1.) $15,000 that you would access 2-3 times a month. I.E., money goes into it, and money comes out to fill a checking account to pay bills. All can be done electronically - no real need for checks.
2.) $35,000 that you don’t need to “touch” for 2-3 years. Likely more like 3. This is a “fund” for a new car that really won’t be needed for that period of time.
I’m trying to do better than 0.55% that I am realizing now locally. My checking is through Chase and they aren’t paying boo on the checking. I’m okay with that as it’s a holding ground for JUST enough to pay bills. It’s where the $15k and $35k “sit” that I want to be certain I am “earning” as much interest as I can.
Ally bank has an online savings account that pays 0.84%. Better than 0.55% for the 15K. It looks like it’s one of the highest (if not the highest) rates available.
It depends on whether you’re willing to accept a little bit of risk, versus having the absolute guarantee of a savings account or CD. If you’re okay with a little bit of risk for the $35,000 investment, look at some of the Vanguard Bond funds.
And Ally has unlimited monthly withdrawals. When I opened an account there 2 years ago the rate was 1.24%. It is down to 0.84% now, which is still better than anywhere else by a good margin for a pretty liquid savings account.
I wish we could just set up a scam where I borrow at the US rate - I’ll give you 2% gladly - and invest at the Australian interest rate, 6% for an online saver type account - i.e. totally liquid.
Have you seen our “Lending Club experiences” thread? If you want some risk, you realistically get about 6% a year. If you want to play the stock market, go with something like HYG or DVY or the safer SPLS. I hear Apple’s paying
Not a scam at all - it’s a perfectly legitimate investment strategy. But as Trom’s link points out, the big risk is that fluctuation in the exchange rate could put you out of business quite quickly.
It would be difficult for me to say how much I could beat that rate by given the data provided. There are too many other factors involved such as state that the saver is resident, risk tolerance, actual planned withdrawals and such.
But I know I could beat that somehow. It would be just a matter of how.
From checking maybe. From savings? No, I don’t think so. You get 6 free withdrawals per month, just like every other bank in the US. This is a limit by Federal law.
They also have a No-Penalty CD for 0.93% APY. I’m not sure how that works myself, or how it differs from savings.
Correct…but you can reduce the risk to near 0% by only selecting the highest rated bonds. My portfolio is considered Moderately Conservative by my broker which has varied 15-25% on bonds over the last 10 years which served me quite well when the market tanked a few years ago. Also, the OP didn’t say whether or not they were adverse to risk, so some consideration should be given to this option.
IANAB, so consult a Broker before making any purchases.
