Putting down payment funds into Wealthfront savings
Is there harm in moving cash intended as a down payment into a Wealthfront savings account? I don't know how long it'll take to find a house and I thought it might be good to put the $500K in a high yield account that compounds monthly at 2.35% It's currently sitting in my savings account which barely accrues interest
Yes, that is what all awaiting home buyers are doing. FDIC insures <=1M.
If you want you can trade some marginal portion on Index fund or large cap stock but that hold some risk and though let’s assume you will make some money but then you need to count on capital gain tax too. Additional factor is what if it repeats Dec. 2018 in your short term forecast? This whole if-else circles back to pick better safe 2.3x % return in wealth front acct.
Yeah I'd rather keep it in a savings account that's easily accessible. My only question is how often does the interest get paid out? I think it's monthly from what I remember
I did the same. It’s a good move
Thanks. Is it safe? Are the funds easily accessible?
I’ve been using Wealthfront since 2013 and opened a savings account with them earlier this year. Haven’t had any issues so far
What were you waiting for not to invest so much cash and have it become into an enormous amount. I never have more than 30K cash in my accounts. Rest everything is invested! Money makes money, so put it to use. Its also advisable to always just put the min down like 3-5 % for your own house, as the remaining money if invested well can give you a lot more return than just putting down upfront.
Terrible advice. Don't through away money on pmi and high interest rates. 20% or wait till you have 20%
It wasn’t all cash. I sold some stock and investments. The house we were planning to buy went off the market. So I have this cash sitting.
If course, this is literally why savings accounts exist. Why wouldn't you? The only downside I can think of would be that it could take 1 to 3 days to get money transfered?
I saw “Wealthfront” and I was like 😱. Then I saw “savings account” and I was like 👍. I wouldn’t put it all in one account though. Split it up over multiple FDIC or FCUA insured institutions instead.
Citi accelerate savings account is more reliable and give 2.36
You only qualify if you don’t live in a state that doesn’t have a branch. ie you don’t qualify if you live in California. And you have to open a checking account blah blah blah. Not worth the hassle for an extra 5 basis points