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Leperflesh posted:There are high yield savings accounts right now at 5.25%. Chasing yields from a new lovely bank every 6 months sucks
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Mar 20, 2024 17:11
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ahah, OK so it has a .04% advantage before you even account for taxes on $50k that's $20/year, not enough to care at all about, so it's gotta be taxes that makes it better Inept posted:Chasing yields from a new lovely bank every 6 months sucks True, but the money market funds aren't a guaranteed yield long-term either, the only way I know of to lock in a yield is by buying actual bonds or CDs. Or does VUSXX consistently stay above the HYSA yields? Leperflesh fucked around with this message at 17:14 on Mar 20, 2024 |
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Mar 20, 2024 17:11
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Honestly even with the slightly higher return aside, I use it because I don't want to have savings account open at half a dozen different online banks in order to chase a higher rate. I think my current highest HYSE rate is 4.75%, I'm not gonna open a new account at a new bank and jump through the hoops of verifying accounts to transfer money in order to get those 54 basis points, but since I already have a Vanguard brokerage account it's easy as piss to just shift money from the 4.75% account to VUSXX.
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Mar 20, 2024 17:13
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For the record we opened an account at CIT in January and it's stayed at 5.05% since then and I can't be assed to move it if that's not the absolute best, but it's also only like $20k. I think you want 5% as a good baseline right now and chasing that last quarter percent is only worth it for relatively large amounts of cash. IMO. But I want to make sure I'm not missing something and I think that's the tax treatment of the yield.
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Mar 20, 2024 17:15
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Leperflesh posted:For the record we opened an account at CIT in January and it's stayed at 5.05% since then and I can't be assed to move it if that's not the absolute best, but it's also only like $20k. I think you want 5% as a good baseline right now and chasing that last quarter percent is only worth it for relatively large amounts of cash. IMO. But I want to make sure I'm not missing something and I think that's the tax treatment of the yield. I'd have to dig into my tax stuff from this year to confirm but I want to say something like 80% of the returns I got from VUSXX weren't taxable, so something around that proportion of the fund is short term US securities, I think Edit: the returns weren't taxable at the state level, that is
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Mar 20, 2024 17:22
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I'm in California, the top marginal rate for most incomes of people in this thread who'd have this level of savings is 9.3%, that's for individual incomes $68,351 to $349,137 or married $136,701 to $698,274. 9.3% of 5.29% = about .5%, so for $20k in the bank, you'd save about $100 a year of the yield from lower taxes, or to put it a different way, 5.29% state tax advantaged is about equal to 4.79% fully taxable yield. A hundred bucks is a hundred bucks! Baby needs a new pair of shoes and it's easy to use VUSXX so I guess why not, right? But also folks should judge whether it's worth whatever inconvenience vs. a bank account to chase that amount of money. Leperflesh fucked around with this message at 17:31 on Mar 20, 2024 |
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Mar 20, 2024 17:28
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Leperflesh posted:I'm in California, the top marginal rate for most incomes of people in this thread who'd have this level of savings is 9.3%, that's for individual incomes $68,351 to $349,137. there's also the concept of "deposit beta" that may affect whether or not you judge it's worth bothering with changing where cash-like funds are stored. flash back to 2020/2021. based on what I can quickly find, Ally HYSA rates never went below 0.5% APY. but treasury bill yields (what backs and determines VUSXX yield) sure as heck did. so in a falling fed funds rate environment, it may flip back to a HYSA often having more yield than VUSXX. https://libertystreeteconomics.newyorkfed.org/2022/11/how-do-deposit-rates-respond-to-monetary-policy/
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Mar 20, 2024 17:34
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I use Raisin, which has a bunch of different banks. Western Alliance Bank (lol) and a few others are at 5.3ish.. they just sent me an email saying it went to 5.26%. I still have my money in WAB even through their issues last year. Extra 0.30% has been good though, IMO.
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Mar 20, 2024 17:35
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Really for me it boils down to the ease of moving the money, I know if I start min-maxing to get a quarter of a percent I will want to start min-maxing other things in my investments, to the detriment of my sanity and for relatively minor gains
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Mar 20, 2024 17:39
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Speaking of money market funds, I was looking at Schwab's and their SNVXX has a "market based NAV" of $0.9999. How is it possible for this to be worth less than $1? Or is "market based NAV" something different/irrelevant?
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Mar 20, 2024 18:09
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I have a feeling HYSAs will drop faster as rates fall, whereas actual funds will be beholden to the performance of the investments which keeps things honest.
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Mar 20, 2024 18:30
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Since we're on the topic, how do the mechanics of the Fidelity CMA work? It looks like the interest rate is 2.7%, and in order to get the 5% rate you have to manually buy a MMF, after which Fidelity will liquidate money in the core position at 2.7% first, followed by the 5% MMF. Those of you with a fidelity CMA, is there a way to automatically buy the 5% position each day? Do you manually do it each month? And how do they calculate interest in this situation? Do they do it daily? Monthly?Boris Galerkin posted:Speaking of money market funds, I was looking at Schwab's and their SNVXX has a "market based NAV" of $0.9999. How is it possible for this to be worth less than $1? Or is "market based NAV" something different/irrelevant? Well, 0.9999 equals 1 right? 
Residency Evil fucked around with this message at 18:51 on Mar 20, 2024 |
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Mar 20, 2024 18:48
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jokes posted:I have a feeling HYSAs will drop faster as rates fall, whereas actual funds will be beholden to the performance of the investments which keeps things honest. This was the thing for me (in addition to having everything in one place) -- I didn't want to have to worry about whether I'm getting the best possible rate.
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Mar 20, 2024 18:54
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Residency Evil posted:Since we're on the topic, how do the mechanics of the Fidelity CMA work? It looks like the interest rate is 2.7%, and in order to get the 5% rate you have to manually buy a MMF, after which Fidelity will liquidate money in the core position at 2.7% first, followed by the 5% MMF. Those of you with a fidelity CMA, is there a way to automatically buy the 5% position each day? Do you manually do it each month? And how do they calculate interest in this situation? Do they do it daily? Monthly? This post answers your questions in detail https://thefinancebuff.com/fidelity-cash-management-checking-savings.html His conclusion is basically that you should just open a brokerage account and set its core position to your MMF of choice -- Fidelity will give you a routing number and account number for brokerage accounts also, so you can use it (i.e. your core position funds within it, it won't auto liquidate VT for you) like a checking account.
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Mar 20, 2024 18:57
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Boris Galerkin posted:Speaking of money market funds, I was looking at Schwab's and their SNVXX has a "market based NAV" of $0.9999. How is it possible for this to be worth less than $1? Or is "market based NAV" something different/irrelevant? quote:The Transaction NAV is calculated using the amortized cost method of accounting to value fund securities. The value shown here is rounded to two decimal places. Transaction NAV is used when calculating net asset value for all Fund share transactions. It's some meaningless technical detail and has only been some tiny fraction of a penny lower than $1 since March 14th.
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Mar 20, 2024 18:57
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Residency Evil posted:Since we're on the topic, how do the mechanics of the Fidelity CMA work? It looks like the interest rate is 2.7%, and in order to get the 5% rate you have to manually buy a MMF, after which Fidelity will liquidate money in the core position at 2.7% first, followed by the 5% MMF. Those of you with a fidelity CMA, is there a way to automatically buy the 5% position each day? Do you manually do it each month? And how do they calculate interest in this situation? Do they do it daily? Monthly? Just open a regular brokerage account instead, it'll auto buy and liquidate SPAXX. The CMA is only useful if you need a debit card to access an ATM (because they reimburse all ATM fees but only for the CMA). If you really needed that, you can just open a CMA and set it to pull from the brokerage account.
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Mar 20, 2024 19:01
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Residency Evil posted:Since we're on the topic, how do the mechanics of the Fidelity CMA work? It looks like the interest rate is 2.7%, and in order to get the 5% rate you have to manually buy a MMF, after which Fidelity will liquidate money in the core position at 2.7% first, followed by the 5% MMF. Those of you with a fidelity CMA, is there a way to automatically buy the 5% position each day? Do you manually do it each month? And how do they calculate interest in this situation? Do they do it daily? Monthly? MMFs "record" the associated interest daily, and then pay out the total interest at the end of the month. If you want to get deep in the weeds, there's also a (2 day?) settlement period when money is moved around that slightly effects when/where the interest is being earned.
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Mar 20, 2024 19:11
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Boris Galerkin posted:Just open a regular brokerage account instead, it'll auto buy and liquidate SPAXX. The CMA is only useful if you need a debit card to access an ATM (because they reimburse all ATM fees but only for the CMA). If you really needed that, you can just open a CMA and set it to pull from the brokerage account. I'd be looking at using the CMA as our regular retail banking account, replacing our current Schwab account. Subvisual Haze posted:What you described is correct. I "buy" FDLXX (Fidelity's "all treasury" MMF, which came out to 90.3% government obligations from interest last year) from my cash position and then it will auto-sell FDLXX if necessary after first using the cash position to cover expenses like you describe. I don't think it can be perfectly automated to move money from the cash position to the MMF. I believe You can automate specific buy amounts at regular intervals, but not "buy all from cash" like would be ideal. I generally just manually put in a buy order for FDLXX which processes at the end of market day after my cash position has grown a bit. That's helpful, thanks.
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Mar 20, 2024 19:27
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Boris Galerkin posted:Just open a regular brokerage account instead, it'll auto buy and liquidate SPAXX. The CMA is only useful if you need a debit card to access an ATM (because they reimburse all ATM fees but only for the CMA). If you really needed that, you can just open a CMA and set it to pull from the brokerage account. I use both since I want the checks and debit card with ATM fee reimbursement (which works internationally). I keep a relatively small balance in the CMA and a larger MMF balance in the brokerage account. Funds moved between accounts are available instantly I believe.
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Mar 20, 2024 21:56
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Assuming equal % and ignoring state tax, is there any downside to VUSXX compared to a HYSA (other than taking time to liquidate)? If I understand correctly, it pays a monthly dividend based on the yield, and the position is liquid and essentially unchanged in value at $1 per “share” barring some cataclysmic event. I’m only now learning of treasury MMF and trying to make sure I’m not missing something significant.
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Mar 21, 2024 00:21
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Enigma posted:Assuming equal % and ignoring state tax, is there any downside to VUSXX compared to a HYSA (other than taking time to liquidate)? The only thing I can think of is that you cant do an ACH directly into or out of VUSXX, which you can with a HYSA. You also cant draw directly out of it with an ATM card. If you are just using it as a savings container with infrequent transactions, this shouldnt really matter.
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Mar 21, 2024 00:33
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Has anyone using Fidelity as a bank account pulled their "early warning system" report to review? https://www.bogleheads.org/forum/viewtopic.php?t=383010 Honestly this all seems a bit concerning. quote:I ordered an EWS report last year. I was shocked by the amount of sensitive information in the report, it was 35 pages long.
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Mar 21, 2024 14:47
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Boris Galerkin posted:Has anyone using Fidelity as a bank account pulled their "early warning system" report to review? What exactly is your concern? Most of that data is going to be interchanged by all sorts of data brokers, with the possible exception of SSN (though, that is a less secure piece of info than people might like to think). I wouldnt be concerned that EWS is going to have a data breach any more than I would be concerned about Fidelity or any other bank holding sensitive info. Yes, its not great, but unless your plan is to keep all your money as cash under the mattress, some financial institution is going to have your info.
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Mar 21, 2024 15:33
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drk posted:I wouldnt be concerned that EWS is going to have a data breach any more than I would be concerned about Fidelity or any other bank holding sensitive info. Counterpoint, Equifax
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Mar 21, 2024 15:54
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That was exactly my point. Breaches can happen, but there is no reason to be more concerned about EWS than anyone else holding your data. The cat is out of the bag as soon as you have any personal or financial info online.
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Mar 21, 2024 16:19
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Later in the thread it's for banking only or brokerage with banking features enabled, so I suspect that it's not super different from whatever regulatory agencies capture and they're not that secure either. I remember the big OMB data breach a decade ago or whatever. drk posted:That was exactly my point. Breaches can happen, but there is no reason to be more concerned about EWS than anyone else holding your data. The cat is out of the bag as soon as you have any personal or financial info online. yeah
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Mar 21, 2024 16:41
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Banks have many more regulations and requirements surrounding the security of account information than any of these info broker companies, which is why a huge info broker company had an absolutely boneheaded lack of security and subsequent breach. So if someone wants to not use Fidelity because they disclose more information to brokers than Vanguard/Schwab, that seems completely legitimate.
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Mar 21, 2024 16:42
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Inept posted:Banks have many more regulations and requirements surrounding the security of account information than any of these info broker companies, which is why a huge info broker company had an absolutely boneheaded lack of security and subsequent breach. So if someone wants to not use Fidelity because they disclose more information to brokers than Vanguard/Schwab, that seems completely legitimate. The disclosures were only for banking type accounts. The OP posts later on to say that: quote:BTW, I double checked my EWS report, here are a few clarifications to my previous message: I think based on above that the OP was over-egging it a bit originally and this seems to be in line with Schwab, et al.
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Mar 21, 2024 16:50
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EWS is a creepy system with way too much information.
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Mar 21, 2024 16:58
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Credit bureaus and ratings are a creepy system with way too much information that information is shared with way too many people we live in this system though and IMO Fidelity isn't more or less trustworthy than transunion, equifax, and experian or the entities they share all your personal info with
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Mar 21, 2024 17:04
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KYOON GRIFFEY JR posted:The disclosures were only for banking type accounts. The OP posts later on to say that: That's good. I still disagree with the sentiment that you can consider these info brokers as secure as banks. They're not.
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Mar 21, 2024 17:23
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Inept posted:That's good. I still disagree with the sentiment that you can consider these info brokers as secure as banks. They're not. I'm not saying they are and I agree with you that info brokers are probably not as secure as banks. I am saying that Fidelity's disclosures to EWS are similar to Schwab's in light of that new information.
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Mar 21, 2024 17:30
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Leperflesh posted:Credit bureaus and ratings are a creepy system with way too much information It's the usual laundering of responsibility to a sketchy 3rd party.
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Mar 21, 2024 17:32
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work email, subject 'Financial Literacy 101' posted:Join us for a Fireside Chat with Serena Ostrowsky on Thursday, April 4th to learn about managing your financial well-being! Nice idea in a vacuum, but I'm not sure how much I want to trust someone with the title Financial Advisor, much less from Edward Jones.
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Mar 21, 2024 18:03
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TITTIEKISSER69 posted:Nice idea in a vacuum, but I'm not sure how much I want to trust someone with the title Financial Advisor, much less from Edward Jones. I dont see “CFP” anywhere in her bio lol
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Mar 21, 2024 18:08
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I think this is my favorite part of her About section:quote:/*********/
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Mar 21, 2024 18:11
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the brokerage account that i opened at the worst possible time is finally making me money  
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Mar 21, 2024 20:51
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Awkward Davies posted:I dont see “CFP” anywhere in her bio lol I responded No to the invitation and included that little factoid in my response.
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Mar 21, 2024 21:08
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Joementum posted:the brokerage account that i opened at the worst possible time is finally making me money Fortunately 3 years is a very short time in the life of a long term portfolio. Going sideways isnt particularly unusual over periods of time like that. Check back in 2031 and see where you're at.
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Mar 22, 2024 02:07
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drk posted:Fortunately 3 years is a very short time in the life of a long term portfolio. Going sideways isnt particularly unusual over periods of time like that. Yeah, I opened this with a time horizon of 30 years so while it was annoying that I started it a couple weeks before the Fed jacked rates and cratered the market, I knew it was eventually going to pay off.
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Mar 22, 2024 02:09
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