# High yield account with no early withdrawal penalty **URL:** \ **Category:** Factual Questions\ **Created:** [February 16, 2015, 8:06pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848 "2015-02-16T20:06:07Z")\ **Posts on this page:** 13\ **Page:** 2
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [February 17, 2015, 7:26pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/21 "2015-02-17T19:26:03Z")
I think you mean six months’ _expenses_. Your pay can easily be more (or less) than your actual financial needs. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [February 17, 2015, 7:30pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/22 "2015-02-17T19:30:10Z")
> [@Bill\_Door](#): > > If you don’t have six months take home pay in liquid form you don’t have enough savings to consider investing in equities. First do that. Anything over and above that can go in a Vanguard index fund. I like VDAIX which is a dividend appreciation fund that has annual returns of 7,3% since the inception date of 2006. > [@Really\_Not\_All\_That\_Bright](#): > > I think you mean six months’ _expenses_. Your pay can easily be more (or less) than your actual financial needs. No, I agree with\* six months’ take home pay\*. The amount between what you bring home vs your actual expenses are an added buffer for _unforeseen_ expenses. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [February 17, 2015, 7:49pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/23 "2015-02-17T19:49:49Z")
Well, not if you’re making less than your expenses - which is hardly unusual in these economic times. ---
**Author:** ![Bill\_Door](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@Bill\_Door](https://boards.straightdope.com/u/Bill_Door)\ **Post date:** [February 17, 2015, 7:54pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/24 "2015-02-17T19:54:17Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Well, not if you’re making less than your expenses - which is hardly unusual in these economic times. If you’re taking home less than your expenses you **really** don’t have any business buying equities. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [February 17, 2015, 8:09pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/25 "2015-02-17T20:09:44Z")
> [@kwc27](#): > > Does anyone know what I’m talking about? There aren’t any high yield, liquid investments that don’t have serious risk involved. Generally, the saying might go “High yield, liquidity or low risk. Pick 2.”. So like others have said, your best bet might be to split your amount and pick a different set of 2 for each part. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [February 17, 2015, 9:08pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/26 "2015-02-17T21:08:21Z")
> [@Schnitte](#): > > And the bottom line of all this? First, the OP needs to make up their mind as to what they actually want, i.e., what is important to them - liquidity (i.e., the ability to withdraw at any time without unacceptable losses), or yield. This is the best advice (although not the only good advice in the thread). You need a plan - preferably one that is written down. Figure out your current financial situation and set a series of financial goals, both short and long term. This should, at a minimum, include an emergency fund and retirement savings but can also include things like future education expenses, large purchases, debt repayment. Then match the necessary return (which drives the necessary risk) with liquidity requirements to determine the correct asset allocation and location, considering any tax-advantaged approaches where possible (retirement accounts, in particular). Assuming you have no high-interest debt and both you and the wife have hit any company match in the 401k, the next best place for that money is likely either a deductible traditional IRA or a Roth IRA (which with yearly limits of $5500 actually fits your $11k pretty nicely). Given your age I would think that a minimum stock/bond allocation of 80/20 would be appropriate, but others would say you should be 100% stock at this point in your life. Low-cost index funds are the way to go, or even a target-date fund for the ultimate in hands-off solutions. But if you have a different goal for the money then that advice could change dramatically. If you want low-risk with low-penalty liquidity then you are basically stuck with 2% returns in today’s rate environment - sorry. ---
**Author:** ![filmore](https://avatars.discourse-cdn.com/v4/letter/f/7993a0/32.png) [@filmore](https://boards.straightdope.com/u/filmore)\ **Post date:** [February 17, 2015, 11:15pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/27 "2015-02-17T23:15:12Z")
Be very wary if you see someone offering ‘safe’ investments with fantastic returns. I remember seeing some in my local newspaper for CDs with 7-10% returns. Most likely those are scams. ---
**Author:** ![dstarfire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dstarfire/32/5762_2.png) [@dstarfire](https://boards.straightdope.com/u/dstarfire)\ **Post date:** [February 17, 2015, 11:34pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/28 "2015-02-17T23:34:59Z")
My online savings account is currently paying 10%. If you’re interested. PM me and I’ll send you a link. (mentioning a specific company/account for a question like this feels too much like spam). ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [February 17, 2015, 11:37pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/29 "2015-02-17T23:37:46Z")
> [@dstarfire](#): > > My online savings account is currently paying 10%. If you’re interested. PM me and I’ll send you a link. (mentioning a specific company/account for a question like this feels too much like spam). No. Feel free to mention it. I find it extremely hard to believe any savings account is offering 10%. If it does, I’m sure lots of folks would love to hear about it. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [February 17, 2015, 11:40pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/30 "2015-02-17T23:40:05Z")
I’d also like to hear about any online account paying ten percent interest today. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [February 17, 2015, 11:56pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/31 "2015-02-17T23:56:47Z")
> [@Dewey\_Finn](#): > > I’d also like to hear about any online account paying ten percent interest today. Yeah, to make it clear (in case it isn’t already) 10% yield is not just high, it’s _crazy high_ with the current inflation rate, exponentially so for something like a savings account, which is supposed to be low-to-no risk. Hell, I’d be happy with a 2 or 3% FDIC insured savings account. There must be an element of risk involved or major catches for that 10% rate. It doesn’t make any sense otherwise that I can think of. ---
**Author:** ![filmore](https://avatars.discourse-cdn.com/v4/letter/f/7993a0/32.png) [@filmore](https://boards.straightdope.com/u/filmore)\ **Post date:** [February 18, 2015, 5:16pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/32 "2015-02-18T17:16:42Z")
> [@dstarfire](#): > > My online savings account is currently paying 10%. If you’re interested. PM me and I’ll send you a link. (mentioning a specific company/account for a question like this feels too much like spam). I would urge you to look carefully at the account and how real the returns are. I’m not saying it’s a scam, but scam investments will often make up numbers so that the interest rate looks good, but it’s not real (see Bernie Madoff). ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [February 18, 2015, 5:30pm UTC](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848/33 "2015-02-18T17:30:40Z")
Invest in the Blue Chips: Transatlantic Zeppelin, Amalgamated Spats, Congreve’s Inflammable Powder, U.S. Hay and that up-and-coming Baltimore Opera Hat Company. [Previous page](https://boards.straightdope.com/t/high-yield-account-with-no-early-withdrawal-penalty/712848.md?page=1)