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Sold home - where to put equity?

4,377 Views | 16 Replies | Last: 4 yr ago by Comeby!
Artorias
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AG
We recently sold our home in the Austin area and made a tidy sum in equity that it currently sitting in our bank account earning nothing.

We likely will not be buying another home for at least a year or two, at which point we will need the money for a down payment. Until then, we would like to invest it somewhere that earns some interest.

I would like to put some of it in an interest earning account that is accessible in case of emergency. The rest can go into longer term investment account until we are ready to buy another home.

Any suggestions on best places to park the money?
Gordon McKernan
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The easy answer is put it in an online savings account earning 2.25-2.5%. Setting up a CD ladder may yield slightly higher rates. Those options are virtually risk free. If you want higher returns than that, well, that depends on how much risk you are comfortable with.
Baby Billy
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AG
Not gonna get more with a CD ladder right now.
Online savings acct/money mrkt acct you can find for around 2.25%.

Money market mutual fund may yield a tad more. One I've been using through Federated has no load and yields 2.4%
diablo loco
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amzn
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94chem
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Money market, cd's, or if you wanna be a bit more risky, a short term bond fund may net you another 0.5 - 1.0%. If you're only talking $100K or thereabouts, I don't know why you'd risk anything to chase $1K in extra returns. The benefit would only come from compounding.

One out of the box option would be if you are a big spender on credit cards. Bank of America pays 2.625% cash back if you have a large balance in savings. If you put $50K in there, got their card, and put $100K on it over a year, that would be $2625 cash back, effectively a 5.25% return on your savings.

You might consider a portfolio of 3 year notes on Lending Club, and just don't reinvest the returns.
AggieMainland
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2 years is not a long time. A lot can happen (also an election in that time frame). Get 2.25% and call it day. Zero risk and you'll be able to buy a home in 2 years.
Woody2006
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AG
Interest rates are 2.5% at maxmyinterest.com
boba
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Which are some of the better reputed banks which offer a 2.25% or thereabouts interest rate on a MM/Savings account?

Thank you
moses1084ever
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AG
https://www.treasurydirect.gov/
94chem
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boba said:

Which are some of the better reputed banks which offer a 2.25% or thereabouts interest rate on a MM/Savings account?

Thank you


All banks are the same.
mazag08
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AG
For two years everyone here is exactly right. Put it in the safest place possible that makes some semblance of a return.
Aggie_2463
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AG
Wells fargo offered 2.17% with a new deposit of $25K or more.
Furlock Bones
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AG
people always say put it on black. that's fools gold. the smart ones put it on red.
insulator_king
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AG
See this post.

https://texags.com/forums/57/topics/3037660
Comeby!
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AG
2% doesn't even cover the CPI. Go more aggressive.
gvine07
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Comeby! said:

2% doesn't even cover the CPI. Go more aggressive.


Remember that time it took the S&P 6 years to rebound after the Great Recession? Or the 8 years it took after the dot-com bust?
Comeby!
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AG
gvine07 said:

Comeby! said:

2% doesn't even cover the CPI. Go more aggressive.


Remember that time it took the S&P 6 years to rebound after the Great Recession? Or the 8 years it took after the dot-com bust?


Ehh, to each is own. I hire people smarter than me to handle this.
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