High-Yield Savings Account

Credit Karma KrmaPolice
Oct 19 46 Comments

Given ~2% is barely above inflation, what APR would it take to make a high-yield savings account interesting to you?

Second question: What’s the next best option to generate low-to-no risk cash flow? Municipal Bonds? Renting? Lending DAI?

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TOP 46 Comments
  • Clover Health sinkinship
    Wait, YOU'RE asking US?!
    Oct 19 17
    • Credit Karma KrmaPolice
      OP
      Oct 19
    • Credit Karma KrmaPolice
      OP
      Now don’t you feel like a clown?

      /thread
      Oct 19
    • Clover Health sinkinship
      Took ya awhile, and of course you snapped it from outside the subthread. You're cute that you're shy about it, but it's cool. 🤷‍♂️👋

      Sorry it got you so upset.
      Oct 19
    • Apple Brahmasmi
      🍿. I like you CloverHealth person!
      Oct 19
    • Clover Health sinkinship
      I mean, trying to lie to software developers and product managers is a fool's errand lol.
      Oct 19
  • Deloitte / Consultant Makiavelli
    cash was the best asset of 2018
    Oct 19 4
    • Credit Karma KrmaPolice
      OP
      That’s true: Cash out performed the market’s -6% return in 2018, but that’s not generally the case, and it’s never been the case over 10+ year time horizons.
      Oct 19
    • Airbnb TSfW65
      Past performance does not guarantee future returns.
      Oct 19
    • Credit Karma KrmaPolice
      OP
      Exactly, @TSfW65
      Oct 19
    • Deloitte / Consultant Makiavelli
      then put it in etf’s and gtfo haha
      Oct 19
  • Amazon / Eng
    takeiteazy

    Amazon Eng

    BIO
    Just taking it easy
    takeiteazymore
    2% is current market rate for savings account. Good enough for me.
    Oct 19 9
    • Amazon / Eng
      takeiteazy

      Amazon Eng

      BIO
      Just taking it easy
      takeiteazymore
      @Karma, but do Robinhood or Bettement offer FDIC insurance?
      Oct 19
    • Credit Karma KrmaPolice
      OP
      Robinhood is SPIC insured up to $250K, Credit Karma is FDIC insured up to $5M, and Betterment is FDIC insured up to $1M, so they’re all same or better than major banks.
      Oct 19
    • Juniper Pliny Jr.
      Karma, I thought the FDIC had a mandated MAX cap with the insurance...wasn't it 250k/person (ie spouses?) on same account or some such?...

      How is 5m even possible? ..
      Oct 19
    • Credit Karma KrmaPolice
      OP
      Credit Karma Savings operates through a partnership with MVB Bank Inc., an FDIC insured institution, using a distributed deposit network of more than 800 banks. Betterment gets to the higher limit in much the same way.

      But this is starting to sound like an ad for Credit Karma... I’m actually not excited about 2.03% and the FDIC limit doesn’t matter to me. I’m interested in other high APR options.
      Oct 19
    • SRI International / Eng awoo
      Credit Karma has a savings account?
      Oct 19
  • D. E. Shaw & Co. WXia81
    If you’re in a high tax state/high tax bracket, state-appropriate Vanguard muni money market funds strictly dominate savings accounts. Taxes turn 2% in a regular savings account into 1% right off the bat; with muni money markets, you currently get around 1.3% but get to keep all of it. Savings accounts have limits on the number of monthly transactions, muni MMs don’t. I’m not saying the returns are particularly exciting either way, but cash has to sit somewhere.

    Longer duration muni bond funds are certainly a very easy way to generate low-to-no risk cash flow at longer horizons. Renting or lending are much more high-touch and the risks are considerably lumpier (especially with renting, which is hard to diversify). I get my renting kick with a Vanguard REIT in a tax-deferred account.
    Oct 19 4
    • Credit Karma KrmaPolice
      OP
      Thanks, @WXia81, this is very interesting. Thanks for taking the time to put together such a detailed answer. I learned about Vanguard REIT and I ended up finding some interesting high yield municipal bond mutual funds.

      I don’t expect to have to pay any taxes on my 2% high yield savings account however. There must be some threshold where I don’t have to report the three-figure (max) gains...
      Oct 19
    • D. E. Shaw & Co. WXia81
      There is no de-minimis exception when it comes to reporting ordinary interest income, and it gets taxed as regular income. You get a 1099-INT, the numbers get reported to the IRS, the IRS sees the difference and doesn’t care where it comes from when it sends you the automated audit form.
      Oct 19
    • New / Eng
      WscU36

      New Eng

      PRE
      LinkedIn, Yahoo, Oracle
      WscU36more
      How long have you been investment business, WXia81? There is nothing wrong by allocating certain position in safe FDIC insured savings account for emergency and divesification. Pretty much most actively managed funds have more or less cash positions. On the other hand, Muni funds are not without risk. They were almost worst performed asset categories just a couple of years ago. You really believe your principals in munis are 100% secure? Treasury index is considerably safer but merely peanuts return. I have high yield CA muni with >4% yield. I'll never compare cash and muni simplely. They are apple and orange. If you have cash for emergency or need a place to park your money for whatever reason, get yourself a higher rate FDIC insured savings account.
      Oct 19
    • D. E. Shaw & Co. WXia81
      When a Vanguard money market fund breaks the buck, what you really want to be long is guns and ammo. Alas, that’s not a legal investment vehicle in NYC.
      Oct 19
  • Earnin TpfV36
    Marcus (Goldman Sachs) and Amex both have 1.9% rates right now.
    Oct 19 4
    • Credit Karma KrmaPolice
      OP
      That’s certainly within the margin of error!
      Oct 19
    • Airbnb YdSR51
      Wealthfront at 2.07
      Oct 19
    • Credit Karma KrmaPolice
      OP
      Great, so now we have 6+ APR offerings between 1.9% and 2.07%... So, ~2% was pretty reasonable in the post. Haha
      Oct 19
    • Juniper Pliny Jr.
      Which is the safest Fintech for future hackings?...
      Oct 19
  • Cornerstone infstone
    S/He gonna pitch that in his/her company
    Oct 19 1
    • Credit Karma KrmaPolice
      OP
      Yes, I’ll pitch the CEO, “raise the interest rate.” Brilliant, @infstone.
      Oct 19
  • Google The Old Nite
    2% APR savings A/C is already interesting for my investments that warrant negligible risk.
    Oct 19 0

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