Parking Cash


#1

I’d like some input on where to park cash for 1 to 2 years. I’m looking at a 12 month CD at 2.50% or 24 months at 2.75%. Thoughts on anything better?

I haven’t been following CD rates lately…does anyone know how quickly the rates are rising in our current environment? If I do the CD, should I do a 12 month and then hope the rate goes up when it matures and do another 12 month, at hopefully a higher rate? Or lock in the 24 month rate now. An extra 0.25% doesn’t excite me too much right now to lock up for an extra year.

Thanks!
Patrice


#2

MEC’s are paying over 3 percent and much more liquid.


#3

I would expect a fairly quick rise in raises in the immediate future, no more than 12 months at a time IMO. Thought I just saw the first 3% on multi year CD’s the other day.


#4

I don’t pretend to be able to predict the future, and the difference between a 12 and 24 month CD will probably not be material unless you are investing A LOT of money, in which case it is not material. I’d just use Bankrate to find the highest rates on a savings account, money market account, or CD and go with that.


#5

How much cash are you looking to park? It’s not for everyone because it requires some upfront work, but my advice is 5k into 5% netspend accounts (if you’re two people, than 10k into them), then the rest you use for bank account bonuses.

Netspend savings accounts are FDIC insured, so no risk of loss there and money isn’t locked up.

Signing up for bank account bonuses you can earn way more than you can get from any savings account. And of course, no risk to loss of principal there since it’s a bank.

Here’s a post I wrote this past summer:


#6

In the old days, it was $5k per NetSpend 5 accounts per person, so you could have $25k per person. I withdrew my funds when they changed it from $5k per card to $1k. Is Mango no longer around? I used to use that one too.


#7

I think Mango is still around, but it’s a ton of hassle.


#8

Still use Mango but it’s more set it and forget it and twice a year, I just go grab some funds from my account. It’s not so bad once you have a dedicated system to it.

Insight was great but that’s long gone by now