Given the stock market has become much more volatile lately, I’m considering playing safe and put some money into a high interest savings account instead. Any recommendation? If you have any other investment advice, appreciate you sharing them as well! I’m mostly on index funds and bonds, but seeking other options.
Marcus through Goldman Sachs. 2%
Depending on age, Permanent life insurance
Just buy a bunch vtsax
High interest savings only really hedges against inflation, but barely. Do Vanguard total US market, some vanguard total international and then maybe 0-10% in vanguard bonds. Vanguard IMO has the best rates and with total US market you are betting on the US economy improving.
No high interest savings is the opposite of hedging against inflation. If there’s high inflation (5%) then your 2% return means -3% real return. Hedges against inflation are assets outside cash, bonds, and savings accounts.
You’re right. I guess hedging is the wrong term here.
Don't pull out of the stock market. You cannot time the market.
CIBC
ICBC
Lol that’s funny. These two banks can be easily confused
If you'd like a Wealthfront referral link message me. I use their high yield savings account. Before it I used Ally.
Try this - orion federal credit union (4% interest)
At current 2% yields, the income from this savings is taxed at your marginal rate. So for people in California this means your getting about 1.3% net, 2% inflation, -0.7% return. People should really be buying high grade low duration municipal bonds so you’re not taxed on the income and still get 2-4% yields with a little volatility.
Could you please elaborate more? Can you recommend a place where one can buy those bonds? Is your money FDIC insured in any way?
VTEB or MUB. CMF for California (0% tax), but there’s others for your own state. Any brokerage like Robinhood. No they’re not FDIC insured, as no bonds are, because their price can fluctuate slightly due to interest rates. But they’re SIPC insured inside a brokerage so the bank/brokerage going insolvent doesn’t mean you lose your money. But the tiny fluctuation is worth 2x returns because any FDIC insured savings is losing -0.7%+ real purchasing power a year so should only be used for absolute sub30 day emergency funds.
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Wealthfront has the highest rate afaik
Oh wow FDIC up to $1mil too
Wealthfront +1 And Barclays for direct deposit