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This is a monthly summary of the highest cash interest rates as of October 2022, roughly sorted from shortest to longest maturity. We all need safe assets for cash reserves and portfolio stability, but often there are opportunities that retail investors are less aware of. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you can earn by moving money between accounts. Prices are current as of October 3, 2022.
TL;DR: Up to $6,000 in liquidity savings with 4% APY, no direct deposit required. Elements Financial has an APY liquid savings of 3.25% and the rate is guaranteed for 1 year. 1 year CD at 3.85% APY. 5-year CD of 4.42% APY. Compare US Treasury Bills and Bonds by maturity (nearly 4% for 12 months). If the limit is not exceeded, the 9.62% Savings I Bond is still available.
Fintech account
Available only to private investors, fintech companies often pay above-market rates (often using venture capital) to achieve rapid short-term growth. “Fintech” is typically the software layer on top of his FDIC insurance at partner banks.
- 4% APY on $6,000. We are currently offering 4% APY up to a total of $6,000 (three savings pods of $2,000 each). No direct deposit required. $50 referral bonus For new members over $200 direct deposit with promo code Jenifep 185Read our current app review for more information.
- 3% APY up to $250,000. However, direct deposit and credit card usage are required. HM Bradley up to $250,000 up to $250,000 if he opens both a checking account and a credit card and maintains positive monthly cash flow, a total monthly direct deposit of $500, and $500 in monthly credit card purchases You will pay APY. Existing customers are exempt from the requirement until the end of 2022 and he gets his APY of 3%. Check out our latest HM Bradley review for more.
high yield savings account
I think all banks should have a separate fee-free online savings account in addition to their existing checking accounts, since the megabanks are basically interest-free. Interest rates on savings accounts can drop at any time, so we list the best interest rates and competitive interest rates from banks with a history of competitive interest rates. lure you in with the highest interest rates, then lower them in the hope that you’re too lazy to walk away.
- Interest rates are rising across the board as the leap to temporary ‘highest’ interest rates continues.Elements Financial Annual interest rate 3.25% (Minimum $2,500, new money, 1 year rate guarantee).
- SoFi Bank is now 2.50% APY + New Account Bonus up to $325 by direct deposit. To get high APY, you need to maintain a direct deposit of any amount each month. SoFi now has its own banking charter, so it’s no longer fintech by my definition. Check out our $25 + $300 SoFi Money New Account and Deposit Bonus for more details.
- There are several other established high-yield savings accounts with APYs close to 2.15%. Goldman Sachs’ Marcus is on that list, and when you open a new account with Marcus’ referral link (from reader Paul), addition 1.00% APY for the first 3 months.
Short-term guaranteed interest rate (1 year or less)
A common question is what to do with large amounts of cash waiting to be deployed soon (planning to buy a house soon, just sold a house, just sold a business, legal settlement, inheritance) . My usual advice is to keep things simple and take your time. If it’s not a savings account, put it in a flexible short-term CD under FDIC restrictions until you can plan.
- No Penalty CDs offer a fixed interest rate that never goes down, but you can withdraw your money (once) without a fee if you want to use it elsewhere. CIT Bank has an 11 month no penalty CD. Annual interest rate 2.75% With a minimum deposit of $1,000. Ally Bank has an 11 month no penalty CD. Annual Interest 2.00% For all balance layers. Marcus has a 13-month no-penalty CD. Annual interest rate 2.20% With a minimum deposit of $500. For greater flexibility, you can open multiple CDs piecemeal.
- The State Bank of Texas has a 12 month certificate. Annual interest rate 3.85%$25,000 minimum. The penalty for early withdrawal is 60 days interest.
Money Market Mutual Fund + Ultra Short Bond ETF*
Many brokerages pay very little interest to default cash sweep funds (and take the difference themselves). *Money Market Mutual Funds are regulated but ultimately not insured by his FDIC. We have included some ultra-short-term bond ETFs because they may be the best alternative to cash in your brokerage account, but short-term losses can occur.
- The Vanguard Federal Money Market Fund is the default sweep option for Vanguard brokerage accounts, with an SEC yield of 2.77%Compare with your own broker’s money market rate.
- The Vanguard Ultra-Short-Term Bond Fund Is Paying Now 3.42% SEC Yield ($3,000 min) and an SEC yield of 3.52% ($50,000 min). The average term is approximately one year, so the principal may vary slightly.
- The PIMCO Enhanced Short-Term Active Bond ETF (MINT) includes: 3.05% SEC Yield The iShares Short Maturity Bond ETF (NEAR) has 3.41% SEC Yield We have a portfolio of investment grade bonds with an average duration of about 6 months.
Government bonds and ultra-short-term government bond ETFs
Another option is to purchase individual Treasury bonds with maturities ranging from 4 to 52 weeks and fully insured by the US government. You can also invest in ETFs that hold rotating baskets of short-term Treasuries while charging a small management fee. T-bill interest is exempt from state and local income taxes.
- You can build your own T-Bill ladder at TreasuryDirect.gov or through an account at a brokerage firm with a bond desk like Vanguard or Fidelity. Here are the current bond yields. As of October 3, 2022, the new 4-week T-Bill equates to an annual interest rate of 2.79% and the 52-week T-Bill equals 4.00% Annual interest.
- The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has an SEC yield of 2.44% and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has an SEC yield of 2.36%. GBIL appears to have a slightly longer average maturity than BIL.
US savings bonds
Series I Savings Bonds provide an interest rate that is indexed to inflation and backed by the U.S. government. Must be retained for at least one year. If you redeem within 5 years, there is a penalty of interest for the last 3 months. The annual purchase limit for electronic I-Bonds is $10,000 per Social Security number and is available online at TreasuryDirect.gov. You can also use your IRS Form 8888 tax refund to purchase an additional $5,000 of Paper I Notes.
- “Eibons” purchased between May 2022 and October 2022 First 6 months rate is 9.62%The rate for the next six months is again based on inflation. Click here for savings bonds.
- Mid-October 2022 will be the CPI announcement, with a short period of time to give a very close estimate of the rate for the next 12 months. I will post another post then.
- See below for EE Bonds as a potential long-term bond alternative.
Prepaid card with savings account
A small subset of prepaid debit cards are “attached” to FDIC-insured savings accounts with very high interest rates. The downside is that your balance is severely limited and there are many fees that you have to be careful to avoid (so they don’t eat up your interest). There is a long list of previous offers that have already disappeared with little notice. I personally do not recommend or use these. Because I feel that the work required and the fee charged if it fails outweighs the potential small profit.
- Mango Money pays 6% APY up to $2,500 if you manage to go through multiple hoops. Requirements include a “signature” purchase of $1,500 or more and a minimum balance of $25.00 at the end of the month.
- Note that NetSpend Prepaid pays 5% APY up to $1,000, but there is also a $5.95 monthly maintenance fee if you don’t maintain regular monthly activity.
Compensation checking account
These unique checking accounts pay above-average interest rates, but come with their own set of risks. You usually have to go through certain hoops that include 10+ debit card purchases, a certain number of his ACH/direct deposits, and/or a certain number of logins per month each cycle. If you make a mistake (or if they decide you made a mistake), you risk zero interest for the month. Some people don’t mind the extra work and attention required, some don’t. Prices can drop suddenly, leaving a “bait and switch” feel.
- (The rate will increase to 4.00% APY with the qualification cycle starting October 20, 2022.) Bank of Denver will purchase 12 debit cards of $5 or more per purchase, accept online statements only, and At least one ACH credit or debit transaction per cycle. If you meet these eligibility, you can also link a Kasasa savings account that pays 1.00% APY on up to $25,000. Thanks to reader Bill for the latest information.
- The Presidential Bank will reward you on balances from $500 up to $25,000 if you maintain direct deposits of $500 or more and at least 7 electronic withdrawals per month (ATM, POS, ACH, Billpay counts). and pay 3.00% APY (2.50% APY after that).
- Liberty Federal Credit Union pays 3.45% APY up to $20,000. Requires at least 15 debit transactions per month and other requirements.
- Lake Michigan Credit Union pays 3.00% APY on up to $15,000. Requires at least 10 debit transactions per month and other requirements.
- Find region-specific rewards checking accounts at DepositAccounts.
Certificate of Deposit (over 1 year)
CDs offer higher rates but come with early withdrawal penalties. Finding a bank CD with reasonable early withdrawal penalties allows you to enjoy higher rates while maintaining access in a true emergency. Alternatively, consider building a CD ladder with different maturities (1, 2, 3, 4, 5 years) so that you can access a portion of the ladder each year. When one CD matures, use that money to buy another five-year CD and continue up the ladder. Some CDs also offer “add-ons” that allow you to deposit additional funds if the rate drops.
- Lafayette Federal Credit Union has a 5 year certificate. 4.42% annual interest rate ($500 min), 4 years 4.32% APY, 3 years 4.22% APY, 2 years 4.11% APY, 1 years 3.80% APY. However, the 5-year CD penalty is 600 days of interest and the early withdrawal penalty can be very severe. Anyone can join this credit union through a partner organization (one-time fee of $10).
- Bread Financial has been certified for 5 years. Annual interest rate 4.25% ($1,500 min), 4 years 4.15% APY, 3 years 4.00% APY, 2 years 3.75% APY, 1 years 3.60% APY. The 5-year early withdrawal penalty is 365 days of interest.
- You can purchase certificates of deposit at Vanguard and Fidelity bond desks. An account may be required to view rates. These “intermediary CDs” offer FDIC insurance and easy laddering, but no predictable early exit penalties. There are currently no CDs of his five years available (no call available).Beware of higher rates from callable CD, which means you can call back the CD if the rate drops later.
long term measure
We use these with caution as they add interest rate risk, but we are tracking the rest of the current yield curve to see.
- Lock your money for 10 years? You can purchase long-term certificates of deposit at Vanguard and Fidelity bond desks. These “intermediary CDs” provide his FDIC insurance, but without predictable early withdrawal penalties. You may find one that pays more than other brokerage cash and treasury options. There are currently no 10-year CDs available (cannot be called) versus 3.72% for 10-year Treasuries.Beware of higher rates from callable A CD that can be recalled if interest rates drop.
- how about 20 years? Series EE Savings Bonds are not indexed to inflation but have a unique guarantee of doubling in value over 20 years. 3.5% annual rateHowever, if you don’t hold on too long, you’ll be stuck at a very low regular rate (currently 0.10%). The purchase limit is $10,000 per calendar year for each Social Security number. However, as of October 3, 2022, the 20-year Treasury yield is at his 4.00%, so this feature is no longer interesting.
All rates are valid as of October 3, 2022.
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