Liquid Yielding Savings
What is you recommendation for someone who wants to have relatively Liquid savings with some sort of yield?
Rule out any IRAs or 401k
I want something that I can easily move, spend, invest and while I don’t use it it gains some sort of yield. Obv I don’t expect it to be high, but something is something.
Thanks
Government Money Market Funds are yielding 4-5% (Fidelity, SPAXX) with low expense ratios 0.4-0.5%. Not FDIC insured. A money market account is FDIC insured but has lower yield, potentially higher fees depending on your bank.
Wealthfront has a Cash account yielding 4.55% with 0 fees, instant transfer, unlimited withdrawals and transfers and FDIC insurance.
I think this beats anything on the market right?
They also have a High yield bond portfolio yielding 5.6%, unlimited no fee withdrawals with 0.25% fee.
What do you think? too good to be true?
It looks legit, I've run into wealthfront or betterment when looking up different accounts in the past. They probably hope that in addition to cash savings you'll use their other services and they'll make their fees up that way. With their bonds you'd have risk of loss so probably wouldn't do that for 3-5 years saving. NerdWallet has a lot of comparisons when looking at cash management, high yield savings, etc.. Easiest is to see if your current brokerage or bank has a similar product, that's how I landed on just doing govt money mkts.
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