoCruncha

Follow the money - he might be personally benefitting by having you in a HYSA or something.

JefeDiez

If you're looking for 1000 by 2030 it is smarter to invest the money into a HYSA.

Historical_Low4458

I agree with everyone here. Healthcare is expensive, and is only getting more expensive. It doesn't seem over funded to me. If she is paying for it every month, I might see if she could stop payments on it and maintain the policy. I am more concerned about the $200k just sitting in a HYSA. I understand capital preservation, is the #1 goal in retirement, but that still is a large amount of money not doing anything. IMO, she should put a portion of that into government bonds.

deafgamer_

Emergency fund? Yep, in a HYSA, around $70k. Our monthly expenses are at around $10k a month. Combined with my wife's income, through 10 months of unemployment my emergency fund went from $120k to $70k so I do not think I will be adding to this fund for some time.

Firm-Raspberry9181

HYSA does have returns. Of course it’s an investment. Would you say your stocks are not an “investment” if they were stagnant, low-yielding, or declined in value? Of course not. When you invest your money in a HYSA you might get 3.5% interest. That’s the return. Some people value stability for something like their emergency funds. Or money you need to access soon, for a tuition bill or house down payment. Or nearing retirement.

HyperPunch

Seems like your on the right path. The only thing I would consider is maybe taking $300 from $1800 and stacking it in your savings account. And if you can, find a HYSA if you don’t already have one. Mine is about 3%. Get ahead on the emergency fund. Never know what could happen.

K_A_irony

Some let you also invest in stocks / index funds inside the HYSA.

Seref15

I mean, at least he went with an HYSA. Plenty of people, especially older people, still have their money in like sub-1% traditional bank savings accounts.

AntiqueProfessor5134

Sounds like you're doing pretty well. I'd probably suggest trying to save up the 5k you might need in HYSA or short term treasuries, but otherwise everything seems reasonable. One comment would be that your portfolio and risk tolerance may not match very well. I guess it depends on what % is in the two individual stocks vs the ETF, but significant concentration in two individual stocks is almost inherently risky. That being said given your age I don't think your portfolio is necessarily unreasonable, I just think you should be prepared the possibility of unpredictable drops if a significant component of your portfolio is two stocks.

MrMapexMan2020

I will let someone smarter than me answer, but I have to say thank you for being honest. Many 20 year olds come on this sub claiming to have $500K invested - have a 6 month emergency fund and have $200K in a HYSA. Should I invest some of that $250K invested my brokerage account? Nonetheless sounds like you are on the right track. Keep it up.

Working-Leg-1482

We have been saving in 401k since the 1990s. Probably not at a high enough level and we have made some stupid money decisions in life. However between us we now have 2 mill in 401k, a decent chunk in HYSA and about 1 mill in home equity at ages 60/58. Never had huge incomes. We have no pension other than a tiny one my husband was vested into before pensions got eliminated. (Enough to pay for groceries). However I am very nervous relying on 401k and SS and I feel like we are not on solid ground. Considering an annuity for reliable income although I know that they are generally not recommended. And I know we are lucky and in better shape than most. I don’t know how people cope with nothing saved. Start small and let compounding work for you over time. Savings gain momentum over time and it becomes almost magical.

kalterik

This is so hot… real question, do you acknowledge you probably suck at this and just got lucky before? Like this is some straight casino shit, you got to >1m and it still wasn’t enough to derisk. No amount will ever be enough for you based on that. Even if you ‘made it all back’ I would put what is your average Tuesday bet (i.e. nearly all of my life savings) that you you just end up losing it in a nearly identical way. No hate, please just don’t forget to post the update if you reload with the HYSA. 🤤

Alternative-Car8221

When you say make it back, please tell me you mean keeping it in safe ETFs and your HYSA.

Jazzlike-Check9040

I have 150k and another 300k in my HYSA; I can make it back.

RecordHigh

I don't totally agree. If you're looking at credit card debt with a rate over 20% then definitely pay that off ASAP, but I've averaged more than 8% in my investment accounts over the last 35 years. Having said that, I always put at least a token amount every month towards paying off loans that were more than I could get in a CD or HYSA. It felt good to pay them off a little early, and I looked at it as part of an overall diversification strategy.

No_Strain8370

It's shocking how many people view a HYSA (or similar) as an "investment"

b1gb0n312

I knew a guy who had invested in just the stable value fund, which is similar to HYSA, in the 401k ever since the 08 crash

NecessaryEmployer488

This is an issue. Also, a lot of GenZ are now investing a lot to FIRE. I do think there will be a lot of disappointment on both sides how difficult it is to FIRE and or retire as life happens. I talked to a guy yesterday who have been investing in HYSA because of all the mistrust in the market. He recently realize you need to take risk if you are ever going to make it.

redhill_qik

I've never seen the advertising, but looking into them their business model is to take over managing your checking account and moving money that they don't think you need into Treasury bonds to get you higher interest. They are likely making money by taking a slice of the interest and by selling the information that they learn by having access to your checking account. Not for me as I don't want to give an algorithm access to my main payment account due to privacy concerns and the potential to make mistakes resulting in overdrafts and late fees. I keep most of my cash in a HYSA and transfer to my checking as needed.

Retired-Programmer

*>* ***Most brokers*** *default to sell at close unless explicitly instructed by the user not to do so* I am 99% positive this is incorrect at least at Schwab that is not the case. I tested something very similar to this a few months back at Schwab with a Long Put on a on option I did not own any shares of on the underlying stock in an IRA account. So IOW, if exercised I would then be short shares (which is not allowed in an IRA account). I let it sit there thru the close and at the market close it ended ITM and Schwab never closed the long put. I waited for like an hour after the close to see if anything would be done (as in a message to me or something) and nothing happened. And then when I saw that nothing was going to happen I bought the appropriate shares (after hours) to cover the Long Put being exercised that night or next morning. You say that what I am describing is not what the OP was doing and therefore IBKR should have closed it. But IBKR can't always know what the OP is doing. Maybe he does have $800K in an HYSA account somewhere. And IBKR (and Schwab) do provide a way to deal with this with a Do Not Exercise (which they allow you to request for almost an hour and a half after the close which I think is pretty generous). When I did this test and commented on my findings in a Reddit thread I then asked does anyone know when do they decide to close the option at the EOD and one guy said it is based on basically the risk to Schwab (tried to go back and find the post but I can't find it).

PashasMom

Affording to put 40% of your IRA in bonds is probably not where you are, financially, if this is your only retirement income. If you already have a solid pension, sure. Otherwise, I wouldn't choose 40% in bonds especially since your risk tolerance is moderate to high. Do you have a solid cash emergency fund in a HYSA? If not, you want to work on that as well. Aim for maybe 18 months of expenses in a HYSA or money market fund by the time you retire. This can be your safety and stability. If you don't want all the volatility that goes with 100% equity, I would do no more than 20% in bonds (preferably 10%). Short term TIPS are great for stabilizing a portfolio while adding some value along the way. Here's a comparison showing VOO + 40%, 20%, and 10% short term TIPS: [https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=65E14U5G2zSvZDQBqEYhkp](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=65E14U5G2zSvZDQBqEYhkp) Personally I would want to diversify into more than just large US companies. While large US companies have done great over the past fifteen years, there is no guarantee they will outperform in the next fifteen or thirty years. International funds have outperformed since early 2025. Small cap value funds also can add a lot to your eventual ending balance -- but they can also be extremely volatile, underperforming for years, making things look terrible, only to absolutely shoot up on the occasional year. You have to be extremely patient with them and not mind the ups and downs. If you think you might be interested in using something like international funds or small cap value funds, let me know and I can do some backtested portfolios for you. But if you aren't comfortable with international funds or with the crazy ride of small cap value, that is fine and you should stick with what you are comfortable with.

ZookeepergamePlane68

With the extra $, start with 50% for savings, like a Money Market (Fidelity, SPAXX is at 3.31%) its like a HYSA but better, IMO. Then open a Roth IRA (its free and will be tax free after your 59.5 age) put 25% into VOO, 15% into QQQM, 5% QTUM ETF, and 5% into whatever stock your need to scratch that gambling itch. Once you get your savings to 3-6 months expenses, whatever your comfortable with, increase VOO, this should be your core. At your age I would do VOO at 50%, QQQM to 30%, QTUM ETF 10%, and the last 10% at whatever stock or ETF, I like NASA ETF. Also, use AI, Claude is your best friend when it comes to this stuff, remember you get out what you put in, better info you feed it the better it gives!

ImpossibleEbb6862

Putting money in an HYSA is investing.

OkBeginning9576

boys i got about 16k saved up and need to get to 55-60k in 2 years (money down for house). saving about 1500/month where to park this besides my AMEX HYSA @ 3%? for realsies

dudeondacouch

No *additional* risk. You still risk assignment, and just sell SGOV shares to cover buying the shares at your strike, then wheel as normal. Doesn’t mitigate any risk, just allows your capital to earn decent interest along the way. It’s basically a HYSA with less clicks inside your brokerage.

vagabending

You could just VTI and chill and it would probably get as good or better returns with basically no risk in comparison to this. This is needlessly complex. Also HYSA’s are terribly tax inefficient. If you’re going to put money into a safe pile, use SGOV or similar so you’re not paying local taxes at least.

Various_Couple_764

Your HSA and is mostly investing government bonds. SGOV invest ingovernement bonds and US bond yield go up and down with the market. HYSA is guarenteeded by government FDIC insurance. No insurance with SGOV but US government has never failed today. So overall there is no real difference between the two. You could however invest in corporate bond fund like CLOZ 8% yield . there his also JAAA 5.5% The main issue is the selling price may be above a or below the purchase price. But based on past history the sale price will be within +$1.5 and -$1.5 of purchase price. And both of there are very safe corperate debt. So the yield will be stable. The increase yield would easily compensate if the selling price is below the purchase price. So overall no significant chang in risk with a higher yield.

JahMusicMan

I use Fidelity as my brokerage/HYSA account and have most of my money in t-bills and my emergency fund in FDLXX which is CA state income tax exempted. The only downside is that it's not a core position so it's more time consuming to manage.

db_deuce

you can convert the $$ into cash in 1-2 days, meanwhile earning \~ 3.7% exempt from state tax risk free. Cash earns nothing. HYSA earned less than 3.7% and subject to both Fed/State tax.

Outside-Cup-1622

*"I have no idea where to start. I have a couple $100 divided into SPY and VOO on Robinhood but I want to start putting only $100-200 on my HYSA and the rest into index funds or something that will grow at higher than 3%"* I will respectfully disagree with you. It looks like you know exactly where to start and you did ! IMO regular contributions into SPY or VOO builds you a great foundation for your future self.

HairyBushies

I’d argue SGOV or an equivalent is pretty much as liquid as a HYSA. If you can’t wait for a 1-day settlement on market days, you may need to look at the bigger structure of your financial life. That’s a non-issue for me. I’m at Schwab and Fidelity. With the latter, my core position with SPAXX is just like cash for all intents and purposes. All my bills are paid from Fidelity. I use SGOV in my Schwab account and it’s not an issue to sell, transfer to my Schwab checking and do whatever is needed as my first backup. And then I have $1,000 cash in a credit union account just in case though I’ve never had to touch that in over 10 years.

Dull_Judgment1587

SGOV yield is roughly 3.59% last time I checked. SGOV and HYSA are similar investments and follow the same market trends. If HYSA yields are falling then SGOV yield is probably falling also (and vice versa).

Pcenemy

i've had tbill ladders for 4-5 years now and love them. slightly more than most HYSA (almost all after their introductory/bait periods and i'm not one to change banks every 3-4 mos) and as others have noted, they are state tax exempt. not sure when you want/need your money or how much -but i'm a fan of the 'ladder' - i look ahead 5 days, if i won't need whatever is scheduled to mature, i have it roll over and basically the interest hits my checking account

VexxySmexxy

Same here, sucks he has the mortgage at his age but circumstances be like that. I like the idea of parking some of that in an HYSA. Why rollover the 401k though and do ladders? He will be at the age where 401k withdrawals are penalty free?

Primary_Excuse_7183

To my understanding most HYSA are backed by similar types of funds. that’s essentially how they’re making said returns on your HYSA. You’re just investing in a fund directly which cuts out the middle man. Government pays their bills and you get paid. if you don’t get your payout……that means the government didn’t pay its bills. And you need to be very….very….afraid.

PaleontologistOne599

I can't comment too much on your actual question, but if you do go the HYSA route I'd recommend CIT bank. They have a 3.75% rate on deposits over $5K and right now they have a promo for 4.10% for your first 6 months.

DoinIt4DaShorteez

short term treasury ETFs will be much easier than actual bonds or notes, but you won't get as high a rate. the etfs are in the low 3's now. one reason to use an etf in a brokerage account instead of a HYSA is that if there's a crash, you can sell the etf to raise cash and immediately plunge it into the mkt. BIL, BILS, SGOV are all about the same.

CosmosMasterMan

If it's in a HYSA sure. Anything less amounts to dry-rot. DBMF and GLD have been excellent hedges and dry powder reserves/generators for me in this market.

Fauked

Best I could find was 3% HYSA and 4% CD .. where do you find 5%?

P0pSm0ke91

I HATE working. YouTube taught me everything like most things I have to learn. Experienced the power of compound growth pre-investing through HYSA. Grew that to 165k before I knew anything about stock market. Took me 21 months to build to 100k invested. I’m bound and determined to live life on my terms someday and not answer to any boss.

Capital_Tiger8306

Maybe a slightly different perspective, but can't afford not to. How many employers out there (over the past 5 years) have handed out 9+% cost of living increases? People say "yeah, well, inflation rate is now down to 4%, and sometimes my employer gives me a 4% merit". .. and you never hear the news say 9% RATE is different than your purchasing power. Our purchasing power has eroded over 27%. (Bureau of labor statistics) We are to the point where you can't save yourself into prosperity(by sitting on cash). This year you go out less, next year you sell one of the two cars, the next year you don't go on vacation.... But ultimately - it's not gonna be enough. Somehow you have to generate returns on what you have to keep your purchasing power. HYSA means you're only falling behind a few percent a year- but your still falling behind. Prices aren't likely to fall 20-30%. Houses are less affordable - yet to investors, they don't care- it's an investment with an annualized return over and above appreciation. The "K" shaped economy is a real thing, and it'll be harder, and harder, and harder to maintain if you didn't take the upward sloping trek 5 years ago.

Illustrious-nductxn

Put all on a HYSA and pay with the interest collected until the tax is paid.

HiMyNamesEvan

A HYSA may work wonders for you. I don’t know your monthly expenses but 20k sounds like a lot to have sitting in a checking account

taplar

I personally would encourage you to look into Money Market Funds. These funds typically end with "XX", such as VUSXX. Use their Trailing Twelve Month (TTM) percentage as a comparison to any HYSA you are looking to open.

Logical_Stranger4889

I just am aiming for cash to support 6-12 months of emergency funds in HYSA and then the rest is going into the stock market.

robobarra

Hey all! I’ve been lurking on subreddits like this for a while and am looking for a little advice. I’m working on saving for a new car - my current one is completely paid off and so I’m “paying myself” a car payment so that, in 10 years, I have the full amount needed to buy a new one. I’m trying to add a little more security to my overall financial situation so I’ve been setting up a few savings goals for higher ticket items that I know I’ll need to replace consistently (car, phone, smartwatch, etc.) I’ve read that for <5-year savings goals, a HYSA is the best bet but was wondering if there are any suggestions for something that feels longer-term than the usual savings goals. Any help would be appreciated!

Richard_Cromwell

First of all, OP has $450k in investments shown in this post. Second, you can live comfortably on ~$1,500/month in a few places around the world, Thailand being one of the most iconic. On paper, that'd get you by for 25 years without any additional side work or interest on current assets. Lastly, some modest investing or a HYSA and 4% returns (admittedly, a not-so-likely outcome given the sub we're in) you could theoretically just live off interest/returns without ever depleting what OP has saved up. So, to sum things up, OP could totally retire comfortably in a low cost of living country if he was fiscally responsibly and savvy. Because he's on this sub, I think it would end poorly and OP would end up having to learn the way of the ladyboy because Thailand does not have Wendy's.

Kazz330

Howdy! I am in the US, and have a fun/side investment account that is separate from my long term savings retirement accounts that I have been using to save for a house over the past 3 years. It is currently up just over 50% over this time period, and I am thinking of cashing out into a HYSA to prepare for us to use it as our down payment next year. Is this sound logic? Or should I continue to gain and add to it? I realize it would trigger a taxable event, but I am just trying to preserve what I've been able to achieve over the last 3 years. Thanks so much!

Majestic_Republic_45

You’re not an investor. Park it in a HYSA or a CD.

Dr_Zoonotikstein

Man, I hope your fears are unfounded. Besides being an atrocity that might trigger WWIII, such an act might possibly tank the entire world economy. Even "VOO and chill" or cash in HYSA would be precarious positions in such a scenario.

account-names

HYSA to let the nerves calm down before making a rushed move

Puzzleheaded_War6102

If you are 1 year from retirement and 100% equity portfolio. You are the greatest regard and belong here. At least 6-8 years out you should be 80:20. And move 5% from equities each year to blend of CD, TBills, and GLD until the ratio is 60:40. You should also have 2 expenses stored in HYSA or CD 1 year prior to retirement.

firesquasher

Maybe 50 years ago. Pensions went most away save from government work. 401ks were the mass migration from companies having to deal with any of that. If you were getting a steady 10% return, you think youre *really* gonna move it over to bonds or an HYSA? Especially because of the massive tax hit you'll get by withdrawal? All whole inflation is steadily eating away at your money if you park it somewhere that doesnt at least cover that? Shame on those that themselves in high risk tolerance investments, but *most* people in that era didnt even know about where their money was parked. They were just told "here, pay into this for your retirement for 30-40 years and youre straight"

Substantial-Task-112

27M, about $291k in total assets. Looking for advice on my portfolio. I make about 65k a year and my risk tolerance is high. Not married no kids and no debt. I'm trying to save for retirement. I currently have about $75k in my Roth IRA (80% VFIAX, 20% VGT), $129k in my TSP (75% S Fund, 25% C Fund), $2k in a brokerage (VTI/VGT), $10k in a HYSA, and $75k in crypto. My current plan is to leave the VFIAX I already own, but put future Roth contributions into VGT and possibly make the Roth 100% VGT over time. For my brokerage, I was thinking about just buying VTI going forward instead of adding more VGT. I would keep my TSP at 75% S / 25% C. I'm 27 and investing for the long term. I know I have a pretty aggressive portfolio, especially with the crypto and VGT. Does this allocation make sense? Would you change anything, especially the VGT/VTI/Roth strategy or the amount I have in crypto?

chronicpenguins

Here’s something to consider: the contributions to a Roth IRA can be withdrawn whenever you want without penalty, it is only the earnings that cannot be withdrawn early without penalty. So let’s say you save that  2,000/month through your employer 401k, you’d need your employer to allow for after tax contributions.  Since you already plan on using half of it.  Once you hit your goal in contributions, you can withdraw it into a more accessible account or keep it in your Roth, but either way whatever earnings you accrued will continue compound, tax free.  This is only a smart idea because this contribution wouldn’t have gone to your retirement anyways - it was a seperate savings fund. The downside of this is that you can’t use those earnings on things you might have if kept them in a taxable account, although some would argue from a retirement perspective it just means more in retirement. Or you can adjust your base 401k retirement savings accordingly, or worse case you pay the 10% penalty.  I’m shifting more of taxable account funding into my Roth, because for me the idea of paying taxes  on earnings makes me hold onto some assets longer than I should have.  I’d prefer to be able to rebalance or reposition my portfolio tax free.  this is after I’ve created a sizable, accessible taxable account, but I would’ve put more into my Roth had I known this.  The other thing I would consider depending on your risk tolerance is being more aggressive in your emergency savings account. For me I used sofi’s automated investing set to moderate aggressive for simplicity of automatic contributions. I still had about 2-3 months of spend in a HYSA, but my real emergency fund that I have only needed to touch once grew 147%.  Since you have a long time horizon, compounding at 6-8% vs 3.5%, after a couple years even if you took a 20% hit at the exact time you lost your job and needed it, you would still be ahead. Again, riskier, but allows you to build wealth faster.  Last but not least, sure your rent is 3,000 a month and you get free food from the office. But is $125/week really how you want to live? Enjoy being a young adult.  San Francisco is a great city, and give yourself some more money for hobbies and traveling! 

RickDick-246

I would lock in those gains and probably put it in ETFs. And I have. I don’t necessarily want it in SGOV. If I were just going to try to beat inflation and needed that cash in the near term, I’d probably just stick it in my HYSA. If it’s going to remain investment money, I’d de-risk it and go 80/20 VTI or VOO and VXUS. There are a million ways to cut it. You could take half and put it in ETFs, you could take a % and put it in SGOV or an HYSA, you could leave half in individual stocks. Just depends on your risk tolerance.

DistributionFun9623

You're 22 and have a fat savings rate, but a house down payment isn't a retirement account. Even with the flexible timeline, one bad year at year 4 will wreck your plans. Keep it in Treasuries or a HYSA, maybe a CD ladder. If you want some upside, put a small slice in VTI and leave the rest safe.

wlphoenix

One thing I haven't seen mentioned from all the people saying HYSA is FDIC limits. If you're above $250k at a single establishment, _technically_ there is additional risk to the account because it's above the limit. Now practically there's minimal risk, but it is worth being aware of. I personally kept my down payment money in my brokerage account in an interest earning settlement fund, which typically going to be a MMF. Rates are typically comparable to a HYSA but contribute toward any brokerage thresholds for better rates/margin/etc.

culdnthinkofanything

SpaceX employee here. 25k shares at \~$200k cost basis. I have the privilege of seeing all the amazing things we work on daily. I’ve been here for quite some time, and I’ll continue to work here regardless of the long hours and high stress/pressure environment. I see that same drive in all my peers, who are objectively some of the best engineers/technicians/planners/specialists this country has to offer. Can I sell? Sure. Will I? Nope. My net worth is 95% SpaceX, and that isn’t getting smaller anytime soon. Whenever I need cash, I get a loan against my shares and park it in a HYSA. I withdraw whatever I need. It’s pretty cheap and easy access to cash. A lot of my peers do the same, and will likely continue to do so. Good luck, shorts. We’re privy to info that you aren’t. Hope this helps.

PiBolarBear

I mean based on your comments you seem like you know what you want to do, but don’t forget you can park them in different places. Maybe setup 20% of that downpayment (100-150k) in a HYSA or bond ladder and then the rest in the S&P500. If you’re looking to be aggressive and think you’ll need more money but aren’t afraid of a few more years then throw that extra 250k into some more aggressive funds like a Large Cap Growth ETF. 

ohstoopid1

Inflation depreciates straight cash over time. I know it's only 5 years but assuming 3% inflation over 5 years for this kind of money adds up. I'd go with a HYSA, SPAXX, or SGOV to at least offset inflation.

MaddRamm

Put the max you can in a HYSA at your local credit union/bank and maybe have accounts at a couple different institutions. Mine only give me the high interest rate 3.80% on the first $50k and then it drops back down to .05%. They want you to put it into CDs and such if you really have a lot. Beyond that, I put it into SGOV, a treasury/bond ETF that’s like owning short term treasuries and pays out around what HYSAs do, so just under 4%. Its value doesn’t fluctuate like an S&P ETF would. What happens if the market happens to be down 10-30% in a few years right when you are looking to buy a house and your down payment has taken a huge hit. But SGOV pretty much maintains a value of $100.30-$100.70 per “share” and pays monthly so it can accrue faster on the earned interest.

BirdNose73

Unless rates skyrocket there’s really no reason to save that much of a downpayment. Having more than 100k in a HYSA or CD’s seems silly and would leave a lot of cash on the table

MarkofCalth

Make yourself a budget sheet in excel. Tweak your numbers to allocate money for investing, HYSA, all your bills, and then assign yourself some “fun money” to spend on going out / buying yourself something you want. If you want something big, save up your fun money each month and then buy it. You can adjust the amount from month to month to meet your needs. That way, you have money to spend - guilt free. It’s not an impulse purchase if it’s in your budget. Investing is important, but also invest in yourself through hobbies and fun things with friends/spouse. Those factors are just as important as having a lot of money when your old

EKingJames

If your timeline is <4 years I would recommend a HYSA.

benchplayer3

From what I understand, you have minimal savings now, but in 5 years you expect it to be around $400k? I would probably do something like 80/20 S&P/VOO for 3-4 years. Around the 1.5 year mark before you buy, you're going to want to start taking money out of the market to keep in HYSA to stay liquid. You're also going to want to minimize capital gains for tax reasons, so structure it in a way that you know the money you take out has been in the market for at least 2 years.

MegaWeinerFarts

> would it be best to put this money in a generic brokerage account invested in the S&P, an HYSA, or somewhere else? Short answer, HYSA or better yet CD's or even Treasuries, making sure they mature before you're ready to buy. As to why people don't generally recommend brokerage: What if the economy is in a full on recession in 5 years? Stocks down 30%. Would you be willing to sell at such a loss in order to buy your home, even if home values might be down a bit too? Probably not. 5 years though, that's usually the cutoff time between investing needed money and saving it in fixed income (HYSA, CD's).

No_Hamster_6615

It depends on where you live, but for a first house: If you have $400k just buy the house. You can get a boujie first house where I live for way less than that. Why mortgage? Also if you are 22 and able to save $400k in 5 years, you've already won. I was scared and did HYSA saving for my first house and lost out on tens of thousands if it was in S&P or bond ladder. S&P could be more, but could affect your timing and force you to wait a couple of years if the market timing is poor.

Odd_Papaya8305

Yes, I’ve been away from options and putting money into my HYSA and roth IRA!

Marcush214

Shut in a HYSA it will pay you enough interest as a minimum wage job while still having liquid cash or maybe he got a dividend portfolio who knows man

GalacticPlutoBear

Think I’m better off sticking to a HYSA

SkillFine9793

Definitely HYSA but nothing is really safe these days.

StinklePink

I like SGOV as an alternative to a HYSA. Maybe not to a 40% of my portfolio degree but as a good Emergency Fund stash.

Paul_Robert_

Lmaoooo, even just a few percent from a HYSA would be more than the median Joe's salary 💀

jyoung1

Look up the money supply growth of your currency and compare HYSA after tax

Various_Couple_764

The answer to the question depends on howling the money will be invested or placed a HYSA. If you invest the money for under a year and then sold it you could get capital gains or a capital loss. If instead you had it in a HYSA there would be no captial gain or loss. and the effect pt inflation depends on the difference e of the rate of inflation and minus the interest earned which it likely going to be a very small number. However if you hold the money for 10 year you would likely get capital gain when you sell while money in a HYSA will suffer 10 years of inflation losses.

CSMATHENGR

this is literally my thesis. I was earning 4-5% in my HYSA of 20k for a few years. Last year once inflation started going crazy and HYSA interest fell to 3 I decided to invest 10k and using the other 10k as spending money. Going to ibiza in 2 weeks. At this rate it’s better off being spent than losing value

shanus94

Logically yes, max out your Roth (if you are eligible) max out your 401k contributions. Throw 10% into a HYSA. But… this is WSB.

mazzicc

“Safest” is not a defined term Government bonds are all but guaranteed to be paid back, and will generate interest, but inflation can grow faster. The same applies to HYSA’s, and I think a LOT of people don’t realize that the awesome 5+% HYSAs they opened in 2023 are not still paying that rate. There are still some 4% out there, but that’s generally the max, and not guaranteed either. But if inflation is right around 4%, and potentially higher, that 4% HYSA or bond isn’t really doing much. if you’re in an HYSA, you’re more liquid to move around if the rate falls, where bonds you’re not as liquid, especially if you want higher rates. All that said, neither of those options really does anything other than hopefully pace inflation. And that’s all they’re supposed to do, really. That’s not really an “investment” to some people, unless you think inflation will be lower than returns…that’s just savings (I know it’s technically an investment, but colloquially people think about investments making them money, not just keeping them flat)

dwntwnleroybrwn

What's the time horizon and what is the money intended for? House down payment in < 5 years? HYSA Retirement > 5 years? S&P500

ImxTrash

really? inflation grows that fast that HYSA is completely voided?

InUrFaceSpaceCoyote

What time frame? What conditions? What constitutes an "investment" for this purpose, because I wouldn't typically call an HYSA an investment in the first place.

InvestInTwinkies

Is the money for less than a few years? HYSA. Is the money for years from now? Index funds

kokanee-fish

Risk and reward are always correlated. So if you literally want to find the "safest investment" then you are trying to find the lowest-ROI investment that doesn't have a negative return. Historically people would say bonds, these days they'll say HYSA or CDs. I think the question you maybe actually had in mind is "which investment offers the best balance of risk and reward for a small account" but the answer to that depends entirely on your circumstances and goals. S&P500 is a decent answer, but even that won't be a positive return every single year.

abeBroham-Linkin

SP500 has been giving returns of up to 11% for the past 5 years, even with tariffs, COVID, and the war. HYSA, largest I seen was 4.5%, for 9 month trial.

BarefootMarauder

*Safest* is HYSA or US Treasuries. But it could depend on the agreed upon definition of "safest" and "investment". To me, those aren't investments, but rather they are places to keep cash safe. For an actual investment, I'd say a low-cost total market or world market index fund. VT & VTI would be examples.

Skippy989

SGOV. Three month duration US treasury bonds. You'll get the same rate as an HYSA without state taxes on dividends.

Fibertad

HYSA would be the safest, but I would open a brokerage with vanguard and put it in VUSXX. It's safe enough