Evaluating my cash holdings and am evaluating whether to park my cash in Marcus by Goldman which is FDIC insured or Fidelity SPAXX money market which is SIPC backed. Leaning towards Marcus. Slightly less yield but FDIC backed. What are the boards thoughts? How is the Marcus platform? Easy to make transfers?

Sipc if it's a lot of cash. Fdic tops at 250k

I have a mix of CDs, t bills and money market for what I consider "cash". They are laddered so I just rotate as they mature or get called early.

I'd go with SPAXX.

I keep my cash in VFMXX at Vanguard which is basically the equivalent with no worries.

I have a Marcus acct too, but decided VFMXX is the better general route.

Most firms have private insurance backing up whatever the gov doesn't insure at SIPC.
Why in the world would someone have enough cash in a brokerage account to worry about the insurance limit?

It's fairly common right now for retiree's to have large cash deposits. It's often recommended that retired people keep 1-3 years of safe assets to fight sequence of return risks in early retirement. The idea is have cash ready incase of a stock year like 2022, you want to spend down the cash in that year and rebuild your cash reserves in years like 2023 and 2024. That way you aren't forced to sell your stocks to live on during a bad year and then miss out on the recovery.

Also 2022 was an eye opening year for a lot of people because both stocks and bonds went down contrary to the belief that bonds act inverse to stocks. That revelation plus the fact cash is paying close to what bonds pay with less risk of losing value has left many to keep their stable reserves in cash.

If you are retired with $3million and following the 4% withdrawal rule you would be trying to live off of $10k a month, it wouldn't be unreasonable to have $360k in cash to fight sequence of return risk in your plan.

I use SPAXX. Fidelity has some higher yielding MM funds, but with higher minimums. You can choose t-bills, muni's, etc.

If you are worried about the safety of SPAXX, they do have a treasury option that has slightly less yield.

jgw02 said:

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Evaluating my cash holdings and am evaluating whether to park my cash in Marcus by Goldman which is FDIC insured or Fidelity SPAXX money market which is SIPC backed. Leaning towards Marcus. Slightly less yield but FDIC backed. What are the boards thoughts? How is the Marcus platform? Easy to make transfers?

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FWIW, Marcus just cut their rate to 3.9%. OTOH, Barclays is currently paying 4.5%.

My elderly mother has some parked at Marcus and she doesn't really do any transfers with it. I've got some with Barclays that I keep for liquidity on my business and it's easy to link external accounts and do transfers in and out.

But, on all of them (e.g. Marcus / Barclays / Sallie Mae, etc...) be aware they can pull the rug out at any time and often do.

depositaccounts.com has rankings, but the top rates are usually for banks with which I'm not really familiar.

If you find a "can't miss" deal, post it here. I'm all ears.

jgw02 said:

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Evaluating my cash holdings and am evaluating whether to park my cash in Marcus by Goldman which is FDIC insured or Fidelity SPAXX money market which is SIPC backed. Leaning towards Marcus. Slightly less yield but FDIC backed. What are the boards thoughts? How is the Marcus platform? Easy to make transfers?

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Are you married? You can put $250K in a single account at Marcus and then also open a joint account with another $250K and have a total of $500k covered.

Thanks for all the replies, I think I am going to go the SPAXX route

I parked about $300k earlier this year in my Robinhood account and was getting over 5%. Now I am at 4.75% plus the 1% cash bonus they offered for the deposit. Not bad.

That's a pretty good deal. I have a large cash balance in one of the Fidelity MMs with a 100k minimum. I think it is 4.62% (?). I know I should invest it, but I'm thinking of a serious house upgrade. I'd like to never pay taxes on it again.

You can link your wife or kids to cash accounts to avoid the $250K FDIC GRiF.

Have you had any success in getting your money out? I've never had more frustration in my financial life than with this outfit. They have intentionally evasive customer service and "restricted" my account as soon as I pulled $30K out. At the time, I thought nothing of it, because I shift money around fairly regularly depending on what I'm doing with it. But these Fers basically locked up my account and I can't transfer anything out.

Sure, I'm making great interest on "digital paper", but it's totally inaccessible.

Chat function is worthless. No call service. They have called me once "to clear it all up" but I missed the call at work and now I'm just sitting here waiting.

If you have the stomach look at some Nuveen CEF's. JGH...NMZ. Nuveen has been around a long time.

Robinhood can't be trusted after what they did a couple of years ago. I'm not sure why anyone would put their money in it.

And it sounds like from above they still have issues.

https://www.reuters.com/technology/broker-robinhood-pay-70-mln-systemic-supervisory-failures-2021-06-30/

There is also BIL.

It's an ETF of 1-3 month treasuries. Currently paying 5%. Backed by Uncle Sam.

Still waiting. Zero contact from them. Account restricted. No way to reach them. It's insane.

I'm tempted to contact an attorney