short term ivestment

[jimmyengland]

hi,

i am looking at short term investments.... i have approx 10000 that i want to invest. I have been looking at money markets, laddering cds, i bonds etc. what do you recommend for me at this point. I need this money to be some what liquid. Does anyone know or have any advice other than above that i could potentially invest in or does anyone know which banks are currently offering the best rates on the products listed above..... thank you in advance for your help.

[Broken Arrow]

Lots of choices. My personal favorite is online savings account.

[sweeps]

Talk to Pound.

[jIM_Ohio]

How liquid?
If you need access to money (all of it) tommorrow without penalty, that is one issue.
If you need access to some of the money tommorrow and would be willing to pay around $80 to get it, that is a different issue.
If you think that you might need some of the money, and could predict when that time is, that is another isse.

For example if you told me the expenses the money needs to cover might be 1k per month for 12 months, then open 12 $1000 CDs, each maturing at 12 month intervals-
open a 12 month CD, 10 month, 9 month, 8 month, 7 month, 6 month, 5 month and 4 month CD, keeping $3000 (or 3 months) in savings. Every month where you do not access the savings, open another 12 month CD. When any CD matures either spend the money or open another 12 month CD.

In 12 months of not spending money you will have 12 12 month CDs, one maturing each month for $1000+interest paid. This is known as a CD ladder.

If you only need $500/month then make each CD above $500, and put the rest in a longer CD or treasuries (treasury direct.com). Treasuries should have a higher return than CDs, but are less liquid.

With CDs you will probably pay a 3 month interest penalty for taking money out when maturing early. Keep the dollar amounts in the CDs small, so the 3 month penalty is low.

[autoxer]

My favorite is a money market. It is more convenient for me to have a money market with the same company that handles all of my other investements (401k, Roth IRA). It doesn't have as high a rate as some of the online banks, but the convenience and simplicity is valuable to me.

[GREENBACK]

That's not a tremendous amount of money in terms of what you can earn from it and if you want it in an account that's liquid I don't think worrying about a percentage point one way or the other will impact you that much currently. I'd probably go for what's most convienent and accessible like an MM or online account but as stated it depends on how accessible does it need to be. If you do the math you'll see that you're just not going to get that much in this current economy with that money no matter what you do.

[GrimJack]

Check out some local Credit Unions - they are making a play for deposits to checking accounts and offering 3 or 4% if you make at least 12 debit card purchases a month. I know this because my CU Makes that offer (I think the limit is $40k). That is the best liquid return I have heard about.

[Broken Arrow]

Originally Posted by GrimJack

Check out some local Credit Unions - they are making a play for deposits to checking accounts and offering 3 or 4% if you make at least 12 debit card purchases a month. I know this because my CU Makes that offer (I think the limit is $40k). That is the best liquid return I have heard about.

Mine is doing that. 4.01% APY. Muahahaha!

[banditfist]

Check that effective interest rates verses the operating expense of your money market. I noticed yesterday that I am actually losing money in my money market because of the expense.

[sweeps]

Originally Posted by banditfist

Check that effective interest rates verses the operating expense of your money market. I noticed yesterday that I am actually losing money in my money market because of the expense.

The quoted return rate is net of expenses. If you were really losing money, you might as well keep your money under the mattress.