Is Anticipating Rate Drops a Good Strategy for Maximizing Your Cash?

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Is Anticipating Rate Drops a Good Strategy for Maximizing Your Cash?
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3 окт 2024

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Комментарии : 15

@MichaelSmith-fj7di 18 дней назад

One should invest any cash that they have that’s not for a planned expense within five years or an emergency fund. You can earn a much better return in the market but only if you don’t need it within five years. That being said, I’d go ahead and put any cash not needed immediately or that’s not an emergency fund into a CD now before the fed cuts rates.

@stevemlejnek7073 17 дней назад

I think it's too late for top CD rates. I've seen rates drop substantially the last month or so in anticipation of the rate cuts.

@JaySmith-pv2mw 18 дней назад

Everbank has a 5.05% HYS right now.

@dustinjones8887 18 дней назад

After 14 years of under 1% cd rates, then after loving the over 5% the past year and a half, I saw the 2 credit unions I held cd's just suddenly lowered from over 5% to 4 1/2. So after they matured last week, I locked in the 4% for 60 months. With hoping to retire in next 6-8 years, my tolerance levels prefers to hold a big cash bucket outside of my 401K. So I'm okay with 4%, and happy to lock it in for 5 years.

@MeltingRubberZ28 18 дней назад

60 months, yikes. Better hope inflation doesn't pick back up higher than it was (historically it does) otherwise your money will be locked for a while at a low rate.

@dustinjones8887 18 дней назад

@@MeltingRubberZ28 - I save 60% of what I earn between 401k and cash savings. I feel I'm beating inflation just by my minimalist lifestyle. As my original comment stated, all those years of rates under 1%, I'm feeling great to lock this in a 4%, whether inflation increases and/or rates stay high. But I don't think rates will stay high.

@dustinjones8887 18 дней назад

@@MeltingRubberZ28 - and even if they did stay high, I'll just add more cd's. With the market history or the 70's and 2000's, I happy to keep a big cash bucket.

@marissareed5790 18 дней назад

This helped me understand cds better. Thanks

@EtherBunny-z7k 18 дней назад

I’ve been doing the ladder technique with T-bills for a couple years. Shorter timelines and no state tax on your earnings 🙂

@michaelsd284 17 дней назад

Speaking of ladders, I have multiple 401ks with target date funds and I ladder these funds in 5 year increments (this is when the asset allocation mixtures change) so that I can manage and stagger my return rates. I also do not plan to land at any allocation below 65/35 as I need to continue to grow my nest egg. I do have my cash reserve fully stocked and plan to subsidies IRA withdrawals to extend it as well.

@appleztooranges 17 дней назад

I threw $2k into my Roth IRA waiting for a dip now. Cash is there just ready

@MeltingRubberZ28 18 дней назад

Depending on how low rates go, I might throw like 10k into a dividend ETF.

@mattbenz99 18 дней назад

Dividends is not free money. It is taking money from your left pocket and putting it in your right pocket.

@MeltingRubberZ28 18 дней назад

@mattbenz99 SCHD, VYM pay out either entirely qualified dividends or very close to it so it's taxed favorably. Also, it has shown growth that at least keeps up with inflation - so dividends plus growth that keeps up with inflation - not sure what there isn't to like for short term money.