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Boris Galerkin posted:So for the people holding cash in Fidelity SPAXX, has the interest rates and returns always been comparable to normal online HYSA rates? I see they are comparable today but I’m trying to figure out if it’s always been more or less comparable. I've only been doing it since the middle of this year so I can't really say. In general it probably roughly mirrors it, if only because the factors that drive the SPAXX rate also drive the interest rates of HYSAs. They're not directly linked, though, so there may be some differences. Best I could come up with through some googling is this chart of the Ally HYSA rate (ignore the orange), and the average yearly yield of SPAXX:  (Current Ally HYSA yield is 4.25%) Spaxx yields: 2018: 1.47% 2019: 1.84% 2020: 0.26% 2021: 0.01% 2022: 1.31% 2023: 4.33% So similar trends, at least, though the SPAXX rate looks generally slightly lower, or at least Ally seems more moderated - when the rates are high SPAXX seems to be higher, when rates are lower SPAXX seems to be lower.
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Dec 15, 2023 22:31
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Boris Galerkin posted:So for the people holding cash in Fidelity SPAXX, has the interest rates and returns always been comparable to normal online HYSA rates? I see they are comparable today but I’m trying to figure out if it’s always been more or less comparable. In theory, when the rates start to diverge, people will move the money from the lower rate to the higher rate and the change in demand will move the rates back towards each other.
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Dec 16, 2023 16:19
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daslog posted:In theory, when the rates start to diverge, people will move the money from the lower rate to the higher rate and the change in demand will move the rates back towards each other. yeah. the general term for this in regards to "savings account vs. money market" is "deposit beta". it's been a hot topic the past couple years: https://libertystreeteconomics.newyorkfed.org/2022/11/how-do-deposit-rates-respond-to-monetary-policy/ https://www.ft.com/content/a54da78a-d9dc-441d-a0d1-2f4684899a64
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Dec 16, 2023 16:38
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pmchem posted:https://libertystreeteconomics.newyorkfed.org/2022/11/how-do-deposit-rates-respond-to-monetary-policy/  The Fed funds rate is the gray dotted line It’s a good article, and this is the culmination of it. If the gap is positive, cash flows into MMF. If it’s negative, flows into banks. DNK fucked around with this message at 16:58 on Dec 16, 2023 |
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Dec 16, 2023 16:55
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drk posted:I opened a CMA a month ago or so. I'll write up a short review at some point, but the summary is, its quite good. I wish I opened it earlier. I've been considering opening one for a few months now and using it to replace my traditional checking account at Chase. My Chase account is truly free (its an old Washington Mutual account with terms that were grandfathered in) but it pays no interest and I don't care about the free access to Chase ATMs. The only thing holding me back is that on very rare occasions I have needed to go into the local Chase branch to cash in old paper EE savings bonds. But once the last of those are done I'm fairly sure I could swap my employer's direct deposit over to Fidelity and start earning something from the money in my checking account. The only other reason to go into a branch in the past few years has been to get signature a guarantee on custodian to custodian IRA transfers but there is a Fidelity office nearby I can go to for stuff like that. My only other concern is what if I end up with a check that is too large to deposit via the mobile app. This has only ever happened once but it sure would be a pain to have to go into a bank that I didn't have an account at and pay a fee or whatever. Would I be able to take such a check down to the local Fidelity office?
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Dec 16, 2023 16:58
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No reason you can't have more than one bank. Keep a small amount in the Chase or a local bank (enough to clear the minimum to avoid account fees if those exist), then you can continue to use them if necessary for in person stuff. That frees up the remainder of your savings, direct deposit, bill paying to go somewhere with better rates.
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Dec 16, 2023 18:24
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Yeah, IMO there's real advantage in being able to go into a branch. My primary checking is in Schwab, but I make sure I have an account at a local bank so I can do in-person stuff easily.
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Dec 16, 2023 18:30
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Antillie posted:My only other concern is what if I end up with a check that is too large to deposit via the mobile app. This has only ever happened once but it sure would be a pain to have to go into a bank that I didn't have an account at and pay a fee or whatever. Would I be able to take such a check down to the local Fidelity office? The maximum check you can deposit via mobile app is customer specific, but a google suggests the limit is often $100k or more. You can mail in larger checks or take them to a Fidelity investor center. Also, there is no reason you cant keep a local bank account. I intend to keep my local credit union account open indefinitely with a small amount of money in the account ($100 or so).
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Dec 16, 2023 18:50
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There's no way to mimic Fidelity's CMA account with Schwab, is there? We keep a decent amount of money floating in our Schwab checking account and it'd be nice to have it doing something at least.
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Dec 16, 2023 19:35
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Residency Evil posted:There's no way to mimic Fidelity's CMA account with Schwab, is there? We keep a decent amount of money floating in our Schwab checking account and it'd be nice to have it doing something at least. Schwab's current business model is paying lovely rates on cash, so no
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Dec 16, 2023 19:50
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To expand a little more, here is a post from bha boglehead posted:2 potentially important things that Schwab does not offer that Fidelity does (don't think other brokerages offer it either): Im using both these features in my CMA and they are good
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Dec 16, 2023 19:58
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Bummer. It's making me think about switching everything over to Fidelity. And then I think about how much that would be and i stop.
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Dec 16, 2023 21:07
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Yeah I posted before about how I use Fidelity for basically everything and I'm very happy with it. Everything comes in and out of my CMA (including my direct deposit and any bills paid by direct debit), and then I distribute my savings/retirement investments into my other brokerage accounts/IRA's, respectively. I do keep a checking account open at one of my local credit unions for the times I need to deposit cash, but those are rare enough that it's almost purely psychological and I'd probably be fine without it.
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Dec 16, 2023 21:46
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Happiness Commando posted:Yeah, IMO there's real advantage in being able to go into a branch. My primary checking is in Schwab, but I make sure I have an account at a local bank so I can do in-person stuff easily. What are all the in-person things you've done over the past two years? I think I've really only done ATM withdrawals. Once I made a wire transfer but those are easier to do online with Schwab and I don't think I'll have to do another one for a very long time.
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Dec 16, 2023 22:21
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Had to get a same day certified check to not miss out on a locking down an apartment rental. I had to do a wire transfer where the recipient’s info was in a weird format that the website couldn’t process. After my wedding had to deposit a bunch of weird bills that atms wouldn’t accept. Converting my account to joint was significantly easier in branch. That’s 4 times over 5-6 years where going in branch has made my life significantly easier. This was across different cities as well, so it being a national bank helped even more. Definitely worth losing out on some interest on the 1500 or so I need to not pay the fees.
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Dec 16, 2023 22:44
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CubicalSucrose posted:What are all the in-person things you've done over the past two years? I think I've really only done ATM withdrawals. Once I made a wire transfer but those are easier to do online with Schwab and I don't think I'll have to do another one for a very long time. Yeah, I’ve been with Schwab for five years or so now and have only needed to go in once (to redeem EE bonds). I’ve deposited checks worth $70k with mobile deposit and not had any problems.
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Dec 17, 2023 00:24
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Bremen posted:Whether I-bonds would be better in treasury bills would be dependent on the inflation rate, so it's hard to say for sure, but I'd move them to something, if only another I-bond for the higher fixed rate, if you're sure you aren't going to want the money in less than a year. Thanks a bunch for this. TreasuryDirect let me redeem them all now, then I’m going to buy the 1.3% I Bonds.
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Dec 17, 2023 04:13
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Similar question to the poster above. I have some I bonds issued June 2022 with a composite rate of 3.94%. Seems like a no brainer to sell them and buy the new ones? Even taking into account the LTCG hit?
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Dec 17, 2023 13:56
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dpkg chopra posted:Similar question to the poster above. I have some I bonds issued June 2022 with a composite rate of 3.94%. The longer you're planning on holding the new bonds the better swapping them over looks. But assuming you're not likely to want the money in the next year, and won't be maxing your $10,000 yearly limit, I'd suggest selling them for something else yeah. There's lots of better options than 3.94% Bremen fucked around with this message at 18:37 on Dec 17, 2023 |
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Dec 17, 2023 18:35
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dpkg chopra posted:Similar question to the poster above. I have some I bonds issued June 2022 with a composite rate of 3.94%. I Bonds dont have capital gains. If you havent bought your allocation for the year, yes you should sell them and buy new ones. If you are maxed for 2023, January works.
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Dec 17, 2023 19:43
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If you already maxed 2023 I Bonds then I would consider waiting until April 2024 before buying more. We'll have a much better idea if the fixed interest rate will go up or down, and you can still lock in the 1.3% if the trend looks bad. e: and of course by bad I actually mean inflation is going back to normal, which is good, actually. Mu Zeta fucked around with this message at 20:02 on Dec 17, 2023 |
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Dec 17, 2023 19:59
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Mu Zeta posted:If you already maxed 2023 I Bonds then I would consider waiting until April 2024 before buying more. We'll have a much better idea if the fixed interest rate will go up or down, and you can still lock in the 1.3% if the trend looks bad. This is helpful advice, thank you.
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Dec 19, 2023 14:23
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Antillie posted:
Anecdotally but my mobile deposit limit is $250k and I can get that raised to $1m if I call. I've never had to, but my parents just bought a house so I helped them with the financing, and if you come to them with the problem of "oh no I have too much money" they will accommodate you.
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Dec 19, 2023 18:39
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I'm guessing this may be a product of it being mostly a physical bank vs. something like Fidelity where I'm sure a lot of their customer base only interacts with their online portion, but for some reason my mobile deposit limit with US Bank is the very strange number of $16,900.
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Dec 19, 2023 19:09
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FWIW, it looks like Schwab lets me mobile deposit up to 100k. The one time I had a physical check that went above that I took it to a local office and they took care of it. Man, mobile deposit is so much better than the old days of mailing checks to schwab.
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Dec 19, 2023 19:16
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USAA has a $100k limit but they did a one-day limit increase when I needed to deposit a larger check. I just had to call ahead of time to let them know.
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Dec 19, 2023 19:32
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I have run into problems with checks that I cannot mobile deposit, but not for being over a maximum cap. At my bank they will not allow mobile deposit on a check that doesn't contain a clear signature line for the sender, which means some business checks require me to deposit in-person.
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Dec 19, 2023 19:37
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I've been playing around with this S&P 500 historical return calculator. It makes a lot of other investments that I've seen over the years look like bad ideas. https://dqydj.com/sp-500-return-calculator/
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Dec 22, 2023 15:07
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Home for Christmas and took a look at my sister's finances. Basically, she called Fidelity a few years ago and used them as a financial advisor to make investments for her. So now there's a brokerage account with an array of Fidelity equities and bond funds, (a very large portion in a muni bond fund, that has lost money, for some reason). She's quitting her job and needs this money. C'est la vie. Is there any way to estimate what her taxes will be by selling? Here's a simpler question. The target date fund in her Roth IRA is called the "Fidelity Freedom 2050 Fund", FFFHX. The expense ratio is a whopping 0.75%. Unless I'm missing something (not like this fund has phenomenal returns or anything),she should change it to something better, like maybe a Vanguard target date fund. I'm thinking that Fidelity basically sold her a bill of goods, so to speak. Does that make sense?
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Dec 22, 2023 17:57
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Ramrod Hotshot posted:Home for Christmas and took a look at my sister's finances. Basically, she called Fidelity a few years ago and used them as a financial advisor to make investments for her. So now there's a brokerage account with an array of Fidelity equities and bond funds, (a very large portion in a muni bond fund, that has lost money, for some reason). She's quitting her job and needs this money. C'est la vie. Is there any way to estimate what her taxes will be by selling? The muni bond fund likely didn't lose money it likely lost market value, assuming they were holding them to maturity. I'd imagine it's generating positive income even if it lost 50% value or whatever. Unless it's actually actively trading bonds (poorly). Fidelity has really competitive index funds but their target date funds are comparatively very high fees. Schwab and Vanguard charge like 0.08%. Unless she's locked into that target date fund as a function of a 401(k) she should consider switching to a cheaper target date fund. jokes fucked around with this message at 18:18 on Dec 22, 2023 |
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Dec 22, 2023 18:15
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There are Fidelity Freedom Funds and Fidelity Freedom INDEX Funds. They're identical but one has an ER of 0.75% and the other is 0.22% or thereabouts. No, the site is not clear about this. EDIT: I checked and it's actullay 0.12% for the one I'm in (FDEWX) Jabarto fucked around with this message at 18:25 on Dec 22, 2023 |
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Dec 22, 2023 18:22
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Ramrod Hotshot posted:Home for Christmas and took a look at my sister's finances. Basically, she called Fidelity a few years ago and used them as a financial advisor to make investments for her. So now there's a brokerage account with an array of Fidelity equities and bond funds, (a very large portion in a muni bond fund, that has lost money, for some reason). She's quitting her job and needs this money. C'est la vie. Is there any way to estimate what her taxes will be by selling? Depends on if the shares she's selling have been owned for less than or at least one year. The former is short-term gains which are taxed at the ordinary income rate, and the latter is long-term gains which are significantly lower - likely either 15% or 0% depending on her AGI for the year. Ramrod Hotshot posted:Here's a simpler question. The target date fund in her Roth IRA is called the "Fidelity Freedom 2050 Fund", FFFHX. The expense ratio is a whopping 0.75%. Unless I'm missing something (not like this fund has phenomenal returns or anything),she should change it to something better, like maybe a Vanguard target date fund. Fidelity is sneaky and has both the "Fidelity Freedom 20xx Funds" with the stupid ER composed of actively managed funds and a second set of "Fidelity Freedom Index 20xx Funds" with a much more reasonable ER which are composed of low cost index funds. If she doesn't want to move the money out of Fidelity you should be able to sell the expensive one and buy the index version. Ramrod Hotshot posted:I'm thinking that Fidelity basically sold her a bill of goods, so to speak. Does that make sense? Yeah, advisors do that. Fidelity will definitely try to upsell the unsavvy on their expensive active managed offerings.
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Dec 22, 2023 18:24
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Ramrod Hotshot posted:Is there any way to estimate what her taxes will be by selling? In the portfolio view, if you click a position, you can see your gains/losses. Here's one of mine:  In this case, if I sold this entire position today I would have about $18 of short-term capital gains. Short term gains are taxed at normal income tax rates. edit: also, if she is going to be unemployed for a while and has a large amount of gains, it would certainly be advisable to wait a couple weeks to January. That way she can pay the taxes in 2025 instead of 2024, which is both delaying it and potentially in a lower tax bracket. drk fucked around with this message at 18:58 on Dec 22, 2023 |
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Dec 22, 2023 18:54
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^^^^ Edit:oh wow that’s huge. Thanks Thanks guys. Thats an easy fix for the target date fund (which is in a Roth IRA, not a 401k). SamDabbers posted:Depends on if the shares she's selling have been owned for less than or at least one year. The former is short-term gains which are taxed at the ordinary income rate, and the latter is long-term gains which are significantly lower - likely either 15% or 0% depending on her AGI for the year. Huh, I didn’t know this. This one year rule ids true for shares of anything in a brokerage account?
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Dec 22, 2023 19:00
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wait is she going to cash out of a Roth IRA? It is not a simple matter of calculating capital gains taxes. The posters responding with that are assuming this is a normal brokerage account and not an IRA. See: https://www.investopedia.com/ask/answers/082515/how-do-you-calculate-penalties-ira-or-roth-ira-early-withdrawal.asp or does she have both a brokerage account and and IRA? She should strongly prefer to liquidate and cash out stuff from a brokerage account before touching an IRA, because of the early withdrawal penalty.
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Dec 22, 2023 19:02
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Leperflesh posted:
correct, two different things. the brokerage account's getting cash out. she's just switching funds in the roth ira.
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Dec 22, 2023 19:26
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Ramrod Hotshot posted:Huh, I didn’t know this. This one year rule ids true for shares of anything in a brokerage account? Yes https://www.investopedia.com/terms/c/capital_gains_tax.asp
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Dec 22, 2023 20:32
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daslog posted:I've been playing around with this S&P 500 historical return calculator. It makes a lot of other investments that I've seen over the years look like bad ideas. scott cederburg has a new paper out that finds a mix of domestic and international stocks with no bonds is the safest portfolio using fixed inflation adjusted withdrawals from a global historical perspective, with the caveat that someone holding it would need to not react some massive short term volatility. one of the main points is that inflation tends to eat nominal bonds alive over the long term i'm honestly not sure how i feel about it, but it does make my massive equity position feel more academically rigorous rational reminder just did an episode interviewing him https://rationalreminder.ca/podcast/284
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Dec 22, 2023 21:50
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I'm going to (probably temporarily unless I get incredibly lucky) stop working for a while in 2024. Is there a thread or set of resources or something for "sabbaticals?" I expect I'm going to not do anything at all to earn money for at least 9 months, possibly up to about 3 years at the high end, probably. I have incorporated COBRA & Health Care Marketplace insurance nonsense already. I'm familiar with the ACA subsidy cliff removal and how that all works, though it won't be relevant for me for 2024. I understand Roth conversion ladders and capital gains harvesting and plan to strategically tax-shift up to sensible marginal tax thresholds. I'll have my resume updated. I've got resources to re-prep for interviews eventually, and have been maintaining a reasonably strong-ish professional network. Even if it takes me a I have no debt and "own" my own house (aside from property taxes). I've got a HELOC to re-lever myself up, if poo poo really hits the fan for some reason. What might I be missing?
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Dec 23, 2023 05:49
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I did a backdoor Roth conversion last month using Fidelity. For some reason I couldn't complete it online and had the call Fidelity so they could process the conversion from traditional IRA to Roth on their end. That was fine, but meant the $6500 sat in the traditional IRA account for slightly longer and generated $.89 cents that appeared after the conversion took place. What's the simplest way to deal with that and get rid of the balance? I'm planning to do another backdoor Roth conversion early in the new year.
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Dec 23, 2023 11:35
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