I am 39yo and started working 10 years ago after being in school for many years. I finally feel like I'm able to build up some meaningful savings and after cashing in a CD that I panic bought a few years ago when I had some cash in my bank account, I've found myself with around 40k that I want to get into a savings or investment account. I want to have it fairly accessible – like be able to access it within a month-ish if needed – I'm casually looking at houses, so would want some cash for a down payment if I find something in the next year or two. But definitely don't want it just sitting in my checking account making nothing.
What are the best options? HYSA? CMA? Something else?
I don't have any debt, have an IRA through my work that I'm putting 15% into + 12% match, and Roth IRA that I've been maxing out for the last 3 years.
Advice for 40k in checking account
byu/socksinthewilderness inpersonalfinance
Posted by socksinthewilderness
8 Comments
Invest into S&P500 and see average yearly gain of 10% which is far higher than what you’ll get in a HYSA.
I keep my emergency fund in a money market fund and SGOV in my Fidelity CMA. If you would rather have a HYSA, I would check out Wealthfront, CIT bank, and Marcus.
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
Openbank has a pretty decent HYSA rate. It’s fairly accessible…can use it as a pay account for credit cards/etc. They don’t connect to anything 3rd party, though, but can connect direct to other banks for fund transfers.
Edit: typo
Do you have a Roth IRA? If not you can deposit that into a Roth IRA uo to 7k for this and last year until April 15th.
You should keep around 6months of expenses in a HYSA (or CMA).
Money for goals you have within 5 years should also be kept in the HYSA.
Money for goals over 5 years should be invested.
So if you’re thinking about a house within a couple years, it should go to the HYSA.
Checking should only be 1-2months expenses. Checking earns nothing so you only want a little money there for access.
>have an IRA through my work that I’m putting 15% into + 12% match, and Roth IRA that I’ve been maxing out for the last 3 years.
You mean you have a 401k at work.
I just moved 30k from checking to Wealthfront HYSA at 4.5% and it took like 3 minutes online. still liquid if you need it for a house, just 1-2 business days to transfer back
Your safe options are HYSA (Cap1, Amex, Marcus), or money market fund, or short term treasury bond fund. Do not invest in stocks since you need it fairly soon.