How do you store cash?

Aug 30, 2021 29 Comments

I have a large amount of cash ~ $1M that I keep for down payment. Right now it is distributed across 4 accounts since there is $250K limit on FDIC insurance.

Is there a better way?

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TOP 29 Comments
  • Google
    korvett

    Go to company page Google

    korvett
    If you want low cash risk, then put it in brokerage accounts in money market funds. Most return 1-2%.

    1M for down payment?
    Aug 30, 2021 2
  • Google / IT
    πŸ’ πŸ’© β†˜οΈπŸš½πŸ§»πŸ€

    Go to company page Google IT

    πŸ’ πŸ’© β†˜οΈπŸš½πŸ§»πŸ€
    I made the mistake of holding 900k in cash for a year planning to buy a house with a sizable downpayment , and missed the wagon of 20%+ appreciation last year. Unless you are expecting to use it really soon it is better have it invested
    Aug 30, 2021 1
    • New
      jHGP26

      New

      jHGP26
      This is what they mean by survivorship bias. If the stock market has sunk, even only by 10%, your house purchase wouldn't be able to happen
      Aug 30, 2021
  • IBM
    Teta

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    Teta
    Tax-free mutual fund.
    Aug 30, 2021 4
    • Google
      WzQ5

      Go to company page Google

      WzQ5
      How’s this tax free
      Aug 30, 2021
    • Google
      vlad_g

      Go to company page Google

      vlad_g
      Tax free because they are put into munis

      However, being high yield they have significant risk if there is a downturn

      If you want something similar to fdic insured stability, do not get this!! Next closest to fdic insured is a non-insured money market, but that is also basically 0%

      After that, a little more risk will get you short-term treasuries (perhaps 0.1-0.2%), then short-term high quality govt bonds (maybe 0.4-0.5%) starting to get a bit of volatility, then ... ...

      Unfortunately if you want safety, you aren't going to be getting much
      Aug 30, 2021
  • Google
    sveee

    Go to company page Google

    sveee
    Leave it as-is if you are close to buying now. I consolidated a couple of months before buying and it was a PITA as my lender/bank went into all the details of sources of that money.

    I assume this is all in an online savings account. Also if it’s a joint account you are covered to 500k (the limit is per-owner, per-account, per-ownership-type)
    Aug 30, 2021 2
  • Amazon
    phasgaye

    Go to company page Amazon

    phasgaye
    Under the mattress ?
    Aug 30, 2021 0