HYSA

mewalkyne

100k invested in lucky individual picks could explode, or it could not. 100k invested in the broad market will not explode any more than a HYSA or bonds.

first_a_fourth_a

Can you elaborate on investing in BNDW? I checked the historical returns since I had never heard of that and it seems to be around 1%. Why invest in that over a HYSA or MMA?

tommy7154

I dont know why people downvote fore someone asking a fucking question, but the answer in general is YES. It's the same. You could have 100K in a single account or 1K in in 100 accounts. Doesn't matter. What does matter in that scenario though is the returns of the specific account. In general a brokerage/ira (individual retirement account)/401K are going to give you higher returns than a HYSA. A HYSA right now might get you 4-5% annually (so 104-105K after one year with no additional contributions) while a retirement account might get you like 7% (so 107K after one year with no additional contributions).

yayamane

What HYSA or other funds do u recommend for Canadians? I'm with TD but open to better alternatives

yayamane

What HYSA or other funds do u recommend for Canadians? I'm with TD but open to better alternatives

yayamane

What HYSA do u recommend for Canadians? I'm with TD but open to better alternatives

yayamane

What HYSA do u recommend for Canadians? I'm with TD but open to better alternatives

unrulyautopilot

You should consider professional financial planning. This is about the least popular answer you’ll get on this sub but you and your husband are setup nicely to build one hell of a retirement nest egg between this $500k and your likely high salaries. This inheritance should not be considered as a standalone investment account to just grow and forget about it. This is a potential tool you can use to do many things simultaneously. Pay off student loans or other debt, set some aside for a home, 529s for kids, maximize retirement accounts if eligible, then set the rest aside for taxable investments. Keeping the funds in a HYSA is good for now, but please research professionals in your area who can help with this. Find an independent registered investment advisor (RIA) and do NOT talk to anyone who tries to sell you insurance products or annuities.

IAM_14U2NV

The rule of 72 states if you take 72 and divide it by your interest rate, that's how long it'll take you to double your money. The S&P 500 historically does about 10% annual returns, on average. So 72 / 10 = 7.2 years to double your money. If your HYSA historically earns 3% per year on average, it'll take you 24 years to double your money. First 100k takes a while because you're compounding on smaller numbers (ex. 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1048, 10 doubles to hit 1000), then when you hit the 100k, you'll begin to start compounding on larger numbers that add up quickly (ex. 1048, 2096, 4192, 8,384, 16,768, 33,536 67,072, 134,144, 268,288, 536,576, 1,073,152, again, 10 doubles). Doubling every year is an exaggerated example, but if you were to double your money every year, beginning with $1, it'll take you 10 years to hit $1,000, then another 10 years to hit $1,000,000.

Here4Snow

"Are they referring to having 100k in a brokerage/HYSA account" No. You described cash and equivalents. Net Worth is Math. What you own minus what you owe. You might have $100k in HYSA and owe $350k on your home. That is a negative net worth of $250k.

HomerGymson

There’s a few pieces of advice one can give. “Hold forever and it’ll eventually be okay” (Long term mindset) “Don’t catch a falling knife” (Bear mindset) “The best time to start is yesterday, second best is today.” (Bull mindset) A 20% dip stinks in timing, not going to say it’s a good thing, but it really won’t matter if they go back up 100% over the next 5-10 years. Let’s look at even the last 3 years for me. I bought some Amazon April ‘21 at $167 current cost basis. Peaked at $185 a couple months later. Then end of 2022 it dropped to $85. “Oh no! I’m down 50% all time!” Today it is $180 again. Even though that’s pretty puny gains for 3 years, it was like $200 last week, and I could have sold then. I could sell now. Frankly, I don’t care, because I believe Amazon will exist 10 years from now and have more profits then than they do now. (Long term mindset) I bought peloton when I was less familiar with investing, then it quadrupled, then I held and well.. it was a bad bet and I only sold once I admitted to myself it was worthless. In hindsight, I should have sold what was clearly an overvalued company without anything special (bear mindset) My NVIDIA gains since 2020 have been about 900% which has covered that less many times over. Big rocket ship etc. (Bull mindset) I am huge on long term bull, but while timing is impossible, it does matter, so that’s why people do little adds each week instead of all at once. I’d say hold, and keep adding to a diversified pool each week (VOO, HYSA, etc.) (Not a financial advisor)

HomerGymson

Also quick add since you’re confused in other comments, this compounding happens regardless of whether it is growth from HYSA, stocks, or anything that GROWS. Its compound growth always and compound interest isn’t some special category, it’s just interest if the gains are from interest, which again, is no better than gains on cash you had already.

NJImperator

Just saw your edit, but I was in the process of writing that HYSA are actually an okay place to park a little bit of money right now. 4.5% is pretty standard atm, so it doesn’t actually hurt as much to have some emergency savings in one. Lets you have the money readily available if required!

asatrocker

Why are you keeping $100k in a HYSA? That should just be your emergency fund + any near term (<5 year) major purchases

LostInSiberia20

If you have $100k aggressively invested in the stock market, it will explode at $100k. If you have $100k aggressively parked in an HYSA, it will not explode, ever.

Emiliwoah

Replace “compounding interest” with “compounding returns”. Some might be interest from HYSA, some will be dividends, but the vast majority will be growth from investments like S&P500.

pktgen

Any savings account counts or treasury bonds. If you have $200k in a HYSA, you’d see like 6k-8k in interest income pretax. With stocks/etfs you want to enable dividends reinvest this way you don’t pay taxes on the dividend income and more of it goes back to your honey pot to grow.

DadsOfAmerica

Compound interest is just math. If you have $100,000 invested/in a HYSA etc. you’re earning interest on the interest you’ve earned in the past. As an example, if you have $100,000 and let’s assume it returns 8% annually over 10 years. Year 1: $100,000*1.08=$108,000 Year 2: $108,000*1.08=$116,640 Year 3: $116,640*1.08=$125,971 Year 4: $124,971*1.08=$136,049 You can keep doing the math but you’ll see it grows faster and faster because you’re earning a return on the return you got last year. As for your question about HYSA, etc. the concept of compound interest never changes as long as you’re earning a return. If your money is earning 5% in a HYSA, you’ll compound at 5% assuming the rate never changes (it will). The 8% is a rule of thumb for the overall stock market over time (typically 30 year).

TRBigStick

Let’s break it down: 30k in individual stocks: high risk, high growth. I don’t know what companies you’re invested in. They could be excellent wealth builders or they could collapse. Not ideal for retirement investing, in my opinion. 20k in HYSA: low risk, low growth. Good for security, not ideal for wealth building. 20k in 401k: completely depends on what that 20k is invested in. You could have 20k sitting in cash in there doing nothing. Definitely make sure you have this money invested. 20k in Roth IRA: same as with the 401k, it depends on what you’re doing with the money in there.

vaultingbassist

Compounding interest is just a term for how growth expressed in annual percentages (10% a year) grows long term. $1000 growing at 10% is 1100 after 1 year, then 1210, then 1330, etc. So over many years it is way more than just 10% a year times the number of years. HYSA vs stocks changes the likely percentage growth. HYSA may be 4% a year while stocks may be 9%. Most people's networth will have some of both, but generally as it grows will be significantly more stocks so cash savings (HYSA) wont have as much effect/weight on the compounding part.

TRBigStick

Money in a HYSA will compound, yes, but at a much slower rate than money in VOO tends to compound. (I say “tends to” because there’s no guarantee that VOO will continue its trend of 10% average yearly returns. And with compounding, the interest rate is *by far* the most important factor. I recommend researching “the time value of money” if you want to learn more about compounding. I took an entire course on it in college and it’s an extremely valuable concept to understand.

wildcat12321

it is a generic guide / rule of thumb. So whether it is 100k or 95 or whatever doesn't really matter. But the key is understanding compound interest. At 10% annual interest, money doubles every 7 years. So doubling 10k isn't really all that meaningful. But going from 100k - 200k - 400k - 800k - 1.6M is pretty significant. The point is after 100k, the percentage increases start to become really meaningful dollar increases. As far as diversification and counting, it really depends how much you have earning decent annual returns. So cash doesn't really help, but a HYSA might be ok at 4-5%

Keysbby_

Okay then that's what I was assuming either dividend stocks or they were assuming we were keeping money in a HYSA.

Keysbby_

Okay I'm still confused on the "compounding" like are they assuming we just keeping the money in a HYSA?

Keysbby_

So let's say I had 100k total in my portfolio. 30k in my individual stock investments, 20k in HYSA, 20k in 401k,20k Roth IRA. Is this still as effective as let's say 100k in individual stocks or HYSA?

Keysbby_

I'm just confused to what they mean by "compounding interest" like are they assuming we are just keeping the money in a HYSA?

bigred1702

My thesis is that rate cuts are coming so boomers will move cash from HYSA to stocks with high dividend yields and name recognition. TLDR $PFE makes my dick grow so it will make my money grow.

Turquoise__Dragon

If the timeframe is 10 years, then I would invest in something like VUAG. If you might need to take some money here and there at any time, then it might be better to just put it into a HYSA. Not advice.

Benji2108

you can swing trade ETF’s too, it’s sort of fun being able to see all the companies that they hold. I would have a little goal though if youre starting off. especially if you’re young. savings rates are so good right now 5.50% that’s a nice little interest check at the end of each month too. HYSA. or if you’re ok with not needing the money anytime soon, the market is gunna be just fine. it always is. just don’t panic when you lose on red days. it’s normal. you don’t lose money unless you actually sell for a loss. you don’t make money unless you sell for a win. issue from a sale, we haven’t made or lost any money. it’s all just numbers and charts 😝

AcanthisittaNo5807

I think most people use online banks for convenience like Sofi and Ally. I use Apple’s HYSA because of convenience but their interest rate is slightly lower at 4.4%

No_One6174

Another vote to leave the money in your retirement. Even if it only generates a return similar to HYSA’s out there, it’ll generate more than you’ll lose in mortgage interest.

fullthrottle13

100% agree. I was just getting on in a dividend eft for the long haul. I’m not trading every day or even every year. I have bonds and HYSA and don’t like to touch risk. I get what you’re saying though.

BlackBastado-2124

HYSA?

anzetominsek

You want a safe investment but you came with crypto?! Anyhow, I think if you are not prepared to take on any risk, HYSA is your best (and safest) bet.

Lord-Zanik

Looking at CDs vs Bitcoin and not any risk categories in between is wild to me. Swinging for the fences and timing the market is more stressful than most find it worth. If you don’t want to just go broad stock market risk like the S&P500 and can use them, intermediate term bond etfs are fairly attractive right now given the interest rate cycle and expectations . BIV or similar. These are generally safer and not correlated to the stock market. Intermediate term balances duration risk and is fairly safe in the current interest rate environment. If interest rates cut, which all signs point to, you would do better than CDs/HYSA/money markets.

Ok_Assignment4100

I admit I’m not financially sound and knowledgeable, but when people hear that I have $236k laying around in an HYSA, they immediately think why this imbecile is keeping so much cash? Well, I think I’m gonna do something with this soon enough as I’m nearing my 40s and attempt to catch up on the retirement/investing game. For context, I do have a 401k and Roth IRA fully contributed and maxed out each year. Now, I’m looking at other reasonable investment vehicles and strategies. I suppose taxable brokerage account comes up, naturally. My plan is just invest a lump sum of $150k into the taxable brokerage account, and let it compound for the next 30-35 years, no contributions whatsoever and have (hope?) the market return rate of at least 7%. It’ll ensure me at least $1.6M by the time I’m into my 70s using the investment calculator (inflation-adjusted and COL not included). Is this a solid plan? Please leave comments or suggestions and will do my due diligence. Thank you.

NeighborhoodParty982

Well, you have a big problem. You're applying emotions to a numbers game. A loan at this rate is a blessing. When you're capable of making more money from guaranteed investments like CDs, money markets, and HYSA, you should be paying that loan as slowly as possible. It's the ability to separate your emotions from your finances that will keep you from being a loser in your old age. Not the fearful kneejerk you're proposing.

Financial_Form_1312

Your mortgage rate is so low that it doesn’t make sense to do this. If you had a 7-10% mortgage this would be sense, potentially, although you’d lose the tax benefits of mortgage interest payments so it would require a CBA even at the 7-10% mortgage rate because the 7-10% in markets may still be a better play. I mean, money in a HYSA will earn you more than your mortgage interest rate right now - it’s probably been 2+ decades since anyone could say that. Don’t pay off the mortgage faster.

Jmcy3

You could look at CDs at banks as well. Not much risk and might give you higher returns than your HYSA. I know regions bank has a 10 month CD at 5% apy currently. Personally I’d probably just invest long-term in a taxable brokerage account with VOO or something like that

Eatdarich1917

It all depends on you, if you want security more than risk keep in the HYSA. Bonds could be a good place for you to look as well. If you want some risk but not a ton. Look at ETFs or index ones like SPY

ralphy1010

never hurts to keep $5k-$10k of cash kicking around in a HYSA for this very reason.

growinginvestor

Also Webull has a cash management section and I believe they are doing 5% on ur money, not sure if rate is fixed or not though, and you can pull in and out rather. Ibonds are doing good rn but you can’t touch it for a while but not sure how this community feels about need wallet but I always check it out to see who has the highest rates for HYSA and short term cds. Rates are pretty good but make sure whoever you invest in is FDIC obviously so you don’t lose ur money. Best of luck

redhill_qik

HYSA paying 4.5-5.5% have been around for about the last 18 months when the Federal  Reserve raised federal base interest rate. It you haven't moved your long term emergency fund to a HYSA then there is no time like the present to do so.

PowerfulPositive3064

You’re young, and full of energy. Get a 2nd job and start your own side hustle and start building something of your own. Then Open a Fidelity investment brokerage account with a HYSA, a HSA, and a Roth IRA and divide at least 20% of your earnings into those three accts. buying FXAIX. Get the Fidelity cash back credit card and link one of those accounts to it. Always pay off your credit card each month and never go into debt other than housing. Buy a duplex and live in one side and rent the other. Then repeat that every one to two years for 10 years never sell the duplexes. You will be set for life by the time you’re 35.

cakeandale

> what makes you think I don't understand opportunity cost? Because you don’t. You’re talking about bond returns in a vacuum, as if any investment can be judged on its own and not in comparison to alternative options. That is, opportunity cost. > Why is money supply inflation irrelevant when calculating your actual return? Inflation affects all money equally. Your 2024 dollars will lose value in 2025 exactly the same whether it’s under your bed, kept in a HYSA, or invested in bonds. The only question that matters is what option among options that exist produces the greatest return. If all returns lose real value then the return that loses the least real value is still best.

redditissocoolyoyo

Sell now then. Stop your bitching and crying. Cut your losses and throw it into a CD or HYSA and forget about investing.

Dear-Bet7063

UPS is basically a HYSA with tons of upside 

No_Bedroom143

Yea, but I hold the cash in my HYSA. If I got assigned I would just move the cash to my brokerage to cover the share cost.

LetsGoWithThat-1

Wealthfront gives 5.5% rate with a referral link for 3 months and 5% thereafter. They’re online only, but also FDIC insured. DM me if you’d like a referral link. So far it’s worked out well for myself and some friends for the higher interest as an HYSA. Some banks cuts the interest rate and the feds still have not, the banks that are giving the higher interest rates can afford to. So can the ones that have cut their rates prematurely. They just want to make more for longer. The more money you deposit the higher balances they can utilize to make more money on their end, collectively.

OmnipresentCPU

Again, this all depends on goal. The kid wants to retire before he can withdraw. That means he’s going to need a lot of money outside of retirement accounts. In order to do that he should start early. Sure you can withdraw contributions but if he wants to buy income generating assets he’ll need cash to do it, so even taking those contributions and putting them in a HYSA suits his needs better than plopping it in a Roth just to withdraw what he contributed later. I personally didn’t max out Roth/401k contributions before buying my first house and am MUCH better off because of it. The ROE on the house due to leverage combined with appreciation has been much higher than what I would’ve had in a Roth. I also now forcibly save $400 of equity each month and that amount constantly increases. It’s not black and white. Plus, you still have compound interest if you invest the money outside of a retirement account! Sure you give up the tax free withdrawals in 50 years but the liquidity advantage over that time to explore opportunities outside of the traditional stock market should NOT be overlooked.

fdwyersd

They are mostly online.. just remember FDIC insurance limit is $250k so you might want to split it up. google for best HYSA and you'll find the latest...

bobdevnul

The expense ratio definitely plays in MMF yield. Vanguard VUSXX ER 0.09%, 7 day yield 5.28% Schwab SNOXX ER 0.34%, 7 day yield 4.99% Fidelity SPAXX ER 0.42%, 7 day yield 4.97% Higher ER means less yield to you. The quoted yield is after the ER is deducted. You don't subtract it out again to compare yields. There is no correlation to bank HYSA. Banks have their expenses too, but the amount is not disclosed or known. All you need to compare is the stated yields. Bank and MMF yields are driven by different factors. MMFs may not always be better than HYSA. They were not when the Fed rate was at 0%. At that time banks were paying \~0.5% and MMFs were \~0.05%.

MyDogLovedMeMore

I learned how to buy on Fidelity watching this channel: https://youtu.be/rFuiC-UNeMc?feature=shared Super easy and you can setup auto roll. They also show how to by from other platforms including Treasury Direct, Schwab etc. I’ve asked Fidelity if I can buy Tbills from their app and currently the answer is no. Logging into the website isn’t an issue for me. I live in a high tax state so Tbills are great choice since they are state tax free unlike HYSA.

IN_US_IR

Do you have emergency fund for expense worth 4-6 months? If not I would first put that money aside in HYSA for emergency fund. Once cover 4-6 months of expense, then start Roth IRA. You can’t withdraw money you will transfer in Roth IRA. So think twice. If you have emergency fund, you can start saving in Roth IRA.

tossip9999

Some banks have HYSA rates over 5% to attract new customers and grow their deposit base. Banks with higher risk profiles might offer these rates, but that doesn’t mean they’re unsafe. Some rates might be promotional and could decrease after a period, so always check the fine print and sites like [Banktruth](https://banktruth.org/savings/?ttcid=high-online-savings) and Bankrate for updated rates. Additionally, check the news or Reddit threads for any changes to the HYSA rates. My Banking Direct and UFB Direct are legitimate and FDIC-insured, and their HYSA rates are also pretty high, but you also need to research their financial health and customer reviews. Check Reddit threads or reviews about that as well. Bigger banks like Amex and Capital One offer around 4.5% APY because they don't need to compete as aggressively.

A-J23

Do you know how the expense ratio plays into this? Would that take away from the overall percentage you would typically earn in a HYSA?

njpc33

Okay, this is a stupid question. Forgive me. But, say I put $1000 into a VOO via a brokerage account. I make $100 dollars on it. If I wanted to liquidate that money and withdraw it into a checking account, is the entire $1100 now taxable, or *just* the $100 I've made? Does the same apply to a HYSA? If I made $50 via a 5% yield, and then I take out $1050, is it just the $50 that's taxable or everything?

Sh8dyLain

“Today Fucking Sucks Ass.” Nice going regard. Next time try a HYSA

fawkesmulder

Fair, a beginner should probably be extremely conservative, and put a fair chunk in bonds / HYSA too.

ZjY5MjFk

It really depends on 1) your tax rate, both federal/state and if you want to optimize for that or not 2) Your liquidity requirements 3) if you are ok with price risk and just want to capture yield or need principal protection too. -- * If you do t-bill (ladder) that will likely earn slightly more interest and be exempt from state taxes. * You could also squeeze a little more yield out of CD ladders. FDIC insured. Pays about same as t-bills though, without state tax exemptions. * MMF also give about the same rate of HYSA, fidelity is about 5% and vanguard is about 5.3% right now. About the same as HYSA, but has some conveniences, but not FDIC insured. * There are some "tax exempt" funds. Price fluctuate on these, but if you have high taxes and just want to collect interest, then they are nice. You can get muni funds that are fed/state tax exempt or just state tax exempt funds. Yields are lower, but if you are in high tax bracket, then you need to compare apples to apples and compare after tax yield. * There are also "high income" funds that pay up to 8%+. These also fluctuate in price and taxed at normal rate, but nice in tax sheltered accounts or if you have low income. * BOXX is a complex product, but they basically capture the market's risk free yield. But the cool thing is that it keeps it in ETF. So if you hold for a year or more before selling, you get 100% long term capital gains, instead of dividend/interest income. Otherwise, under a year is short term cap gains. --

Jarse-

HYSA $40k, max out this years Roth IRA contribution into VOO then put the rest into a brokerage account & do some researching of stocks to invest into. COST & some tech for brokerage is a good start imo.

foamy295

Pay any high interest debt. Build emergency fund 3-6 months of expenses. HYSA for any cash needed in next couple years. Could max Roth IRA if you qualify otherwise VOO and chill.

SenorValasco

True. I'm just trying to figure out if it's worth moving money out of a HYSA getting 5%. I do all investing and banking through Schwab so I like the idea of having everything in there.

bobdevnul

Yes, you buy SNSXX just like a stock for $ per share. SNSXX is a money market fund. The share price is kept at exactly$1 per share at all times. Since the share price is held steady there will be no capital gains or losses for taxes. It accrues dividends daily for the amount of money held for each day. The dividends are distributed monthly. It's currently paying 5% annualized rate. This will go down quickly if the Fed reduces their interest rate, but so will HYSA. The Fed is expected to lower their interest rate 1-3 times through 2024 - probably in 0.25% increments.

Dith_q

Do you just buy this as though its a stock? Not trolling, I really don't know. I currently have a HYSA with a promotional rate (5.4) that will adjust to 4.4 at the end of this month and I'm looking for another place to park it.

BigDTowing

Hey there! I'm somewhat new to investing and have been working on diversifying my portfolio lately. Here's my current split: * BND - $6.5k * VOO - $47.5K * VXP - $10.5k * VXUS - $21k * FSELX - $11k I'm aiming for a 3-fund portfolio. I already had VOO and FSELX before starting this transition. I'm keeping FSELX but not adding more to it for now. In addition to this, I have a substantial amount of company stock - $200k worth, with 70% of it in long-term holding. The last time I sold this stock was at $85. Since then, it dropped by 60%, which was disappointing. However, the price has recently risen back up to around $50, and I'm considering selling. There are rumors of the company getting bought out, which adds to my uncertainty about whether to wait or sell now. I know holding this stock poses a significant risk to my portfolio, but I'm unsure whether patience might pay off. I'm also curious about the tax implications. What would taxes look like if the stock is bought out or transferred to the acquiring company?  Additional info: I have a fully funded emergency fund plus extra in a HYSA, and I max out my retirement contributions, so there's no pressure on those fronts. This money is purely to set me up for the future as best as I can. I'd appreciate any additional insight here. What would you all do? Am I overthinking this?

Alone_Outcome3272

Maxing out my [Roth IRA](https://acorns.com/share/?advocate.partner_share_id=5319981357789293263&shareable_code=5UFKTXL) and then investing the rest into a HYSA with betterment, they’re offering a 5.5% apr for first three months and then 5%

Interesting-Fuel238

My issue is, how many people will read that post and see it as saying "everyone is FDIC insured." Not a criticism to you personally. Its like I tell my kids when they get called out on a strike 3 call that is outside the zone, you can be technically right and still be wrong. You are 100% correct on the facts. However It does not mean it is not a problem for consumers who go online and look for "HYSA savings account FDIC insured" and they are led to these fintechs that are neither banks nor FDIC insured even though they advertise as such. My point is for anyone reading this post, I hope they do their research and don't make an assumption that every "bank" is safe.

Interesting-Fuel238

Consumers go online and see HYSA, FDIC and think they are putting their money in an FDIC insured account. So the reality is people need to be careful when putting their money in something they perceive to be an FDIC insured bank account.

440_Hz

It’s not always about chasing the highest interest rate, you have to take some time yourself to research terms of service (transfer limits etc.), ease of use/UI, people’s experience with customer service, general reputation as an institution, etc. Also take note that some institutions offering HYSA or a similar product are fintech companies that are not banks and therefore are not FDIC insured. Instead, they “cash sweep” the money into actual banks which are FDIC insured and the fintech company takes responsibility for the ledgers. It adds a layer of complexity (especially if something goes wrong) which may deter some, but I do have some savings with Wealthfront who does this. However the bulk of my cash savings is with Discover HYSA because I consider them to be a pretty “bombproof” company.

DazzlingRice8970

So which one is better in all over ? A random bank with HYSA with rate of 5.00 or let’s say SNSXX with the rate of 5.00? I know you can’t cash it right away for one . And other thing is that no state income tax .

Mr_Alex

Any reason why this is preferable to a HYSA?

DazzlingRice8970

- That’s like treasury bill , money market ETF , right? - can you cash it out any time you like , like HYSA or you have to keep it certain time? Thanks!

happy_snowy_owl

First, HYSA's are actually banking promotional deals. That's why none of the major ones offer one. Secondly, the interest offered in a HYSA essentially represents the financial institution's average interest rate on its own short term reserves and cash investments.

1-RogueOne-1

This is a long answer. The short version is invest in CD’s, HYSA, and for stocks,,,,VTI, VOO, SCHD, QQQ. Everything else, IMHO will be more risky. Even “research” can lead you down a dark path. You do you though.

Historical_Low4458

If VUSXX is the money market fund that you use for your brokerage account, then just put the cash there. I leave my emergency fund in a money market fund over a HYSA because it allows me to invest some of it quicker if an opportunity arises.

Hurricane_Ivan

There's plenty of HYSA offering over 5%. Been like that for almost a year now.

Dual-ThreatQBJim

I have few different brokerages amont Fidelity/Vanguard/Schwab as well as employer 401K and my own HYSA. Fidelity is the most flexible for ETFs, Vanguard has the best MM sweep rates, and Schwab has good customer service. In general, I would create a new account for a specific purpose (e.g. long term investment, short-term stocks, fixed-income/treasuries, house downpayment, emergency fund) I would keep similar products with the same brokerage so you can move the assets around if you need to (e.g. My house downpayment and treasuries accounts are both at Vanguard).

DivyLeo

Can you take it as lump sum? Annuity is a notoriously bad investment... Icd just take all the money and put it in some diversified ETF... HYSA rates will collapse when fed starts cutting rates. If you want income now, $50k in SCHD will give you $2000 a year... Not as much as $800/m but you principal is not running down as in annuity.

Rikharor1980

I split mine into 3rds between HYSA at 5% on Wealthfront, Wealthfront bond ladder at avg 5.25%, and USFR currently at 5.33%

YetiPwr

So were you already planning to buy a house in the next 5 years or so? If yes, then sure, put it into a HYSA or the like. If no, I don’t think buying a house just because you came into some money is a good idea. Houses come with all sorts of hidden costs and fees and limit your flexibility moving forward. If you’ve got a family and need to solidify your living arrangements then sure, use this to accelerate your savings for a down payment… Otherwise if you’re just trying to do the responsible thing, consider just boring old stock market index investing. Do you have an existing 401k through your employer? This might be a good way to start maxing that out.

mungbeanboi

The schwab brokerage is mt form of a HYSA and Id like to keep it that way. If i dual use it as a taxable investment account then it may mess with how I look at my savings. Do you still recommend to dual use that brokerage?

Anonymous_Chipmunk

SoFi HYSA. 4.60%, and I got a bonus for opening the account through a referral. (Happy to refer anyone to make a mutual referral bonus... Lol) I also use SoFi for some brokerage stuff so I use it as an "out of sight" savings.

Yo_Biff

I'm going to assume your time horizon to purchase is in the next 5 years, the time of the annuity payout. The general consensus on monies you will need in the next 5 years are better off invested in less risky investment vehicles. This includes things like Bonds, Money markets, HYSA, CD(s), etc. You want things that do not risk your principle. Protecting your principle means lower, but highly stable returns. You can go riskier of you so choose, but understand that big returns come through compounding over ***Time***. I stress this because 5 years or less is not a lot of time. You have $10k in savings and at least $800/month to add ($48k contributed after 5 years). At a 5% return (approx. bond return right now), you'll have about $67k. Let's say you go riskier, and aim for a 10% return. You might end up with $77k. The problem is equities could do better. They could do worse, and you could end up with less than you invested/saved. The question you have to answer for yourself is: *Is that worth the risk of your down payment?*.

BaloogaJoe

Yes, this is the go to for me also. Took all my HYSA out and put into this.

Kind-City-2173

I recommend a vanguard money market fund as they are more tax efficient than a HYSA

LocoDarkWrath

Depends on how long you plan to keep it invested. Less than 5 years probably a HYSA. More than 5 years go with an S&P500 fund.

NetRealizableValue

Sorry to hear you're having to deal with that I Bonds were a great place to park your money during the pandemic, but I was so relieved to liquidate into a HYSA. That website is a mess and I knew if anything went wrong it'd be a huge pain in the ass to fix

jester29

Your options are: * HYSA (High-Yield Savings Account) * Money Market Fund You could also consider T-Bills or brokered CDs. While both have a longer maturity date, they can both be traded on the secondary market if you purchase in a brokerage like Fidelity or Schwab

Dan-in-Va

To be clear, I strongly recommend NOT waiting for a bear market. We never know when one will occur. All I’m saying is to DCA 1/52 of the $100K each week into VTI via fractional investing from a HYSA earning 5% (I automate this with M1 from their 5% HYCA), but if the market dips by 20%, I would be comfortable investing the remainder of that $100K without continuing to DCA.

drgath

Everyone says “VOO and chill”, but it really should be VOO and HYSA (or money market fund like VMRXX), as the latter is offering historically high rates. You can either get a guaranteed 5%, or somewhere between -15% to 15%, depending on your opinion of the stock market. I’m like 95/5 right now, favoring VOO, but I do occasionally think about pulling some out for HYSA in the case the market tanks in the next 1-2 years. If that happens, I’d shift the HYSA to VOO after the drop and ride it back up. Only reason I’m so heavily weighted towards VOO is because that’s just the way it’s been for the last 10 years and HYSA rates haven’t been attractive until the last few years. I should probably at least steer new contributions towards the HYSA

SouthBound2025

HYSA until next market correction

Dan-in-Va

I wouldn’t invest it all at once. I would put it in a HYSA and DCA into positions on a weekly basis over the next 12 months. If the market drops by 20%, I would put it all in.

freeflyrooster

Wife and I just sold our house and after moving we have approximately $160,000 in cash just sitting around needing a place to be. Per automod: We are both 33, US, employed, combined $200k income I'm well-acquainted with the PF flowchart at this point and my soft plan is the following: * 6 months cash for bills/emergencies in case someone loses a job (\~$37k) - HYSA or maybe T-bill ladder depending on rates * 3-5 year (replacement car, trips, whatever) 30% of remaining (\~$37k) - 70/30 split bond ETF/VOO * 5+ years 70% of remaining (\~$85k) - 30/70 split Bond ETF/VOO for growth Essentially debt-free (small monthly car payment and new mortgage @ 6.6%), both contributing to our 401k and getting employer match. We're considering a kid in the next year or two, would it be better drip-feeding some of the money over the next few year into a 529 or maxing out our ROTHs? Or just let it ride in the portfolio above? Going from our previous 2.9% to a 6.6% mortgage rate, would it make sense to use the 3-5 year horizon fund's earnings to make additional payments per year at the beginning of our mortgage to work down the principal faster? Anything else patently obvious I'm missing? I don't want a super involved and complex investing project, just a series of holdings that are making decent returns over the various time horizons.

WishyWashy2jr

If you need it for college, maybe saving some in an HYSA could be a good idea.

Bakahead_trader

Either learn how to invest the hard way or give your $ to a financial advisor to invest it for you. You could pick one or two ETFs and/or a HYSA and then just set it and forget it. You could also pick one stock and one ETF out of every option you listed. It looks like you prefer TSLA, SCHD, NVDA, and AAPL. I would avoid ARKK, QQQ, and VTI. I suggest you figure out why you are investing and invest based on that. I invest in 3 industries by investing in 2 stocks and 1 ETF per industry.

Apprehensive_Fox4115

Wow. So if I'm understanding right, a HYSA would've done better?

LabDaddy59

Two people each have $22,444. Person A buys 100 shares of a stock trading at $224.44. Person B buy 1 LEAPS call with 2.5 years until expiration for $47.50 and invests the rest in a HYSA at 5%. Stock dumps 20% from it's original price overnight -- maybe there was a product recall, maybe some dodgy accounting, whatever. Say this happens a year out. Person A has 100 shares of stock valued at $17,955. Person B has a worthless (let's assume worst case, even though there is still a year and a half until expiration) but has cash of $18,579 (($22,444 - $4,750) \* 1.05). This is how you don't lose more than owning the stock. I'm not sure a lot of people recognize that the P&L graph of a LEAPS call is similar to holding the stock and buying a put.

ThatPeace5

Well in all the reading material and podcasts etc that I’ve learned from, they all say you should start by paying off debt, then open a HYSA with 3-6 months worth of pay followed by a Roth IRA/HSA and max out 401k contributions. Last on that list is a traditional account. I’m assuming since you pay more taxes on that but like I mentioned, I’m still learning.

theoldme3

When I got into the stock market, Gold was regularly talked about as a purchase....Those guys are now old, dead or saving there pennies for retirement with ETF's, Bonds and HYSA