Author Topic: Cash Parking  (Read 11137 times)

anabio

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Re: Cash Parking
« Reply #60 on: January 29, 2018, 02:04:34 PM »
Got one year to go....but I really can start using it now as a kind of 1 year CD...just haven't got the urge yet.

11 years ago I "hid" 200,000 cash in a fixed annuity....not for investment purposes but to get it off my assets so I even had a chance of getting financial aid for my children, one of whom was going to college a few years later.

Side note: Lot of good that did me...among other colleges, she got accepted into a couple of UC systems...even with their high costs we were only able to get about $3,000 in LOANS...no free money...I made too much money...didn't think that one through the whole way....

Anyway. That fixed annuity pays 3% and in one year there will no longer be any withdrawal penalty, so I can start using it as a bank savings account...

Not sure what they will do if they see multiple deposits coming in and withdrawals going out... anyone have any experience in this situation...will they stop me from making deposits/withdrawals???
As Will Rogers stated: : I'm not as concerned about the return on my money as I am the return of my money

nonattender

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Re: Cash Parking
« Reply #61 on: February 27, 2018, 02:43:32 AM »
13-month CD @ 2.75% APY (only avail for two days, 2/27 and 2/28, max $250k, must have residential address in MA, NH, ME, CT, VT, or RI):

https://www.harborone.com/remarkable

(I'm terribly tempted to get on the phone with them tomorrow, put on my best Bahsten accent - I speak Brahmin and Southie - and try to find a sweet teller who will let me pretend I live out of my old office... but I probably can't get thea from heah.  Maybe some of you can - it looks like a sweet deal!)

« Last Edit: February 27, 2018, 02:45:57 AM by nonattender »
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Rob L

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Re: Cash Parking
« Reply #62 on: March 11, 2018, 07:11:52 PM »
My apprehension was misplaced. Things worked out well, but it wasn't a smooth process.
Late this afternoon I received a message from the Andrews website. The message said:

"Per your application comment, you are attempting to establish IRA Certificates and not the fixed rate certificates you have elected on your application. Due to us being unable to finalize your request, this application will be canceled."

Uh Oh.. There was a phone number to call. I did at 5:30 pm (they close at 7 pm) and I (surprisingly) actually reached a person. Ultimately she was able to resolve everything; issuing desired IRA certificates for my wife and me (yes at 3%) and even made them effective in mid February when they had received our money. Thought this was pretty amazing actually. Life is full of surprises.

I did maintain a bit of apprehension until today when interest was posted for the first time.
We did get the 3% as promised, back dated to 2/17/2017. Remarkable!

Recently past the one year anniversary of my 3% 84 month Andrews FCU CD's. Still the best deal I've seen even since that time.
Meanwhile I just parked some cash at Ally Bank in 12 month CD's at 2.0%. IIRC EWP is only 60 days so I'm just waiting for higher rates to come.
Ally typically has lower APR but lower EWP. You can get 3% at any number of places for 5 year term, but EWP is a full year of interest.
They call it the 3 for 5 club and its membership is growing.
Betting on higher rates (slowly) so parking this cash short term expecting better rates a year from now.

nonattender

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Re: Cash Parking
« Reply #63 on: March 12, 2018, 03:18:28 AM »
There's a 4% 60 monther lurking in the Southeast...  I, too, expect much better fishing for savers in the near future - nationwide.
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Rob L

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Re: Cash Parking
« Reply #64 on: April 11, 2018, 12:24:22 AM »
Goldman (Marcus) upped their online savings account APR to 1.6%.
https://www.marcus.com/us/en/savings/high-yield-savings?prd=os&chl=ag&schl=agd&cid=2955844

Ally at 1.45% is starting to fall behind a bit.
Popular Direct tops the list at 2%.

jheizer

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Re: Cash Parking
« Reply #65 on: April 11, 2018, 12:38:15 AM »
Been nice seeing them all go up lately. Was surprised to see my purepoint at 1.75 a few days ago.
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Fred93

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Re: Cash Parking
« Reply #66 on: April 11, 2018, 01:14:57 AM »
There's a thing going on right now where short term muni bonds, and their associated muni bond funds, are yielding more relative to taxable alternatives than is usual.

Vanguard's California tax-free money market fund VCTXX, for example, has a 1.32% SEC yield right now.  That's equiv 2.87% taxable for me!

Some brokers have stopped allowing people to buy this fund.  Fidelity for example.  They're trying to stop the flow out of their own higher fee funds.  Vanguard refuses to give kickbacks to brokers.  TDAmeritrade is still allowing purchase, and of course you can buy it thru Vanguard.  TDAmeritrade won't allow VCTXX to be the money market fund that your money rolls into and out of automatically.  You have to place explicit buy and sell orders.

You can also buy very short term muni bonds right now.  Most brokers mark the bonds up so much that it really kills the yield on very short term bonds.  Retail customers just get really bad pricing.  However, at Fidelity right now I am able to buy some short term AA and above California muni bonds at yields of 1.3% to 1.5%  I've been buying some with only 3mo to 6 mo to maturity.  These are the things you would find in a muni money market fund!

Individual brokers' characteristics differ in funny ways.  At TDAmeritrade I just buy VCTXX, because they won't sell me muni bonds at a decent markup.  At Fidelity I just buy the short term muni bonds myself, because they won't sell me VCTXX. 

I've been selling T bills and whatnot and buying short term munis lately.

nonattender

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Re: Cash Parking
« Reply #67 on: April 11, 2018, 01:23:36 PM »
I'd feel uncomfortable owning Californian municipal debt, but that's probably just the result of some sort of subconscious bias that I have against bankrupt, totally-out-of-control spenders whose governments and/or politicians seem, if the fake news can be believed, to be about to secede... :)

I'll say two Hail Moonbeams and see if I stop seeing a strange resemblance between modern day California politics / 1860's era Southern States.

(I'll be fine.  You probably will be, too;  I don't know.  That stuff's not for me, though.)
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Fred93

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Re: Cash Parking
« Reply #68 on: April 11, 2018, 01:50:36 PM »
I'd feel uncomfortable owning Californian municipal debt, but that's probably just the result of some sort of subconscious bias that I have against bankrupt, totally-out-of-control spenders whose governments and/or politicians seem, if the fake news can be believed, to be about to secede... :)

Fake news definitely should not be believed.  The question, when one doubts the long term viability of policy is the maturity of the debt in question.  I'm buying CA debt with 2 to 8 month maturities.  Nothing crazy will happen in that time frame.


Quote
I'll say two Hail Moonbeams and see if I stop seeing a strange resemblance between modern day California politics / 1860's era Southern States.

Interesting.  I've not heard that comparison before.  There are many problems with California politics.  I'm doin' what I can, but I'm all alone here!


jheizer

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Re: Cash Parking
« Reply #69 on: April 11, 2018, 01:55:14 PM »
Buying bonds like that is a game I've never tried to play.  One of these days I need to read up on it all more.  Any time I am tempted my mind just tries to figure out what I am do wrong/if this is good, why is it being sold.
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nonattender

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Re: Cash Parking
« Reply #70 on: April 11, 2018, 02:19:50 PM »
Quote
I'll say two Hail Moonbeams and see if I stop seeing a strange resemblance between modern day California politics / 1860's era Southern States.

Interesting.  I've not heard that comparison before.  There are many problems with California politics.  I'm doin' what I can, but I'm all alone here!

Well, it just kinda strikes me as the new home of indentured servitude.  They pay, but, relatively speaking, it looks to me just a little bit too much like a smug liberal version of sharecropping, complete with the continual importation of labor (which then votes "correctly"). ;)

I think some guy published a piece along this line in The Atlantic a few weeks back, but the outcry from the overlords made 'em retract.

That guy is lucky he's not in the Atlantic, now (like tied to a boat anchor, at the bottom of it) - after saying truths out loud that made it uncomfortable for agriculture and the H1-B tech mafia...  Luckily, they're still polite out there and he's just being shunned at dinner parties (and being unfriended on the Facebook / losing "followers" / getting mean frowny faces or whatever.)

(If you're feeling lonely, say two Hail Rohrabachers and head Orange-way?)
« Last Edit: April 11, 2018, 02:22:45 PM by nonattender »
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Fred93

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Re: Cash Parking
« Reply #71 on: April 11, 2018, 02:48:53 PM »
Buying bonds like that is a game I've never tried to play.  One of these days I need to read up on it all more.  Any time I am tempted my mind just tries to figure out what I am do wrong/if this is good, why is it being sold.

You look at bond ratings and yields.  Choose a rating level you're comfortable with.  For munis I pick AA.  You look at bonds offered with that rating.  Usually there are several with similar yields. If one has a yield much higher than the others it definitely causes me to ask the question why.  Not why is it being sold, but why is it sitting there offered at a higher yield than similar bonds. 

For short maturities, these issues aren't heavy on my mind.  For longer maturity bonds, the questions are heavy, and I avoid states where I question the finances in general, such as Illinois.  I'm not buying any long maturity bonds now because of the risk of interest rates rising, so luckily I don't have to struggle with these creditworthiness questions.

For corporate bonds, I use the knowledge I have of the general corporate character of companies, and I treat bond ratings as a little less important.  We all know a lot about major corporations. 

For municipal bonds, the situation is reversed.  MOST muni bonds are issued by tiny issuers.  A particular sewer system, or transportation district (bus line perhaps), or a school district, etc.  There is no way I can understand these small entities, so I rely heavily on the bond rating agencies.  Of course you know general areas of danger, such as Detroit, but so do the ratings agencies, so these guys don't tend to show up on reasonably conservative screens.

Most brokers try to screw small retail clients by marking up bonds.  Luckily FINRA has a web site where you can view recent trades in particular bonds, so you can see whether your broker is marking up the bonds too much.  This varies heavily by broker.  Full service brokers are the worst, although sometimes your personal broker can waive his cut and reduce the markup.  At TDAmeritrade muni markups are bad now online, but you can call their "bond desk" and get better prices.  I hate this, but that's the way it is.  At Fidelity right now muni bonds have very low markups, even on very small size transactions.  I don't know why, or whether this will persist.  Its probably a mistake, ie some policy setting guy fat fingered his last edit. 

I've found recent corporate bond markups reasonable at both TDAmeritrade and Fidelity, although Fidelity is usually a bit better.  The TDAmeritrade bond desk will often give me a price as good as the Fidelity online quote.  I'm not presently buying corporate bonds, because their yields don't seem to be enough higher than treasuries to make it worthwhile, and muni bonds beat them right now in any case.  (At the short maturity end.)

Its interesting how different brokers have such different character.  People keep writing articles comparing "commissions" between different brokers, which is completely stupid, as all commissions are so low as to be irrelevant nowadays.  However, there are huge differences between brokers, and you actually have to use them to learn about these differences.

An example is the experience I've had buying VCTXX, where Fidelity lies and tells customers it is "closed to new investment", whereas TDAmeritrade gladly takes orders.  One funny thing about Vanguard funds... When buying thru Vanguard I've often had them call me up and ask how long I was gonna keep the money in the fund.  Its part of their grand scheme to keep expenses low.  They claim it helps them plan, but I suspect its real purpose is to make people feel a little guilty about frequent trading and thus make people trade less often which lowers Vanguard's trading costs.  I understand this, and usually tell them "several years", which is generally right for stocks or bonds.  I had never experienced one of these phone calls when buying a Vanguard fund thru another broker until today.  I got a call from a guy at TDAmeritrade who said Vanguard asked him to call me to ask about today's purchase of VCTXX.  How long did I plan to keep this money in the fund.  Heck, its a money market fund!  ...so this is a really strange question in this context.  People use mmf for very short term holding.  I have no idea when something will come along that catches my interest.  I made up a number and gave it to him.  Its not a promise after all.  Its just information.  I wonder if they remember these answers and check later how well customers predicted their own actions.  One could fantasize that it's like the ratings that Uber drivers give to customers. 


nonattender

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Re: Cash Parking
« Reply #72 on: April 11, 2018, 03:24:18 PM »
I wonder if they remember these answers and check later how well customers predicted their own actions.  One could fantasize that it's like the ratings that Uber drivers give to customers.

You should ask them for a copy of your SalesForce profile next time they call.  They won't give it to you, but it'll be a fun phonecall. :)
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jheizer

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Re: Cash Parking
« Reply #73 on: April 11, 2018, 03:38:05 PM »
Thanks for the good long answer.  Oh and living in Illinois is AWESOME! not...

I guess the flip of my "why is this for sale", is the why hasn't someone else bought this already if it is a good deal.  Similar to say folio buying before we learned there can be very few good notes up for sale at times and those of us that had a really fast system had a major edge.  Others might not have every seen them at all and with the lack of history have no idea.  Too bad I only ran that for a few months before I decided to down size.

But back to bonds, so I do a search for say 4-8 month maturity of AA and above and sort by yield.  Refresh a few minutes later and the results are the same or very very close.  So I immediately go if these are all still available, why should I be the one buying them knowing nothing.  Or you do look at one more closely and see it has had 3 trades in the last month.  I get them most are small so they'll have low volume, but I also assume that maybe that means that have been up for sale by someone for all the time and just slowly getting bought as someone decides they are now a good deal. 

I guess put simply, its the case of not knowing what I don't know.
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Fred93

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Re: Cash Parking
« Reply #74 on: April 11, 2018, 04:19:46 PM »
I guess the flip of my "why is this for sale", is the why hasn't someone else bought this already if it is a good deal.

Do you ask yourself the same question when buying stocks?

I'm suspecting the answer is no.  If no, then what is fundamentally different about stocks?


Quote
I guess put simply, its the case of not knowing what I don't know.

I have no problem with that.  As you gain more familiarity, these concerns will diminish.